EX-10.25






This is a Credit Line Deed of Trust




Deed of Trust, Assignment of Rents,

Security Agreement and(Illinois)




 Fixture Filing

Project Location: 11611 Robious Road, Midlothian, Virginia

Tax Map Parcel: 739714407400000

Made by

G&E HC REIT II Midlothian SNF, LLC,

as Grantor

to

Linda J. Rehak, a resident of Chesterfield County

as Trustee

for the benefit of

Grubb & Ellis Healthcare REIT II Holdings, LP,

as Beneficiary and Assignor




and for the benefit of

KeyBank national Association,

as Agent,

as Beneficiary













Dated as of: June 30, 2011

Re: Grubb & Ellis Healthcare REIT II Holdings, LP




The Maximum Principal Amount Secured by this Deed of Trust is $71,500,000





	 	 	 	Prepared By and Upon Recordation
Return To:






Schiff Hardin LLP


6600 Sears Tower


Chicago, Illinois 60606


Attention: Sean T. Maloney, Esq.



This Deed of Trust is part of a multi-state financing in the Maximum Aggregate Amount of
$71,500,000.00, which is secured by mortgages and/or deeds of trust on real estate both inside and
outside of Virginia. The total loan value of all real estate secured is $71,500,000.00 and the
total loan value of the all the Virginia real estate secured is $21,595,040. Pursuant to Virginia
Code § 58.1-803.B., the Virginia recordation tax on this Deed of Trust shall be only upon such
proportion of the debt secured as the value of the property located in Virginia bears to the value
of the all property. The value of the property in Virginia is 30.20% percent of the total value of
the entire property. Therefore, Virginia state and local recordation taxes for this deed of trust
should be based on the sum of $21,595,040.



PURSUANT TO SECTION 58.1-812, CODE OF VIRGINIA, AS AMENDED, THE STATE TAX IMPOSED BY SECTION
58.1-803(B), CODE OF VIRGINIA, AS AMENDED, IN THE AMOUNT OF $50,030.69 HAS BEEN PAID IN FULL TO THE
CLERK OF THE CIRCUIT COURT OF THE COUNTY OF CHESTERFIELD, VIRGINIA.



THE LOCAL TAX IMPOSED BY SECTION 58.1-814, CODE OF VIRGINIA, AS AMENDED, IN THE AMOUNT OF
$16,676.90 HAS BEEN COMPUTED AND PAID ON THE BASIS OF THE FOLLOWING PERCENTAGE AMOUNTS AS ALLOCATED
BASED UPON THE PRORATA VALUES OF THE PROPERTIES SECURED:



1. County of Chesterfield = $11,879,000 or 55% LOCAL TAX DUE $9,172.30


2. County of Bath = $1,775,000 or 8% LOCAL TAX DUE $1,334.15


3. City of Botetourt = $361,040 or 2% LOCAL TAX DUE $333.54


4. County of Albemarle= $7,600,000 or 35% LOCAL TAX DUE $5,836.91



TOTAL $16,676.90



1



Deed of Trust Assignment of Rents, Security

Agreement and(Illinois)




 Fixture Filing




Project Location: 11611 Robious Road, Midlothian, Virginia

This is a Credit Line Deed of Trust




This Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (this “Deed
of Trust”) is made as of June 30, 2011, by G&E HC REIT II Midlothian SNF, LLC, a Delaware
limited liability company (“Grantor”), whose address is c/o Grubb & Ellis Healthcare REIT II, Inc.,
1551 North Tustin Avenue, Suite 300, Santa Ana, California 92705, in favor of Linda J.
Rehak, a resident of Chesterfield County, her successors and assigns (“Trustee”)
whose address is c/o First American Title Insurance Company, 14368 Sommerville Court, Midlothian,
VA 23113  for the benefit of (a) Grubb & Ellis Healthcare REIT II Holdings, LP,
a Delaware limited partnership (“Borrower”), as mortgagee and also as assignor, whose address is
c/o Grubb & Ellis Healthcare REIT II, Inc., 1551 North Tustin Avenue, Suite 300, Santa Ana,
California 92705 and (b) KeyBank National Association, as Agent, its successors and
assigns (“Beneficiary”), whose address is Mailcode WA-31-13-2313, 1301 5th Avenue, 23rd
Floor, Seattle, Washington 98101.



This Deed of Trust Secures Future Advances.



All notices to be given to Beneficiary pursuant to Sections 55-58.2 of the Code of Virginia
shall be given as set forth in Section 8.12 of this Deed of Trust.



Recitals:




A. Grantor, directly or indirectly, is a subsidiary of Borrower.



B. The Borrower has entered into that certain Credit Agreement dated as of June 30, 2011 (as
the same may be amended, supplemented, restated or otherwise modified from time to time, the
“Credit Agreement”) among the Borrower, KeyBank National Association, as Agent (the “Agent”) and
each of the Lenders from time to time parties thereto (the “Lenders”), providing for, among other
things, Revolving Credit Loans to the Borrower of up to $71,500,000 (herein, and as defined in the
Credit Agreement, the “Revolving Credit Loans”).



C. The proceeds of the Revolving Credit Loans will be used by Borrower to provide funds (each,
an “Intercompany Loan”) from time to time to each Subsidiary Guarantor (as defined in the Credit
Agreement) to purchase or refinance an Eligible Facility (as defined in the Credit Agreement) that
is owned or operated by such Subsidiary Guarantor.



D. Each Intercompany Loan will be (i) evidenced by an Intercompany Note (as defined in the
Credit Agreement) from each such Subsidiary Guarantor, which Intercompany Note will be assigned
(including an assignment of Grantor’s Intercompany Note contemporaneously herewith) to Agent as
collateral for all of the Revolving Credit Loans and (ii) secured by this Deed of Trust, the rights
of Borrower with respect hereto are being contemporaneously assigned in toto to Beneficiary
pursuant to the assignment contained at the end of this Deed of Trust.



E. Grantor is a Subsidiary Guarantor under that certain Subsidiary Guaranty Agreement dated as
of the date hereof (as supplemented, modified or amended from time to time, the “Subsidiary
Guaranty”) providing a guarantee of all of Borrower’s Obligations (as defined in the Credit
Agreement) under the Loan Documents (as defined in the Credit Agreement).



F. The below defined Property is (on the date hereof) an Eligible Facility.



G. The Agent and the Lenders have required as a condition of their making Revolving Credit
Loans from time to time that the Borrower cause the Grantor to enter into this Deed of Trust, and
the Borrower has agreed to cause the undersigned Grantor to execute this Deed of Trust, in order to
induce the Agent and the Lenders to make the Revolving Credit Loans and thereby benefit the
Borrower and its Subsidiaries by providing funds to the Borrower for the purposes described in
Schedule 2.8 of the Credit Agreement.



Now, therefore, as required by the Credit Agreement and in consideration of the
premises and other good and valuable consideration, the receipt and sufficiency whereof are hereby
acknowledged, Grantor does hereby covenant and agree as follows:



1. Grant and Secured Obligations.



1.1 Grant. For the purpose of securing payment and performance of the Secured
Obligations defined and described in Section 1.2 below, Grantor hereby irrevocably and
unconditionally grants, bargains, sells, conveys, mortgages and warrants to Trustee (for the
benefit and use of Borrower and Beneficiary, as their interests may appear), with power of sale and
with right of entry and possession, all estate, right, title and interest which Grantor now has or
may later acquire in and to the following property (all or any part of such property, or any
interest in all or any part of it, as the context may require, the “Property”):




(a) The real property located in the County of Chesterfield, Commonwealth of Virginia,
as described in Exhibit A, together with all existing and future easements and rights
affording access to it (the “Premises”); together with




(b) All buildings, structures and improvements now located or later to be constructed
on the Premises (the “Improvements”); together with




(c) All existing and future appurtenances, privileges, easements, franchises and
tenements of the Premises, including all minerals, oil, gas, other hydrocarbons and
associated substances, sulphur, nitrogen, carbon dioxide, helium and other commercially
valuable substances which may be in, under or produced from any part of the Premises, all
development rights and credits, air rights, water, water rights (whether riparian,
appropriative or otherwise, and whether or not appurtenant) and water stock, and any
Premises lying in the streets, roads or avenues, open or proposed, in front of or adjoining
the Premises and Improvements; together with




(d) All existing and future leases, subleases, subtenancies, licenses, occupancy
agreements and concessions (“leases”) relating to the use and enjoyment of all or any part
of the Premises and Improvements, and any and all guaranties and other agreements relating
to or made in connection with any of such leases; together with




(e) All real property and improvements thereon, and all appurtenances and other
property and interests of any kind or character, whether described in Exhibit A or not,
which may be reasonably necessary or desirable to promote the present and any reasonable
future beneficial use and enjoyment of the Premises and Improvements; together with




(f) All goods, materials, supplies, chattels, furniture, fixtures, equipment and
machinery now or later to be attached to, placed in or on, or used in connection with the
use, enjoyment, occupancy or operation of all or any part of the Premises and Improvements,
whether stored on the Premises or elsewhere, including all pumping plants, engines, pipes,
ditches and flumes, and also all gas, electric, cooking, heating, cooling, air conditioning,
lighting, refrigeration and plumbing fixtures and equipment, all of which shall be
considered to the fullest extent of the law to be real property for purposes of this Deed of
Trust and any manufacturer’s warranties with respect thereto; together with




(g) All building materials, equipment, work in process or other personal property of
any kind, whether stored on the Premises or elsewhere, which have been or later will be
acquired for the purpose of being delivered to, incorporated into or installed in or about
the Premises or Improvements; together with




(h) All of Grantor’s interest in and to all operating accounts, the Revolving Credit
Loan funds, whether disbursed or not, all reserves set forth in the Budget relating to the
Property, and any other bank accounts of Grantor; together with




(i) All rights to the payment of money, accounts, accounts receivable, reserves,
deferred payments, refunds, cost savings, payments and deposits, whether now or later to be
received from third parties (including all earnest money sales deposits) or deposited by
Grantor with third parties (including all utility deposits), contract rights, development
and use rights, governmental permits and licenses, applications, architectural and
engineering plans, specifications and drawings, as-built drawings, chattel paper,
instruments, documents, notes, drafts and letters of credit (other than letters of credit in
favor of Beneficiary), which arise from or relate to construction on the Premises or to any
business now or later to be conducted on it, or to the Premises and Improvements generally
and any builder’s or manufacturer’s warranties with respect thereto; together with




(j) All insurance policies pertaining to the Premises and all proceeds, including all
claims to and demands for them, of the voluntary or involuntary conversion of any of the
Premises, Improvements or the other property described above into cash or liquidated claims,
including proceeds of all present and future fire, hazard or casualty insurance policies and
all condemnation awards or payments now or later to be made by any public body or decree by
any court of competent jurisdiction for any taking or in connection with any condemnation or
eminent domain proceeding, and all causes of action and their proceeds for any damage or
injury to the Premises, Improvements or the other property described above or any part of
them, or breach of warranty in connection with the construction of the Improvements,
including causes of action arising in tort, contract, fraud or concealment of a material
fact; together with




(k) All books and records pertaining to any and all of the property described above,
including computer-readable memory and any computer hardware or software necessary to access
and process such memory, but not including, to the extent required by applicable laws and
rules concerning resident privacy, resident files (“Books and Records”); together with




(l) All proceeds of, additions and accretions to, substitutions and replacements for,
and changes in any of the property described above.



Capitalized terms used above and elsewhere in this Deed of Trust without definition have the
meanings given them in the above defined Credit Agreement.



1.2 Secured Obligations.




(a) Grantor makes the grant, conveyance, and mortgage set forth in Section 1.1 above,
and grants the security interest set forth in Section 3 below for the purpose of securing
the following obligations (the “Secured Obligations”) in any order of priority that
Beneficiary may choose:




(i) Payment of all obligations at any time owing under (A) the various
promissory notes (the “Note”) dated as of June 30, 2011, payable by Borrower, as
maker in the aggregate principal amount of Seventy-One Million Five Hundred Thousand
and No/100 Dollars ($71,500,000.00) to the order of Lenders, (B) that certain
Intercompany Note of the Grantor dated as of the date hereof payable to Borrower and
assigned to Agent, (C) those certain Intercompany Notes of the other Subsidiary
Guarantors from time to time, as maker(s), payable to Borrower and assigned to Agent
(together with the Note, the “Notes”), and (D) the Subsidiary Guaranty;




(ii) Payment and performance of all Guaranteed Obligations (as defined in the
Subsidiary Guaranty);




(iii) Payment and performance of all obligations of Grantor under this Deed of
Trust;




(iv) Payment and performance of all obligations of Borrower under the Credit
Agreement and the other Loan Documents;




(v) Payment and performance of any obligations of Grantor and the other Loan
Parties (including each other Subsidiary Guarantor) under the other Loan Documents;




(vi) Payment and performance of all future advances and other obligations that
Grantor or any successor in ownership of all or part of the Property may agree to
pay and/or perform (whether as principal, surety or guarantor) for the benefit of
Beneficiary, when a writing evidences the parties’ agreement that the advance or
obligation be secured by this Deed of Trust; and




(vii) Payment and performance of all modifications, amendments, extensions, and
renewals, however evidenced, of any of the Secured Obligations.




(b) All persons who may have or acquire an interest in all or any part of the Property
will be considered to have notice of, and will be bound by, the terms of the Secured
Obligations and each other agreement or instrument made or entered into in connection with
each of the Secured Obligations. Such terms include any provisions in the Notes or the
Credit Agreement which permit borrowing, repayment and reborrowing, or which provide that
the interest rate on one or more of the Secured Obligations may vary from time to time.



2. Assignment of Rents.



2.1 Assignment. Grantor hereby irrevocably, absolutely, presently and unconditionally assigns
to Beneficiary all rents, royalties, issues, profits, revenue, income, accounts, proceeds and other
benefits of the Property, whether now due, past due or to become due, including all prepaid rents
and security deposits (some or all collectively, as the context may require, “Rents”). This is an
absolute assignment, not an assignment for security only.



2.2 Grant of License. Beneficiary hereby confers upon Grantor a license (“License”) to
collect and retain the Rents as they become due and payable, so long as no Event of Default, as
defined in Section 6.2 below, shall exist and be continuing. If an Event of Default has occurred
and is continuing, Beneficiary shall have the right, which it may choose to exercise in its sole
discretion, to terminate this License without notice to or demand upon Grantor, and without regard
to the adequacy of Beneficiary’s security under this Deed of Trust.



2.3 Collection and Application of Rents. Subject to the License granted to Grantor under
Section 2.2 above, Beneficiary has the right, power and authority to collect any and all Rents.
Grantor hereby appoints Beneficiary its attorney-in-fact to perform any and all of the following
acts (if an Event of Default has occurred and is continuing) if and at the times when Beneficiary
in its sole discretion may so choose:




(a) Demand, receive and enforce payment of any and all Rents; or




(b) Give receipts, releases and satisfactions for any and all Rents; or




(c) Sue either in the name of Grantor or in the name of Beneficiary for any and all
Rents.



Beneficiary and Grantor agree that the mere recordation of the assignment granted herein entitles
Beneficiary immediately to collect and receive rents upon the occurrence (and during the
continuance) of an Event of Default without first taking any acts of enforcement under applicable
law, such as, but not limited to, providing notice to Grantor, filing foreclosure proceedings, or
seeking and/or obtaining the appointment of a receiver. Further, Beneficiary’s right to the Rents
does not depend on whether or not Beneficiary takes possession of the Property as permitted under
Subsection 6.3(c). In Beneficiary’s sole discretion, Beneficiary may choose to collect Rents
either with or without taking possession of the Property. Beneficiary shall apply all Rents
collected by it in the manner provided under Section 6.6. If an Event of Default occurs while
Beneficiary is in possession of all or part of the Property and is collecting and applying Rents as
permitted under this Deed of Trust, Beneficiary and any receiver shall nevertheless be entitled to
exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law
or in equity.



2.4 Beneficiary Not Responsible. Under no circumstances shall Beneficiary have any duty to
produce Rents from the Property. Regardless of whether or not Beneficiary, in person or by agent,
takes actual possession of the Premises and Improvements, unless Beneficiary agrees in writing to
the contrary, Beneficiary is not and shall not be deemed to be:




(a) A “mortgagee in possession” for any purpose; or




(b) Responsible for performing any of the obligations of the lessor under any lease; or




(c) Responsible for any waste committed by lessees or any other parties, any dangerous
or defective condition of the Property, or any negligence in the management, upkeep, repair
or control of the Property; or




(d) Liable in any manner for the Property or the use, occupancy, enjoyment or operation
of all or any part of it.



2.5 Leasing. Grantor shall not accept any deposit or prepayment of rents under the leases for
any rental period exceeding one (1) month without Beneficiary’s prior written consent, which shall
not be unreasonably withheld, delayed or conditioned. Grantor shall not lease the Property or any
part of it except strictly in accordance with the Credit Agreement.



3. Grant of Security Interest.



3.1 Security Agreement. The parties intend for this Deed of Trust to create a lien on the
Property, and an absolute assignment of the Rents, all in favor of Beneficiary. The parties
acknowledge that some of the Property and some or all of the Rents may be determined under
applicable law to be personal property or fixtures. To the extent that any Property or Rents may
be or be determined to be personal property, Grantor as debtor hereby grants Beneficiary as secured
party a security interest in all such Property and Rents, to secure payment and performance of the
Secured Obligations. This Deed of Trust constitutes a security agreement under the Uniform
Commercial Code of the State in which the Property is located, covering all such Property and
Rents.



3.2 Financing Statements. Grantor hereby authorizes Beneficiary to file one or more financing
statements. In addition, Grantor shall execute such other documents as Beneficiary may from time
to time reasonably require to perfect or continue the perfection of Beneficiary’s security interest
in any Property or Rents. As provided in Section 5.9 below, Grantor shall pay all fees and costs
that Beneficiary may incur in filing such documents in public offices and in obtaining such record
searches as Beneficiary may reasonably require. In case Grantor fails to execute any financing
statements or other documents for the perfection or continuation of any security interest, Grantor
hereby appoints Beneficiary as its true and lawful attorney-in-fact to execute any such documents
on its behalf. If any financing statement or other document is filed in the records normally
pertaining to personal property, that filing shall never be construed as in any way derogating from
or impairing this Deed of Trust or the rights or obligations of the parties hereunder.



4. Fixture Filing.



This Deed of Trust constitutes a financing statement filed as a fixture filing under Article 9
of the Uniform Commercial Code in the State in which the Property is located, as amended or
recodified from time to time, covering any Property which now is or later may become fixtures
attached to the Premises or Improvements. For this purpose, the respective addresses of Grantor,
as debtor, and Beneficiary and Trustee, as secured parties, are as set forth in the preamble of
this Deed of Trust and Grantor’s organizational number is:       .



5. Rights and Duties of the Parties.



5.1 Representations and Warranties. Grantor represents and warrants that:




(a) Grantor lawfully possesses and holds fee simple title to all of the Premises and
Improvements;




(b) Grantor has or will have good title to all Property other than any portion thereof
that is personal property owned by any tenant;




(c) Grantor has the full and unlimited power, right and authority to encumber the
Property and assign the Rents;




(d) This Grantor creates a first and prior lien on the Property subject only to
Permitted Liens;




(e) The Property includes all property and rights which may be reasonably necessary or
desirable to promote the present and any reasonable future beneficial use and enjoyment of
the Premises and Improvements;




(f) Except for any portion thereof that is personal property owned by any tenant,
Grantor owns any Property which is personal property free and clear of any security
agreements, reservations of title or conditional sales contracts, and there is no financing
statement affecting such personal property on file in any public office;




(g) Grantor expects to derive a direct benefit (and its board of directors or other
governing body had determined that it may reasonably be expected to derive such benefit)
from: (1) the Revolving Credit Loans and the Intercompany Loans to finance its business;
(2) the successful operations of Borrower and each other Subsidiary Guarantor individually
and as a group; (3) its rights of contribution and subrogation against the Borrower and each
other Subsidiary Guarantor as provided in the Subsidiary Guaranty or under applicable law;
and (4) the Credit Agreement and the other Loan Documents; and




(h) Grantor’s place of business, or its chief executive office if it has more than one
place of business, is located at the address specified below.



5.2 Taxes, and Assessments. Grantor shall pay prior to delinquency all taxes, levies, charges
and assessments, in accordance with Section 6.6 of the Credit Agreement.



5.3 Performance of Secured Obligations. Grantor shall promptly pay and perform each Secured
Obligation to be performed by it under the Loan Documents in accordance with its terms.



5.4 Liens, Charges and Encumbrances. Grantor shall immediately discharge any lien on the
Property that is not a Permitted Lien and which Beneficiary has not otherwise consented to in
writing in accordance with the terms of Section 7.2 of the Credit Agreement.



5.5 Damages and Insurance and Condemnation Proceeds. In the event of any casualty or
condemnation of the Property, the provisions of Section 6.17 of the Credit Agreement shall govern.



5.6 Maintenance and Preservation of Property.




(a) Grantor shall insure (or cause its tenant to insure) the Property as more
specifically required by the Credit Agreement and keep the Property in good condition and
repair.




(b) Grantor shall not remove or demolish the Property or any part of it, or materially
alter, restore or add to the Property, or initiate or allow any change or variance in any
zoning or other Premises use classification which materially and adversely affects the
Property or any part of it, except as permitted or required by the Credit Agreement or with
Beneficiary’s express prior written consent in each instance, which consent shall not be
unreasonably withheld, delayed or conditioned.




(c) If all or part of the Property becomes damaged or destroyed, Grantor shall promptly
and completely repair and/or restore the Property in a good and workmanlike manner in
accordance with (and as required by) the Credit Agreement.




(d) Grantor shall not commit or allow any act upon or use of the Property which would
violate (i) any applicable Laws or order of any Governmental Authority, whether now existing
or later to be enacted and whether foreseen or unforeseen, in any material adverse manner;
or (ii) any public or private covenant, condition, restriction or equitable servitude
affecting the Property. Grantor shall not bring or keep any article on the Property or
cause or allow any condition to exist on it, if that could invalidate or would be prohibited
by any insurance coverage required to be maintained by Grantor on the Property or any part
of it under the Credit Agreement.




(e) Grantor shall not commit or allow waste of the Property, including those acts or
omissions characterized under the Credit Agreement as waste which arises out of Hazardous
Material.




(f) Grantor shall perform (or cause to be performed) all other acts which from the
character or use of the Property may be reasonably necessary to maintain and preserve its
value.



5.7 Releases, Extensions, Modifications and Additional Security. From time to time,
Beneficiary may perform any of the following acts without incurring any liability or giving notice
to any person:




(a) Release any person liable for payment of the Secured Obligations;




(b) Extend the time for payment, or otherwise alter the terms of payment, of the
Secured Obligations;




(c) Accept additional real or personal property of any kind as security for the Secured
Obligations, whether evidenced by deeds of trust, mortgages, security agreements or any
other instruments of security;




(d) Alter, substitute or release any property securing the Secured Obligations;




(e) Consent to the making of any plat or map of the Property or any part of it;




(f) Join in granting any easement or creating any restriction affecting the Property;
or




(g) Join in any subordination or other agreement affecting this Deed of Trust or the
lien of it; or




(h) Release the Property or any part of it.



5.8 Release. When the Secured Obligations (or such sums as required by Section 2.5(f) of the
Credit Agreement) have been paid in full and all fees and other sums owed by Grantor under Section
5.9 of this Deed of Trust by Grantor and the other Loan Parties under the other Loan Documents have
been received (and subject to the terms and conditions of Section 7.7 of the Credit Agreement),
Beneficiary and Trustee shall release this Deed of Trust, the lien created thereby, and all notes
and instruments evidencing the Secured Obligations. In such event, Beneficiary and Trustee shall,
at the request of Grantor, deliver to Grantor, in recordable form, all such documents as shall be
reasonably necessary to release this Deed of Trust and all liens, security interests, conveyances
and assignments created hereunder. Grantor shall pay any costs of preparation and recordation of
such release.



5.9 Compensation, Exculpation, Indemnification.




(a) Grantor agrees to pay a reasonable fee for any services that Beneficiary may render
in connection with this Deed of Trust, including Beneficiary’s providing a statement of the
Secured Obligations (but specifically excluding a fee, but not reimbursement for costs or
expenses, for providing the release pursuant to Section 5.8 above). Grantor shall also pay
or reimburse all of Beneficiary’s and Trustee’s reasonable out-of-pocket costs and expenses
which may be incurred in rendering any such services. Grantor further agrees to pay or
reimburse Beneficiary for all actual, reasonable, out-of-pocket costs, expenses and other
advances which may be incurred or made by Beneficiary in any efforts to enforce any terms of
this Deed of Trust, including any rights or remedies afforded to Beneficiary and Trustee
under Section 6.3, whether any lawsuit is filed or not, or in defending any action or
proceeding arising under or relating to this Deed of Trust, including attorneys’ fees and
other legal costs, costs of any Foreclosure Sale (as defined in Subsection 6.3(i) below) and
any cost of evidence of title. If Beneficiary and/or Trustee, as required by applicable
law, chooses to dispose of Property through more than one Foreclosure Sale, Grantor shall
pay all costs, expenses or other advances that may be incurred or made by Beneficiary and/or
Trustee in each of such Foreclosure Sales. In any suit to foreclose the lien hereof or
enforce any other remedy of Trustee or Beneficiary under this Deed of Trust or the Note,
there shall be allowed and included as additional indebtedness in the decree for sale or
other judgment or decree all expenditures and expenses which may be paid or incurred by or
on behalf of Trustee or Beneficiary for reasonable attorneys’ costs and fees (including the
costs and fees of paralegals), survey charges, appraiser’s fees, inspecting engineer’s
and/or architect’s fees, fees for environmental studies and assessments and all additional
expenses incurred by Trustee and Beneficiary with respect to environmental matters, outlays
for documentary and expert evidence, stenographers’ charges, publication costs, and costs
(which may be estimated as to items to be expended after entry of the decree) of procuring
all such abstracts of title, title searches and examinations, title insurance policies and
similar data and assurances with respect to title as Trustee and Beneficiary may deem
reasonably necessary either to prosecute such suit or to evidence to bidders at any sale
which may be had pursuant to such decree the true condition of the title to, the value of
or the environmental condition of the Property. All expenditures and expenses of the nature
in this Subsection mentioned, and such expenses and fees as may be incurred in the
protection of the Property and maintenance of the lien of this Deed of Trust, including the
fees of any attorney (including the costs and fees of paralegals) employed by Trustee or
Beneficiary in any litigation or proceeding affecting this Deed of Trust, the Notes or the
Property, including probate and bankruptcy proceedings, or in preparation for the
commencement or defense of any proceeding or threatened suit or proceeding, shall be
immediately due and payable by Grantor, with interest thereon at the Default Rate and shall
be secured by this Deed of Trust.




(b) Neither Beneficiary nor Trustee shall be directly or indirectly liable to Grantor
or any other person as a consequence of any of the following:




(i) Beneficiary’s or Trustee’s exercise of or failure to exercise any rights,
remedies or powers granted to Beneficiary and/or Trustee in this Deed of Trust;




(ii) Beneficiary’s or Trustee’s failure or refusal to perform or discharge any
obligation or liability of Grantor under any agreement related to the Property or
under this Deed of Trust; or




(iii) Any loss sustained by Grantor or any third party resulting from
Beneficiary’s failure to lease the Property, or from any other act or omission of
Beneficiary in managing the Property, during the continuance of an Event of Default,
unless the loss is caused by the gross negligence, willful misconduct or bad faith
of Beneficiary.




Grantor hereby expressly waives and releases all liability of the types described above, and
agrees that no such liability shall be asserted against or imposed upon Beneficiary or
Trustee.




(c) Grantor agrees to indemnify Beneficiary and Trustee against and hold them harmless
from all losses, damages, liabilities, claims, causes of action, judgments, court costs,
attorneys’ fees and other legal expenses, cost of evidence of title, cost of evidence of
value, and other costs and expenses which they may suffer or incur:




(i) In performing any act required or permitted by this Deed of Trust or any of
the other Loan Documents or by law;




(ii) Because of any failure of Guarantor to perform any of its obligations
under this Deed of Trust or the other Loan Documents; or




(iii) Because of any alleged obligation of or undertaking by Beneficiary and/or
Trustee to perform or discharge any of the representations, warranties, conditions,
covenants or other obligations in any document relating to the Property other than
the Loan Documents, unless this loss is caused by the gross negligence, willful
misconduct or bad faith of Beneficiary.




This agreement by Grantor to indemnify Beneficiary and Trustee shall survive the release and
cancellation of any or all of the Secured Obligations and the full or partial release of
this Deed of Trust.




(d) Grantor shall pay all obligations to pay money arising under this Section 5.9
promptly upon demand by Beneficiary. Each such obligation shall be added to, and considered
to be part of, the principal of the Note, and shall bear interest from the date the
obligation arises at the Default Rate.



5.10 Defense and Notice of Claims and Actions. At Grantor’s sole expense, Grantor shall
protect, preserve and defend the Property and title to and right of possession of the Property, and
the security of this Deed of Trust and the rights and powers of Beneficiary created under it,
against all adverse claims. Grantor shall give Beneficiary prompt notice in writing if any claim
is asserted which does or could materially affect any such matters, or if any action or proceeding
is commenced which alleges or relates to any such claim.



5.11 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether
released of record or not, which are discharged in whole or in part by Beneficiary in accordance
with this Deed of Trust or with the proceeds of any loan secured by this Deed of Trust.



5.12 Site Visits, Observation and Testing. Beneficiary and its agents and representatives
shall have the right at any reasonable time (subject to rights of tenants to quiet enjoyment under
applicable leases) to enter and visit the Property for the purpose of performing appraisals,
observing the Property, taking and removing soil or groundwater samples, and conducting tests on
any part of the Property. Beneficiary has no duty, however, to visit or observe the Property or to
conduct tests, and no site visit, observation or testing by Beneficiary, its agents or
representatives shall impose any liability on any of Beneficiary, its agents or representatives.
In no event shall any site visit, observation or testing by Beneficiary, its agents or
representatives be a representation that Hazardous Material are or are not present in, on or under
the Property, or that there has been or shall be compliance with any law, regulation or ordinance
pertaining to Hazardous Material or any other applicable governmental law. Neither Grantor nor any
other party is entitled to rely on any site visit, observation or testing by any of Beneficiary,
its agents or representatives. Neither Beneficiary, its agents or representatives owe any duty of
care to protect Grantor or any other party against, or to inform Grantor or any other party of, any
Hazardous Material or any other adverse condition affecting the Property. Beneficiary shall give
Grantor reasonable advance notice before entering the Property. Beneficiary shall make reasonable
efforts to avoid interfering with Grantor’s use of the Property in exercising any rights provided
in this Section 5.12.



5.13 Notice of Change. Grantor shall give Beneficiary prior written notice of any change in
(a) the location of its place of business or its chief executive office if it has more than one
place of business; (b) the location of any of the Property, including the Books and Records; and
(c) Grantor’s name, business structure or jurisdiction of organization. Unless otherwise approved
by Beneficiary in writing, all Property that consists of personal property (other than the Books
and Records) will be located on the Premises and all Books and Records will be located at Grantor’s
place of business or chief executive office if Grantor has more than one place of business.



6. Accelerating Transfers, Default and Remedies.



6.1 Accelerating Transfers.




(a) “Accelerating Transfer” means any transfer not expressly permitted under Sections
7.7 or 10.12 of the Credit Agreement.




(b) Grantor acknowledges that Lenders are making one or more advances under the Credit
Agreement in reliance on the expertise, skill and experience of Grantor. In consideration
of Beneficiary’s reliance, Grantor agrees that Grantor shall not make any Accelerating
Transfer, unless the transfer is preceded by Beneficiary’s express written consent to the
particular transaction and transferee. Beneficiary may withhold such consent in its sole
discretion. If any Accelerating Transfer occurs, Beneficiary in its sole discretion may
declare all of the Secured Obligations to be immediately due and payable, and Beneficiary
may invoke any rights and remedies provided by Section 6.3 of this Deed of Trust.



6.2 Events of Default. Grantor will be in default under this Deed of Trust upon the
occurrence of any “Event of Default” under the Credit Agreement or any other Loan Document.



6.3 Remedies. At any time after an Event of Default, Beneficiary shall be entitled to invoke
any and all of the rights and remedies described below, in addition to all other rights and
remedies available to Beneficiary at law or in equity. All of such rights and remedies shall be
cumulative, and the exercise of any one or more of them shall not constitute an election of
remedies.




(a) Acceleration. Beneficiary may declare any or all of the Secured Obligations to be
due and payable immediately without presentment, notice, protest or demand (that is, this
Deed of Trust is “subject to call upon default” as that phrase is construed under Section
55-60(4) of the Code of Virginia, as amended).




(b) Receiver. Beneficiary shall, as a matter of right, without notice and without
giving bond to Grantor or anyone claiming by, under or through Grantor, and without regard
for the solvency or insolvency of Grantor or the then value of the Property, to the extent
permitted by applicable law, be entitled to have a receiver appointed for all or any part of
the Property and the Rents, and the proceeds, issues and profits thereof, with the rights
and powers referenced below and such other rights and powers as the court making such
appointment shall confer, and Grantor hereby consents to the appointment of such receiver
and shall not oppose any such appointment. Such receiver shall have all powers and duties
prescribed by applicable law, all other powers which are necessary or usual in such cases
for the protection, possession, control, management and operation of the Property, and such
rights and powers as Beneficiary would have, upon entering and taking possession of the
Property under subsection (c) below.




(c) Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter,
take possession of, manage and operate all or any part of the Property, and may also do any
and all other things in connection with those actions that Beneficiary may in its sole
discretion consider necessary and appropriate to protect the security of this Deed of
Trust. Such other things may include: taking and possessing all of Grantor’s or the then
owner’s Books and Records; entering into, enforcing, modifying or canceling leases on such
terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants;
fixing or modifying Rents; collecting and receiving any payment of money owing to
Beneficiary; completing any unfinished construction; and/or contracting for and making
repairs and alterations. If Beneficiary so requests, Grantor shall assemble all of the
Property that has been removed from the Premises and make all of it available to Beneficiary
at the site of the Premises. Grantor hereby irrevocably constitutes and appoints
Beneficiary as Grantor’s attorney-in-fact to perform such acts and execute such documents as
Beneficiary in its sole discretion may consider to be appropriate in connection with taking
these measures, including endorsement of Grantor’s name on any instruments.




(d) Cure; Protection of Security. Beneficiary may cure any breach or default of
Grantor, and if it chooses to do so in connection with any such cure, Beneficiary may also
enter the Property and/or do any and all other things which it may in its sole discretion
consider necessary and appropriate to protect the security of this Deed of Trust, including,
without limitation, completing construction of the improvements at the Property contemplated
by the Credit Agreement. Such other things may include: appearing in and/or defending any
action or proceeding which purports to affect the security of, or the rights or powers of
Beneficiary under, this Deed of Trust; paying, purchasing, contesting or compromising any
encumbrance, charge, lien or claim of lien which in Beneficiary’s sole judgment is or may be
senior in priority to this Deed of Trust, such judgment of Beneficiary or to be conclusive
as among the parties to this Deed of Trust; obtaining insurance and/or paying any premiums
or charges for insurance required to be carried under the Credit Agreement; otherwise caring
for and protecting any and all of the Property; and/or employing counsel, accountants,
contractors and other appropriate persons to assist Beneficiary. Beneficiary may take any
of the actions permitted under this Subsection 6.3(d) either with or without giving notice
to any person. Any amounts expended by Beneficiary under this Subsection 6.3(d) shall be
secured by this Deed of Trust.




(e) Uniform Commercial Code Remedies. Beneficiary may exercise any or all of the
remedies granted to a secured party under the Uniform Commercial Code in the State in which
the Property is located.




(f) Foreclosure; Lawsuits. Beneficiary shall have the right, in one or several
concurrent or consecutive proceedings, to foreclose the lien hereof upon the Property or any
part thereof, for the Secured Obligations, or any part thereof, by any proceedings
appropriate under applicable law. Beneficiary or its nominee may bid and become the
purchaser of all or any part of the Property at any foreclosure or other sale hereunder, and
the amount of Beneficiary’s successful bid shall be credited on the Secured Obligations.
Without limiting the foregoing, Beneficiary may proceed by a suit or suits in law or equity,
whether for specific performance of any covenant or agreement herein contained or in aid of
the execution of any power herein granted, or for any foreclosure under the judgment or
decree of any court of competent jurisdiction. In addition to the right provided in
Subsection 6.3(a), upon, or at any time after the filing of a complaint to foreclose this
Deed of Trust, Trustee and Beneficiary shall be entitled to the appointment of a receiver of
the property by the court in which such complaint is filed, and Grantor hereby consents to
such appointment.




(g) Other Remedies. Beneficiary may exercise all rights and remedies contained in any
other instrument, document, agreement or other writing heretofore, concurrently or in the
future executed by Grantor or any other person or entity in favor of Beneficiary in
connection with the Secured Obligations or any part thereof, without prejudice to the right
of Beneficiary thereafter to enforce any appropriate remedy against Grantor. Beneficiary
shall have the right to pursue all remedies afforded to a lender or secured party under
applicable law, and shall have the benefit of all of the provisions of such applicable law,
including all amendments thereto which may become effective from time to time after the date
hereof.




(h) Sale of Personal Property. Beneficiary and/or Trustee, as required by applicable
law, shall have the discretionary right to cause some or all of the Property, which
constitutes personal property (but excluding the personal property of any of the patients or
residents of the Property), to be sold or otherwise disposed of in any combination and in
any manner permitted by applicable law.




(i) For purposes of this power of sale, Beneficiary and/or Trustee, as required
by applicable law, may elect to treat as personal property any Property which is
intangible or which can be severed from the Premises or Improvements without causing
structural damage. If it chooses to do so, Beneficiary and/or Trustee, as required
by applicable law, may dispose of any personal property, in any manner permitted by
Article 9 of the Uniform Commercial Code of the State in which the Property is
located, including any public or private sale, or in any manner permitted by any
other applicable law.




(ii) In connection with any sale or other disposition of such Property, Grantor
agrees that the following procedures constitute a commercially reasonable sale:
Beneficiary shall mail written notice of the sale to Grantor not later than thirty
(30) days prior to such sale. Beneficiary will publish notice of the sale in a
local daily newspaper of general circulation. Upon receipt of any written request,
Beneficiary will make the Property available to any bona fide prospective purchaser
for inspection during reasonable business hours. Notwithstanding the foregoing,
Beneficiary shall be under no obligation to consummate a sale if, in its judgment,
none of the offers received by it equals the fair value of the Property offered for
sale. The foregoing procedures do not constitute the only procedures that may be
commercially reasonable.




(i) Single or Multiple Foreclosure Sales. If the Property consists of more than one
lot, parcel or item of property, Beneficiary and/or Trustee, as required by applicable law,
may:




(i) Designate the order in which the lots, parcels and/or items shall be sold
or disposed of or offered for sale or disposition; and




(ii) Elect to dispose of the lots, parcels and/or items through a single
consolidated sale or disposition to be held or made under or in connection with
judicial proceedings, or by virtue of a judgment and decree of foreclosure and sale;
or through two or more such sales or dispositions; or in any other manner
Beneficiary may deem to be in its best interests (any such sale or disposition, a
“Foreclosure Sale;” and any two or more, “Foreclosure Sales”).



If Beneficiary chooses to have more than one Foreclosure Sale, Beneficiary at its option may
cause the Foreclosure Sales to be held simultaneously or successively, on the same day, or on such
different days and at such different times and in such order as Beneficiary may deem to be in its
best interests. No Foreclosure Sale shall terminate or affect the liens of this Deed of Trust on
any part of the Property which has not been sold, until all of the Secured Obligations have been
paid in full.



6.4 Credit Bids. At any Foreclosure Sale, any person, including Grantor or Beneficiary, may
bid for and acquire the Property or any part of it to the extent permitted by then applicable law.
Instead of paying cash for such property, Beneficiary may settle for the purchase price by
crediting the sales price of the property against the following obligations:




(a) First, the portion of the Secured Obligations attributable to the expenses of sale,
costs of any action and any other sums for which Grantor is obligated to pay or reimburse
Beneficiary and Trustee under Section 5.9 above; and




(b) Second, all other Secured Obligations in any order and proportions as Beneficiary
in its sole discretion may choose.



6.5 Application of Foreclosure Sale Proceeds. Beneficiary shall apply the proceeds of any
Foreclosure Sale in the following manner:




(a) First, to pay the portion of the Secured Obligations attributable to the expenses
of sale, costs of any action and any other sums for which Grantor is obligated to reimburse
Beneficiary or Trustee under Section 5.9 of this Deed of Trust;




(b) Second, to pay the portion of the Secured Obligations attributable to any sums
expended or advanced by Beneficiary under the terms of this Deed of Trust which then remain
unpaid;




(c) Third, to pay all other Secured Obligations in any order and proportions as
Beneficiary in its sole discretion may choose; and




(d) Fourth, to remit the remainder, if any, to the Grantor (or as a court of competent
jurisdiction may otherwise order).



6.6 Application of Rents and Other Sums. Beneficiary shall apply any and all Rents collected
by it, and any and all sums other than proceeds of a Foreclosure Sale which Beneficiary may receive
or collect under Section 6.3 above, in the following manner:




(a) First, to pay the portion of the Secured Obligations attributable to the costs and
expenses of operation and collection that may be incurred by Beneficiary or any receiver;




(b) Second, to pay all other Secured Obligations in any order and proportions as
Beneficiary in its sole discretion may choose; and




(c) Third, to remit the remainder, if any, to the Grantor (or as a court of competent
jurisdiction may otherwise order).



Beneficiary shall have no liability for any funds which it does not actually receive.



7. The Trustee.



7.1 Certain Rights. With the approval of Beneficiary, Trustee shall have the right to take any
and all of the following actions: (i) to select, employ and consult with counsel (who may be, but
need not be, counsel for Beneficiary) upon any matters requiring Trustee’s action or consent
hereunder, including the preparation, execution and interpretation of the Loan Documents, and shall
be fully protected in relying as to legal matters on the advice of counsel, (ii) to execute any of
the trusts and powers hereof and to perform any duty hereunder either directly or through his or
her agents or attorneys, (iii) to select and employ, in and about the execution of his or her
duties hereunder, suitable accountants, engineers and other experts, agents and attorneys-in-fact,
either corporate or individual, not regularly in the employ of Trustee (and Trustee shall not be
answerable for any act, default, negligence, or misconduct of any such accountant, engineer or
other expert, agent or attorney-in-fact, if selected with reasonable care, or for any error of
judgment or act done by Trustee in good faith, or be otherwise responsible or accountable under any
circumstances whatsoever, except for Trustee’s gross negligence or bad faith), and (iv) any and all
other lawful action that Beneficiary may instruct Trustee to take to protect or enforce
Beneficiary’s rights hereunder. Trustee shall not be personally liable in case of entry by
Trustee, or anyone entering by virtue of the powers herein granted to Trustee, upon the Premises
for debts contracted for or liability or damages incurred in the management or operation of the
Premises. Trustee shall have the right to rely on any instrument, document, or signature
authorizing or supporting any action taken or proposed to be taken by Trustee hereunder, believed
by Trustee in good faith to be genuine. Trustee shall be entitled to reimbursement for customary
and reasonable expenses incurred by Trustee in the performance of Trustee’s duties hereunder and to
reasonable compensation for such of Trustee’s services hereunder as shall be rendered. Grantor
will, from time to time, pay the compensation due to Trustee hereunder and reimburse Trustee for,
and save and hold Trustee harmless against, any and all liability and expenses which may be
incurred by Trustee in the performance of Trustee’s duties. Notwithstanding the terms of this
Section 7.1, the Grantor shall not be required to indemnify Trustee under this Section 7.1 for any
matters indemnified hereunder to the extent arising or resulting from the willful misconduct or
gross negligence of Trustee (or that of its agents, employees or contractors)



7.2 Retention of Money. All moneys received by Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, and shall be segregated
from any other moneys of Trustee.



7.3 Successor Trustees. Trustee may resign by the giving of notice of such resignation in
writing to Beneficiary. If Trustee shall die, resign or become disqualified from acting in the
execution of this trust, or if, for any reason, Beneficiary, in Beneficiary’s sole discretion and
with or without cause, shall prefer to appoint a substitute trustee or multiple substitute
trustees, or successive substitute trustees or successive multiple substitute trustees, to act
instead of the aforenamed Trustee, Beneficiary shall have full power to appoint a substitute
trustee (or, if preferred, multiple substitute trustees) in succession who shall succeed (and if
multiple substitute trustees are appointed, each of such multiple substitute trustees shall
succeed) to all the estates, rights, powers and duties of the aforenamed Trustee. Such appointment
may be executed by any authorized agent of Beneficiary, and if such Beneficiary be a corporation
and such appointment be executed on its behalf by any officer of such corporation, such appointment
shall be conclusively presumed to be executed with authority and shall be valid and sufficient
without proof of any action by the board of directors or any superior officer of the corporation.
Grantor hereby ratifies and confirms any and all acts which the aforenamed Trustee, or his or her
successor or successors in this trust, shall do lawfully by virtue hereof. If multiple substitute
trustees are appointed, each of such multiple substitute trustees shall be empowered and authorized
to act alone without the necessity of the joinder of the other multiple substitute trustees,
whenever any action or undertaking of such substitute trustees is requested or required under or
pursuant to this Deed of Trust or applicable law. Any prior election to act jointly or severally
shall not prevent either or both of such multiple substitute Trustees from subsequently executing,
jointly or severally, any or all of the provisions hereof.



7.4 Perfection of Appointment. Should any deed, conveyance, or instrument of any nature be
required from Grantor by any Trustee or substitute Trustee to more fully and certainly vest in and
confirm to Trustee or substitute Trustee such estates, rights, powers, and duties, then, upon
request by Trustee or substitute trustee, any and all such deeds, conveyances and instruments shall
be made, executed, acknowledged, and delivered and shall be caused to be recorded and/or filed by
Grantor.



7.5 Succession Instruments. Any substitute trustee appointed pursuant to any of the
provisions hereof shall, without any further act, deed or conveyance, become vested with all the
estates, properties, rights, powers, and trusts of its, his or her predecessor in the rights
hereunder with like effect as if originally named as Trustee herein; but nevertheless, upon the
written request of Beneficiary or of the substitute trustee, the Trustee ceasing to act shall
execute and deliver any instrument transferring to such substitute trustee, upon the trusts herein
expressed, all the estates, properties, rights, powers, and trusts of the Trustee so ceasing to
act, and shall duly assign, transfer and deliver any of the property and moneys held by such
Trustee to the substitute trustee so appointed in such Trustee’s place.



7.6 No Representation by Trustee or Beneficiary. By accepting or approving anything required
to be observed, performed, or fulfilled or to be given to Trustee or Beneficiary pursuant to the
Loan Documents, neither Trustee nor Beneficiary shall be deemed to have warranted, consented to, or
affirmed the sufficiency, legality, effectiveness or legal effect of the same, or of any term,
provision, or condition thereof, and such acceptance or approval thereof shall not be or constitute
any warranty or affirmation with respect thereto by Trustee or Beneficiary.



8. Miscellaneous Provisions.



8.1 Additional Provisions. The Loan Documents fully state all of the terms and conditions of
the parties’ agreement regarding the matters mentioned in or incidental to this Deed of Trust. The
Loan Documents also grant further rights to Beneficiary and contain further agreements and
affirmative and negative covenants by Grantor which apply to this Deed of Trust and to the
Property.



8.2 No Waiver or Cure.




(a) Each waiver by Beneficiary must be in writing, and no waiver shall be construed as
a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary to
take action on account of any default of Grantor. Consent by Beneficiary to any act or
omission by Grantor shall not be construed as a consent to any other or subsequent act or
omission or to waive the requirement for Beneficiary’s consent to be obtained in any future
or other instance.




(b) If any of the events described below occurs, that event alone shall not: cure or
waive any breach, Event of Default or notice of default under this Deed of Trust or
invalidate any act performed pursuant to any such default or notice; or nullify the effect
of any notice of default or sale (unless all Secured Obligations then due have been paid and
performed and all other defaults under the Loan Documents have been cured); or impair the
security of this Deed of Trust; or prejudice Beneficiary or any receiver in the exercise of
any right or remedy afforded any of them under this Deed of Trust; or be construed as an
affirmation by Beneficiary of any tenancy, lease or option, or a subordination of the lien
of this Deed of Trust.




(i) Trustee or Beneficiary, its agent or a receiver takes possession of all or
any part of the Property in the manner provided in Subsection 6.3(c).




(ii) Beneficiary collects and applies Rents as permitted under Sections 2.3 and
6.6 above, either with or without taking possession of all or any part of the
Property.




(iii) Beneficiary or Trustee receives and applies to any Secured Obligation any
proceeds of any Property, including any proceeds of insurance policies, condemnation
awards, or other claims, property or rights assigned to Beneficiary under
Section 5.5 above.




(iv) Beneficiary makes a site visit, observes the Property and/or conducts
tests as permitted under Section 5.12 above.




(v) Beneficiary or Trustee receives any sums under this Deed of Trust or any
proceeds of any collateral held for any of the Secured Obligations, and applies them
to one or more Secured Obligations.




(vi) Beneficiary, Trustee or any receiver invokes any right or remedy provided
under this Deed of Trust.



8.3 Powers of Beneficiary.




(a) If Beneficiary performs any act which it is empowered or authorized to perform
under this Deed of Trust, including any act permitted by Section 5.7 or Subsection 6.3(d) of
this Deed of Trust, that act alone shall not release or change the personal liability of any
person for the payment and performance of the Secured Obligations then outstanding, or the
lien of this Deed of Trust on all or the remainder of the Property for full payment and
performance of all outstanding Secured Obligations. The liability of the original Grantor
shall not be released or changed if Beneficiary grants any successor in interest to Grantor
any extension of time for payment, or modification of the terms of payment, of the Secured
Obligations. Beneficiary shall not be required to comply with any demand by the original
Grantor that Beneficiary refuse to grant such an extension or modification to, or commence
proceedings against, any such successor in interest.




(b) Beneficiary may take any of the actions permitted under Subsections 6.3(b) and/or
6.3(c) regardless of the adequacy of the security for the Secured Obligations, or whether
any or all of the Secured Obligations have been declared to be immediately due and payable,
or whether notice of default and election to sell has been given under this Deed of Trust.




(c) From time to time, Beneficiary may apply to any court of competent jurisdiction for
aid and direction in executing and enforcing the rights and remedies created under this Deed
of Trust. Beneficiary may from time to time obtain orders or decrees directing, confirming
or approving acts in executing and enforcing these rights and remedies.



8.4 Merger. No merger shall occur as a result of Beneficiary’s acquiring any other estate in
or any other lien on the Property unless Beneficiary consents to a merger in writing.



8.5 [Intentionally Omitted].



8.6 Applicable Law. The creation, perfection and enforcement of the lien of this Deed of Trust
shall be governed by the law of the Commonwealth of Virginia. Subject to the foregoing, in all
other respects, this Deed of Trust shall be governed by the internal laws of the State of New York
applicable to contracts made and to be performed entirely within such State, without regard to
conflict of laws principles except Title 14 of Article 5 of the New York General Obligations Law.



8.7 Successors in Interest. The terms, covenants and conditions of this Deed of Trust shall
be binding upon and inure to the benefit of the heirs, successors and assigns of the parties.
However, this Section 8.7 does not waive the provisions of Section 6.1 above.



8.8 Interpretation.




(a) Whenever the context requires, all words used in the singular will be construed to
have been used in the plural, and vice versa, and each gender will include any other gender.
The captions of the sections of this Deed of Trust are for convenience only and do not
define or limit any terms or provisions. The word “include(s)” means “include(s), without
limitation,” and the word “including” means “including, but not limited to.”




(b) The word “obligations” is used in its broadest and most comprehensive sense, and
includes all primary, secondary, direct, indirect, fixed and contingent obligations. It
further includes all principal, interest, prepayment charges, late charges, loan fees and
any other fees and charges accruing or assessed at any time, as well as all obligations to
perform acts or satisfy conditions.




(c) No listing of specific instances, items or matters in any way limits the scope or
generality of any language of this Deed of Trust. The Exhibits to this Deed of Trust are
hereby incorporated in this Deed of Trust.



8.9 [Intentionally Omitted].



8.10 Waiver of Statutory Rights. To the extent permitted by law, Grantor hereby agrees that
it shall not and will not apply for or avail itself of any appraisement, valuation, stay, extension
or exemption laws (including, without limitation, Section 55-60(3) of the Code of Virginia), or any
so-called “Moratorium Laws,” now existing or hereafter enacted, in order to prevent or hinder the
enforcement or foreclosure of this Deed of Trust, but hereby waives the benefit of such laws.
Grantor for itself and all who may claim through or under it waives any and all right to have the
property and estates comprising the Property marshalled upon any foreclosure of the lien hereof and
agrees that any court having jurisdiction to foreclose such lien may order the Property sold as an
entirety. Grantor hereby waives any and all rights of redemption from sale under any judgment of
foreclosure of this Deed of Trust on behalf of Grantor and on behalf of each and every person
acquiring any interest in or title to the Property of any nature whatsoever, subsequent to the date
of this Deed of Trust. The foregoing waiver of right of redemption is made pursuant to the
provisions of applicable law.



8.11 Severability. If any provision of this Deed of Trust should be held unenforceable or
void, that provision shall be deemed severable from the remaining provisions and shall in no way
affect the validity of this Deed of Trust except that if such provision relates to the payment of
any monetary sum, then Beneficiary may, at its option, declare all Secured Obligations immediately
due and payable.



8.12 Notices. Any notice, demand, request or other communication which any party hereto may be
required or may desire to give hereunder shall be in writing and shall be deemed to have been
properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail
(postage prepaid, return receipt requested), three Business Days after mailing (c) if by Federal
Express or other reliable overnight courier service, on the next Business Day after delivered to
such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on
the same day by overnight courier as set forth below:



	 	 	 	 	 
	Grantor:	 	c/o Grubb & Ellis Healthcare REIT II, Inc.

	 	 	1551 North Tustin Avenue, Suite 300

	 	 	Santa Ana, California 92705

	 	 	Attention:

	 	Danny Prosky







Telecopier No.: (714)       -     


Telephone No: (714) 667-0611




	 	 	with a copy to:





	 	 	 
	Grubb & Ellis Healthcare REIT II Holdings, LP

	c/o Grubb & Ellis Healthcare REIT II, Inc.

	1551 North Tustin Avenue, Suite 300

	Santa Ana, California 92705

	Attention:

	 	Shannon K. S. Johnson







Telecopier No.: (866) 508-4769


Telephone No: (714) 975-2135


Email: Shannon.Johnson@Grubb-Ellis.com



with a copy to:



	 	 	 
	Arnall Golden Gregory LLP

	171 17th Street NW

	Suite 2100

Atlanta, Georgia

Attention:

	 	

30363

David B. Lotz, Esq.







Telecopier No.: (404) 873-8168


Telephone No: (404) 873-8169


Email: david.lotz@agg.com



Trustee:




Linda J. Rehak


c/o First American Title Insurance Company,


14368 Sommerville Court,


Midlothian, Virginia 23113



	 	 	 
	Beneficiary:
	 	KeyBank National Association, as Agent

Mailcode WA-31-13-2313

1301 5th Avenue, 23rd Floor

Seattle, Washington 98101

Attention: Senior Manager, Healthcare Finance

Telecopier No.: (206) 343-6843

Facsimile: (206)       -     

	With a copy to:
	 	Schiff Hardin LLP







233 South Wacker Drive



Suite 6600



Chicago, Illinois 60606



Attention: Sean T. Maloney



Telephone: (312) 258-5505



Facsimile: (312) 258-5700



or at such other address as the party to be served with notice may have furnished in writing to the
party seeking or desiring to serve notice as a place for the service of notice.



Any notice or demand delivered to the person or entity named above to accept notices and
demands for Grantor shall constitute notice or demand duly delivered to Grantor, even if delivery
is refused.



8.13 Future Advances. This Deed of Trust secures, among other things, a revolving credit.
This Deed of Trust will secure not only the existing indebtedness, but also such future advances
and readvances, pursuant to the provisions of Section 55-58.2 of the Code of Virginia, whether such
advances or readvances are obligatory or to be made at the option of Beneficiary or otherwise, as
are made within twenty (20) years from the date hereof, although there may be no advance made at
the time hereof and although there may be no indebtedness outstanding at the time any advance is
made. The lien of this Deed of Trust as to third persons without actual notice thereof shall be
valid as to all such indebtedness and future advances or readvances from the time this Deed of
Trust is filed for record in the Clerk’s Office, Circuit Court, City of       , Virginia, except
as otherwise provided by applicable law (including, without limitation, Section 55-58.2 of the Code
of Virginia). This Deed of Trust is a “credit line deed of trust” as described in Section 55-58.2,
and secures advances up to a maximum amount of indebtedness outstanding at any time of Seventy-One
Million Five Hundred Thousand and No/100 Dollars (71,500,000.00), plus accrued and unpaid interest,
advances for the payment of taxes, assessments, impositions, maintenance charges, insurance
premiums or costs incurred for the protection of the Premises or the lien of this Deed of Trust,
attorneys’ fees and expenses incurred by Beneficiary by reason of default by Grantor or any
guarantor, together with all other sums due hereunder or secured hereby. The maturity date of the
indebtedness secured by this Deed of Trust is June 30, 2014, subject to extension to June 30, 2015
as provided in Section 2.24 of the Credit Agreement



8.14 Beneficiary’s Lien for Service Charge and Expenses. At all times, regardless of whether
any Loan proceeds have been disbursed, this Deed of Trust secures (in addition to any Loan proceeds
disbursed from time to time) the payment of any and all loan commissions, service charges,
liquidated damages, expenses and advances due to or incurred by Beneficiary not to exceed the
maximum amount secured hereby.



8.15 WAIVER OF TRIAL BY JURY. GRANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION
WITH THIS DEED OF TRUST, THE NOTE, OR ANY OF THE OTHER LOAN DOCUMENTS, THE REVOLVING CREDIT LOAN OR
ANY OTHER STATEMENTS OR ACTIONS OF GRANTOR OR BENEFICIARY. GRANTOR ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED IN THE SIGNING OF THIS DEED OF TRUST AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL
COUNSEL. GRANTOR FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS THE MEANING AND
RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER IS A MATERIAL INDUCEMENT FOR BENEFICIARY TO MAKE THE
REVOLVING CREDIT LOAN, ENTER INTO THIS DEED OF TRUST AND EACH OF THE OTHER LOAN DOCUMENTS, AND
(iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER LOAN DOCUMENTS AS IF FULLY
INCORPORATED THEREIN.



8.16 Inconsistencies. In the event of any inconsistency between this Deed of Trust and the
Credit Agreement, the terms hereof shall be controlling as necessary to create, preserve and/or
maintain a valid security interest upon the Property, otherwise the provisions of the Credit
Agreement shall be controlling.



8.17 UCC Financing Statements. Grantor hereby authorizes Beneficiary to file UCC financing
statements to perfect Beneficiary’s security interest in any part of the Property. In addition,
Grantor agrees to sign any and all other documents that Beneficiary deems necessary in its sole
discretion to perfect, protect, and continue Beneficiary’s lien and security interest on the
Property.



8.18 Certain Matters Relating to Property Located in the Commonwealth of Virginia. With
respect to the Property which is located in the Commonwealth of Virginia, notwithstanding anything
contained herein to the contrary, it is acknowledged and agreed by Grantor that Trustee and
Beneficiary are entitled to all rights arising under Section 55-59 of the Code of Virginia, as
amended and this Deed of Trust shall be subject to the terms of Sections 55-59.1, 55-59.2, 55-59.3
and 55-59.4 of the Code of Virginia, as amended.



8.19 Incorporation of Waivers in Subsidiary Guaranty. Each consent, acknowledgement and
waiver set forth in Section 4 of the Subsidiary Guaranty with respect to the Grantor (as Subsidiary
Guarantor) is hereby incorporated by reference into this Deed of Trust. In addition, Grantor
waives any rights afforded by Sections 49-25 and 49-26 of the Code of Virginia, as amended, or any
similar or subsequent law.



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In Witness Whereof, Grantor has executed this Deed of Trust as of the date first
above written.



Grantor:



G&E HC REIT II Midlothian SNF, LLC,


a Delaware limited corporation



By: G&E HC REIT II Virginia SNF Portfolio LLC,


a Delaware limited liability company, its sole member



By: Grubb & Ellis Healthcare REIT II Holdings, LP,


a Delaware limited partnership, its sole member



By: Grubb & Ellis Healthcare REIT II, Inc.,





a Maryland corporation, its General Partner



By: /s/ Shannon K S Johnson

Name: Shannon K S Johnson

Title: Chief Financial Officer




	 	 	 	 	 	 	 
	STATE OF CALIFORNIA

	 	)

)
	 	

SS:
	COUNTY OF ORANGE

	 	 	)	 	 	







On June 23, 2011 before me, Rex Morishita Notary Public, personally appeared Shannon K S
Johnson, who proved to me on the basis of satisfactory evidence to be the person whose name is
subscribed to the within instrument and acknowledged to me that her executed the same in her
authorized capacity, and that by her signature on the instrument the person, or the entity upon
behalf of which person acted, executed the instrument.



I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.



WITNESS my hand and official seal.



Signature /s/ Rex Morishita (Seal)


My Commission Expires: May 1, 2015




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