EX-10.3






LOAN AGREEMENT




for a loan in the amount of




$30,500,000.00




MADE BY AND BETWEEN




NNN HEALTHCARE/OFFICE REIT E FLORIDA LTC, LLC

a Delaware limited liability




and




KEYBANK NATIONAL ASSOCIATION,




a national banking association




as a Lender and as Administrative Agent




Key Healthcare Finance




WA 31-13-2313

1301 Fifth Avenue, 23rd Floor

Seattle, WA 98101




1




TABLE OF CONTENTS




	 	 	 
	Exhibit A-1

Exhibit A-2

Exhibit A-3

Exhibit B

Exhibit C

Exhibit D

Exhibit E

Exhibit F

	 	Legal Description of Sunrise Land

Legal Description of Winter Park Land

Legal Description of Jacksonville Land

Form of LIBOR Election Notice

Form of Assignment and Assumption Agreement

Insurance Requirements

Form of Compliance Certificate

Patriot Act and OFAC Transferee and Assignee Identifying

Information Form






2




LOAN AGREEMENT




THIS LOAN AGREEMENT (“Agreement”) dated as of September 28, 2007, is made by and among NNN
HEALTHCARE/OFFICE REIT E FLORIDA LTC, LLC, a Delaware limited liability company (“Borrower”), each
lender from time to time a party hereto (individually, a “Lender” and collectively, the “Lenders”)
and KEYBANK NATIONAL ASSOCIATION, a national banking association (“KeyBank”), its successors and
assigns, as administrative agent for the Lenders (referred to in such capacity as “Agent”).



Recitals




Borrower is purchasing the Facilities from the Sellers pursuant to the Purchase Agreement and has
applied to KeyBank for a loan in the amount of THIRTY MILLION FIVE HUNDRED THOUSAND and NO/100
DOLLARS ($30,500,000.00) (the “Loan”) to finance a portion of the purchase price. Lenders are
willing to make the Loan on the terms and conditions hereinafter set forth.



Agreement




NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the
parties hereto agree as follows:



ARTICLE 1.




INCORPORATION OF RECITALS AND EXHIBITS




1.1 Incorporation of Recitals.



The foregoing preambles and all other recitals in this Agreement are made a part of this Agreement
by this reference.



1.2 Incorporation of Exhibits.



Exhibits A through F to this Agreement are incorporated in this Agreement and
expressly made a part hereof by this reference.



ARTICLE 2.




DEFINITIONS




2.1 Defined Terms.



The following terms as used herein shall have the following meanings:



Adjusted LIBOR Rate: For any LIBOR Interest Period, an interest rate per annum equal to
the sum of (A) the rate obtained by dividing (x) the LIBOR Rate for such LIBOR Interest Period by
(y) a percentage equal to one hundred percent (100%) minus the Reserve Percentage for such LIBOR
Interest Period and (B) the LIBOR Margin; provided, however, that at no time shall such rate exceed
the highest rate permitted by applicable law.



Adjusted Prime Rate: A rate per annum equal to the greater of (i) the Prime Rate or (ii)
one percent (1%) in excess of the Federal Funds Effective Rate. Any change in the Adjusted Prime
Rate shall be effective immediately from and after each change in the Prime Rate or the Federal
Funds Effective Rate, as applicable; provided, however, that at no time shall such rate exceed the
highest rate permitted by applicable law.



Affiliate: With respect to a specified person or entity, any individual, partnership,
corporation, limited liability company, trust, unincorporated organization, association or other
entity which, directly or indirectly, through one or more intermediaries, controls or is controlled
by or is under common control with such person or entity, including, without limitation, any
general or limited partnership in which such person or entity is a partner.



Agreement: This Loan Agreement.



Allocated Loan Amount: As to each Facility, that portion of the maximum Loan Amount
allocable to such Facility based on the proportionate Appraised Values of each Facility, as reduced
by principal payments on the Loan which shall be allocated among the Facilities in proportion to
their respective Allocated Loan Amounts. Agent will calculate the Allocated Loan Amounts when the
Appraised Values of the Facilities are determined pursuant to Section 4.2(c) and
communicate those Allocated Loan Amounts to Borrower as soon as reasonably possible thereafter.



Applicable Rate: The rate of interest applicable to the Loan from time to time as
described in Section 5.1 below.



Appraisal. An MAI certified appraisal of the Facilities performed in accordance with
FIRREA and Agent’s appraisal requirements by an appraiser selected and retained by Agent.



Appraised Value: As to any Facility, the fair market value of the Facility as set out in
the Appraisal of the Facilities approved by Agent pursuant to Section 4.2(c) below.



Assignment and Assumption: An Assignment and Assumption Agreement in the form of
Exhibit C attached hereto and made a part hereof.



Assignment of Leases: The Assignment of Rents and Leases of even date herewith made by
Borrower in consideration of the Loan assigning to Agent for the benefit of Lenders all Borrower’s
right, title and interest under the Operating Leases, together with all guarantees of the
obligations of the Tenants thereunder, all Borrower’s right, title and interest in and to the
Reserves, and all right, title and interest Borrower may now own or hereafter acquire in and to all
leases, subleases and other agreements relating to the use and occupancy of the Facilities , and
all present and future leases, rents, issues and profits therefrom.



Authorized Representative: As such term is defined in Section 9.22.



Bankruptcy Code: Title 11 of the United States Code entitled “Bankruptcy” as now or
hereafter in effect, or any successor thereto or any other present or future bankruptcy or
insolvency statute.



Base Rent: As defined in the Operating Leases.



Breakage Costs: (a) The cost to Lenders of re-employing funds bearing interest at an
Adjusted LIBOR Rate, incurred (or expected to be incurred) in connection with (i) any payment of
any portion of the Loan bearing interest at an Adjusted LIBOR Rate prior to the termination of any
applicable LIBOR Rate Interest Period, or (ii) the conversion of an Adjusted LIBOR Rate to any
other applicable interest rate on a date other than the last day of the relevant LIBOR Interest
Period and (b) any amounts payable by Borrower under any Interest Rate Agreement in connection with
termination of such Agreement.



Business Day: A day of the year on which banks are not required or authorized to close in
Cleveland, Ohio.



Commitment: The maximum amount each Lender has agreed to lend to Borrower as part of the
Loan (which amounts may be set forth below the signature line of each Lender if the Lender is a
signatory to this Agreement), subject to modification by each Assignment and Assumption Agreement.
The Commitment shall in no event be less than an aggregate amount of $30,500,000.00.



Control: As such term is used with respect to any person or entity, including the
correlative meanings of the terms “controlled by” and “under common control with”, shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management
policies of such person or entity, whether through the ownership of voting securities, by contract
or otherwise.



Debt Service Coverage Ratio: For any period, the ratio of (a) the aggregate Base Rent
actually paid to Borrower by the Tenants under the Operating Leases of all the Facilities during
such period, less allowances for (i) an annual replacement reserve of $300 per unit in the assisted
living portions of the Facilities and per bed in the nursing home portions of the Facilities, and
(ii) management fees equal to 5% of the gross revenues of the Facilities, to (b) the total monthly
payments of principal and interest on the Loan required under this Agreement during such period.



Default or default: Any event, circumstance or condition which, if it were to continue
uncured, would, with notice or lapse of time or both, constitute an Event of Default hereunder.



Default Rate: A rate per annum equal to three percent (3%) in excess of the interest rate
otherwise applicable on each outstanding advance, but shall not at any time exceed the highest rate
permitted by law.



Defaulting Lender: As such term is defined in Section 15.5(b).



Eligible Assignee: (i) Any Lender; (ii) any commercial bank, savings bank, savings and
loan association or similar financial institution which (A) has total assets of Five Billion
Dollars ($5,000,000,000) or more, (B) is “well capitalized” within the meaning of such term under
the regulations promulgated under the auspices of the Federal Deposit Insurance Corporation
Improvement Act of 1991, (C) in the sole judgment of Agent, is engaged in the business of lending
money and extending credit, and buying loans or participations in loans under credit facilities
substantially similar to those extended under this Agreement, and (D) in the reasonable judgment of
Agent, is operationally and procedurally able to meet the obligations of a Lender hereunder to the
same degree as a commercial bank; (iii) any insurance company in the business of writing insurance
which (A) has total assets of Five Billion Dollars ($5,000,000,000) or more (B) is “best
capitalized” within the meaning of such term under the applicable regulations of the National
Association of Insurance Commissioners, and (C) meets the requirements set forth in subclauses (C)
and (D) of clause (ii) above; and (iv) any other financial institution having total assets of Five
Billion Dollars ($5,000,000,000) (including a mutual fund or other fund under management of any
investment manager having under its management total assets of FIVE BILLION DOLLARS
($5,000,000,000) or more) which meets the requirement set forth in subclauses (C) and (D) of clause
(ii) above; provided that each Eligible Assignee must (w) be organized under the Laws of the United
States of America, any state thereof or the District of Columbia, or, if a commercial bank, be
organized under the Laws of the United States of America, any state thereof or the District of
Columbia, the Cayman Islands or any country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of such a country, (x) act under the Loan
Documents through a branch, agency or funding office located in the United States of America, (y)
be exempt from withholding of tax on interest and deliver the documents related thereto pursuant to
the Internal Revenue Code as in effect from time to time and (z) not be Borrower or an Affiliate of
Borrower.



Environmental Indemnity: The Environmental and Hazardous Substances Indemnity Agreement of
even date herewith from Borrower, indemnifying Agent and Lenders with regard to all matters related
to Hazardous Material and other matters.



Environmental Laws: All federal, state and local statutes, ordinances, rules, regulations,
and other laws relating to environmental protection, contamination or cleanup.



Environmental Proceedings: Any environmental proceedings, whether civil (including actions
by private parties), criminal, or administrative proceedings, relating to any Facility.



Environmental Report: Collectively, the environmental reports regarding the Facilities
prepared at Borrower’s expense by a qualified environmental consultant approved by Agent, dated not
more than six (6) months prior to the Loan Closing Date and addressed to Agent (or subject to
separate letter agreement permitting Agent to relay on such environmental report).



ERISA: The Employee Retirement Income Security Act of 1974, as amended, and the
regulations promulgated thereunder from time to time.



Escrow Account: As defined in Section 9.3.



Event of Default: As such term is defined in Section 12.1.



Extension Option: As such term is defined in Section 4.4.



Extension Term: A period of twelve (12) months commencing on October 1, 2010, and ending
on October 1, 2011.



Facilities: Collectively the following (each, a “Facility”):



(a) A 120 bed nursing home and an adjacent 125 room assisted living residential facility
located at 9701 and 9711 West Oakland Park Blvd., Sunrise, Florida (the “Sunrise Facility”) on real
property (the “Sunrise Land”) legally described on Exhibit A-1 to this Agreement;



(b) A 120 bed nursing home and an adjacent 125 room assisted living residential facility
located at 558 North Semoran Blvd., Winter Park, Florida (the “Winter Park Facility”) on real
property (the “Winter Park Land”) legally described on Exhibit A-2 to this Agreement; and



(c) A 120 bed nursing home and an adjacent 82 room assisted living residential facility
located at 8700 A.C. Skinner Parkway, Jacksonville, Florida (the “Jacksonville Facility”) on real
property (the “Jacksonville Land”) legally described on Exhibit A-3 to this Agreement.



Federal Funds Effective Rate: Shall mean, for any day, the rate per annum, rounded upward
to the nearest on one-hundredth of one percent (1/100 of 1%), announced by the Federal Reserve Bank
of Cleveland on such day as being the weighted average of the rates on overnight federal funds
transactions arranged by federal funds brokers on the previous trading day, as computed and
announced by such Federal Reserve Bank in substantially the same manner as such Federal Reserve
Bank computes and announces the weighted average it refers to as the “Federal Funds Effective
Rate.”



Fee Letter: The letter agreement between Agent and Borrower of even date herewith.



FIRREA: The Financial Institutions Reform, Recovery And Enforcement Act of 1989, as
amended from time to time.



Governmental Authority: Any federal, state, county or municipal government, or political
subdivision thereof, any governmental or quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality, or public body, or any court, administrative tribunal, or
public utility.



Guarantor: NNN Healthcare/Office REIT, Inc., a Maryland corporation.



Hazardous Material: Means and includes gasoline, petroleum, asbestos containing materials,
explosives, radioactive materials or any hazardous or toxic material, substance or waste which is
defined by those or similar terms or is regulated as such under any Law of any Governmental
Authority having jurisdiction over the Facilities or any portion thereof or its use, including:
(i) any “hazardous substance” defined as such in (or for purposes of) the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.A. § 9601(14) as may be amended
from time to time, or any so-called “superfund” or “superlien” Law, including the judicial
interpretation thereof; (ii) any “pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33);
(iii) any material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (iv) any
petroleum, including crude oil or any fraction thereof; (v) natural gas, natural gas liquids,
liquefied natural gas, or synthetic gas usable for fuel; (vi) any “hazardous chemical” as defined
pursuant to 29 C.F.R. Part 1910; and (vii) any other toxic substance or contaminant that is
subject to any other Law or other past or present requirement of any Governmental Authority. Any
reference above to a Law, includes the same as it may be amended from time to time, including the
judicial interpretation thereof.



Holdback: As defined in Section 4.2(c).



Holdback Account: As defined in Section 4.2(c).



Improvements: All buildings and other improvements now or hereafter located on the Land.



Including or including: Including but not limited to.



Indemnified Party: As such term is defined in Section 9.15.



Interest Rate Agreement: As such term is defined in Section 5.2.



Interest Rate Protection Product: As such term is defined in Section 5.2.



Internal Revenue Code: The Internal Revenue Code of 1986, as amended from time to time.



Land: Collectively, the Sunrise Land, the Winter Park Land and the Jacksonville Land
legally described on Exhibits A-1, A-2 and A-3 to this Agreement.



LaSalle Loan Agreement: The Loan Agreement dated September 10, 2007, between NNN
HEALTHCARE/OFFICE REIT HOLDINGS, L.P., a Delaware limited partnership, an Affiliate of Guarantor,
as borrower and LASALLE BANK NATIONAL ASSOCIATION as lender and as agent for the other financial
institutions party thereto.



Late Charge: As defined in Section 4.6.



Laws: Collectively, all federal, state and local laws, statutes, codes, ordinances,
orders, rules and regulations, including judicial opinions or precedential authority in the
applicable jurisdiction.



Lender: As defined in the opening paragraph of this Agreement, and including any successor
holder of the Loan from time to time.



Lender Default Obligation: As such term is defined in Section 15.5(b).



Lender Reply Period: As such term is defined in Section 15.7.



LIBOR Business Day: A Business Day on which dealings in U.S. dollars are carried on in the
London Interbank Market.



LIBOR Interest Period: With respect to each amount bearing interest at a LIBOR based rate,
a period of one (1), two (2) or three (3) months, to the extent deposits with such maturities are
available to Agent, commencing on a LIBOR Business Day, as selected by Borrower provided, however,
that (i) any LIBOR Interest Period which would otherwise end on a day which is not a LIBOR Business
Day shall continue to and end on the next succeeding LIBOR Business Day, unless the result would be
that such LIBOR Interest Period would be extended to the next succeeding calendar month, in which
case such LIBOR Interest Period shall end on the next preceding LIBOR Business Day and (ii) any
LIBOR Interest Period which begins on a day for which there is no numerically corresponding date in
the calendar month in which such LIBOR Interest Period would otherwise end shall instead end on the
last LIBOR Business Day of such calendar month.



LIBOR Margin: One and four-fifths percent (1.80%) per annum; provided, however, that if
there is then no uncured Event of Default under the Loan Documents, the LIBOR Margin shall be
reduced to one and two-fifths percent (1.40%) per annum as of the first day of the first month
after the following conditions are met and for so long thereafter as they continue to be satisfied:




	 	•	 	The Debt Service Coverage Ratio is at least 1.40 to 1.00; and






	 	•	 	The Rent Coverage Ratio is at least 1.10 to 1.00.





LIBOR Rate: For any LIBOR Interest Period, the average rate (rounded upwards to the
nearest 1/16th) as shown in Dow Jones Markets (formerly Telerate) (Page 3750) at which
deposits in U.S. dollars are offered by first class banks in the London Interbank Market at
approximately 1:00 p.m. (London time) on the day that is two (2) LIBOR Business Days prior to the
first day of such LIBOR Interest Period with a maturity approximately equal to such LIBOR Interest
Period and in an amount approximately equal to the amount to which such LIBOR Interest Period
relates, adjusted for reserves and taxes if required by future regulations. If Dow Jones Markets
no longer reports such rate or Agent determines in good faith that the rate so reported no longer
accurately reflects the rate available to Lenders in the London Interbank Market, Agent may select
a replacement index.



LIBOR Rate Option: As defined in Section 5.1(b).



Loan: As defined in the Recitals.



Loan Amount: The maximum amount of the Loan as set forth in Section 4.2 as reduced
by principal payments made from time to time.



Loan Documents: The collective reference to this Agreement, the documents and instruments
listed in Section 4.3, and all the other documents and instruments entered into from time
to time, evidencing or securing the Obligations. Notwithstanding any provision of this Agreement
or any other Loan Document, none of the obligations of Borrower under the Environmental Indemnity
or of Guarantor under the Guaranty are secured by the Mortgage or any other collateral for the
Loan.



Loan Closing or Loan Closing Date: The date the Mortgage is recorded and all conditions to
the initial disbursement of the Loan have been satisfied.



Management Agreements: Collectively, the Management Agreements, each dated as of June 1,
2004, between the Tenants and the Management Company for management services with respect to the
Facilities.



Management Company: Senior Health Management-HQ, LLC, a Florida limited liability company.



Material Adverse Change or material adverse change: If, in Agent’s reasonable discretion,
the business prospects, operations or financial condition of a person, entity or property has
changed in a manner which could impair the value of the security for the Loan, prevent timely
repayment of the Loan or otherwise prevent the applicable person or entity from timely performing
any of its material obligations under the Loan Documents.



Maturity Date: October 1, 2010, or if extended for the Extension Term, October 1, 2011.



Mortgage: The Mortgage, Assignment of Rents, Security Agreement and Fixture Filing of even
date herewith executed by Borrower as mortgagor to Agent as mortgagee in order to secure the
Obligations, granting Agent for the benefit of Lenders a first priority lien on Borrower’s fee
simple title to the Facilities.



Net Operating Income: With respect to any Facility for any period, the net income realized
by the Tenant of that Facility during such period, computed in accordance with generally accepted
accounting principles, before taxes, depreciation, amortization of intangible assets, rental
payments under the applicable Operating Lease, interest expense, management fees and replacement
reserves, decreased by (i) an annual replacement reserve of $300 per unit in the assisted
living portion of the Facility and per bed in the nursing home portion of the Facility, and (ii) an
allowance for management fees equal to 5% of the gross revenues of the Facility.



Note: A promissory note or notes, aggregating the Loan Amount, executed by Borrower and
payable to the order of each Lender, in the amount of its respective Commitment, evidencing the
Loan.



Obligations. All obligations of Borrower under this Agreement and the other Loan
Documents.



OFAC: Office of Foreign Asset Control of the Department of the Treasury of the United
States of America.



OFAC Review Process: That certain review process established by Agent to determine if any
potential transferee of any interests or any assignee of any portion of the Loan or any of their
members, officers or partners area a party with whom Agent and any Lender are restricted from doing
business under (i) the regulations of OFAC, including those Persons named on OFAC’s Specially
Designated and Blocked Persons list, or (ii) any other statute, executive order or other
governmental action or list (including the September 24, 2001 Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism.



Operating Leases: Collectively, the following (each, an “Operating Lease”) together with
that certain Agreement to Lease dated May 27, 2004, among Seller, Tenants and the Management
Company, as amended by Addendum to Agreement to Lease among Seller, Tenants and the Management
Company dated August 30, 2005, and as further amended by Amendment of Agreement to Lease and Leases
among Seller, Tenants and the Management Company dated September 21, 2007:



(a) Lease Agreement (“Sunrise Lease”) dated as of May 24, 2004, between Health Quest Realty
XXXV, an Indiana general partnership (“HQ 35”) as Landlord and ISLF –Westchester of Sunrise, LLC, a
Florida limited liability company (“Sunrise Tenant”) for the lease of the Sunrise Facility to the
Sunrise Tenant;



(b) Lease Agreement (“Winter Park Lease”) dated as of May 24, 2004, between Health Quest
Realty XVII, an Indiana general partnership (“HQ 17”) as Landlord and ISLF –Regents Park-Winter
Park, LLC, a Florida limited liability company (“Winter Park Tenant”) for the lease of the Winter
Park Facility to the Winter Park Tenant; and



(c) Lease Agreement (“Jacksonville Lease”) dated as of May 24, 2004, between Health Quest
Realty XXII, an Indiana general partnership (“HQ 22”) as Landlord and ISLF –Deerwood
Place-Jacksonville, LLC, a Florida limited liability company (“Jacksonville Tenant”) for the lease
of the Jacksonville Facility to the Jacksonville Tenant.



Patriot Act Customer Identification Process: That certain customer identification and
review process established by Agent pursuant to the requirements of 31 U.S.C. §5318(1) and 31
C.F.R. §103.121 to verify the identity of all permitted transferees of interests in Borrower and
any assignees of a portion of the Loan hereunder.



Payment Guaranty: The Unconditional Payment Guaranty of even date herewith executed by
Guarantor for the benefit of Agent and Lenders.



Percentage: With respect to each Lender, the percentage that its Commitment constitutes of
the maximum amount of the Loan.



Permits: All licenses, permits, certificates, approvals, authorizations and registrations
obtained from any governmental or quasi-governmental authority and used or useful in connection
with the ownership, operation, use or occupancy of the Facilities, including, without limitation,
business licenses, nursing home licenses, state health department licenses, food service licenses,
licenses to conduct business, certificates of need and all such other permits, licenses and rights.



Permitted Exceptions: Those matters listed on Schedule B of the Title Policy to which
title to the Facilities is subject at the Loan Closing and thereafter such other title exceptions
as Agent may reasonably approve in writing.



Permitted Transfer: (a) Any Transfer of shares of common stock or other beneficial or
ownership interests or other forms of securities in Guarantor or in any direct or indirect owner of
Guarantor, (b) any Transfer of 49% or less of the membership interests in Borrower so long as
Guarantor retains Control of Borrower, (c) any lease or occupancy agreement with respect to a
Facility entered into by the Tenant or the Management Company in the ordinary course of business
and in accordance with the provisions of the applicable Operating Lease and Management Agreement,
(d) any Transfer with respect to a Facility after the Mortgage has been released from such Facility
pursuant to Section 11.3 below, and (e) any other Transfer approved by Agent in its sole
and absolute discretion from time to time.



Prime Rate: That interest rate established from time to time by KeyBank as its Prime Rate,
whether or not such rate is publicly announced; the Prime Rate may not be the lowest interest rate
charged by KeyBank for commercial or other extensions of credit.



Purchase Agreement: That certain Agreement for Purchase and Sale of Real Property and
Escrow Instructions dated August 6, 2007, among Borrower and Seller for the purchase and sale of
the Facilities.



Rent Coverage Ratio: For any period, the ratio of the aggregate Net Operating Income of
the Facilities during such period to the total rental payments required under the Operating Leases
during such period.



Replacement Reserve Account: As defined in Section 9.3.



Required Lenders: Lenders holding Percentages aggregating at least sixty six and
two-thirds percent (66 2/3%) of the outstanding principal balance of the Loan.



Reserve Percentage: For any LIBOR Interest Period, that percentage which is specified
three (3) Business Days before the first day of such LIBOR Interest Period by the Board of
Governors of the Federal Reserve System (or any successor) or any other governmental or
quasi-governmental authority with jurisdiction over Lender for determining the maximum reserve
requirement (including, but not limited to, any marginal reserve requirement) for Lender with
respect to liabilities constituting of or including (among other liabilities) Eurocurrency
liabilities in an amount equal to that portion of the Loan affected by such LIBOR Interest Period
and with a maturity equal to such LIBOR Interest Period.



Reserve Accounts: Collectively the Escrow Account, the Replacement Reserve Account and the
Security Deposit Account.



Reserves: Collectively, the “Replacement Reserve Fund,” the “Security Deposit,” the “Tax
Escrow” and the “Insurance Escrow”(as such terms are defined in the Operating Leases) required
under the Operating Leases.



Security Deposit Account: As defined in Section 9.3.



Seller: Collectively, HQ 17, HQ 22 and HQ 35 (as such terms are defined in the definition
of Operating Lease above).



State: The state in which the Facilities are located.



Tenants: Collectively, the Sunrise Tenant, the Winter Park Tenant and the Jacksonville
Tenant (each, a “Tenant”), as such terms are defined above within the definition of Operating
Leases.



Title Insurer: First American Title Insurance Company, or such other title insurance
company licensed in the State as may be approved in writing by Agent.



Title Policy: An ALTA Mortgagee’s Loan Title Insurance Policy with extended coverage
issued by the Title Insurer and approved by Agent insuring the lien of the Mortgage as a valid
first, prior and paramount lien upon the Land and all appurtenant easements, and subject to no
other exceptions other than the Permitted Exceptions and containing such endorsements as Agent may
require.



Transfer: (a) Any sale, transfer, lease, conveyance, alienation, pledge, assignment,
mortgage, encumbrance, hypothecation or other disposition of (i) all or any portion of a Facility
or any portion of any other security for the Obligations, or (ii) all or any portion of Borrower’s
right, title and interest (legal or equitable) in and to a Facility or any portion of any other
security for the Obligations, (b) any issuance, sale, transfer, conveyance, alienation, pledge,
assignment, mortgage, encumbrance, hypothecation or other disposition of any interest in Borrower
or Guarantor or any manager of Borrower or any beneficial ownership interest in any entity which
directly or indirectly holds a beneficial ownership interest in, or directly or indirectly
Controls, Borrower, or (c) any change in the identity of the manager of Borrower.



2.2 Other Definitional Provisions.



All terms defined in this Agreement shall have the same meanings when used in the Note, Mortgage,
any other Loan Documents, or any certificate or other document made or delivered pursuant hereto.
The words “hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement.



ARTICLE 3.




BORROWER’S REPRESENTATIONS AND WARRANTIES




3.1 Representations and Warranties.



Borrower represents and warrants to Agent and Lenders as follows, which representations and
warranties shall be true on the date of each disbursement of Loan proceeds as if made on and as of
such date:



(a) Borrower (i) has good and marketable fee simple title to the Land and all buildings,
structures and improvements located thereon, including the Improvements, subject only to the
Operating Leases and the Permitted Exceptions, and (ii) other than any portion of the Facilities
which are owned by the Tenants in accordance with the Operating Leases, Borrower is the sole owner
of all portions of the Facilities that are not real property under the Laws of the State, free of
all liens or encumbrances.



(b) Except as previously disclosed to Agent in writing, (i) no litigation or proceedings are
pending, or to the best of Borrower’s knowledge threatened, against Borrower or Guarantor which
could, if adversely determined, cause a Material Adverse Change with respect to Borrower,
Guarantor, any Tenant or any Facility, and (ii) to Borrower’s knowledge, no litigation or
proceedings are pending or threatened against any Tenant or with respect to any Facility which
could, if adversely determined, cause a Material Adverse Change with respect to Borrower,
Guarantor, any Tenant or any Facility. There are no pending Environmental Proceedings and Borrower
has no knowledge of any threatened Environmental Proceedings or any facts or circumstances which
may give rise to any future Environmental Proceedings.



(c) Borrower is a duly organized and validly existing limited liability company organized
under the laws of the State of Delaware, Borrower is duly qualified as a foreign limited liability
company in the State of Florida and Borrower has full power and authority to execute, deliver and
perform all Loan Documents to which Borrower is a party, and such execution, delivery and
performance have been duly authorized by all requisite action on the part of Borrower.



(d) Guarantor is a duly organized and validly existing corporation organized under the laws of
the State of Delaware, Guarantor has full power and authority to execute, deliver and perform the
Payment Guaranty, and such execution, delivery and performance have been duly authorized by all
requisite action on the part of Guarantor.



(e) No consent, approval or authorization of or declaration, registration or filing with any
Governmental Authority or nongovernmental person or entity, including any creditor or member of
Borrower, is required in connection with the execution, delivery and performance of this Agreement
or any of the Loan Documents other than the recordation of the Mortgage and the Assignment of
Leases and the filing of the UCC-1 Financing Statements, except for such consents, approvals or
authorizations of or declarations or filings with any Governmental Authority or non-governmental
person or entity where the failure to so obtain would not have an adverse effect on Borrower or
which have been obtained as of any date on which this representation is made or remade.



(f) The execution, delivery and performance of this Agreement and the other Loan Documents
have not constituted and will not constitute, upon the giving of notice or lapse of time or both, a
breach or default under any other agreement to which Borrower or Guarantor is a party or may be
bound or affected, or a violation of any law or court order which may affect any Facility, any part
thereof, any interest therein, or the use thereof.



(g) There is no Default or Event of Default under this Agreement or the other Loan Documents.



(h) (i) No condemnation of any portion of any Facility, (ii) no condemnation or relocation of
any roadways abutting any Facility, and (iii) no proceeding to deny access to any Facility from any
point or planned point of access to any Facility, has commenced or, to the best of Borrower’s
knowledge, is contemplated by any Governmental Authority.



(i) To the best of Borrower’s knowledge, no Facility violates in any material way (i) any Laws
(including subdivision, zoning, building, environmental protection and wetland protection Laws), or
(ii) any building permits, restrictions of record, or agreements affecting such Facility or any
part thereof.



(j) No brokerage fees or commissions are payable by Borrower or any Affiliate of Borrower in
connection with this Agreement or the Loan to be disbursed hereunder.



(k) All financial statements previously furnished by Guarantor to Agent in connection with the
Loan are true, complete and correct in all material respects and fairly present the financial
conditions of Guarantor as of the dates thereof and do not fail to state any material fact
necessary to make such statements or information not misleading, and no Material Adverse Change
with respect to Guarantor has occurred since the dates of such statements. Guarantor has no
material liability, contingent or otherwise, not disclosed in such financial statements.



(l) Except as disclosed by Borrower to Agent in writing, to the best of Borrower’s knowledge:
(i) each Facility is in a clean, safe and healthful condition, and, except for materials used in
the ordinary course of maintenance and operation of the Facility in compliance with all
Environmental Laws, is free of all Hazardous Material and is in compliance with all applicable
Laws; (ii) neither Borrower nor any other person or entity, has ever caused or permitted any
Hazardous Material to be placed, held, located or disposed of on, under, at or in a manner to
affect any Facility, or any part thereof, (except for materials used in the ordinary course of
maintenance and operation of the Facility in compliance with all Environmental Laws), and no
Facility has ever been used for any activities involving, directly or indirectly, the use,
generation, treatment, storage, transportation, or disposal of any Hazardous Material; (iii) no
Facility, Tenant nor Borrower is subject to any existing, pending or threatened investigation or
inquiry by any Governmental Authority, and no Facility is subject to any remedial obligations under
any applicable Laws pertaining to health or the environment; and (iv) there is no underground tank,
vessel, or similar facility for the storage, containment or accumulation of Hazardous Materials of
any sort on, under or affecting any Facility.



(m) Each Facility is taxed separately without regard to any other property and for all
purposes each Facility may be mortgaged, conveyed and otherwise dealt with as an independent
parcel.



(n) Except as may be disclosed in the surveys provided to Agent in connection with the Loan
Closing, none of the Improvements encroach upon any property line, building line, setback line,
side yard line or any recorded or visible easement (or other easement of which Borrower is aware or
has reason to believe may exist) with respect to the Land.



(o) The Loan is not being made for the purpose of purchasing or carrying “margin stock” within
the meaning of Regulation G, T, U or X issued by the Board of Governors of the Federal Reserve
System, and Borrower agrees to execute all instruments necessary to comply with all the
requirements of Regulation U of the Federal Reserve System.



(p) Borrower is not a party in interest to any plan defined or regulated under ERISA, and the
assets of Borrower are not “plan assets” of any employee benefit plan covered by ERISA or
Section 4975 of the Internal Revenue Code.



(q) Borrower is not a “foreign person” within the meaning of Section 1445 or 7701 of the
Internal Revenue Code.



(r) Borrower uses no trade name other than its actual name set forth herein. The principal
place of business of Borrower is as stated in Section 13.14.



(s) Borrower’s place of formation or organization is the State of Delaware.



(t) Borrower’s Federal Tax Identification Number is 20-0896161.



(u) Neither Borrower nor Guarantor is (or will be) a person with whom Agent or any Lender is
restricted from doing business under OFAC (including, those Persons named on OFAC’s Specially
Designated and Blocked Persons list) or under any statute, executive order (including, the
September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and
shall not engage in any dealings or transactions or otherwise be associated with such persons. In
addition, Borrower hereby agrees to provide to Agent with any additional information Agent deems
necessary from time to time in order to ensure compliance with all applicable Laws concerning money
laundering and similar activities.



3.2 Survival of Representations and Warranties.



Borrower agrees that all of the representations and warranties set forth in Section 3.1 and
elsewhere in this Agreement are true as of the date hereof, will be true at the Loan Closing and,
except for matters which have been disclosed by Borrower and approved by Agent in writing, at all
times thereafter.



ARTICLE 4.




LOAN AND LOAN DOCUMENTS




4.1 Agreement to Borrow and Lend.



Subject to the terms, provisions and conditions of this Agreement and the other Loan Documents,
Borrower agrees to borrow from Lender and each Lender severally agrees to lend to Borrower its
Percentage of the Loan, for the purposes and subject to all of the terms, provisions and conditions
contained in this Agreement. The obligations of each Lender to Borrower with respect to each
Lender’s Commitment shall be several and not joint and several and shall be limited to its
Percentage of the Loan and of each Advance.



4.2 Loan Amount; Obligations to Disburse.



(a) The Loan shall be in the principal amount of Thirty Million Five Hundred Thousand and
No/100 Dollars ($30,500,000.00).



(b) Subject to Borrower’s compliance with and satisfaction of all conditions precedent to the
Loan Closing, at the Loan Closing, each Lender severally agrees that it will disburse its
Percentage of the Loan Amount to Borrower.



(c) At the Loan Closing, Borrower shall pay Four Million Five Hundred Thousand and No/100
Dollars ($4,500,000.00) (the “Holdback”) of the proceeds of the Loan to Agent and Agent shall
deposit the same in an interest bearing deposit account (the “Holdback Account”) in Borrower’s name
and for the benefit of Borrower but under the sole dominion and control of Agent. Borrower grants
Agent for the benefit of Lenders, a security interest in Holdback Account, all funds on deposit
therein and all earnings thereon, as security for the Obligations. Agent has ordered an Appraisal
of the Facilities. Upon Agent’s receipt and approval of the Appraisal, if and to the extent the
Loan Amount exceeds sixty percent (60%) of the aggregate Appraised Value of the Facilities, the
Holdback will be applied to prepayment of the Loan in the amount required to reduce the Loan Amount
to 60% of the aggregate Appraised Value of the Facilities, and provided there is then no Default or
Event of Default, any remaining funds in the Holdback Account will be released to Borrower.



4.3 Loan Documents.



Borrower agrees that it will, on or before the Loan Closing Date, execute and deliver or cause to
be executed and delivered to Lender the following documents in form and substance acceptable to
Lender:



(a) The Note.



(b) The Mortgage.



(c) The Assignment of Leases.



(d) The Payment Guaranty.



(e) The Environmental Indemnity.



(f) Such other documents, instruments or certificates as Agent may reasonably require,
including such documents as Agent in its sole discretion deems necessary or appropriate to
effectuate the terms and conditions of this Agreement and the Loan Documents, and to comply with
the laws of the State.



Borrower irrevocably authorizes Agent to file such UCC financing statements as Agent determines are
advisable or necessary to perfect or notify third parties of the security interests intended to be
created by the Loan Documents.



4.4 Term of the Loan.



(a) All principal, interest and other sums due under the Loan Documents shall be due and
payable in full on the Maturity Date. Borrower shall have the option (“Extension Option”) to
extend the Maturity Date for an additional twelve (12) month term (“Extension Term”)



(b) Borrower may exercise the Extension Option upon satisfying the following conditions:



(i) Borrower shall have delivered to Agent written notice of such election no earlier than
ninety (90) days and no later than thirty (30) days prior to the Maturity Date;



(ii) Agent shall have received Borrower’s and Guarantor’s current financial statements,
certified as correct by Borrower and Guarantor. There must be no Material Adverse Change in
Borrower’s or Guarantor’s financial condition since the Loan Closing Date;



(iii) Borrower pays Agent for the ratable account of Lenders, and extension fee equal to
one-quarter of one percent (0.25%) of the Loan Amount; and



	 	 	 	 	 
	4.5

	 	(iv)

Prepayments.
	 	There is then no Default or Event of Default.



	
 
	 	 
	 	







Borrower shall have the right to make prepayments of the Loan, in whole or in part, without
prepayment penalty, upon not less than seven (7) days prior written notice to Agent. No prepayment
of all or part of the Loan shall be permitted unless same is made together with the payment of all
interest accrued on the Loan through the date of prepayment and an amount equal to all Breakage
Costs and attorneys’ fees and disbursements incurred by Agent and Lenders as a result of the
prepayment.



4.6 Payments.



Borrower shall pay interest in arrears on the tenth (10th) day of every calendar month
commencing with the calendar month immediately following the Loan Closing, in the amount of all
interest accrued and unpaid through the last day of the immediately preceding calendar month. In
addition, with each such monthly interest payment Borrower shall make monthly principal payments
each in the amount of Thirty-Eight Thousand Eight Hundred Fifty-Four and No/100 Dollars
($38,854.00). All principal shall be paid on the Maturity Date. In the event of any partial
prepayment of the Loan (including any partial prepayment required under Section 4.2(c)
above or Section 11.3 below), the amount of each monthly payment of principal thereafter
required hereunder shall be proportionately reduced by an amount reasonably calculated by Agent to
take into account the prepayment and Agent will notify Borrower of the revised principal payment
amount prior to the next payment date.



4.7 Late Charge.



Any and all amounts due hereunder or under the other Loan Documents which remain unpaid more than
five (5) days after the date said amount was due and payable shall incur a fee (the “Late Charge”)
equal to four percent (4%) of the amount of such payment, which payment shall be in addition to all
of Agent’s and Lenders’ other rights and remedies under the Loan Documents, provided that no Late
Charge shall apply to the final payment of principal on the Maturity Date.



ARTICLE 5.




INTEREST




5.1 Interest Rate.



(a) Unless the Default Rate is applicable, the outstanding principal balance of the Loan shall
bear interest at the Adjusted Prime Rate, except that the Adjusted LIBOR Rate shall be the
Applicable Rate with respect to portions of the Loan as to which a LIBOR Option is then in effect.



(b) Provided that no Event of Default exists, Borrower shall have the option (the “LIBOR
Option”) to elect from time to time in the manner and subject to the conditions hereinafter set
forth an Adjusted LIBOR Rate as the Applicable Rate for all or any portion of the Loan.



(c) The only manner in which Borrower may exercise the LIBOR Option is by giving Agent
irrevocable notice (which may be verbal notice provided that Borrower delivers to Agent facsimile
confirmation in the form of Exhibit B attached within twenty-four (24) hours) of such
exercise not later than 1:00 p.m. Cleveland time on the second LIBOR Business Day prior to the
proposed commencement of the relevant LIBOR Interest Period, which written notice shall specify:
(i) the portion of the Loan with respect to which Borrower is electing the LIBOR Option, (ii) the
LIBOR Business Day upon which the applicable LIBOR Interest Period is to commence and (iii) the
duration of the applicable LIBOR Interest Period. The Applicable Rate for any portion of the Loan
with respect to which Borrower has elected the LIBOR Option shall revert to the Adjusted Prime Rate
as of the last day of the LIBOR Interest Period applicable thereto (unless Borrower again exercises
the LIBOR Option for such portion of the Loan). Agent shall be under no duty to notify Borrower
that the Applicable Rate on any portion of the Loan is about to revert from an Adjusted LIBOR Rate
to the Adjusted Prime Rate. The LIBOR Option may be exercised by Borrower only with respect to any
portion of the Loan equal to or in excess of $500,000. At no time may there be more than five (5)
LIBOR Interest Periods in effect with respect to the Loan. Notwithstanding the foregoing, if
Borrower shall elect a LIBOR Option, only so much of the outstanding principal amount of the Loan
as would not become due and payable during the applicable LIBOR Interest Period shall accrue
interest at the Adjusted LIBOR Rate and the remaining principal balance shall accrue interest at
the Adjusted Prime Rate.



(d) If Agent determines (which determination shall be conclusive and binding upon Borrower,
absent manifest error) (i) that Dollar deposits in an amount approximately equal to the portion of
the Loan for which Borrower has exercised the LIBOR Option for the designated LIBOR Interest Period
are not generally available at such time in the London interbank market for deposits in Dollars,
(ii) that the rate at which such deposits are being offered will not adequately and fairly reflect
the cost to Lenders of maintaining a LIBOR Rate on such portion of the Loan or of funding the same
for such LIBOR Interest Period due to circumstances affecting the London interbank market
generally, (iii) that reasonable means do not exist for ascertaining a LIBOR Rate, or (iv) that an
Adjusted LIBOR Rate would be in excess of the maximum interest rate which Borrower may by law pay,
then, in any such event, Agent shall so notify Borrower and all portions of the Loan bearing
interest at an Adjusted LIBOR Rate that are so affected shall, as of the date of such notification
with respect to an event described in clause (ii) or (iv) above, or as of the expiration of the
applicable LIBOR Interest Period with respect to an event described in clause (i) or (iii) above,
bear interest at the Adjusted Prime Rate until such time as the situations described above are no
longer in effect or can be avoided by Borrower exercising a LIBOR Option for a different LIBOR
Interest Period.



(e) Interest at the Applicable Rate (or Default Rate) shall be calculated for the actual
number of days elapsed on the basis of a 360-day year, including the first date of the applicable
period to, but not including, the date of repayment.



(f) Borrower shall pay all Breakage Costs incurred from time to time by Lenders upon demand
within fifteen (15) Business Days of receipt of written notice from Agent.



(g) If the introduction of or any change in any Law, regulation or treaty, or in the
interpretation thereof by any Governmental Authority charged with the administration or
interpretation thereof, shall make it unlawful for Lenders to maintain the Applicable Rate at an
Adjusted LIBOR Rate with respect to the Loan or any portion thereof, or to fund the Loan or any
portion thereof in Dollars in the London interbank market, or to give effect to its obligations
regarding the LIBOR Option as contemplated by the Loan Documents, then (1) Agent shall notify
Borrower that Lenders are no longer able to maintain the Applicable Rate at an Adjusted LIBOR Rate,
(2) the LIBOR Option shall immediately terminate, (3) the Applicable Rate for any portion of the
Loan for which the Applicable Rate is then an Adjusted LIBOR Rate shall automatically be converted
to the Adjusted Prime Rate, and (4) Borrower shall pay to Agent the amount of Breakage Costs (if
any) incurred by Lenders in connection with such conversion. Thereafter, Borrower shall not be
entitled to exercise the LIBOR Option until such time as the situation described herein is no
longer in effect or can be avoided by Borrower exercising a LIBOR Option for a different LIBOR
Interest Period.



5.2 Interest Rate Agreements.



(a) If Borrower institutes an interest rate hedging program through the purchase of an
interest rate swap, cap or such other interest rate protection product (“Interest Rate Protection
Product”) from Agent or any Affiliate of Agent, Borrower shall enter into a written agreement
(“Interest Rate Agreement”) relating to such Interest Rate Protection Product. Any indebtedness
incurred pursuant to an Interest Rate Agreement entered into by Borrower and Agent or an Affiliate
of Agent shall constitute indebtedness evidenced by the Note and secured by the Mortgage and any
other collateral for the Obligations to the same extent and effect as if the terms and provisions
of such Interest Rate Agreement were set forth herein, whether or not the aggregate of such
indebtedness, together with disbursements of the proceeds of the Loan, shall exceed the aggregate
face amount of the Note. Notwithstanding the foregoing, however, payment of any indebtedness
incurred pursuant to an Interest Rate Agreement entered into by Borrower and Agent or an Affiliate
of Agent shall be subordinated to payment of the Loan and all other amounts owing under the Loan
Documents and no Lender shall have any right to share in the proceeds of any such indebtedness.



(b) Borrower hereby collaterally assigns to Agent for the benefit of Lenders any and all
Interest Rate Protection Products purchased or to be purchased by Borrower in connection with the
Loan, as security for the Obligations, and agrees to provide Agent with any additional
documentation requested by Agent in order to confirm or perfect such security interest during the
term of the Loan. If Borrower obtains an Interest Rate Protection Product from a party other than
Agent or an Affiliate of Agent, Borrower shall deliver to Agent such third party’s consent to such
collateral assignment. No Interest Rate Protection Product purchased from a third party may be
secured by an interest in Borrower or the Facilities.



ARTICLE 6.




COSTS OF MAINTAINING LOAN




6.1 Increased Costs and Capital Adequacy.



(a) Borrower recognizes that the cost to Lenders of maintaining the Loan or any portion
thereof may fluctuate and, Borrower agrees to pay Agent additional amounts to compensate Lenders
for any increase in their actual costs incurred in maintaining the Loan or any portion thereof
outstanding or for the reduction of any amounts received or receivable from Borrower as a result
of:



(i) any change after the date hereof in any applicable Law, regulation or treaty, or in the
interpretation or administration thereof, or by any domestic or foreign court, (A) changing the
basis of taxation of payments under this Agreement to any Lender (other than taxes imposed on all
or any portion of the overall net income or receipts of such Lender), or (B) imposing, modifying or
applying any reserve, special deposit or similar requirement against assets of, deposits with or
for the account of, credit extended by, or any other acquisition of funds for loans by any Lender
(which includes the Loan or any applicable portion thereof) (provided, however, that Borrower shall
not be charged again the Reserve Percentage already accounted for in the definition of the Adjusted
LIBOR Rate), or (C) imposing on any Lender, or the London interbank market generally, any other
condition affecting the Loan, provided that the result of the foregoing is to increase the cost to
such Lender of maintaining the Loan or any portion thereof or to reduce the amount of any sum
received or receivable from Borrower by such Lender under the Loan Documents; or



(ii) the maintenance by a Lender of reserves in accordance with reserve requirements
promulgated by the Board of Governors of the Federal Reserve System of the United States with
respect to “Eurocurrency Liabilities” of a similar term to that of the applicable portion of the
Loan (without duplication for reserves already accounted for in the calculation of a LIBOR Rate
pursuant to the terms hereof).



Notwithstanding the foregoing, Borrower shall not be obligated to pay such amounts for a period in
excess of three (3) months prior to date Agent notifies Borrower of the applicable increase.



(b) If the application of any Law, rule, regulation or guideline adopted or arising out of the
July, 1988 report of the Basel Committee on Banking Regulations and Supervisory Practices entitled
“International Convergence of Capital Measurement and Capital Standards”, or the adoption after the
date hereof of any other Law, rule, regulation or guideline regarding capital adequacy, or any
change after the date hereof in any of the foregoing, or in the interpretation or administration
thereof by any domestic or foreign Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any Lender, with any
request or directive regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has the effect of reducing the rate of return on
such Lender’s capital to a level below that which such Lender would have achieved but for such
application, adoption, change or compliance (taking into consideration the policies of such Lender
with respect to capital adequacy), then, from time to time Borrower shall pay to such Lender such
additional amounts as will compensate such Lender for such reduction with respect to any portion of
the Loan outstanding.



(c) Any amount payable by Borrower under Section 6.1(a) or 6.1(b) shall be
paid within ten (10) Business Days of receipt by Borrower of a certificate signed by an authorized
officer of Agent setting forth the amount due and the basis for the determination of such amount,
which statement shall be conclusive and binding upon Borrower, absent manifest error. Failure on
the part of Agent to demand payment from Borrower for any such amount attributable to any
particular period shall not constitute a waiver of any Lender’s right to demand payment of such
amount for any subsequent or prior period. Agent shall use reasonable efforts to deliver to
Borrower prompt notice of any event described in Section 6.1(a) or 6.1(b) of the
amount of the reserve and capital adequacy payments resulting therefrom and the reasons therefor
and of the basis of calculation of such amount; provided, however, that any failure by Agent to so
notify Borrower shall not affect Borrower’s obligation to pay the reserve and capital adequacy
payment resulting therefrom.



6.2 Borrower Withholding.



If by reason of a change in any applicable Laws occurring after the date hereof, Borrower is
required by Law to make any deduction or withholding in respect of any taxes (other than taxes
imposed on or measured by the net income of any Lender or any franchise tax imposed on any Lender),
duties or other charges from any payment due under the Note to the maximum extent permitted by law,
the sum due from Borrower in respect of such payment shall be increased to the extent necessary to
ensure that, after the making of such deduction or withholding, Lenders receive and retain a net
sum equal to the sum which Lenders would have received had no such deduction or withholding been
required to be made.



ARTICLE 7.




LOAN EXPENSE AND ADVANCES




7.1 Loan and Administration Expenses.



Borrower unconditionally agrees to pay all expenses of the Loan, including all amounts payable
pursuant to Sections 7.2 and 7.3 and any and all other fees owing to Agent or Lender
pursuant to the Loan Documents, and also including, without limiting the generality of the
foregoing, all recording, filing and registration fees and charges, mortgage or documentary taxes,
all insurance premiums, title insurance premiums and other charges of the Title Insurer, printing
and photocopying expenses, survey fees and charges, cost of certified copies of instruments, cost
of premiums on surety company bonds and the Title Policy, all appraisal fees, insurance
consultant’s fees, travel related expenses and all costs and expenses incurred by Agent in
connection with the determination of whether or not Borrower has performed the obligations
undertaken by Borrower hereunder or has satisfied any conditions precedent to the obligations of
Lender hereunder and, if any Default or Event of Default occurs hereunder or under any of the Loan
Documents or if the Loan or Note or any portion thereof is not paid in full when and as due, all
costs and expenses of Agent and Lender (including, without limitation, court costs and counsel’s
fees and disbursements and fees and costs of paralegals) incurred in attempting to enforce payment
of the Loan and expenses of Agent and Lender incurred (including court costs and counsel’s fees and
disbursements and fees and costs of paralegals) in attempting to realize, while a Default or Event
of Default exists, on any security or incurred in connection with the sale or disposition (or
preparation for sale or disposition) of any security for the Loan. Borrower agrees to pay all
brokerage, finder or similar fees or commissions payable in connection with the transactions
contemplated hereby and shall indemnify and hold Agent and Lender harmless against all claims,
liabilities, costs and expenses (including attorneys’ fees and expenses) incurred in relation to
any claim by broker, finder or similar person.



7.2 Loan Fees.



	 	 	 
	Borrower shall pay fees to Agent in accordance with the Fee Letter.

	7.3

	 	Attorneys Fees and Disbursements.
	
 
	 	 






Borrower agrees to pay Agent’s attorneys fees and disbursements incurred in connection with this
Loan, including (i) the preparation of this Agreement, any intercreditor agreements and the other
Loan Documents and the preparation of the closing binders, (ii) the disbursement, syndication and
administration of the Loan and (iii) the enforcement of the terms of this Agreement and the other
Loan Documents.



7.4 Time of Payment of Fees and Expenses.



Borrower shall pay all expenses and fees incurred by Agent as of the Loan Closing on the Loan
Closing Date (unless sooner required herein). At the time of the Loan Closing, Agent may pay all
fees, costs and expenses then due from Borrower from the proceeds of the Loan (to the extent
provided for in the Budget). Agent may require the payment of outstanding fees and expenses as a
condition to disbursement of the Loan.



7.5 Expenses and Advances Secured by Loan Documents.



Any and all advances or payments made by Agent or Lender under this Article 7 from time to time,
and any amounts expended by Agent or Lender pursuant to Section 12.2(a), shall, as and when
advanced or incurred, constitute additional indebtedness evidenced by the Note and secured by the
Mortgage and the other Loan Documents.



7.6 Right to Make Advances to Cure Borrower’s Defaults.



In the event that Borrower fails to perform any of Borrower’s covenants, agreements or obligations
contained in this Agreement or any of the other Loan Documents (including the obligation to pay
accrued interest upon the Loan when due) (after the expiration of applicable grace periods, except
in the event of an emergency or other exigent circumstances), Agent may (but shall not be required
to) perform any of such covenants, agreements and obligations, and any amounts expended by Agent in
so doing and shall constitute additional indebtedness evidenced by the Note and secured by the
Mortgage and the other Loan Documents and shall bear interest at a rate per annum equal to the
Applicable Rate (or Default Rate following an Event of Default).



ARTICLE 8.




CONDITIONS TO CLOSING AND DISBURSEMENT OF THE LOAN




8.1 Conditions to Closing.



Borrower agrees that closing of the Loan and the several obligations of the Lenders to disburse the
Loan are conditioned upon Borrower’s delivery, performance and satisfaction of the following
conditions precedent in form and substance satisfactory to Agent in its sole discretion:



(a) Approval of Operating Leases. All right, title and interest of the Seller under
the Operating Leases shall have been duly assigned to Borrower and Agent shall have received and
approved each of the Operating Leases.



(b) Assignment and Subordination Agreements. Borrower, Agent and each Tenant shall
have entered into an Assignment and Subordination Agreement with respect to each of the Operating
Leases in form and substance satisfactory to Agent.



(c) Tenant Estoppel Certificates. Each Tenant shall have executed and delivered to
Agent a tenant estoppel certificate with respect to each Operating Lease in form and substance
satisfactory to Agent.



(d) Management Agreements. Agent shall have received and approved the Management
Agreements between the Tenants and the Management Company for management of the Facilities and
Agent shall have received satisfactory evidence that any termination of a Operating Lease because
of a default by a Tenant thereunder will result in a termination of the Management Agreement with
respect to such Facility.



(e) Closing of Purchase. All conditions to Borrower’s obligations as buyer under the
Purchase Agreement shall have been satisfied (or waived by Borrower but waiver of any material
condition thereunder shall require the consent of Agent, not to be unreasonably withheld) and the
sale of the Facilities to Buyer shall close in accordance with the Purchase Agreement concurrently
with the Closing of the Loan.



(f) Reserves. Agent shall have received and approved an accounting approved by
Tenants of all Reserves held by the landlord under the Operating Leases and Borrower shall have
deposited all such Reserves with Agent in the applicable Reserve Accounts provided for under
Section 9.3 below.



(g) Title Policy. Agent shall have received the Title Policy or an unconditional
commitment from the Title Insurer to issue the Title Policy.



(h) Survey. Agent shall have received and approved four copies of a ALTA/ACSM “Class
A” Land Title Survey of each Facility dated no earlier than ninety (90) days prior to the Loan
Closing.



(i) Insurance Policies. Agent shall have received and approved not less than ten (10)
days prior to the date of this Agreement policies or binders evidencing that insurance coverage is
in effect with respect to the Facilities and Borrower, in accordance with the Insurance
Requirements attached hereto as Exhibit D, for which the premiums have been fully prepaid
with endorsements satisfactory to Agent.



(j) No Litigation. No litigation or proceedings shall be pending or threatened which
could or might cause a Material Adverse Change with respect to Borrower, Guarantor, any Tenant or
any Facility.



(k) No Material Adverse Change. No Material Adverse Change shall have occurred with
respect to Borrower, Guarantor, any Tenant or any Facility



(l) Attorney Opinion Letter. Borrower shall have furnished to Agent an opinion from
counsel for Borrower and Guarantor covering due authorization, execution and delivery and
enforceability of the Loan Documents and also containing such other legal opinions as Agent shall
reasonably require.



(m) Lien Searches. Agent shall have received and approved current bankruptcy, federal
tax lien and judgment searches and searches of all Uniform Commercial Code financing statements
filed in each place UCC Financing Statements are to be filed hereunder, demonstrating the absence
of adverse claims.



(n) Financial Statements. Agent shall have received and approved current annual
financial statements of Borrower, Guarantor, the Tenants and the Management Company and such other
persons or entities connected with the Loan as Agent may request.



(o) Management Agreements. Agent shall have received and approved the Management
Agreements.



(p) Flood Hazard. Agent shall have received evidence that no Facility is located in
an area designated by the Secretary of Housing and Urban Development as a special flood hazard
area, or flood hazard insurance acceptable to Agent in its sole discretion.



(q) Zoning. If the Title Policy does not include a zoning endorsement, Borrower shall
have furnished to Agent a zoning letter or other evidence satisfactory to Lender regarding
compliance of each Facility with applicable zoning and similar laws.



(r) Organizational Documents. Borrower shall have furnished to Agent proof
satisfactory to Agent of authority, formation, organization and good standing in the State of its
incorporation or formation and, if applicable, qualification as a foreign entity in good standing
in the state of its incorporation or formation, of all corporate, partnership, trust and limited
liability company entities (including Borrower and Guarantor) executing any Loan Documents, whether
in their own name or on behalf of another entity. Borrower shall also provide certified
resolutions in form and content satisfactory to Agent, authorizing execution, delivery and
performance of the Loan Documents, and such other documentation as Agent may reasonably require to
evidence the authority of the persons executing the Loan Documents.



(s) No Default. There shall be no Default or Event of Default by Borrower hereunder.



(t) Environmental Report. Agent shall have received and approved the Environmental
Report with respect to each Facility.



(u) Structural Inspections. Agent shall have received and approved a property
condition report with respect to each of the Facilities.



(v) Permits. Agent shall have received and approved copies of all Permits with
respect to the Facilities.



(w) Annual Statements and Monthly Reports. Agent shall have received and approved
the “Annual Statement” required under the Operating Leases for the 2006 fiscal year and copies of
all “Monthly Reports” required to date under the Operating Leases for the 2007 fiscal year.



(x) Additional Documents. Agent shall have received and approved such other
materials, documents, papers or requirements regarding the Facilities, Tenants, the Management
Company, Borrower and Guarantor as Agent shall reasonably request.



(y) Compliance with Ratios. Agent shall have determined to its satisfaction that the
Debt Service Coverage Ratio for the Facilities will be no less than 1.35 to 1.00 and that the Rent
Coverage Ratio for the Facilities will be no less than 1.05 to 1.00.



(z) No Default by Guarantor. There shall be no uncured default under any indebtedness
owing by or guaranteed by Guarantor to Agent or any Affiliate of Agent.



ARTICLE 9.




OTHER COVENANTS




	 	 	 	 	 
	Borrower further covenants and agrees as follows:

	9.1
	 	Maintenance and Renewal of Insurance.  .






Borrower shall at all times maintain or cause to be maintained insurance coverage in full force and
effect in accordance with the requirements of Exhibit D to this Agreement, will timely pay
or cause to be paid all premiums on all insurance policies required hereunder, and as and when
additional insurance is required, from time to time and as and when any policies of insurance may
expire, furnish or cause to be furnished to Agent, premiums prepaid, additional and renewal
insurance policies with companies, coverage and in amounts satisfactory to Agent in accordance with
Exhibit D.



9.2 Payment of Taxes.



Borrower shall pay or cause to be paid all real estate taxes and assessments and charges of every
kind upon the Facilities before the same become delinquent, provided, however, that Borrower shall
have the right to pay such tax under protest or to otherwise contest any such tax or assessment,
but only if (i) such contest has the effect of preventing the collection of such taxes so contested
and also of preventing the sale or forfeiture of the Facilities or any part thereof or any interest
therein, (ii) Borrower has notified Agent of Borrower’s intent to contest such taxes, and
(iii) Borrower has deposited security in form and amount satisfactory to Agent, in its sole
discretion, and has increased the amount of such security so deposited promptly after Agent’s
request therefor. If Borrower fails to commence such contest or, having commenced to contest the
same, and having deposited such security required by Agent for its full amount, shall thereafter
fail to prosecute such contest in good faith or with due diligence, or, upon adverse conclusion of
any such contest, shall fail to pay such tax, assessment or charge, Agent may, at its election (but
shall not be required to), pay and discharge any such tax, assessment or charge, and any interest
or penalty thereon, and any amounts so expended by Agent shall be deemed to constitute
disbursements of the Loan proceeds hereunder (even if the total amount of disbursements would
exceed the face amount of the Note). Borrower shall furnish to Agent evidence that taxes are paid
at least five (5) days prior to the delinquency date for payment of such taxes and before
imposition of any penalty or accrual of interest.



9.3 Payment of Reserves.



(a) Borrower shall deposit all “Tax Escrow Deposits” and “Insurance Escrow Deposits” required
under the Operating Leases and received by Borrower from Tenants in a depository account or
accounts (collectively, the “Escrow Account”) with Agent. Provided there is then no uncured Event
of Default, Borrower may withdraw funds from the Escrow Account to pay property taxes and insurance
premiums due with respect to the Facilities. All funds deposited in the Escrow Account and all
interest accruing thereon shall belong to Borrower. Borrower grants Agent, for the benefit of
Lenders, a security interest in and to the Escrow Account and all funds at any time on deposit
therein and all earnings thereon as security for the Obligations.. If there is an Event of
Default, Agent may terminate or restrict Borrower’s access to the Escrow Account and Agent may, at
its option, apply funds in the Escrow Account to the Obligations in such order as Agent may
require.



(b) Borrower shall deposit all “Replacement Reserve Installments” required under the Operating
Leases and received by Borrower from Tenants in a depository account or accounts (collectively, the
“Replacement Reserve Account”) with Agent meeting the applicable requirements of the Operating
Leases for the “Replacement Reserve Fund” thereunder. Borrower grants Agent, for the benefit of
Lenders, a security interest in and to all Borrower’s right, title and interest in and to the
Replacement Reserve Account and all funds at any time on deposit therein and all earnings thereon
as security for the Obligations. Such grant of a security interest to Agent is subject to any
rights Tenants may have with respect thereto. Borrower will provide Agent with a copy of any and
all “Draw Requests” by Tenants for disbursements from the Replacement Reserve Account pursuant to
Section 7 of the Operating Leases and will permit disbursements from the Replacement Reserve
Account only on the terms and conditions set out in the Operating Leases.



(c) Borrower shall deposit all “Security Deposit Installments” required under the Operating
Leases and received by Borrower from Tenants in a depository account or accounts (collectively, the
“Security Deposit Account”) with Agent in the name of Borrower but under the sole dominion and
control of Agent until such time as the Obligations are fully paid and satisfied; provided,
however, that Agent will permit funds to be withdrawn from the Security Deposit Account if and to
the extent Borrower is required to return funds therein to Tenants pursuant to the terms of the
Operating Leases. Borrower grants Agent, for the benefit of Lenders, a security interest in and to
all Borrower’s right, title and interest in and to the Security Deposit Account and all funds at
any time on deposit therein and all earnings thereon as security for the Obligations. Such grant
of a security interest to Agent is subject to any rights Tenants may have with respect thereto.



9.4 Mechanic’s Liens.



Borrower will not suffer or permit any mechanics’ lien claims to be filed or otherwise asserted
against the Facilities and will promptly discharge the same; provided, however,
that Borrower shall have the right to contest in good faith and with reasonable diligence the
validity of any such lien if Borrower posts a statutory lien bond reasonably acceptable to Agent
which removes such lien from title to the Facilities within thirty (30) days of written notice by
Agent to Borrower of the existence of the lien.



9.5 Personal Property.



All of Borrower’s personal property, fixtures, attachments and equipment delivered upon, attached
to or used in connection with the operation of the Facilities shall always be located at the
Facilities and shall be kept free and clear of all liens, encumbrances and security interests.



9.6 Defaults Under Operating Leases.



Borrower will not suffer or permit any breach or default to occur in any of Borrower’s obligations
under any of the Operating Leases. Borrower will not agree to any material amendment or
termination of any Operating Lease or waive any material obligation of any Tenant under any
Operating Lease without Agent’s prior written consent. Borrower shall notify Agent promptly in
writing in the event a Tenant commits a material default under an Operating Lease. Unless Agent
consents otherwise in writing, Borrower will promptly and diligently enforce all of the obligations
of the Tenants under the Operating Leases. In the event of a material default by a Tenant under an
Operating Lease, Borrower will consult with Agent regarding the action to be taken with respect to
such default.



9.7 Condition of Facilities.



Borrower will keep or cause the Facilities to be kept in good repair, working order and condition,
reasonable wear and tear excepted, and from time to time make all needed and proper repairs,
renewals, replacements, additions, and improvements thereto to keep the same in good operating
condition.



9.8 Inventory and Equipment.



Borrower will enforce the obligations of the Tenants and the Management Company to maintain
sufficient inventory and equipment of types and quantities at the Facilities to adequately operate
the Facilities.



9.9 Permits.



Borrower will cause all Permits required for the operation of the Facilities to be maintained in
full force and effect.



9.10 Attorneys’ Fees for Enforcement of Agreement.



In case of any Default or Event of Default hereunder, Borrower (in addition to Agent’s Lenders’
reasonable attorneys’ fees, if any, to be paid pursuant to Section 7.3) will pay Agent’s
and Lender’s reasonable attorneys’ and paralegal fees (including, without limitation, any attorney
and paralegal fees and costs incurred in connection with any litigation or bankruptcy or
administrative hearing and any appeals therefrom and any post-judgment enforcement action
including, without limitation, supplementary proceedings) in connection with the enforcement of
this Agreement; without limiting the generality of the foregoing, if at any time or times hereafter
Agent or Lender employs counsel (whether or not any suit has been or shall be filed and whether or
not other legal proceedings have been or shall be instituted) for advice or other representation
with respect to the Facilities, this Agreement, or any of the other Loan Documents, or to protect,
collect, lease, sell, take possession of, or liquidate any of the Facilities, or to attempt to
enforce any security interest or lien in any portion of the Facilities, or to enforce any rights of
Agent and Lender or Borrower’s obligations hereunder, then in any of such events all of the
reasonable attorneys’ fees arising from such services, and any expenses, costs and charges relating
thereto (including fees and costs of paralegals), shall constitute an additional liability owing by
Borrower to Agent and Lender, payable on demand.



9.11 Appraisals.



Agent shall have the right to obtain a new or updated Appraisal of the Facilities from time to
time. Borrower shall cooperate with Agent in this regard. If the Appraisal is obtained to comply
with a specific requirement of this Agreement or any applicable law or regulatory requirement, or
bank policy promulgated to comply therewith, or if an Event of Default exists, Borrower shall pay
for any such Appraisal upon Agent’s request.



9.12 Financial Information.



Borrower shall deliver or cause the following to be delivered to Agent:



(a) Annual consolidated financial statements of Guarantor audited by a CPA reasonably
acceptable to Agent, within 120 days after the end of each fiscal year.



(b) Internally prepared quarterly consolidating financial statements of Guarantor, within 60
days after the end of each fiscal quarter, which financial statements shall be in a format
reasonably acceptable to Agent.



(c) A copy of each “Monthly Report” required under the Operating Leases by the 15th
Business Day of the succeeding calendar month (each of which shall include occupancy statistics,
payor mix, daily rate and other relevant operating data and a certified rent roll), including the
monthly financial statements for each Facility required under the Operating Leases.



(d) A copy of each audited “Annual Statement” required under the Operating Leases within 120
days after the end of each calendar year.



(e) A copy of all “Survey Reports,” reimbursement reports, Medicare and Medicaid cost reports
and other reports required under the Operating Leases promptly after the same are received by
Borrower.



(f) Quarterly financial statements for Borrower within sixty (60) days after the end of each
fiscal quarter, which financial statements shall be in a format reasonably acceptable to Agent.



(g) Annual financial statements for Borrower within 120 days after the end of each fiscal
year, which financial statements shall be in a format reasonably acceptable to Agent.



(h) Quarterly and annual compliance certificates in the form of Exhibit E to this
Agreement, concurrently with Borrower’s and Guarantor’s quarterly and annual financial statements
required above.



(i) Such additional financial information regarding Borrower, Guarantor, Tenants, the
Management Company and the Facilities as Agent may reasonably require from time to time.



9.13 Financial Covenants.



Failure by Borrower or Guarantor to continuously comply with the following financial covenants
shall, at the option of Agent, be an Event of Default on the Loan:



(a) The aggregate Debt Service Coverage Ratio for all Facilities shall be no less than 1.30 to
1.00.



(b) The aggregate Rent Coverage Ratio for all Facilities shall be no less than 1.05 to 1.00
through February 28, 2009, and 1.10 to 1.00 thereafter.



(c) Guarantor’s Net Worth (as defined in the LaSalle Loan Agreement) must be no less than
$100,000,000.00 plus 75% of the aggregate amount of all net funds received by Guarantor
from offerings of “Equity Interests” (as defined in the LaSalle Loan Agreement) by Guarantor made
after September 10, 2007.



9.14 Lost Note.



Upon a Lender furnishing to Borrower an affidavit to such effect, Borrower shall, if a Note is
mutilated, destroyed, lost or stolen, deliver to such Lender, in substitution therefor, a new note
containing the same terms and conditions as the Note.



9.15 Indemnification.



Borrower shall indemnify Agent and each Lender, including each party owning an interest in the Loan
and their respective officers, directors, employees and consultants (each, an “Indemnified Party”)
and defend and hold each Indemnified Party harmless from and against all claims, injury, damage,
loss and liability, cost and expense (including attorneys’ fees, costs and expenses) of any and
every kind to any persons or property by reason of (i) the operation or maintenance of the
Facilities; (ii) any breach of representation or warranty, Default or Event of Default; or (iii)
any other matter arising in connection with the Loan, Borrower or the Facilities. No Indemnified
Party shall be entitled to be indemnified against its own gross negligence or willful misconduct.



9.16 No Additional Debt.



Except for the Loan, Borrower shall not incur any indebtedness (whether recourse or nonrecourse,
secured or unsecured) other than customary trade payables paid within sixty (60) days after they
are incurred.



9.17 Compliance With Laws.



Borrower shall comply with all applicable requirements (including applicable Laws) of any
Governmental Authority having jurisdiction over Borrower or the Facilities.



9.18 Organizational Documents.



Borrower shall not, without the prior written consent of Agent, permit or suffer (i) a material
amendment or modification of its organizational documents, (ii) the admission of any new member,
partner or shareholder, or (iii) any dissolution or termination of its existence.



9.19 Management Contracts.



Borrower shall not enter into, modify, amend, terminate or cancel any management contracts for the
Facilities or agreements with agents or brokers, without the prior written approval of Agent.



9.20 Furnishing Notices.



Borrower shall provide Agent with copies of all material notices pertaining to the Facilities
received by Borrower from any Tenant, Guarantor, any Governmental Authority or any insurance
company within seven (7) days after such notice is received. Borrower shall give Agent written
notice of any default by a Tenant under an Operating Lease or by the Management Company under a
Management Agreement promptly after Borrower has actual knowledge of such default. Borrower will
provide Agent with a copy of any notice of default given by Borrower to any Tenant at the same time
such notice is given to Tenant.



9.21 Alterations.



Without the prior written consent of Agent, Borrower shall not make or permit any material
alterations to the Facilities.



9.22 Authorized Representative.



Borrower hereby appoints Shannon Johnson as its authorized representative (“Authorized
Representative”) for purposes of dealing with Agent on behalf of Borrower in respect of any and all
matters in connection with this Agreement, the other Loan Documents, and the Loan. The Authorized
Representative shall have the power, in his discretion, to give and receive all notices, monies,
approvals, and other documents and instruments, and to take any other action on behalf of Borrower.
All actions by the Authorized Representative shall be final and binding on Borrower. Agent and
Lender may rely on the authority given to the Authorized Representative until actual receipt by
Agent of a duly authorized resolution substituting a different person as the Authorized
Representative. No more than one person shall serve as Authorized Representative at any given
time.



9.23 Right of First Refusal.



Borrower grants Agent a right of first refusal with respect to any term financing for any or all of
the Facilities which term financing is applied in whole or in part to pay the Loan or any portion
thereof. Agent (which, as used in this paragraph includes any Affiliate of Agent) shall have the
right, but not the obligation, to match the terms of any such financing offered to Borrower by any
reputable institutional real estate lender. If Agent offers Borrower a loan on terms which are
comparable or better in all material respects to the terms of any such offered financing, as
reasonably determined by Borrower and Agent, then if Borrower does not accept the comparable
financing offered by Agent, Borrower shall be obligated to pay Agent a fee in an amount equal to
one-half of one percent (0.50%) of the aggregate initial Allocated Loan Amounts of the Facilities
being refinanced, which fee shall be due and payable in full on the Maturity Date (as it may be
extended hereunder) or such earlier date as the Mortgage is released from any refinanced Facility
or the Loan is paid in full. Borrower’s obligation to pay such fee shall be secured by the
Mortgage.



ARTICLE 10.




CASUALTIES AND CONDEMNATION




10.1 Agent’s Election to Apply Proceeds on Indebtedness.



(a) Subject to the provisions of Section 10.1(b) below, in the event of any casualty
to any Facility or any condemnation of any portion of a Facility, Agent may elect to collect,
retain and apply upon the indebtedness of Borrower under this Agreement or any of the other Loan
Documents all proceeds of insurance or condemnation (individually and collectively referred to as
“Proceeds”), including, without limitation, all Proceeds which might otherwise belong to a Tenant
under a Operating Lease, after deduction of all expenses of collection and settlement, including
attorneys’ and adjusters’ fees and charges. Any proceeds remaining after repayment of the
indebtedness under the Loan Documents shall be paid by Agent to Borrower.



(b) Notwithstanding anything in Section 10.1(a) to the contrary, in the event of any
casualty to any Facility or any condemnation of any portion of a Facility, Agent will allow the
Proceeds to be applied to restoration of the Facility if the following conditions are satisfied:



(i) There is then no Default or Event of Default hereunder and there is no uncured default by
any Tenant under any Operating Lease or by the Management Company under any Management Agreement;



(ii) All Proceeds are deposited with Agent;



(iii) In Agent’s reasonable judgment, the amount of Proceeds available for restoration of the
Facility (together with any funds or other security reasonably acceptable to Agent deposited with
Agent by Borrower for such purpose) is sufficient to pay the full and complete costs of such
restoration;



(iv) No Operating Lease will be terminated as a result of such casualty or condemnation;



(v) If the cost of restoration exceeds ten percent (10%) of the Allocated Loan Amount to such
Facility, in Agent’s sole determination after completion of restoration the Loan Amount will not
exceed 60% of the fair market value of all the Facilities;



(vi) In Agent’s reasonable determination, the Facility can be restored to an architecturally
and economically viable project in compliance with applicable Laws;



(vii) Guarantor reaffirms its Guaranty in writing; and



(viii) In Agent’s reasonable determination, such restoration is likely to be completed not
later than three (3) months prior to the Maturity Date.



10.2 Borrower’s Obligation to Rebuild and Use of Proceeds Therefor.



In case Agent does not elect to apply or does not have the right to apply the Proceeds to the
indebtedness, as provided in Section 10.1 above, Borrower shall:



(a) Proceed with diligence to make settlement with insurers or the appropriate governmental
authorities and cause the Proceeds to be deposited with Agent;



(b) In the event the Proceeds are insufficient to pay the full cost of restoration, promptly
deposit the deficit with Agent; and



(c) Promptly proceed with the restoration of the Facility to substantially its former
condition (with any changes required by applicable Law).



Agent may condition the disbursement of Proceeds and other funds deposited with Agent for the cost
of restoration on Agent’s reasonable approval of the plans and specifications for the restoration,
contractor’s cost estimates, architect’s certificates, waivers of liens, sworn statements of
mechanics and materialmen, and such other evidence of costs, percentage completion of construction,
application of payments and satisfaction of liens as Agent may reasonably require.



ARTICLE 11.




TRANSFER RESTRICTIONS AND PARTIAL RELEASES




11.1 Prohibition of Assignments and Transfers by Borrower.



Borrower shall not assign or attempt to assign its rights under this Agreement and any purported
assignment shall be void. Without the prior written consent of Agent, in Agent’s sole discretion,
Borrower shall not suffer or permit (i) any change in the management (whether direct or indirect)
of the Facilities, (ii) any transfer or encumbrance of the Tenant’s leasehold interest under any
Operating Lease, or (iii) any Transfer other than a Permitted Transfer.



11.2 Prohibition of Transfers in Violation of ERISA.



In addition to the prohibitions set forth in Section 11.1 above, Borrower shall not assign,
sell, pledge, encumber, transfer, hypothecate or otherwise dispose of its interest or rights in
this Agreement or in the Facilities, or attempt to do any of the foregoing or suffer any of the
foregoing, nor shall any party owning a direct or indirect interest in Borrower assign, sell,
pledge, encumber, transfer, hypothecate or otherwise dispose of any of its rights or interest
(direct or indirect) in Borrower, attempt to do any of the foregoing or suffer any of the
foregoing, if such action would cause the Loan, or the exercise of any of Lender’s rights in
connection therewith, to constitute a prohibited transaction under ERISA or the Internal Revenue
Code or otherwise result in any Lender being deemed in violation of any applicable provision of
ERISA. Borrower agrees to indemnify and hold Agent and each Lender free and harmless from and
against all losses, costs (including attorneys’ fees and expenses), taxes, damages (including
consequential damages) and expenses Agent or such Lender may suffer by reason of the investigation,
defense and settlement of claims and in obtaining any prohibited transaction exemption under ERISA
necessary or desirable in Agent’s or Lender’s sole judgment or by reason of a breach of the
foregoing prohibitions. The foregoing indemnification shall be a recourse obligation of Borrower
and shall survive repayment of the Note, notwithstanding any limitations on recourse contained
herein or in any of the Loan Documents.



11.3 Partial Releases.



Agent will cause the Mortgage to be released from a Facility upon written request from Borrower if
the following conditions are satisfied:



(a) There is then no Default or Event of Default;



(b) Borrower pays Agent the Allocated Loan Amount with respect to such Facility for
application against the principal amount then owing on the Loan;



(c) Agent reasonably determines that after such partial release the Debt Service Coverage
Ratio (computed based on the reduced Loan Amount and the Facilities remaining subject to the
Mortgage) will be no less than 1.60 to 1.00 and the Rent Coverage Ratio will be no less than 1.05
to 1.00.



(d) Agent receives a partial release endorsement to the Title Policy insuring that the
validity, priority and enforceability of the Mortgage have not been impaired by such partial
release and that the Mortgage remains a first lien on Borrower’s fee simple title to the remaining
Facilities subject only to the Permitted Exceptions applicable to such Facilities; and



(e) Borrower pays all reasonable costs and expenses incurred by Agent in connection with such
partial release, including the cost of the partial release endorsement, recording fees and charges,
escrow fees and charges and reasonable attorneys’ fees. Otherwise, no penalty or premium shall be
due from Borrower for such partial release.



11.4 Successors and Assigns.



Subject to the foregoing restrictions on transfer and assignment contained in this Article 11, this
Agreement shall inure to the benefit of and shall be binding on the parties hereto and their
respective successors and permitted assigns.



ARTICLE 12.




DEFAULT




12.1 Events of Default.



The occurrence of any one or more of the following shall constitute an “Event of Default” as said
term is used herein:



(a) Failure of Borrower to make any payment of principal or interest on the Note within five
(5) days after the date when due.



(b) Failure of Borrower to observe or perform any of the other covenants or conditions by
Borrower to be performed under the terms of this Agreement or any other Loan Document concerning
the payment of money, for a period of ten (10) days after written notice from Agent that the same
is due and payable.



(c) Failure of Borrower for a period of thirty (30) days after written notice from Agent, to
observe or perform any non-monetary covenant or condition contained in this Agreement or any other
Loan Documents; provided that if any such failure concerning a non-monetary covenant or condition
is susceptible to cure and cannot reasonably be cured within said thirty (30) day period, then
Borrower shall have an additional sixty (60) day period to cure such failure and no Event of
Default shall be deemed to exist hereunder so long as (x) Borrower commences such cure within the
initial thirty (30) day period and diligently and in good faith pursues such cure to completion
within such resulting ninety (90) day period from the date of Agent’s notice, and (y) the existence
of such default will not result in any Tenant having the right to terminate its Operating Lease due
to such default; and provided further that if a different notice or grace period is specified under
any other subsection of this Section 12.1 with respect to a particular breach, the specific
provision shall control.



(d) Any Transfer or other disposition in violation of Article 11.



(e) Any default by Borrower under any Operating Lease which is not cured within any applicable
cure period thereunder.



(f) If any warranty, representation, statement, report or certificate made now or hereafter by
Borrower or Guarantor is untrue or incorrect in any material respect at the time made or delivered,
provided that if such breach is reasonably susceptible of cure, then no Event of Default shall
exist so long as Borrower cures said breach (i) within the notice and cure period provided in
Section 12.1(b) above for a breach that can be cured by the payment of money or (ii) within
the notice and cure period provided in Section 12.1(c) above for any other breach.



(g) Borrower or Guarantor shall commence a voluntary case concerning Borrower or such
Guarantor under Title 11 of the United States Code entitled “Bankruptcy” as now or hereafter in
effect, or any successor thereto or any other present or future bankruptcy or insolvency statute
(the “Bankruptcy Code”); or an involuntary proceeding is commenced against Borrower or Guarantor
under the Bankruptcy Code and relief is ordered against Borrower or such Guarantor, or the petition
is controverted but not dismissed or stayed within sixty (60) days after the commencement of the
case, or a custodian (as defined in the Bankruptcy Code) is appointed for or takes charge of all or
substantially all of the property of Borrower or Guarantor; or the Borrower or Guarantor commences
any other proceedings under any reorganization, arrangement, readjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar Law of any jurisdiction whether now or
hereafter in effect relating to the Borrower or Guarantor; or there is commenced against Borrower
or Guarantor any such proceeding which remains undismissed or unstayed for a period of sixty (60)
days; or the Borrower or Guarantor fails to controvert in a timely manner any such case under the
Bankruptcy Code or any such proceeding, or any order of relief or other order approving any such
case or proceeding is entered; or the Borrower or Guarantor by any act or failure to act indicates
its consent to, approval of, or acquiescence in any such case or proceeding or the appointment of
any custodian or the like of or for it for any substantial part of its property or suffers any such
appointment to continue undischarged or unstayed for a period of sixty (60) days.



(h) Borrower or Guarantor shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due, or shall consent to
the appointment of a receiver or trustee or liquidator of all of its property or the major part
thereof or if all or a substantial part of the assets of Borrower or Guarantor are attached,
seized, subjected to a writ or distress warrant, or are levied upon, or come into the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors.



(i) Any failure to comply with any of the covenants contained in Section 9.13 of this
Agreement.



(j) If a Tenant is enjoined, restrained or in any way prevented by any court order from
operating the Facilities.



(k) One or more final judgments are entered (i) against Borrower in amounts aggregating in
excess of $250,000.00 or (ii) against Guarantor in amounts aggregating in excess of $2,000,000.00,
and said judgments are not satisfied, stayed or bonded over within thirty (30) days after entry.



(l) If Borrower or Guarantor shall fail to pay any debt (which term shall not include
judgments under clause (m) above) owed by it or is in default under any agreement with Agent or any
other party (other than a failure or default for which Borrower’s maximum liability does not exceed
$250,000.00 and Guarantor’s maximum liability does not exceed $2,000,000.00) and such failure or
default continues after any applicable grace period specified in the instrument or agreement
relating thereto.



(m) Any default by a Tenant under an Operating Lease which is not cured (or waived by Borrower
with the reasonable consent of Agent) within any applicable cure period or grace period thereunder.



(n) Any default under the LaSalle Loan Agreement which is not cured within any applicable
grace period or cure period thereunder.



(o) The occurrence of any other event or circumstance denominated as an Event of Default
herein or under any of the other Loan Documents and the expiration of any applicable grace or cure
periods, if any, specified for such Event of Default herein or therein, as the case may be.



12.2 Remedies.



Upon the occurrence of any Event of Default, Agent may, and at the request of Required Lenders
shall, pursue any one or more of the following remedies concurrently or successively, it being the
intent hereof that none of such remedies shall be to the exclusion of any other:



(a) Take possession of the Facilities and do anything which is necessary or appropriate in its
sole judgment to fulfill the obligations of Borrower under this Agreement and the other Loan
Documents;



(b) Declare the Note to be immediately due and payable;



(c) Use and apply any monies or letters of credit deposited by Borrower with Agent, regardless
of the purposes for which the same was deposited, to cure any such default or to apply on account
of any indebtedness under this Agreement which is due and owing to Lender;



(d) Exercise or pursue any other remedy or cause of action permitted under this Agreement or
any other Loan Documents, or conferred upon Agent by operation of Law.



Notwithstanding the foregoing, upon the occurrence of any Event of Default under
Section 12.1(g), all amounts evidenced by the Note shall automatically become due and
payable, without any presentment, demand, protest or notice of any kind to Borrower.



ARTICLE 13.




GENERAL PROVISIONS




13.1 Time is of the Essence.



	 	 	 
	Borrower agrees that time is of the essence under this Agreement.

	13.2

	 	Captions.
	
 
	 	 






The captions and headings of various Articles, Sections and subsections of this Agreement and
Exhibits pertaining hereto are for convenience only and are not to be considered as defining or
limiting in any way the scope or intent of the provisions hereof.



13.3 Modification; Waiver.



No modification, waiver, amendment or discharge of this Agreement or any other Loan Document shall
be valid unless the same is in writing and signed by the party against which the enforcement of
such modification, waiver, amendment or discharge is sought.



13.4 Governing Law.



Irrespective of the place of execution and/or delivery, this Agreement shall be governed by, and
shall be construed in accordance with, the laws of the State.



13.5 Disclaimer.



This Agreement is made for the sole benefit of Borrower, Agent and Lenders, and no other person or
persons shall have any benefits, rights or remedies under or by reason of this Agreement, or by
reason of any actions taken by Agent or Lenders pursuant to this Agreement. By making the Loan or
taking any action pursuant to any of the Loan Documents, neither Agent nor any Lender shall be
deemed a partner or a joint venturer with Borrower or fiduciary of Borrower.



13.6 Partial Invalidity; Severability.



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



13.7 Definitions Include Amendments.



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



13.8 Execution in Counterparts.



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



13.9 Entire Agreement.



This Agreement, taken together with all of the other Loan Documents and all certificates and other
documents delivered by Borrower to Lender, embody the entire agreement and supersede all prior
agreements, written or oral, relating to the subject matter hereof.



13.10 Waiver of Damages.



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



13.11 Claims Against Agent or Lender.



Except as provided in Section 15.5(b) regarding Defaulting Lenders, neither Agent nor any
Lender shall be in default under this Agreement, or under any other Loan Documents, unless a
written notice specifically setting forth the claim of Borrower shall have been given to Agent
within three (3) months after Borrower first had knowledge of the occurrence of the event which
Borrower alleges gave rise to such claim and Agent or such Lender does not remedy or cure the
default, if any there be, promptly thereafter. Borrower waives any claim, set-off or defense
against Agent or Lenders arising by reason of any alleged default by Agent or Lenders as to which
Borrower does not give such notice timely as aforesaid. Borrower acknowledges that such waiver is
or may be essential to Agent’s or Lenders’ ability to enforce its remedies without delay and that
such waiver therefore constitutes a substantial part of the bargain between Agent and Lenders and
Borrower with regard to the Loan.



13.12 Jurisdiction.



TO THE GREATEST EXTENT PERMITTED BY LAW, BORROWER HEREBY WAIVES ANY AND ALL RIGHTS TO REQUIRE
MARSHALING OF ASSETS. WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS AGREEMENT
(EACH, A “PROCEEDING”), BORROWER IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE STATE, AND (B) WAIVES ANY OBJECTION WHICH IT
MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY
CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO
OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH
PARTY. NOTHING IN THIS AGREEMENT SHALL PRECLUDE AGENT FROM BRINGING A PROCEEDING IN ANY OTHER
JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE
BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION. BORROWER FURTHER AGREES AND CONSENTS THAT, IN
ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF
PROCESS IN ANY PROCEEDING MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
DIRECTED TO BORROWER AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON
RECEIPT; EXCEPT THAT IF BORROWER SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE
FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.



13.13 Set-Offs.



After the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably
authorizes and directs Lenders from time to time to charge Borrower’s accounts and deposits with
Lenders (or their Affiliates), and to pay over to Lenders an amount equal to any amounts from time
to time due and payable to Lenders hereunder, under the Note or under any other Loan Document.
Borrower hereby grants to Lenders a security interest in and to all such accounts and deposits
maintained by Borrower with Lenders (or their Affiliates).



13.14 Notices.



All notices required or permitted hereunder shall be in writing and shall be given to the parties
as follows:




	 	 	 	If to Agent: KeyBank National Association





	 	 	 
	Healthcare Services

	 	

	Mailcode: WA-31-13-2313

	1301 5th Ave, 23rd Floor

	Seattle, WA 98111-0090

	 	

	Attn: Vice President and Manager

	Fax No. 206-343-6843

With a copy to:

	 	

KeyBank National Association






	 	 	 	 	 	 	 	 	 
	Healthcare Services
	 	 	 	 	 	 	 	 
	800 Superior Avenue, 6th Floor
	 	 	 	 
	Cleveland, OH 44114
	 	 	 	 	 	 	 	 
	Mail Code: OH-01-02-0628
	 	 	 	 
	Fax: 216-828-7521
	 	 	 	 	 	 	 	 
	If to Borrower:	 	NNN Healthcare/Office REIT E Florida LTC, LLC
	 	 	c/o Triple Net Properties, LLC
	 
	 	1551 N. Tustin, Suite 300	 	 	 	 
	 
	 	Santa Ana, CA 92705	 	 	 	 
	 
	 	Attention: Theresa Hutton	 	 	 	 
	 
	 	Facsimile:	 	 	714-918-9138	 






Any such notices shall be either (a) sent by certified mail, return receipt requested, in which
case notice shall be deemed delivered three business days after deposit, postage prepaid in the
U.S. mail, or (b) sent by a nationally recognized overnight courier, in which case notice shall be
deemed delivered one business day after deposit with such courier; or (c) served personally, in
which case notice shall be deemed given on the date of such service, or (d) delivered by facsimile
transmission followed by delivery by personal service or nationally recognized courier service on
the next business day after facsimile transmission, in which case notice shall be deemed to have
been given on the date of facsimile transmission. The above addresses may be changed by written
notice to the other party; provided that no notice of a change of address shall be effective until
actual receipt of such notice. Copies of notices are for informational purposes only, and a
failure to give or receive copies of any notice shall not be deemed a failure to give notice.
Notwithstanding anything in this Agreement to the contrary, and all notices, demands, requests or
other communication by and between Borrower and Lenders shall occur through Agent, and all payments
required of Borrower to Lenders shall be made by Borrower to Agent.



13.15 Waiver of Jury Trial.



BORROWER, AGENT AND LENDER EACH WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS AGREEMENT AND AGREE THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.



ARTICLE 14.




ASSIGNMENTS AND PARTICIPATIONS




14.1 Assignments and Participations.



(a) Each Lender shall have the right to assign, transfer, sell, negotiate, pledge or otherwise
hypothecate this Agreement and any of its rights and security hereunder and under the other Loan
Documents to any other Eligible Assignee with the prior written consent of Agent, which consent
shall not be unreasonably withheld, conditioned or delayed and no consent of Agent shall be
required if the Eligible Assignee is also a Lender; provided, however, that (i) the parties to each
such assignment shall execute and deliver to Agent, for its approval and acceptance, an Assignment
and Assumption, (ii) each such assignment shall be of a constant, and not a varying, percentage of
the assigning Lender’s rights and obligations under this Agreement, (iii) if the potential assignee
is not already a Lender hereunder, at least ten (10) days prior to the date of the assignment, the
potential assignee shall deliver to Agent the fully completed Patriot Act and OFAC forms attached
as Exhibit F hereto and such other information as Agent shall require to successfully
complete Agent’s Patriot Act Customer Identification Process and OFAC Review Process, (iv) unless
Agent otherwise consents, the aggregate amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment shall in no event be less than Five Million Dollars
($5,000,000), (iv) Agent shall receive from the assigning Lender a processing fee of Three Thousand
Five Hundred Dollars ($3,500), and (vi) if the assignment is less than the assigning Lender’s
entire interest in the Loan, the assigning Lender must retain at least a Five Million Dollar
($5,000,000.00) interest in the Loan. Agent may designate any Eligible Assignee accepting an
assignment of a specified portion of the Loan to be a Co-Agent, an “Arranger” or similar title, but
such designation shall not confer on such Assignee the rights or duties of Agent. Upon such
execution, delivery, approval and acceptance, and upon the effective date specified in the
applicable Assignment and Assumption, (a) the Eligible Assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Assumption, have the rights and obligations of a Lender hereunder and under the
other Loan Documents, and Borrower hereby agrees that all of the rights and remedies of Lenders in
connection with the interest so assigned shall be enforceable against Borrower by an Eligible
Assignee with the same force and effect and to the same extent as the same would have been
enforceable but for such assignment, and (b) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have been assigned by it
pursuant to such Assignment and Assumption, relinquish its rights and be released from its
obligations hereunder and thereunder.



(b) By executing and delivering an Assignment and Assumption, the assigning Lender thereunder
and the Eligible Assignee thereunder confirm to and agree with each other and the other parties
hereto as follows:



(i) except as provided in such Assignment and Assumption, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any statements, warranties
or representations made in or in connection with this Agreement or any other Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other Loan Document or any other instrument or document furnished in connection therewith;



(ii) such assigning Lender makes no representation or warranty and assumes no responsibility
with respect to the financial condition of Borrower or the performance or observance by Borrower of
any of its obligations under any Loan Document or any other instrument or document furnished in
connection therewith;



(iii) such Eligible Assignee confirms that it has received a copy of this Agreement together
with such financial statements, Loan Documents and other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into the Assignment and
Assumption and to become a Lender hereunder;



(iv) such Eligible Assignee will, independently and without reliance upon Agent, the assigning
Lender or any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under this Agreement;



(v) such Eligible Assignee appoints and authorizes Agent to take such action as Agent on its
behalf and to exercise such powers under this Agreement and the other Loan Documents as are
delegated to Agent by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto; and



(vi) such Eligible Assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be performed by it as a
Lender.



(c) Agent shall maintain a copy of each Assignment and Assumption delivered to and accepted by
it and shall record in its records the names and address of each Lender and the Commitment of, and
Percentage of the Loan owing to, such Lender from time to time. Borrower, Agent and Lenders may
treat each entity whose name is so recorded as a Lender hereunder for all purposes of this
Agreement.



(d) Upon receipt of an Assignment and Assumption executed by an assigning Lender and an
Eligible Assignee, Agent shall, if such Assignment and Assumption has been properly completed and
consented to if required herein, accept such Assignment and Assumption, and record the information
contained therein in its records, and Agent shall use its best efforts to give prompt notice
thereof to Borrower (provided that neither Agent nor Lenders shall be liable for any failure to
give such notice).



(e) Borrower shall use reasonable efforts to cooperate with Agent and each Lender in
connection with the assignment of interests under this Agreement or the sale of participations
herein.



(f) Anything in this Agreement to the contrary notwithstanding, and without the need to comply
with any of the formal or procedural requirements of this Agreement, including this Section, any
Lender may at any time and from time to time pledge and assign all or any portion of its rights
under all or any of the Loan Documents to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from its obligations hereunder. To facilitate any such pledge
or assignment, Agent shall, at the request of such Lender, enter into a letter agreement with the
Federal Reserve Bank in, or substantially in, the form of the exhibit to Appendix C to the Federal
Reserve Bank of New York Operating Circular No. 12.



(g) Anything in this Agreement to the contrary notwithstanding, any Lender may assign all or
any portion of its rights and obligations under this Agreement to another branch or Affiliate of
such Lender without first obtaining the approval of any Agent, provided that (i) such Lender
remains liable hereunder unless Borrower and Agent shall otherwise agree, (ii) at the time of such
assignment such Lender is not a Defaulting Lender, (iii) such Lender gives Agent and Borrower at
least fifteen (15) days prior written notice of any such assignment; (iv) the parties to each such
assignment execute and deliver to Agent an Assignment and Assumption, and (v) Agent receives from
the assigning Lender a processing fee of One Thousand Five Hundred Dollars ($1,500).



(h) Each Lender shall have the right, without the consent of Borrower, to sell participations
to one or more Eligible Assignees in or to all or a portion of its rights and obligations under the
Loan and the Loan Documents; provided, however, that (i) such Lender’s obligations under this
Agreement (including without limitation its Commitment to Borrower hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations (iii) Borrower, Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and obligations under
this Agreement and with regard to any and all payments to be made under this Agreement and (iv) the
holder of any such participation shall not be entitled to voting rights under this Agreement or the
other Loan Documents (but such holder may contract with Lender selling such Eligible Assignee its
interest in such Lender’s share of the Loan as to voting of such Lender’s interest under
Section 15.6(b) but not under any other section of this Agreement, provided that any such
agreement by a Lender shall bind only such Lender alone and not Borrower, the other Lenders or
Agent).



(i) No Eligible Assignee of any rights and obligations under this Agreement shall be permitted
to subassign such rights and obligations. No participant in any rights and obligations under this
Agreement shall be permitted to sell subparticipations of such rights and obligations.



(j) Borrower acknowledges and agrees that Lenders may provide to any Assignee or Participant
originals or copies of this Agreement, any other Loan Document and any other documents,
instruments, certificates, opinions, insurance policies, letters of credit, reports, requisitions
and other materials and information of every nature or description, and may communicate all oral
information, at any time submitted by or on behalf of Borrower or received by any Lender in
connection with the Loan or with respect to Borrower, provided that prior to any such delivery or
communication, such Eligible Assignees or Participants shall agree to preserve the confidentiality
of any of the foregoing to the same extent that such Lender agreed to preserve such
confidentiality. In order to facilitate assignments to Eligible Assignees and sales to Eligible
Assignees, Borrower shall execute such further documents, instruments or agreements as Lenders may
reasonably require; provided, that Borrower shall not be required (i) to execute any document or
agreement which would materially decrease its rights, or materially increase its obligations,
relative to those set forth in this Agreement or any of the other Loan Documents (including
financial obligations, personal recourse, representations and warranties and reporting
requirements), or (ii) to expend more than incidental sums of money or incidental administrative
time for which it does not receive reasonable reimbursement in order to comply with any requests or
requirements of any Lender in connection with such assignment or sale arrangement. In addition,
Borrower agrees to cooperate fully with Lenders in the exercise of Lenders’ rights pursuant to this
Section, including providing such information and documentation regarding Borrower as any Lender or
any potential Eligible Assignee may reasonably request and to meet with potential Eligible
Assignees.



14.2 Several Liability.



Anything in this Agreement contained to the contrary notwithstanding, the obligations of each
Lender to Borrower under this Agreement are several and not joint and several; each Lender shall
only be obligated to fund its Percentage of each disbursement to be made hereunder up to the amount
of its Commitment. During any time, and only during such time, as Agent is the sole Lender and has
not assigned any portion or portions of its interest in the Loan to another Lender pursuant to an
Assignment and Assumption Agreement, Agent in its individual capacity shall be liable for all of
the obligations of the Lenders under this Agreement and the other Loan Documents. From and after
the date that Agent as the sole Lender assigns any portion or portions of its interest in the Loan
to another Lender pursuant to an Assignment and Assumption Agreement, then Agent shall act as the
administrative agent on behalf of itself as a Lender and the other Lenders.



ARTICLE 15.




AGENT




15.1 Appointment of Agent.



(a) KeyBank is hereby appointed as Agent hereunder and under each other Loan Document, and
each Lender hereby irrevocably authorizes Agent to act as agent for Lenders and to take such
actions as Lenders are obligated or entitled to take under the provisions of this Agreement and the
other Loan Documents and to exercise such powers as are set forth herein or therein, together with
such other powers as are reasonably incidental thereto. Agent agrees to act as such upon the
express conditions contained in this Article in substantially the same manner that it would act in
dealing with a loan held for its own account. Agent shall not have a fiduciary relationship with
respect to any Lender by reason of this Agreement.



(b) The provisions of this Article are solely for the benefit of Agent and Lenders, and
Borrower shall not have any rights to rely on or enforce any of the provisions hereof except as
provided in Section 15.2 below. In performing its functions and duties under this
Agreement, Agent shall act solely as agent of Lender and does not assume, and shall not be deemed
to have assumed, any obligations toward or relationship of agency or trust with or for Borrower.



15.2 Reliance on Agent.



All acts of and communications by Agent, as agent for Lenders, shall be deemed legally conclusive
and binding; and Borrower or any third party (including any court) shall rely on any and all
communications or acts of Agent with respect to the exercise of any rights or the granting of any
consent, waiver or approval on behalf of a Lender in all circumstances where an action by such
Lender is required or permitted pursuant to this Agreement or the provisions of any other Loan
Document or by applicable law without the right or necessity of making any inquiry of any
individual Lender as to the authority of Agent with respect to such matter. In no event shall any
of the foregoing limit the rights or obligations of any Lender with respect to any other Lender
pursuant to this Article 15.



15.3 Powers of Agent.



Agent shall have and may exercise such powers under the Loan Documents as are specifically
delegated to Agent by the terms of each thereof, together with such powers as are reasonably
incidental thereto or are otherwise necessary or desirable in connection with the administration of
the Loan, and may exercise all other powers of Lenders as are not made subject to the consent of
the Required Lenders pursuant to Section 15.6(a) or to the consent of all Lenders pursuant
to Section 15.6(b). Without limiting the foregoing, Agent may consent to or execute
easements, plats, dedications, release of minor portions of the collateral and similar documents.
Agent shall not be considered, or be deemed, a separate agent of Lenders hereunder, but is, and
shall be deemed, acting in its contractual capacity as Agent, exercising such rights and powers
under the Loan Documents as are specifically delegated to Agent or Agent is otherwise entitled to
take hereunder. Agent shall have no implied duties to Lenders, or any obligation to Lenders to
take any action except any action specifically provided by the Loan Documents to be taken by Agent.



15.4 Disbursements.



(a) At least one (1) Business Day (by 1:00 p.m. Cleveland time) prior to each date a
disbursement of the Loan is to be made hereunder pursuant to this Agreement (or at least two (2)
LIBOR Business Days (by 1:00 p.m. Cleveland time) for any disbursements to be made at the Adjusted
LIBOR Rate), Agent shall notify each Lender of the proposed disbursement. Each Lender shall make
available to Agent (or the funding Lender or entity designated by Agent), the amount of such
Lender’s Percentage of such disbursement (with respect to such Lender, such amount being referred
to herein as an “Advance”) in immediately available funds not later than 1:00 p.m. Cleveland time
on the date such disbursement is to be made (such date being referred to herein as a “Funding
Date”). Unless Agent shall have been notified by any Lender prior to such time for funding in
respect of any Advance that such Lender does not intend to make available to Agent such Lender’s
Advance, Agent may assume that such Lender has made such amount available to Agent and Agent, in
its sole discretion, may, but shall not be obligated to, make available to Borrower a corresponding
amount. If such corresponding amount is not in fact made available to Agent by such Lender on or
prior to the respective Funding Date, such Lender agrees to pay and Borrower agrees to repay to
Agent forthwith on demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to Borrower until the date such amount is paid or
repaid to Agent, at (A) in the case of such Lender, the Federal Funds Effective Rate, and (B) in
the case of Borrower, the interest rate applicable at the time to a disbursement made on such
Funding Date. If such Lender shall pay to Agent such corresponding amount, such amount so paid
shall constitute such Lender’s Advance, and if both such Lender and Borrower shall have paid and
repaid, respectively, such corresponding amount, Agent shall promptly return to Borrower such
corresponding amount in same day funds.



(b) Requests by Agent for funding by Lenders of disbursements of the Loan will be made by
facsimile. Each Lender shall make its Advance available to Agent in dollars and in immediately
available funds to such Lender and account as Agent may designate, not later than Noon (Cleveland
time) on the Funding Date. Nothing in this Section 15.4 shall be deemed to relieve any
Lender of its obligation hereunder to make any Advance on any Funding Date, nor shall any Lender be
responsible for the failure of any other Lender to perform its obligations to make any Advance
hereunder, and the Commitment of any Lender shall not be increased or decreased as a result of the
failure by any other Lender to perform its obligation to make any Advances hereunder.



15.5 Distribution and Apportionment of Payments.



(a) Subject to Section 15.5(b), payments actually received by Agent for the account of
Lenders shall be paid to them promptly after receipt thereof by Agent, but in any event within one
(1) Business Day, provided that, if any such payments are not distributed to Lenders within one
Business Day after Agent’s receipt thereof, Agent shall pay to such Lenders interest thereon, at
the lesser of (i) the Federal Funds Effective Rate and (ii) if the applicable payment represents
repayment of a portion of the principal of the Loan, the rate of interest applicable to such
portion of the Loan, from the date of receipt of such funds by Agent until such funds are paid in
immediately available funds to such Lenders provided such funds are received by Agent not later
than 1:00 p.m. (Cleveland time) on the date of receipt. All payments of principal and interest in
respect of the Loan, all payments of the fees described in this Agreement (but not in any separate
fee letter except to the extent expressly set forth therein), and all payments in respect of any
other obligations of Borrower under the Loan Documents shall be allocated among such of Lenders as
are entitled thereto, in proportion of their respective Percentages or otherwise as provided herein
in the other Loan Documents, as the case may be. Agent shall distribute to each Lender at its
primary address set forth herein or in its Assignment and Assumption, or at such other address as a
Lender may request in writing, such funds as it may be entitled to receive, provided that Agent
shall in any event not be bound to inquire into or determine the validity, scope or priority of any
interest or entitlement of any Lender and may suspend all payments and seek appropriate relief
(including without limitation instructions from the Required Lenders, or all Lenders, as
applicable, or an action in the nature of interpleader) in the event of any doubt or dispute as to
any apportionment or distribution contemplated hereby. The order of priority herein is set forth
solely to determine the rights and priorities of Lenders as among themselves and may at any time or
from time to time be changed by Lenders as they may elect, in writing, without necessity of notice
to or consent of or approval by Borrower.



(b) If a Lender (a “Defaulting Lender”) defaults in making any Advance or paying any other sum
payable by it hereunder, such sum together with interest thereon at the Default Rate from the date
such amount was due until repaid (such sum and interest thereon as aforesaid referred to,
collectively, as the “Lender Default Obligation”) shall be payable by the Defaulting Lender (i) to
any Lender(s) which elect, at their sole option (and with no obligation to do so), to fund the
amount which the Defaulting Lender failed to fund or (ii) to Agent or any other Lender which under
the terms of this Agreement is entitled to reimbursement from the Defaulting Lender for the amounts
advanced or expended. Notwithstanding any provision hereof to the contrary, until such time as a
Defaulting Lender has repaid Lender Default Obligation in full, all amounts which would otherwise
be distributed to the Defaulting Lender shall instead be applied first to repay Lender Default
Obligation (to be applied first to interest at the Default Rate and then to principal) until Lender
Default Obligation has been repaid in full (whether by such application or by cure by the
Defaulting Lender), whereupon such Lender shall no longer be a Defaulting Lender. Any interest
collected from Borrower on account of principal advanced by any Lender(s) on behalf of a Defaulting
Lender shall be paid to Lender(s) who made such advance and shall be credited against the
Defaulting Lender’s obligation to pay interest on the amount advanced at the Default Rate. If no
other Lender makes an advance a Defaulting Lender failed to fund, a portion of the indebtedness of
Borrower to the Defaulting Lender equal to Lender Default Obligation shall be subordinated to the
indebtedness of Borrower to all other Lenders and shall be paid only after the indebtedness of
Borrower to all other Lenders is paid. The provisions of this Section shall apply and be effective
regardless of whether an Event of Default occurs and is then continuing, and notwithstanding (i)
any other provision of this Agreement to the contrary or (ii) any instruction of Borrower as to its
desired application of payments. No Defaulting Lender shall have the right to vote on matters
which are subject to the consent or approval of Required Lenders or all Lenders and while any
Lender is a Defaulting Lender the requisite percentage of Lenders which constitutes the Required
Lenders shall be calculated exclusive of the Percentage of the Defaulting Lender. Agent shall be
entitled to (A) withhold or set off, and to apply to the payment of Lender Default Obligation any
amounts to be paid to such Defaulting Lender under this Agreement, and (B) bring an action or suit
against such Defaulting Lender in a court of competent jurisdiction to recover Lender Default
Obligation and, to the extent such recovery would not fully compensate Lenders for the Defaulting
Lender’s breach of this Agreement, to collect damages. In addition, the Defaulting Lender shall
indemnify, defend and hold Agent and each of the other Lenders harmless from and against any and
all claims, actions, liabilities, damages, costs and expenses (including attorneys’ fees and
expenses), plus interest thereon at the Default Rate, for funds advanced by Agent or any other
Lender on account of the Defaulting Lender or any other damages such persons may sustain or incur
by reason of or as a direct consequence of the Defaulting Lender’s failure or refusal to abide by
its obligations under this Agreement.



(c) At least five Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is not incorporated under the laws of the
United States of America, or a state thereof, agrees that it will deliver to Agent two duly
completed copies of United States Internal Revenue Service Form W8 BEN or W8 ECI, certifying in
either case that such Lender is entitled to receive payments under this Agreement and the Note
without deduction or withholding of any United States federal income taxes. Each Lender which so
delivers a Form W8 BEN or W8 ECI further undertakes to deliver Agent two additional copies of such
form (or a successor form) on or before the date that such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent forms so delivered by it,
and such amendments thereto or extensions or renewals thereof as may be reasonably requested by
Agent, in each case certifying that such Lender is entitled to receive payments under this
Agreement and the Note without deduction or withholding of any United States federal income taxes,
unless an event (including without limitation any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender advises Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.



15.6 Consents and Approvals.



(a) Each of the following shall require the approval or consent of the Required Lenders:



(i) The exercise of any rights and remedies under the Loan Documents following an Event of
Default, provided that absent any direction from the Required Bank, Agent may exercise any right or
remedy under the Loan Documents as Agent may determine in good faith to be necessary or appropriate
to protect Lenders or the collateral securing the Loan.;



(ii) Appointment of a successor Agent;



(iii) Approval of Post-Default Plan, defined in Section 15.7(b); and



(iv) Except as referred to in Section 15.6(b) below, approval of any amendment or
modification of this Agreement or any of the other Loan Documents, or issuance of any waiver of any
material provision of this Agreement or any of the other Loan Documents;



(b) Each of the following shall require the approval or consent of all Lenders:



(i) Extension of the Maturity Date (beyond any extension permitted herein) or forgiveness of
all or any portion of the principal amount of the Loan or any accrued interest thereon, or any
other amendment of this Agreement or the other Loan Documents which would reduce the interest rate
options or the rate at which fees are calculated or forgive any loan fee, or extend the time of
payment of any principal, interest or fees;



	 	 	 
	(ii)

(iii)

(iv)

	 	Reduction of the percentage specified in the definition of Required Lenders;

Any release of Guarantor’s liability under the Payment Guaranty;

Increasing of the amount of the Loan;






(v) Release of any lien on any material collateral (except as Borrower is entitled to under
the Loan Documents); and



(vi) Amendment of the provisions of this Article 15.



(c) In addition to the required consents or approvals referred to in subsections (a)
and (b) above, Agent may at any time request instructions from the Required Lenders with
respect to any actions or approvals which, by the terms of this Agreement or of any of the Loan
Documents, Agent is permitted or required to take or to grant without instructions from any
Lenders, and if such instructions are promptly requested, Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be under any liability
whatsoever for refraining from taking any action or withholding any approval under any of the Loan
Documents until it shall have received such instructions from the Required Lenders. Without
limiting the foregoing, no Lender shall have any right of action whatsoever against any Agent as a
result of such Agent acting or refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of the Required Lenders or, where applicable, all
Lenders. Agent shall promptly notify each Lender at any time that the Required Lenders have
instructed Agent to act or refrain from acting pursuant hereto.



(d) Each Lender authorizes and directs Agent to enter into the Loan Documents other than this
Agreement for the benefit of Lenders. Each Lender agrees that any action taken by Agent at the
direction or with the consent of the Required Lenders in accordance with the provisions of this
Agreement or any other Loan Document, and the exercise by Agent at the direction or with the
consent of the Required Lenders of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding upon all Lenders,
except for actions specifically requiring the approval of all Lenders. All communications from
Agent to Lenders requesting Lenders’ determination, consent, approval or disapproval (i) shall be
given in the form of a written notice to each Lender, (ii) shall be accompanied by a description of
the matter or item as to which such determination, approval, consent or disapproval is requested,
or shall advise each Lender where such matter or item may be inspected, or shall otherwise describe
the matter or issue to be resolved, (iii) shall include, if reasonably requested by a Lender and to
the extent not previously provided to such Lender, written materials and a summary of all oral
information provided to Agent by Borrower in respect of the matter or issue to be resolved, and
(iv) shall include Agent’s recommended course of action or determination in respect thereof. Each
Lender shall reply promptly, but in any event within ten (10) Business Days after receipt of the
request therefor from Agent (the “Lender Reply Period”). Unless a Lender shall give written notice
to Agent that it objects to the recommendation or determination of Agent (together with a written
explanation of the reasons behind such objection) within Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or determination. With respect to
decisions requiring the approval of the Required Lenders or all Lenders, Agent shall upon receiving
the required approval or consent follow the course of action or determination recommended to
Lenders by Agent or such other course of action recommended by the Required Lenders.



15.7 Agency Provisions Relating to Collateral.



(a) Agent is hereby authorized on behalf of all Lenders, without the necessity of any notice
to or further consent from any Lender, at any time and from time to time, to take any action with
respect to any collateral for the Loan or any Loan Document which may be necessary to preserve and
maintain such collateral or to perfect and maintain perfected the liens upon such collateral
granted pursuant to this Agreement and the other Loan Documents.



(b) Except as provided in this Agreement, Agent shall have no obligation whatsoever to any
Lender or to any other person or entity to assure that any collateral exists or is owned by
Borrower or is cared for, protected or insured or has been encumbered or that the liens granted
herein or in any of the other Loan Documents or pursuant hereto or thereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are entitled to any
particular priority.



(c) Should Agent commence any proceeding or in any way seek to enforce Agent’s or Lenders’
rights or remedies under the Loan Documents, irrespective of whether as a result thereof Agent
shall acquire title to any collateral, each Lender, upon demand therefor from time to time, shall
contribute its share (based on its Percentage) of the reasonable costs and/or expenses of any such
enforcement or acquisition, including, but not limited to, fees of receivers or trustees, court
costs, title company charges, filing and recording fees, appraisers’ fees and fees and expenses of
attorneys to the extent not otherwise reimbursed by Borrower. Without limiting the generality of
the foregoing, each Lender shall contribute its share (based on its Percentage) of all reasonable
costs and expenses incurred by Agent (including reasonable attorneys’ fees and expenses) if Agent
employs counsel for advice or other representation (whether or not any suit has been or shall be
filed) with respect to any collateral for the Loan or any part thereof, or any of the Loan
Documents, or the attempt to enforce any security interest or lien on any collateral, or to enforce
any rights of Agent or Lenders or any of Borrower’s or any other party’s obligations under any of
the Loan Documents, but not with respect to any dispute between Agent and any other Lender(s). It
is understood and agreed that in the event Agent determines it is necessary to engage counsel for
Lender from and after the occurrence of a Default or Event of Default, said counsel shall be
selected by Agent and written notice of such selection, together with a copy of such counsel’s
engagement letter and fee estimate, shall be delivered to Lenders.



(d) In the event that all or any portion of the collateral for the Loan is acquired by Agent
as the result of the exercise of any remedies hereunder or under any other Loan Document, or is
retained in satisfaction of all or any part of Borrower’s obligations under the Loan Documents,
title to any such collateral or any portion thereof shall be held in the name of Agent or a nominee
or subsidiary of Agent, as agent, for the ratable benefit of Agent and Lenders. Agent shall
prepare a recommended course of action for such collateral (the “Post-Default Plan”), which shall
be subject to the approval of the Required Lenders. Agent shall administer the collateral in
accordance with the Post-Default Plan, and upon demand therefor from time to time, each Lender will
contribute its share (based on its Percentage) of all reasonable costs and expenses incurred by
Agent pursuant to the Post-Default Plan, including without limitation, any operating losses and all
necessary operating reserves. To the extent there is net operating income from such collateral,
Agent shall, in accordance with the Post-Default Plan, determine the amount and timing of
distributions to Lenders. All such distributions shall be made to Lenders in accordance with their
respective Percentages. In no event shall the provisions of this subsection or the Post-Default
Plan require Agent or any Lender to take an action which would cause such Lender to be in violation
of any applicable regulatory requirements.



15.8 Lender Actions Against Borrower or the Collateral.



Each Lender agrees that it will not take any action, nor institute any actions or proceedings,
against Borrower or any other person hereunder or under any other Loan Documents with respect to
exercising claims against Borrower or rights in any Collateral without the consent of the Required
Lenders. With respect to any action by Agent to enforce the rights and remedies of Agent and
Lenders with respect to Borrower and any collateral in accordance with the terms of this Agreement,
each Lender hereby consents to the jurisdiction of the court in which such action is maintained.



15.9 Assignment and Participation.



No Lender shall be permitted to assign or sell all or any portion of its rights and obligations
under this Agreement to Borrower or any Affiliate of Borrower.



15.10 Ratable Sharing.



Subject to Sections 15.4 and 15.5, Lenders agree among themselves that (i) with
respect to all amounts received by them which are applicable to the payment of the Loan, equitable
adjustment will be made so that, in effect, all such amounts will be shared among them ratably in
accordance with their Percentages, whether received by voluntary payment, by the exercise of the
right of set-off or bankers’ lien, by counterclaim or cross action or by the enforcement of any or
all of the Loan Documents or any collateral and (ii) if any of them shall by voluntary payment or
by the exercise of any right of counterclaim, set-off, bankers’ lien or otherwise, receive payment
of a proportion of the aggregate amount of the Loan held by it which is greater than its Percentage
of the payments on account of the Loan, the one receiving such excess payment shall purchase,
without recourse or warranty, an undivided interest and participation (which it shall be deemed to
have done simultaneously upon the receipt of such payment) in such obligations owed to the others
so that all such recoveries with respect to such obligations shall be applied ratably in accordance
with their Percentages; provided, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases shall be rescinded and the
purchase prices paid for such participations shall be returned to that party to the extent
necessary to adjust for such recovery, but without interest except to the extent the purchasing
party is required to pay interest in connection with such recovery. Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this Section may, to the
fullest extent permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the direct creditor of
Borrower in the amount of such participation.



15.11 General Immunity.



Neither Agent nor any of its directors, officers, agents or employees shall be liable to Borrower
or any Lender for any action taken or omitted to be taken by it or them hereunder or under any
other Loan Document or in connection herewith or therewith, except for its or their own gross
negligence or willful misconduct. In the absence of gross negligence, Agent shall not be liable
for any apportionment or distribution of payments made by it in good faith pursuant to
Section 15.5 and if any such apportionment or distribution is subsequently determined to
have been made in error the sole recourse of any Lender to whom payment was due, but not made,
shall be to recover from the recipients of such payments any payment in excess of the amount to
which they are determined to have been entitled.



15.12 No Responsibility for Loan, Recitals, etc.



Neither Agent nor any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (i) any statement, warranty or representation
made in connection with any Loan Document or any use of the Loan; (ii) the performance or
observance of any of the covenants or agreements of any party to any Loan Document; (iii) the
satisfaction of any condition specified in this Agreement, except receipt of items purporting to be
the items required to be delivered to any Agent; or (iv) the validity, effectiveness or genuineness
of any Loan Document or any other instrument or writing furnished in connection therewith, provided
that the foregoing shall not release Agent from liability for its gross negligence or willful
misconduct.



15.13 Action on Instructions of Lenders.



Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by all Lenders (or the
Required Lenders, if such action may be directed hereunder by the Required Lenders), and such
instructions and any action taken or failure to act pursuant thereto shall be binding on all of
Lenders. Each Lender, severally to the extent of its Percentage, hereby agrees to indemnify Agent
against and hold it harmless from any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action, provided that the foregoing shall not
release Agent from liability for its gross negligence or willful misconduct.



15.14 Employment of Agents and Counsel.



Agent may undertake any of its duties as Agent hereunder and under any other Loan Document by or
through employees, agents, and attorneys-in-fact and shall not be liable to Lenders, except as to
money or securities received by them or their authorized agents, for the default or misconduct of
any such agents or attorneys-in-fact selected by it with reasonable care. Agent shall be entitled
to advice of counsel concerning all matters pertaining to the agency hereby created and its duties
hereunder and under any other Loan Document.



15.15 Reliance on Documents; Counsel.



Agent shall be entitled to rely upon any notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel
selected by Agent, which counsel may be an employee of Agent, provided that the foregoing shall not
release Agent from liability for its gross negligence or willful misconduct. Any such counsel
shall be deemed to be acting on behalf of Lender in assisting Agent with respect to the Loan, but
shall not be precluded from also representing Agent in any matter in which the interests of Agent
and the other Lenders may differ.



15.16 Agent’ Reimbursement and Indemnification.



Lenders agree to reimburse and indemnify Agent ratably (i) for any amounts (excluding principal and
interest on the Loan and loan fees) not reimbursed by Borrower for which Agent is entitled to
reimbursement under the Loan Documents, (ii) for any other expenses incurred by Agent on behalf of
Lender, in connection with the preparation, execution, delivery, administration and enforcement of
the Loan Documents, if not paid by Borrower, (iii) for any expenses incurred by Agent on behalf of
Lender which may be necessary or desirable to preserve and maintain collateral or to perfect and
maintain perfected the liens upon the collateral granted pursuant to this Agreement and the other
Loan Documents, if not paid by Borrower, (iv) for any amounts and other expenses incurred by Agent
on behalf of Lender in connection with any default by any Lender hereunder or under the other Loan
Documents, if not paid by such Lender, and (v) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against Agent in any way relating to or
arising out of the Loan Documents or any other document delivered in connection therewith or the
transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such
other documents, provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of Agent.



15.17 Rights as a Lender.



With respect to its Commitment, if any, Agent shall have the same rights, powers and obligations
hereunder and under any other Loan Document as any Lender and may exercise such rights and powers
as though it were not an Agent, and the term “Lender” or “Lenders” shall, unless the context
otherwise indicates, include Agent in its individual capacities. The Borrower and each Lender
acknowledge and agree that Agent and/or its affiliates may accept deposits from, lend money to,
hold other investments in, and generally engage in any kind of trust, debt, equity or other
transaction or have other relationships, in addition to those contemplated by this Agreement or any
other Loan Document, with Borrower or any of its affiliates in which Borrower or such affiliate is
not restricted hereby from engaging with any other person.



15.18 Lenders’ Credit Decisions.



Each Lender acknowledges that it has, independently and without reliance upon Agent or any other
Lender and based on the financial statements and other information prepared by Borrower and such
other documents and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges
that it will, independently and without reliance upon Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement and the other Loan Documents.



15.19 Notice of Events of Default.



Should Agent receive any written notice of the occurrence of a Default or Event of Default, or
should Agent send Borrower a notice of Default or Event of Default, Agent shall promptly furnish a
copy thereof to each Lender.



15.20 Successor Agent.



(a) Agent may resign from the performance of all its functions and duties hereunder at any
time by giving at least thirty (30) days prior written notice to Lenders and Borrower. Such
resignation shall take effect on the date set forth in such notice or as otherwise provided below.
Such resignation by Agent as agent shall not affect its obligations hereunder, if any, as a Lender.



(b) Upon resignation by Agent, or any successor Agent, the Required Lenders shall appoint a
successor Agent with the consent of Borrower, which shall not be unreasonably withheld, conditioned
or delayed (provided that no consent of Borrower shall be required if the successor Agent is also a
Lender or if an Event of Default then exists). If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment within thirty (30) days after the
retiring Agent’s giving notice of resignation, then the retiring Agent may appoint a successor
Agent with the consent of Borrower, which shall not be unreasonably withheld, conditioned or
delayed (provided that no consent of Borrower shall be required if the successor Agent is also a
Lender or if an Event of Default then exists). Upon the acceptance of any appointment as an Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of Agent and Agent, and the retiring Agent shall
be discharged from its duties and obligations hereunder and under the other Loan Documents other
than its liability, if any, for duties and obligations accrued prior to its retirement. After any
retiring Agent’s resignation hereunder as an Agent, the provisions of this Article 15 shall
continue in effect for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as an Agent hereunder and under the other Loan Documents.



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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date written above.



“Borrower”



NNN HEALTHCARE/OFFICE REIT E FLORIDA


LTC, LLC, a Delaware limited liability company



	 	 	 
	By: /s/ Shannon K S Johnson

	Name: Shannon K S Johnson

	Title:

	 	Authorized Signatory






“Agent”



KEYBANK NATIONAL ASSOCIATION, a national


banking association



By: /s/ Bellini Lacey

Name: Bellini Lacey

Title: Closing Officer





“Lender”



KEYBANK NATIONAL ASSOCIATION, a national





banking association



	 	 	 	 	 
	By: /s/ Bellini Lacey
Name: Bellini Lacey
Title: Closing Officer
Amount of Commitment:
	 	$	30,500,000.00	 
	Percentage:
	 	 	100	 







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