Document:

Exhibit 10.1

Exhibit 10.1

Prepared by, recording requested by,

and after recording return to:

Sean Gillen, Esq.

Kutak Rock LLP

The Omaha Building

1650 Farnam Street

Omaha, NE 68102

Index this document as:

(1) Deed of Trust

(2) Fixture Filing

Assessor’s Parcel No.: 313-382-17

COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT

OF LEASES AND RENTS AND FIXTURE FILING

	 	 	 
	GRANTOR:

	 	CM HEALTH HOLDINGS LLC, a Nevada limited liability company
	 
	 	 
	TRUSTEE:

	 	FIDELITY NATIONAL TITLE INSURANCE COMPANY, a California
corporation
	 
	 	 
	BENEFICIARY:

	 	RBS ASSET FINANCE, INC., a New York corporation
	 
	 	 
	PROPERTY:

	 	11895 Avenue of Industry, San Diego, CA 92128

Dated: December 31, 2010

NOTICE: THE DEBT SECURED HEREBY IS SUBJECT TO CALL IN FULL OR THE TERMS THEREOF BEING MODIFIED IN
THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY HEREIN CONVEYED.

DO NOT DESTROY THIS DEED OF TRUST OR THE NOTE WHICH IT SECURES AS THESE MUST BE PRESENTED TO THE
TRUSTEE FOR CANCELLATION IN ORDER TO OBTAIN A RECONVEYANCE. THE RECONVEYANCE MUST BE RECORDED IN
THE OFFICE OF THE COUNTY RECORDER.

THIS INSTRUMENT COVERS REAL PROPERTY AND PERSONAL PROPERTY AND GOODS WHICH ARE OR ARE TO BECOME
FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN AND IS TO BE FILED FOR RECORD IN THE RECORDS WHERE
DEEDS OF TRUST ON REAL ESTATE ARE RECORDED. IN ADDITION, THIS INSTRUMENT SHOULD BE APPROPRIATELY
INDEXED NOT ONLY AS A DEED OF TRUST, BUT ALSO AS A FINANCING STATEMENT COVERING PERSONAL PROPERTY
AND GOODS THAT ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED THEREIN. THE MAILING ADDRESS
OF THE GRANTOR (DEBTOR) AND THE BENEFICIARY (SECURED PARTY) ARE SET FORTH IN THIS INSTRUMENT.

THIS COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE
FILING, dated as of December 31, 2010 (this “Instrument”), made by the trustor, CM HEALTH HOLDINGS
LLC, a Nevada limited liability company (together with its successors and assigns, “Borrower”),
with Federal Tax Identification Number 33-1127462 and Organizational Identification Number
E0794152005-5, having an address at 11895 Avenue of Industry, San Diego, CA 92128, in favor of
FIDELITY NATIONAL TITLE INSURANCE COMPANY, a California corporation (together with its
successors and assigns, “Trustee”), whose address is 1300 Dove Street, Suite 310, Newport Beach, CA
92660, for the benefit of the Beneficiary, RBS ASSET FINANCE, INC., a New York corporation
(together with its successors and assigns, “Lender”), having an address at 71 S. Wacker Drive,
Suite 2800, Chicago, IL 60606.

 

 

 

W I T N E S S E T H  T H A T:

WHEREAS, Borrower is on the date of delivery hereof the holder of a fee simple estate in the
parcel or parcels of land described in Schedule 1 hereto (the “Land”) and of the Improvements (as
defined below); and

WHEREAS, Lender has made a loan (the “Loan”) to Borrower evidenced by that certain Note as
more particularly described below; and

WHEREAS, this Instrument is given by Borrower to secure: (a) the Note dated as of the date
hereof (the “Note”) executed by Borrower in the original principal amount of $35,000,000 and with a
scheduled maturity date of January 1, 2018, together with any renewals, extensions or modifications
thereof; (b) the payment and performance of all obligations of Borrower owed to Lender under the
Loan Documents (as defined below), whether now existing or hereafter arising, including, without
limitation, any renewal, extension or modification thereof and all future advances and readvances
that may subsequently be made to Borrower by Lender under the Loan Documents (collectively, the
“Obligations”); (c) the payment and performance of all obligations under any other document or
instrument that recites that it is secured hereby, whether now existing or hereafter arising,
including, without limitation, any renewal, extension or modification thereof; and (d) the payment
and performance of all obligations of Borrower or Guarantor owed to Lender, whether now existing or
hereafter arising ((a) through (d) are referred to herein as the “Secured Obligations”); and

WHEREAS, as a condition precedent to Lender making the Loan, Borrower is required to execute
and deliver this Instrument for the benefit of Lender to secure the payment and performance of the
Secured Obligations; and

WHEREAS, Borrower has duly authorized the execution, delivery and performance of this
Instrument.

G R A N T:

NOW, THEREFORE, for and in consideration of the premises, and of the mutual covenants herein
contained, and in order to induce Lender to make the Loan to Borrower, and in order to secure the
full, timely and proper payment and performance of and compliance with each and every one of the
Secured Obligations, Borrower hereby irrevocably grants, bargains, sells, mortgages, warrants,
aliens, demises, releases, hypothecates, pledges, assigns, transfers, conveys and grants a security
interest in and to Trustee, in trust, WITH THE POWER OF SALE, all of Borrower’s estate, right,
title and interest, if any, now or hereafter arising, in and to the following (collectively, the
“Collateral”):

(a) Premises. The Land, together with all tenements, rights, easements, hereditaments,
rights of way, privileges, liberties, appendages and appurtenances now or hereafter
belonging or in anywise pertaining to the Land (including, without limitation, all rights
relating to storm and sanitary sewer, water, gas, electric, railway and telephone services);
all development rights, air rights, riparian rights, water, water rights, water stock, all
rights in, to and with respect to any and all oil, gas, coal, minerals and other substances
of any kind or character underlying or relating to the Land and any interest therein; any
street, road, highway or alley, vacated or other, adjoining the Land or any part thereof;
all strips and gores belonging, adjacent or pertaining to the Land; and any after-acquired
title to any of the foregoing (collectively, the “Premises”);

(b) Improvements. All buildings, structures and other improvements and any additions
and alterations thereto or replacements thereof, now or hereafter built, constructed or
located upon the Premises; and all furnishings, fixtures, fittings, appliances, apparatus,
equipment, machinery, building and construction materials and other articles of property of
every kind and nature whatsoever, now or hereafter
affixed or attached to, erected on or used in connection with the operation of the
Premises or such buildings, structures and other improvements, including, without
limitation, all partitions, furnaces, boilers, oil burners, radiators and piping, plumbing
and bathroom fixtures, refrigeration, heating, ventilating, air conditioning and sprinkler
systems, other fire prevention and extinguishing apparatus and materials, vacuum cleaning
systems, gas and electric fixtures, incinerators, compactors, elevators, engines, motors,
generators and all other articles of property that are considered fixtures under applicable
law (collectively together with all additions and accessions thereto and all replacements
and substitutions thereof, the “Improvements”; the Premises and the Improvements are
collectively referred to herein as the “Property”);

 

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(c) Leases. All leases, licenses, occupancy agreements, concessions and other
arrangements, oral or written, now existing or hereafter entered into (including, without
limitation, the leases listed on Schedule 3 hereto), whereby any person agrees to pay money
or any other consideration for the use, possession or occupancy of, or any estate in, the
Property or any portion thereof or interest therein (collectively, the “Leases”);

(d) Permits and Approvals. To the extent assignable under applicable law, all permits,
franchises, licenses, approvals and other authorizations respecting the use, occupation or
operation of the Property or any part thereof and respecting any business or other activity
conducted on or from the Property, and any product or proceed thereof or therefrom,
including, without limitation, all building permits, certificates of occupancy and other
licenses, permits and approvals issued by governmental authorities having jurisdiction;

(e) Rents. All rents, issues, profits, royalties, avails, income, proceeds and other
benefits derived or owned, directly or indirectly, by Borrower from the Collateral,
including, without limitation, all rents and other consideration payable by Tenants, claims
against guarantors, any guaranties with respect to any Tenant’s obligations under any Lease
and any cash or other securities deposited to secure performance by Tenants, under the
Leases (collectively, “Rents”);

(f) Plans. To the extent assignable under applicable law, all plans, specifications,
contracts and agreements relating to the design or construction of the Improvements, any
payment, performance, or other bond provided in connection with the design or construction
of the Improvements, all contracts, agreements and purchase orders with contractors,
subcontractors, suppliers and materialmen incidental to the design or construction of the
Improvements, all other contracts and agreements pertaining to or affecting the Property,
including, without limitation, all options or contracts to acquire other property for use in
connection with operation or development of the Property and management contracts, service
or supply contracts with respect to the Property;

(g) Trademarks and Trade Names. All trademarks, trade names, symbols, assumed names,
and other rights and interest in and to the name and marks used by Borrower in connection
with the Property, together with the goodwill associated therewith;

(h) Deposits. Any moneys on deposit with or for the benefit of Lender in connection
with any of the Collateral, including deposits for the payment of real estate taxes, public
assessments and repairs;

(i) Claims. All claims, demands, judgments, insurance proceeds, awards of damages and
settlements hereafter made resulting from the taking of the Property or any portion thereof
under the power of eminent domain, or for any damage (whether caused by such taking, by
casualty or otherwise) to the Property or any portion thereof;

(j) Other Rights. All other property and rights of Borrower relating to any of the
foregoing; and

(k) Addition; Replacements; Proceeds. All additions, accessions, replacements,
substitutions, proceeds and products of the property, tangible and intangible, described
herein.

 

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AND, without limiting any of the other provisions of this Instrument, Borrower expressly
grants to Lender, as secured party, a security interest in all of those portions of the Collateral
that are or may be subject to the UCC provisions applicable to secured transactions; and

TO HAVE AND TO HOLD the Collateral unto Trustee for the benefit of Lender.

PROVIDED, HOWEVER, that nothing contained herein shall create an obligation on the part of
Lender to make future advances or readvances to Borrower; and

PROVIDED, FURTHER, that the total amount of the Secured Obligations and advances at any one
time secured hereby shall in no event exceed $70,000,000, plus interest thereon and all charges and
expenses of collection incurred by Lender, including court costs and attorneys’ fees and expenses
and advancements for taxes, insurance premiums, public assessments and repairs, if any; and

FURTHER to secure the full, timely and proper payment and performance of the Secured
Obligations, Borrower hereby covenants and agrees with and warrants to Trustee for the benefit of
Lender as follows:

ARTICLE I

DEFINITIONS

The following terms shall have the following meanings for all purposes of this Instrument, and
capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms
in the Note:

“Business Day” means any day on which Lender is open for business and is neither a Saturday
nor Sunday nor a legal holiday on which banks are authorized or required to be closed in New York,
New York or Chicago, Illinois.

“Change of Control” means a change in control of Borrower or Guarantor, including, without
limitation, a change in control resulting from direct or indirect transfers of voting stock or
partnership, membership or other ownership interests, whether in one or a series of transactions.
“Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of Borrower or Guarantor, and a Change of Control shall
occur if any of the following occurs: (a) any person or group (as such term is used in Section
13(d)(3) of the Exchange Act) acquires, after the date of this Instrument, the beneficial ownership
directly or indirectly, of 50% or more of the voting power of the total outstanding stock or other
ownership interests of Borrower or Guarantor or (b) Guarantor ceases to own 100% of the outstanding
membership interests of Borrower.

“Default” means any Event of Default or any condition, occurrence or event that, after notice
or lapse of time or both, would constitute an Event of Default.

“Environmental Indemnity Agreement” means the Environmental Indemnity Agreement dated as of
the date hereof executed by Borrower for the benefit of Lender, and any amendment or supplement
thereto.

“Environmental Laws” means (i) all Federal Toxic Waste Laws, (ii) all local, State or foreign
laws, statutes, regulations, or ordinances analogous to any of the Federal Toxic Waste Laws and
(iii) all other federal, State or local laws (including any common law, consent decrees and
administrative orders), statutes, regulations or ordinances regulating, permitting, prohibiting or
otherwise restricting the placement, discharge, release, generation, treatment or disposal upon or
into any environmental media of any substance, pollutant, contaminant or waste that is now or
hereafter classified or considered to be hazardous or toxic; “Environmental Laws” shall also
include any and all amendments to any of (i), (ii) or (iii).

“Event of Default” has the meaning set forth in Section 4.01.

 

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“Federal Toxic Waste Laws” means any federal law or implementing regulation regulating any
substance, matter, material, waste, contaminant or pollutant, the generation, storage, disposal,
handling, release, treatment,
discharge or emission of which is regulated, prohibited or limited, including, without
limitation: (i) the Resource Conservation and Recovery Act, as amended by the Hazardous and Solid
Waste Amendments of 1984, as now or hereafter amended (42 U.S.C. Section 6901 et seq.), (ii) the
Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund
Amendments and Reauthorization Act of 1986, as now or hereafter amended (42 U.S.C. Section 9601 et
seq.), (iii) the Clean Water Act, as now or hereafter amended (33 U.S.C. Section 1251 et seq.),
(iv) the Toxic Substances and Control Act, as now or hereafter amended (15 U.S.C. Section 2601 et
seq.) and (v) the Clean Air Act, as now or hereafter amended (42 U.S.C. Section 7401 et seq.).

“GAAP” means generally accepted accounting principles in the United States applied on a
consistent basis.

“Guarantor” means The Ensign Group, Inc., a Delaware corporation.

“Guaranty” means the Guaranty of even date herewith executed by Guarantor for the benefit of
Lender, pursuant to which, among other things, Guarantor has guaranteed the payment and performance
obligations of Borrower under the Loan Documents.

“Hazardous Material” means (a) any “hazardous substance” as defined by Environmental Laws, (b)
any hazardous waste” as defined by Environmental Laws, (c) any petroleum product including, without
limitation, waste oil, used oil or wastewater containing petroleum product, (d) any asbestos or
material containing asbestos and (e) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any Environmental Law relating to or imposing
liability or standards of conduct.

“Impositions” has the meaning set forth in Section 2.04.

“Indemnified Liabilities” has the meaning set forth in Section 2.12.

“Indemnified Parties” has the meaning set forth in Section 2.12.

“Loan Documents” means, collectively, this Instrument, the Note and each other instrument or
document executed or delivered pursuant to or in connection with this Instrument and the other Loan
Documents, including, without limitation, any instrument or agreement given to evidence or further
secure the Obligations.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, properties or financial condition of Borrower or Guarantor, (b) the ability of Borrower
to perform or pay its Obligations or any material indebtedness in accordance with the terms
thereof, (c) the ability of Guarantor to perform its obligations under the Guaranty, (d) Lender’s
Lien on the Collateral or the priority of such Lien or (e) the validity or enforceability of any
Loan Document or the rights and remedies available to Lender under any Loan Document.

“Permitted Exceptions” means the exceptions set forth in Schedule 2 hereto.

“Property” has the meaning set forth in the granting clause.

“Premises” has the meaning set forth in the granting clause.

“Release” means a “release” or “threatened release” as such terms are defined in Environmental
Laws of a Hazardous Material.

“Rents” has the meaning set forth in the granting clause.

“State” means the State of California.

“Taking” has the meaning set forth in Section 3.02.

“Tenant” means any tenant of the Property, and its successors and assigns.

“UCC” means the Uniform Commercial Code as enacted in the State.

 

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ARTICLE II

COVENANTS AND AGREEMENTS OF BORROWER

Section 2.01. Payment and Performance of Obligations. Borrower agrees that it will duly and
punctually pay and perform or cause to be paid and performed each of the Secured Obligations at the
time and in accordance with the terms specified in the Loan Documents.

Section 2.02. Title to Collateral. Borrower represents and warrants to Lender that:

(a) as of the date hereof and at all times hereafter while this Instrument is
outstanding, Borrower is and shall be the sole, absolute owner and holder of the fee simple
estate in the Property and the absolute owner of the legal and beneficial title to all other
property included in the Collateral, subject in each case only to this Instrument and
Permitted Exceptions;

(b) Borrower has good and lawful right, power and authority to execute this Instrument
and to convey, transfer, assign, mortgage and grant a security interest in the Collateral,
all as provided herein;

(c) this Instrument has been duly executed, acknowledged and delivered on behalf of
Borrower, all consents and other actions required to be taken by the officers, directors,
shareholders, managers and partners, as the case may be, of Borrower have been duly and
fully given and performed and this Instrument constitutes the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its terms; and

(d) Borrower, at its expense, will and hereby does warrant and defend to Lender and any
purchaser under the power of sale herein or at any foreclosure sale such title to the
Collateral (as described in subsection (a) of this Section) and the first mortgage lien and
first priority perfected security interest of this Instrument thereon and therein against
all claims and demands and will maintain, preserve and protect such Lien (as defined below)
and will keep this Instrument a valid, first mortgage lien of record on and a first priority
perfected security interest in the Collateral, subject only to the Permitted Exceptions.

(e) Borrower has duly paid in full all fees, premiums and other charges due in
connection with (i) the recording of this Instrument and the issuance of a loan policy or
policies of title insurance in form and amount satisfactory to Lender naming Lender as the
insured, insuring the title to and the first lien of this Instrument on the Property with
endorsements reasonably requested by Lender and (ii) a survey of the Property in form and
substance acceptable to Lender and title insurer.

Section 2.03. Title Insurance. All proceeds received by and payable to Lender for any loss
under any loan policy or policies of title insurance delivered to Lender shall be the property of
Lender and shall be applied by Lender in accordance with the provisions of Section 3.03 or 3.04, as
applicable.

Section 2.04. Impositions. Borrower will pay or cause to be paid all taxes, insurance
premiums, assessments, water and sewer rates, ground rents, fees and other charges (collectively,
the “Impositions”) that at any time may be assessed, levied, confirmed or imposed or that may
become a Lien upon the Collateral, or any portion thereof, or that are payable with respect
thereto, prior to delinquency, before any fine, penalty or interest may be added for non-payment
and before the commencement of any action to foreclose any Lien against all or any portion of the
Collateral with respect thereto. Borrower will deliver to Lender, upon request, copies of official
receipts or other satisfactory proof evidencing such payments. Borrower shall not be entitled to
any credit against the Secured Obligations by reason of the payment of any Imposition.

 

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Upon the occurrence of an Event of Default (hereinafter defined), and at Lender’s sole option
at any time thereafter, Borrower shall pay in addition to each monthly payment under the Note,
one-twelfth of the Impositions payable during each year (as estimated by Lender in its sole
discretion), to be held by Lender without interest to
Borrower, for the payment of such obligations. If the amount of such additional payments held
by Lender (the “Funds”) at the time of the annual accounting thereof shall exceed the amount deemed
necessary by Lender to provide for the payment of Impositions as they fall due, such excess shall
be at Borrower’s option, either repaid to Borrower or credited to Borrower on the next monthly
installment or installments of Funds due. If at any time the amount of the Funds held by Lender
shall be less than the amount deemed necessary by Lender to pay Impositions as they fall due,
Borrower shall pay to Lender any amount necessary to make up the deficiency within 30 days after
notice from Lender to Borrower requesting payment thereof. Lender may apply, in any amount and in
any order as Lender shall determine in Lender’s sole discretion, any Funds held by Lender at the
time of application (i) to pay Impositions which are now or will hereafter become due or (ii) as a
credit against the Secured Obligations. Upon payment in full of the Secured Obligations, Lender
shall refund to Borrower any Funds held by Lender.

Section 2.05. Liens. Borrower will not directly or indirectly create or permit or suffer to
be created or to remain, and will promptly discharge or cause to be discharged, any deed of trust,
mortgage, encumbrance or charge on, pledge of, security interest in or conditional sale or other
title retention agreement with respect to or any other lien on or in the Collateral or any part
thereof or the interest of Borrower or Lender therein (herein, “Liens”), or any proceeds or Rents
or other sums arising therefrom other than Permitted Exceptions.

Section 2.06. Compliance with Instruments. Borrower, at its expense, will promptly comply
with all rights of way or use, privileges, franchises, servitudes, licenses, easements, tenements,
hereditaments and appurtenances forming a part of the Collateral and all instruments creating or
evidencing the same, in each case, to the extent compliance therewith is required of Borrower under
the terms thereof. Borrower will not terminate, forfeit or materially amend rights afforded to
Borrower under any such instruments, without the prior written consent of Lender.

Section 2.07. Maintenance and Repair. Subject to ordinary wear and tear, Borrower will keep
or cause to be kept all presently and subsequently erected or acquired Improvements and the
sidewalks, curbs, vaults and vault space, if any, located on or adjoining the same, and the streets
and the ways adjoining the same, in good and substantial order and repair and in such a fashion
that the value and utility of the Collateral will not be materially diminished, and, at its sole
cost and expense, will promptly make or cause to be made all necessary and appropriate repairs,
replacements and renewals thereof, whether interior or exterior, structural or nonstructural,
ordinary or extraordinary, foreseen or unforeseen, so that its business carried on in connection
therewith may be properly conducted at all times. All repairs, replacements and renewals shall be
equal or greater in quality and class to the original Improvements. Borrower, at its expense, will
do or cause to be done all shoring of foundations and walls of any building or other Improvements
on the Premises and (to the extent permitted by law) of the ground adjacent thereto, and every
other act necessary or appropriate for the preservation and safety of the Property by reason of or
in connection with any excavation or other building operation upon the Premises and upon any
adjoining property, whether or not Borrower shall be required to take such action or be liable for
failure to do so.

Section 2.08. Alterations, Additions. Borrower shall not make or cause to be made any
alterations of and additions to the Property or any part thereof without prior written consent of
Lender, which consent shall not be unreasonably withheld; provided, however, that Borrower may make
nonstructural additions to the Property costing less than $1,000,000 per year without Lender’s
consent so long as such additions do not diminish the value of the Property. If Lender consents to
any alterations or additions to the Property, such alterations or additions shall be made at
Borrower’s sole expense by a licensed contractor and according to the plans and specifications
approved by Lender and subject to any other conditions required by Lender. Any work commenced on
the Property shall be diligently completed, shall be of good workmanship and materials and shall
comply with the terms of this Instrument. Upon the completion of any alterations or additions,
Borrower shall promptly provide Lender with (a) evidence of full payment to all laborers,
materialmen contributing to the alterations or additions, (b) an architect’s certificate certifying
the alterations conform to the plans and specification approved by Lender, (c) a certificate of
occupancy (if such alterations or additions require the issuance thereof) and (d) any other
documents or information reasonably requested by Lender.

 

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Section 2.09. Acquired Property Subject to Lien. All right, title and interest of Borrower
in and to all alterations, improvements, substitutions, restorations and replacements of, and all
additions and appurtenances to, the Property hereafter acquired by Borrower, whether such property
is acquired by exchange, purchase, construction or otherwise, shall forthwith become subject to the
Lien of this Instrument without further action on the part of
Borrower or Lender. Upon the request of Lender, Borrower, at its expense, will execute and
deliver (and will record and file as provided herein) an instrument or document supplemental to
this Instrument satisfactory in substance and form to Lender, whenever such an instrument or
document is necessary under applicable law to subject to the Lien of this Instrument all right,
title and interest of Borrower in and to all property provided or required by this Instrument to be
subject to the Lien hereof.

Section 2.10. Assignment of Rents and Leases.

(a) The assignment, grant and conveyance of the Leases, Rents and all other rents,
income, proceeds and benefits of the Collateral contained in the granting clause of this
Instrument shall constitute an absolute, present and irrevocable assignment, grant and
conveyance, provided that, until an Event of Default has occurred, a license is hereby given
to Borrower to collect, receive and apply Rents, as they become due and payable, but not in
advance thereof, and in accordance with all of the other terms, conditions and provisions
hereof and of the Leases, contracts, agreements and other instruments with respect to which
such payments are made. Upon the occurrence of an Event of Default, such license shall be
revoked and shall terminate, immediately and automatically without notice to Borrower or any
other person (to the extent permitted by law), and shall not be reinstated upon a cure of
such Event of Default without the express written consent of Lender. Such assignment shall
be fully effective without any further action on the part of Borrower or Lender, and Lender
shall be entitled, at its option, upon the occurrence of an Event of Default hereunder, to
collect, receive and apply all Rents and all other rents, income, proceeds and benefits from
the Collateral, including all right, title and interest of Borrower in any escrowed sums or
deposits or any portion thereof or interest therein, whether or not Lender takes possession
of the Collateral or any part thereof. The collection of such amounts by Lender shall in no
way waive the right of Lender to foreclose this Instrument in the event of any Event of
Default. Nothing contained herein and no exercise of any right or privilege hereunder by
Lender shall be construed to constitute Lender as a mortgagee-in-possession. All Rents and
all other rents, income, proceeds and benefits of the Collateral received by Borrower from
or related to the Collateral or any part thereof, from and after the occurrence of an Event
of Default, shall be deemed received in trust and shall be turned over to Lender within one
Business Day after Borrower’s receipt thereof. Borrower further grants to Lender the right,
at Lender’s option, to:

(i) enter upon and take possession of the Property for the purpose of
collecting Rents and all other rents, income, proceeds and other benefits;

(ii) dispossess by the customary summary proceedings any Tenant, purchaser or
other person defaulting in the payment of any amount when and as due and payable, or
in the performance of any other obligation, under the Leases, contract or other
instrument to which said Rents or other rents, income, proceeds or benefits relate;

(iii) let or convey the Collateral or any portion thereof or any interest
therein; and

(iv) apply Rents and such other rents, income, proceeds and benefits, after the
payment of all necessary fees, charges and expenses, on account of the Secured
Obligations in accordance with Section 3.03.

(v) Lender shall be under no obligation to exercise or prosecute any of the
rights or claims assigned to it hereunder or to perform or carry out any of the
obligations of the lessor under any of the Leases and does not assume any of the
liabilities in connection with or arising or growing out of the covenants and
agreements of Borrower in the Leases. It is further understood that the assignment
granted hereunder shall not operate to place responsibility for the control, care,
management or repair of the Property, or parts thereof, upon Lender, nor shall it
operate to make Lender liable for the performance of any of the terms and conditions
of any of the Leases, or for any waste of the Property by any Tenant under any of
the Leases or any other person, or for any dangerous or defective condition of the
Property or for any negligence in the management, upkeep, repair or control of the
Property resulting in loss or injury or death to any lessee, licensee, employee or
stranger.

 

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(b) Borrower represents, warrants, covenants and agrees with Lender that, other than as
set forth on Schedule 3, there are no existing Leases, and Borrower will not enter into any
other Lease without the prior written consent of Lender.

(c) Borrower hereby irrevocably appoints Lender its true and lawful attorney-in-fact
with power of substitution and with full power for Lender in its own name and capacity or in
the name and capacity of Borrower, from and after the occurrence and during the continuance
of an Event of Default, to demand, collect, receive and give complete acquittances for any
and all Rents accruing from the Property that Lender may deem necessary or desirable in
order to collect and enforce the payment of the Rents and to demand, correct, receive,
endorse, and deposit all checks, drafts, money orders or notes given in payment of such
Rents. Such appointment is coupled with an interest and is irrevocable. Lender shall not
be liable for or prejudiced by any loss of any note, checks, drafts, etc., unless such loss
shall have been found by a court of competent jurisdiction to have been due to the gross
negligence or willful misconduct of Lender. Borrower also hereby irrevocably appoints
Lender as its true and lawful attorney-in-fact to appear in any state or federal bankruptcy,
insolvency, or reorganization proceeding in any state or federal court involving any of the
Tenants of the Leases. Lessees of the Property are hereby expressly authorized and
directed, from and after service of a notice by Lender to pay any and all amounts due
Borrower pursuant to the Leases to Lender or such nominee as Lender may designate in writing
delivered to and received by such Tenants, and such Tenants are expressly relieved of any
and all duty, liability or obligation to Borrower in respect of all payments so made.

Section 2.11. No Claims Against Lender. Nothing contained in this Instrument shall
constitute any consent or request by Lender, express or implied, for the performance of any labor
or the furnishing of any materials or other property in respect of the Property or any part
thereof, or be construed to permit the making of any claim against Lender in respect of labor or
services or the furnishing of any materials or other property or any claim that any Lien based on
the performance of such labor or the furnishing of any such materials or other property is prior to
the Lien of this Instrument. Borrower shall make all contractors, subcontractors, vendors and
other persons dealing with the Property, or with any persons interested therein, take notice of the
provisions of this Section.

Section 2.12. Indemnification.

(a) Whether or not covered by insurance, Borrower hereby assumes responsibility for and
agrees to reimburse Lender, its affiliates and its and their respective officers, directors,
employees and agents (individually and collectively, the “Indemnified Parties”) for and will
indemnify, defend and hold the Indemnified Parties harmless from and against any and all
liabilities, obligations, losses, damages, penalties, claims, suits, actions, proceedings,
judgments, awards, amounts paid in settlements, debts, diminutions in value, fines,
penalties, charges, fees, costs and expenses (including reasonable attorneys’ fees and
expenses) of whatsoever kind and nature, imposed on, incurred by or asserted against any
Indemnified Party that in any way relate to or arise out of any of the Loan Documents, the
transactions contemplated thereby and the Collateral, including, without limitation, (i) the
selection, manufacture, construction, acquisition, acceptance or rejection of the
Collateral, (ii) the ownership of the Collateral, (iii) the delivery, installation, lease,
possession, maintenance, use, condition, return or operation of the Collateral, (iv) the
condition of the Collateral sold or otherwise disposed of after possession by Borrower, (v)
any patent or copyright infringement, (vi) any act or omission on the part of Borrower,
Guarantor or any of its or their officers, employees, agents, contractors, lessees,
licensees or invitees, (vii) any misrepresentation or inaccuracy in any representation or
warranty of Borrower or Guarantor, or a breach of Borrower or Guarantor of any of its
covenants or obligations under any of the Loan Documents, (viii) any claim, loss, cost or
expense involving alleged damage to the environment relating to the Collateral, including,
without limitation, investigation, removal, cleanup and remedial costs, (ix) any personal
injury, wrongful death or property damage arising under any statutory or common law or tort
law theory, including, without limitation, damages assessed for the maintenance of a private
or public nuisance or for the conducting of an abnormally dangerous activity on or near the
Collateral, (x) any past, present or threatened injury to, or destruction of, the
Collateral, including, without limitation, costs to investigate and assess such injury or
damage, (xi) any administrative process or proceeding or judicial or other similar
proceeding (including, without limitation, any alternative dispute resolution process and
any bankruptcy proceeding) in any way connected with any matter addressed in any of the Loan
Documents, (xii) any use,
non-use or condition of the Property or any part thereof or the adjoining sidewalks,
curbs, vaults and vault spaces, if any, streets, alleys or ways, (xiii) performance of any
labor or services or the furnishing of any materials or other property in respect of the
Collateral or any part thereof made or suffered to be made by or on behalf of Borrower or
any Tenant, (xiv) any work in connection with any alterations, changes, new construction or
demolition of or additions to the Property or (xv)(A) any Hazardous Materials on, in, under
or affecting all or any portion of the Property, the groundwater, or any surrounding areas,
(B) any violation or claim of violation by Borrower or any Tenant of any Environmental Laws
or (C) the imposition of any Lien for damages caused by or the recovery of any costs for the
cleanup of Hazardous Materials or any Release.

 

9

 

(b) If any action or proceeding be commenced, to which action or proceeding the
Indemnified Parties are made a party by reason of the execution of this Instrument or the
Loan Documents, or in which it becomes necessary to defend or uphold the Lien of this
Instrument, all sums paid by the Indemnified Parties, for the expense of any litigation to
prosecute or defend the rights and Lien created hereby or otherwise, shall be paid by
Borrower to such Indemnified Parties, as the case may be, as hereinafter provided. Borrower
will pay and save the Indemnified Parties harmless against any and all liability with
respect to any intangible personal property tax or similar imposition of the State or any
subdivision or authority thereof now or hereafter in effect, to the extent that the same may
be payable by the Indemnified Parties in respect of this Instrument or any Secured
Obligation.

(c) All amounts payable to the Indemnified Parties under this Section shall be deemed
indebtedness secured by this Instrument, and any such amounts that are not paid within 30
days after written demand therefor by any Indemnified Party shall bear interest at the
highest Default Rate from the date of such demand. In case any action, suit or proceeding
is brought against the Indemnified Parties by reason of any such occurrence, Borrower, upon
request of such Indemnified Parties, will, at Borrower’s expense, resist and defend such
action, suit or proceeding or cause the same to be resisted or defended by counsel
designated by Lender. The obligations of Borrower under this Section shall survive any
satisfaction, discharge or reconveyance of this Instrument and payment in full of the
Obligations. If and to the extent that the foregoing undertaking may be unenforceable for
any reason, Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities that is permissible under applicable
law.

Section 2.13. Hazardous Materials. Borrower covenants and agrees that (a) the Collateral
shall be kept free of Hazardous Materials, except for those Hazardous Materials reasonably
necessary for the operation of the Property and customarily employed in the ordinary course of
businesses similar to the business conducted at the Property and that are used, stored, transported
and disposed of in accordance with all applicable Environmental Laws; (b) Borrower shall comply
with, and ensure compliance by all persons on the Property with, all Environmental Laws relating to
all or any part of the Collateral; (c) Borrower shall keep the Collateral free and clear of any
liens imposed pursuant to such Environmental Laws; (d) Borrower shall conduct and complete all
investigations, studies, sampling and testing, and all remedial actions necessary to clean up and
remove any Hazardous Materials from the Property in accordance with the recommendations contained
in any reports issued in connection with such investigations, studies, sampling and testing and in
accordance with all applicable Environmental Laws’ and (e) Borrower shall cause compliance by all
Tenants and sub-tenants on the Property with Borrower’s covenants and agreements contained in this
Section. Borrower shall immediately notify Lender of any investigation, demand, or claim affecting
the Property made by any third party.

Section 2.14. Right of Lender To Require Appraisal. Following the occurrence of an Event of
Default (other than an Event of default that has been waived in writing by Lender or confirmed as
having been cured in writing by Lender), Lender shall have the right, from time to time during the
term of this Instrument, to obtain one or more fair market value appraisals of the Property from
one or more MAI certified appraisers in such form as is satisfactory to Lender. The cost of any
such appraisal(s) shall be paid by Borrower.

Section 2.15. Instrument as UCC Security Agreement and Fixture Filing. This Instrument shall
constitute a security agreement, a financing statement and a fixture filing pursuant to the UCC for
any of the items specified herein as part of the Collateral that, under applicable law, may be
subject to a security interest pursuant to the UCC. The Collateral includes goods that are or are
to become fixtures. Borrower agrees that Lender may file
this Instrument, or a reproduction thereof, in the real estate records or other appropriate
index as a fixture filing or other financing statement for any of the items specified above as part
of the Collateral. Any reproduction of this Instrument or of any other security agreement or
financing statement shall be sufficient as a financing statement.

 

10

 

Section 2.16. Additional Representations, Warranties and Covenants. Borrower represents,
warrants and covenants for the benefit of Lender, as follows:

(a) Borrower is a limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. Borrower is in good
standing and is duly licensed or qualified to transact business in the State and in each
other jurisdiction where the nature of its business requires such qualification, except for
those jurisdictions in which the failure to qualify could not reasonably be expected to have
a Material Adverse Effect. Borrower’s exact legal name is as set forth on the execution
page hereof.

(b) Borrower has full power and authority and holds all requisite governmental
licenses, permits and other approvals to (i) enter into and perform its obligations under
this Instrument, the Note and each other Loan Document to which it is a party and to own its
property, (ii) use the Collateral and (iii) conduct its business substantially as currently
conducted by it, except as to clause (iii) where the failure to hold such licenses, permits
and approvals could not reasonably be expected to have a Material Adverse Effect.

(c) This Instrument, the Note and the other Loan Documents to which it is a party have
been duly authorized, executed and delivered by Borrower and constitute legal, valid and
binding obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except to the extent limited by bankruptcy, reorganization or other laws
of general application relating to or effecting the enforcement of creditors’ rights.

(d) The execution and delivery of this Instrument, the Note and the other Loan
Documents, the consummation of the transactions contemplated hereby and thereby and the
fulfillment of the terms and conditions hereof and thereof do not and will not violate any
law, rule, regulation or order, conflict with or result in a breach of any of the terms or
conditions of the articles of organization or operating agreement of Borrower or of any
corporate restriction or of any agreement or instrument to which Borrower is now a party and
do not and will not constitute a default under any of the foregoing or result in the
creation or imposition of any liens, charges or encumbrances of any nature upon any of the
property or assets of Borrower other than Liens in favor of Lender.

(e) The authorization, execution, delivery and performance of this Instrument, the Note
and the other Loan Documents by Borrower do not require submission to, approval of, or other
action by any governmental authority or agency, except for such action that has been duly
obtained or taken and is in full force and effect.

(f) There is no action, suit, proceeding, claim, inquiry or investigation, at law or in
equity, before or by any court, regulatory agency, public board or body pending or, to the
best of Borrower’s knowledge, threatened against or affecting Borrower or Guarantor (other
than those described in Guarantor’s public filings with the Securities and Exchange
Commission (“SEC”)), challenging Borrower’s or Guarantor’s authority to enter into this
Instrument, the Note or any of the other Loan Documents or any other action wherein an
unfavorable ruling or finding would adversely affect the enforceability of this Instrument,
the Note or any of the other Loan Documents, or could reasonably be expected to have a
Material Adverse Effect.

(g) Borrower is in compliance with all laws, rules, regulations and orders of
governmental authorities applicable to it and its properties except to the extent the
non-compliance with which could not reasonably be expected to have a Material Adverse
Effect.

(h) Borrower has heretofore furnished to Lender the financial statements of Borrower
and Guarantor for their fiscal year ended December 31, 2009 and the unaudited financial
statement of Borrower and Guarantor and for the nine months ended September 30, 2010 and
those statements fairly present the financial condition of Borrower and Guarantor, if any,
on the dates thereof and the results of its operations and cash flows for the periods then
ended and were prepared in accordance with GAAP. Since the date of
the most recent financial statements, there has been no material adverse change in the
business, properties or condition (financial or otherwise) of Borrower or Guarantor. Except
as disclosed in the Financial Statements or the notes thereto, neither Borrower nor
Guarantor, as of the Closing Date, has or will have any liabilities, contingent or
otherwise, that could reasonably be expected to have a Material Adverse Effect.

 

11

 

(i) Borrower has paid or caused to be paid, and will pay (after giving effect to any
grace periods for which no penalties are incurred), to the proper authorities when due all
federal, state and local taxes required to be withheld by it. Borrower has filed, and will
pay, all federal, state and local tax returns which are required to be filed, and Borrower
has paid or caused to be paid to the respective taxing authorities all taxes as shown on
said returns or on any assessment received by it to the extent such taxes have become due,
except any such taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP have been
set aside on its books.

(j) For purposes of Section 9-307 of the UCC, Borrower is and will remain located in
the State. Borrower’s residence for federal income tax purposes is located at its address
specified in the preamble to this Instrument. Borrower has authorized Lender to file
financing statements that are sufficient when filed to perfect the security interests
created pursuant to this Instrument and the other Loan Documents. When such financing
statements are filed in the offices noted therein, Lender will have a valid and perfected
security interest in the Collateral that constitutes personal property, subject to no other
Lien.

(k) None of the Collateral constitutes a replacement of, substitution for or accessory
to any property of Borrower subject to a lien of any kind.

(l) Except where any failure could not reasonably be expected to result in a Material
Adverse Effect, Borrower has obtained all permits, licenses and other authorizations which
are required under all Environmental Laws at Borrower’s facilities or in connection with the
operation of its business. Except where any failure could not reasonably be expected to
result in a Material Adverse Effect, Borrower and all activities of Borrower at its
facilities comply with all Environmental Laws and with all terms and conditions of any
required permits, licenses and authorizations applicable to Borrower with respect thereto.
Except where any failure could not reasonably be expected to result in a Material Adverse
Effect, Borrower is also in compliance with all limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables contained in
Environmental Laws or contained in any plan, order, decree, judgment or notice of which
Borrower is aware. Borrower is not aware of, nor has Borrower received notice of, any
events, conditions, circumstances, activities, practices, incidents, actions or plans which
may interfere with or prevent continued compliance with, or which may give rise to any
liability under, any Environmental Laws.

(m) All factual information heretofor or contemporaneously furnished by or on behalf of
Borrower or Guarantor in writing to Lender for purposes of or in connection with this
Instrument or any transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of Borrower or Guarantor to Lender will be, true and
correct in all material respects on the date as of which such information is dated or
certified, and such information is not, or shall not be, as the case may be, incomplete by
omitting to state any material fact necessary to make such information not misleading.

(n) Neither Borrower nor Guarantor is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or carrying
“margin stock.” None of the proceeds of the Loan will be used for the purpose of, or be
made available by Borrower or Guarantor in any manner to any other person to enable or
assist such person in, directly or indirectly purchasing or carrying “margin stock”. Terms
for which meanings are provided in F.R.S. Board Regulation T, U or X or any regulations
substituted therefor, as from time to time in effect, are used in this subsection with such
meanings.

(o) Neither Borrower nor Guarantor is an “investment company” nor a “company controlled
by an investment company” within the meaning of the Investment Company Act of 1940, as
amended, or a “holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,”
within the meaning of the Public Utility Holding Company Act of 1935, as amended.

 

12

 

(p) Borrower and Guarantor are solvent and will not be rendered insolvent by the Loan
Documents or the transactions contemplated thereby and, after giving effect to such
transactions, neither Borrower nor Guarantor will be left with an unreasonably small amount
of capital with which to engage in its business, and neither Borrower or Guarantor intends
to incur, or believes that it has incurred, debts beyond its ability to pay as they mature.
Neither Borrower nor Guarantor contemplates the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of Borrower or Guarantor or any of their
assets. Neither Borrower nor Guarantor is entering into the transactions contemplated by
the Loan Documents with any intent to hinder, delay or defraud any of Borrower’s or
Guarantor’s creditors.

(q) Borrower shall deliver to Lender each of the following:

(i) as soon as possible and in any event within three Business Days after the
occurrence of a Default, an Event of Default or an event which could reasonably be
expected to result in a Material Adverse Effect, a statement of Borrower setting
forth reasonably detailed information regarding such Default, Event of Default or
event and the action that Borrower has taken and proposes to take with respect
thereto;

(ii) promptly after the commencement thereof, notice in writing of all
litigation and of all proceedings before any governmental or regulatory agency
affecting Borrower, Guarantor or any of their subsidiaries which seek a monetary
recovery against Borrower in excess of $1,000,000 or against Guarantor in excess of
$5,000,000;

(iii) promptly upon knowledge thereof, notice of any loss, theft or destruction
of or material damage to, any accident involving any, and any action, suit or
proceeding relating to, Collateral having a value in excess of $500,000 (whether in
one occurrence or in aggregate);

(iv) promptly after the amending thereof, copies of any and all amendments to
any of its articles of organization or operating agreement; and

(v) promptly upon knowledge thereof, notice of the violation by Borrower or
Guarantor of any law, rule or regulation applicable to Borrower or Guarantor, which
violation could reasonably be expected to have a Material Adverse Effect.

(r) Borrower and each of its subsidiaries shall comply in all material respects with
all governmental rules and regulations and all other applicable laws, rules, regulations and
orders, including, without limitation, all Environmental Laws.

(s) Borrower will keep books and records that accurately reflect in all material
respects all of its business affairs and transactions. Borrower will, and will cause
Guarantor to, permit Lender or any of its representatives (including outside auditors), at
reasonable times and intervals (but, absent the occurrence of an Event of Default, not to
exceed two times in any fiscal year), to visit all of its offices, to discuss its financial
matters with its officers and independent public accountant (and Borrower hereby authorizes
such independent accountant to discuss Borrower’s financial matters with Lender or its
representatives whether or not any representative of Borrower is present) and to examine
(and, at the expense of Borrower, copy extracts from) books or other corporate records
(including computer records). If Lender exercises its rights under this subsection
following the occurrence of an Event of Default (other than an Event of default that has
been waived in writing by Lender or confirmed as having been cured in writing by Lender),
Borrower shall pay any fees of such independent accountant incurred in connection therewith.
Borrower shall not be required to cause Guarantor to comply with the foregoing for any
period that Guarantor is subject to regulation by the SEC.

(t) Borrower shall permit Lender to make or cause to be made reasonable entries upon
the Property to inspect the interior and exterior thereof. Except in case of emergency or
upon an Event of Default, such inspection shall be with two Business Days’ prior notice.

 

13

 

Section 2.17. Additional Negative Covenants. So long as the Loan shall remain unpaid,
Borrower agrees that:

(a) Borrower will not, and will not permit any of its subsidiaries to, form or acquire
any subsidiary, enter into any merger, consolidation, reorganization, or recapitalization,
or reclassify its capital stock, or liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), or, other than in the ordinary course of its business, convey,
sell assign, lease, transfer, or otherwise dispose of, in one transaction or series of
transactions, all or any substantial part of its property or assets.

(b) Borrower will not, and will not permit any of its subsidiaries to, sell, transfer,
lease, contribute or otherwise convey or dispose of (in each case in one transaction or
series of transactions), or grant options, warrants or other rights with respect to (in each
case in one transaction or series of related transactions), or agree to do any of the
foregoing with respect to, all or any part of the Collateral.

(c) Borrower will not change its location for purposes of Section 9-307 of the UCC or
its name in any manner that could make any financing statement filed in connection with any
Loan Document seriously misleading within the meaning of Section 9-506 of the UCC or any
similar statute, unless it shall have given Lender at least 30 days’ prior written notice
thereof.

ARTICLE III

INSURANCE; DAMAGE, DESTRUCTION OR TAKING

Section 3.01. Insurance.

(a) Borrower will, at its expense, maintain or cause to be maintained with insurance
carriers approved by Lender insurance with respect to the Collateral in such amounts and
against such insurable hazards as Lender from time to time may require, including, without
limitation the following (and with respect to liability insurance specified in subsection
(ii), for a period of two years following indefeasible payment in full of the Loan: (i) “all
risk” property and fire insurance in an amount not less than the full replacement value of
the Property (with a deductible not to exceed $10,000), naming Lender under a lender’s loss
payable endorsement as mortgagee and loss payee and including agreed amount, inflation
guard, replacement cost and waiver of subrogation endorsements; (ii) general liability
insurance in an amount not less than $1,000,000 per claim and on a claims-made basis,
insuring against personal injury, death and property damage and naming Lender as additional
insured, with all such insurance primary and non-contributory for Lender; (iii) business
interruption insurance or rent-loss insurance, as applicable, covering loss of rental or
other income (including all expenses payable by Tenants) for up to 12 months; (iv) boiler
and machinery coverage for mechanical and electrical failure; (v) flood hazard insurance if
the Property is located in an area designated by the Federal Emergency Management Act if and
to the extent that the Property is located within an area that has been or is hereafter
designated or identified as an area having special flood hazards by the Department of
Housing and Urban Development or such other official as shall from time to time be
authorized by federal or state law to make such designation pursuant to any national or
state program of flood insurance, Borrower shall carry flood insurance with respect to the
Property in amounts not less than the maximum limit of coverage then available with respect
to the Property or the amount of the Obligations, whichever is less; (vi) worker’s
compensation insurance to the full extent required by applicable law for all employees of
Borrower engaged in any work on or about the Property and employer’s liability insurance
with a limit of not less than $1,000,000 for each occurrence; (vii) earthquake insurance;
and (viii) such other types of insurance or endorsements to existing insurance as may be
required from time to time by Lender in accordance with its standard commercial lending
practices. Borrower agrees that if Borrower shall change insurers at any time during the
term of the Loan or within two years thereof, Borrower shall purchase a “prior acts”
endorsement from the insurer or shall purchase an “extended reporting” endorsement to
continue coverage from the current insurer.

 

14

 

(b) All insurance maintained by Borrower pursuant to Section 3.01(a) shall (i) (except
for worker’s compensation insurance) name Lender as additional insured and/or loss payee, as
applicable, (ii) (except for worker’s compensation and public liability insurance) provide
that the proceeds for any losses
shall be adjusted by Borrower subject to the approval of Lender and from and after the
occurrence of an Event of Default shall be payable to Lender, to be held and applied as
provided in Section 3.03, (iii) include effective waivers by the insurer of all rights of
subrogation against any named insured, the indebtedness secured by this Instrument and the
Collateral and all claims for insurance premiums against Lender, (iv) provide that any
losses shall be payable notwithstanding (A) any act, failure to act or negligence of or
breach of warranties, declarations or conditions contained in such policy by any named
insured, (B) the occupation or use of the Property for purposes more hazardous than
permitted by the terms thereof, (C) any foreclosure or other action or proceeding taken by
Trustee or Lender pursuant to any provision of this Instrument or (D) any change in title or
ownership of the Property, (v) provide that no cancellation, reduction in amount or material
change in coverage thereof or any portion thereof shall be effective until at least 30 days
after receipt by Lender of written notice thereof, (vi) provide that any notice under such
policies shall be simultaneously delivered to Lender and (vii) be reasonably satisfactory in
all other respects to Lender. Any insurance maintained pursuant to Section 3.01 may be
evidenced by blanket insurance policies covering the Property and other properties or assets
of Borrower, provided that any such policy shall specify the portion, if less than all, of
the total coverage of such policy that is allocated to the Property and shall in all other
respects comply with the requirements of Section 3.01. Borrower’s obligation to maintain
insurance coverage in accordance with the terms hereof shall not be construed to limit the
amount of indemnification or insurance proceeds available to Lender.

(c) Borrower will deliver to Lender, promptly upon request, the certificates of
insurance and, if requested by Lender, copies of all policies (certified by the issuer of
such policies as being true and accurate copies of the original policies), evidencing all
insurance required to be maintained under Section 3.01(a) (or, in the case of blanket
policies, certificates thereof by the insurers together with a counterpart of each blanket
policy). Borrower will also deliver to Lender not later than 30 days prior to the
expiration of any policy a binder or certificate of the insurer evidencing the replacement
thereof; provided that if Borrower does not deliver such replacement insurance at least 30
days prior to such expiration, failure to deliver such replacement insurance shall not be an
Event of Default hereunder unless and until the existing insurance actually lapses so long
as Borrower complies with each of the following: (i) Borrower has delivered notice to Lender
at least 30 days prior to such expiration that Borrower is unable to deliver such
replacement insurance at least 30 days prior to such expiration; (ii) Borrower provides
evidence reasonably acceptable to Lender that Borrower is using best efforts to obtain such
replacement insurance; and (iii) Borrower provides evidence reasonably acceptable to Lender
that Borrower has a good faith belief that such replacement insurance will be obtained prior
to expiration of the existing insurance.

(d) Borrower will not take out separate insurance concurrent in form or contributing in
the event of loss with that required to be maintained pursuant to Section 3.01.

Section 3.02. Damage, Destruction or Taking; Notice; Assignment of Awards. In case of any
damage to or destruction of the Collateral or any material part thereof or any taking, whether for
permanent or temporary use, of all or any part of the Collateral or any interest therein or right
accruing thereto, as the result of or in anticipation of the exercise of the right of condemnation
or eminent domain (a “Taking”), or the commencement of any proceedings or negotiations that may
result in a Taking, Borrower will promptly give written notice thereof to Lender, generally
describing the nature and extent of such damage, destruction or Taking and Borrower’s best estimate
of the cost of restoring the Collateral, or the nature of such proceedings or negotiations and the
nature and extent of the Taking that might result therefrom, as the case may be. Lender shall be
entitled to all insurance proceeds payable on account of such damage or destruction and to all
awards or payments allocable to the Collateral on account of such Taking, and Borrower hereby
irrevocably assigns, transfers and sets over to Lender all rights of Borrower to any such proceeds,
awards or payments and irrevocably authorizes and, in the event Borrower has not filed for such
proceeds by the first to occur of (i) 10 Business Days prior to the expiration of the applicable
time for such filing or (ii) 30 days after damage to the Collateral or any Taking, empowers Lender,
at its option, in the name of Borrower or otherwise, to file and prosecute what would otherwise be
Borrower’s claim for any such proceeds, award or payment and to collect, receipt for and retain the
same for disposition in accordance with Section 3.03 or Section 3.04, as applicable. Borrower will
pay all reasonable costs and expenses, if any, incurred by Lender in connection with any such
damage, destruction or Taking and seeking and obtaining any insurance proceeds, awards or payments
in respect thereof.

 

15

 

Section 3.03. Application of Insurance Proceeds. (a) Subject to Sections 3.03(b) and 3.04,
Lender may, from and after the occurrence of an Event of Default, in its sole discretion, apply all
amounts recovered under any insurance policy required to be maintained by Borrower hereunder in any
one or more of the following ways:

(i) to the payment of the reasonable costs and expenses incurred by Trustee or
Lender in obtaining any such insurance proceeds or awards, including the fees and
expenses of attorneys and insurance and other experts and consultants, the costs of
litigation, arbitration, mediation, investigations and other judicial,
administrative or other proceedings and all other out-of-pocket expenses;

(ii) to the payment of any Secured Obligation;

(iii) to fulfill any of the other covenants contained herein or in any other
Loan Document, in accordance therewith as Lender may determine after the occurrence
of a Default or an Event of Default;

(iv) to Borrower for application to the cost of restoring or replacing the
Collateral destroyed, damaged or taken; or

(v) to Borrower.

(b) Notwithstanding the provisions of subsection (a) of this Section to the contrary (but
subject to the provisions of Section 3.04), if each of the following conditions is satisfied,
Borrower shall apply insurance proceeds received by it to the restoration or replacement of the
Collateral, to the extent necessary for the restoration or replacement thereof:

(i) there shall then exist no uncured Default or Event of Default; and

(ii) Borrower shall furnish to Lender a certificate of an architect or engineer
reasonably acceptable to Lender stating (A) that the Collateral is capable of being
restored, prior to the maturity of the Note, to substantially the same condition as existed
prior to the casualty, (B) the insurance proceeds are sufficient for such restoration and
(C) the restoration or replacement is reasonably capable of being fully completed by no
later than six months prior to the latest Maturity Date for the Note.

(c) In the event that such insurance proceeds are to be utilized in the restoration or
replacement of the Collateral, Borrower shall use such amounts for such restoration or
replacement. In the event that, after the restoration or replacement of the Collateral, any
insurance proceeds shall remain, such amount shall be retained by Borrower.

(d) If, prior to the receipt by Borrower of such insurance proceeds, the Collateral
shall have been sold on foreclosure, Lender shall have the right to receive said insurance
proceeds to the extent of any deficiency found to be due upon such sale, with legal interest
thereon, but only to the extent of a deficiency judgment sought or recovered or denied, and
the reasonable attorneys’ fees, costs and disbursements incurred by Lender in connection
with the collection of such proceeds.

Section 3.04. Taking and Total Destruction. If all or any part of the Property is lost,
stolen, destroyed or damaged beyond repair (and the Property is not fully replaced to Lender’s
satisfaction) or a Taking shall occur, Lender shall apply all amounts recovered under any insurance
policy referred to in Section 3.01(a) and all awards received by it on account of any such Taking
as follows:

(a) first, to the payment of the reasonable costs and expenses incurred by Lender in
obtaining any such insurance proceeds or awards, including the fees and expenses of
attorneys and insurance and other experts and consultants, the costs of litigation,
arbitration, mediation, investigations and other judicial, administrative or other
proceedings and all other out-of-pocket expenses;

 

16

 

(b) second, to the payment of any Secured Obligation;

(c) third, to fulfill any of the other covenants contained herein or in the Loan
Documents in accordance with such Loan Documents as Lender may determine after the
occurrence of a Default or an Event of Default; and

(d) fourth, the balance, if any, to Borrower.

ARTICLE IV

EVENTS OF DEFAULT; REMEDIES

Section 4.01. Events of Default. Each of the following shall constitute an “Event of
Default” under this Instrument:

(a) The occurrence of an “Event of Default” as defined in the Note or in any other Loan
Document.

(b) The attachment of any Lien on any portion of the Collateral other than Permitted
Exceptions.

(c) Failure of Borrower to maintain insurance as required by Section 3.01.

(d) Borrower, Guarantor or any Tenant shall be or become insolvent, or admit in writing
its inability to pay its debts as they mature, or make an assignment for the benefit of
creditors; or any Borrower, Guarantor or any Tenant shall apply for or consent to the
appointment of any receiver, trustee or similar officer for it or for all or any substantial
part of its property; or such receiver, trustee or similar officer shall be appointed
without the application or consent of Borrower, Guarantor or any Tenant; or Borrower,
Guarantor or any Tenant shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the laws of any
jurisdiction; or any such proceeding shall be instituted (by petition, application or
otherwise) against Borrower, Guarantor or any Tenant.

(e) Borrower shall fail to perform any of its obligations under Section 2.02, 2.05 or
2.17;

(f) Borrower shall default in the due performance and observance of any other agreement
contained herein or in any other Loan Document (other than items set forth elsewhere in this
Section 4.01), and such default shall continue unremedied for a period of 30 days after
Borrower has actual knowledge thereof or has received notice by Lender thereof.

(g) The occurrence of an event of default or a breach or default, after the passage of
all applicable notice and cure or grace periods provided therefor, under any other Mortgage
(as defined in the Note), under any other Loan Document or any other similar agreement
between or among (i) Borrower or Guarantor and (ii) Lender or any of its affiliates or
subsidiaries;

(h) The occurrence of a default or an event of default (however defined) under any
instrument, agreement or other document evidencing or relating to any indebtedness or other
monetary obligation of Borrower, Guarantor or any of its or their affiliates or subsidiaries
having a principal amount (including, without limitation, the amount of any outstanding
letters of credit), individually or in the aggregate, in excess of $20,000,000.

(i) Any judgment or order for the payment of money (not paid or fully covered by
insurance maintained in accordance with the requirements of this Instrument and as to which
the relevant insurance company has acknowledged coverage) which could reasonably be expected
to result in a Material Adverse Effect shall be rendered against Borrower or Guarantor that
remains undischarged, unvacated, unbounded or unstayed for a period of 60 days.

 

17

 

(j) Guarantor shall repudiate, purport to revoke or fail to perform any of Guarantor’s
obligations under the Guaranty.

(k) Any representation or warranty made by Borrower or Guarantor in any Loan Document
or in any other document executed in connection herewith was untrue in any material respect
when made.

(l) The occurrence of any Change in Control.

(m) Subject to Section 4.20, any of the Leases shall terminate.

(n) Subject to Section 4.20, the occurrence of an event of default or a breach or
default (however defined), after the passage of all applicable notice and cure or grace
periods provided therefor, under any of the Leases.

Section 4.02. Acceleration. Following the occurrence of an Event of Default (other than an
Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender) described in subsection (d) of Section 4.01, all of the outstanding principal
amount of the Secured Obligations shall be due and payable, whereupon the full unpaid amount of
such Secured Obligations which shall be so declared due and payable shall be and become immediately
due and payable, without presentment, notice of dishonor, protest or further notice of any kind,
all of which are hereby expressly waived by Borrower. Following the occurrence of any other Event
of Default (other than an Event of default that has been waived in writing by Lender or confirmed
as having been cured in writing by Lender), Lender may, by notice to Borrower, declare all or any
portion of the outstanding principal amount of the Secured Obligations to be due and payable,
whereupon the full unpaid amount of the Loan and other Secured Obligations which shall be so
declared due and payable shall be and become immediately due and payable, without presentment,
notice of dishonor, protest or further notice of any kind, all of which are hereby expressly waived
by Borrower. Borrower will pay on demand all costs and expenses, including, without limitation,
reasonable attorneys’ fees and expenses of one counsel, incurred by or on behalf of Lender in
enforcing this Instrument, the Secured Obligations or the Loan Documents or occasioned by any Event
of Default hereunder or thereunder.

Section 4.03. Legal Proceedings; Foreclosure. If an Event of Default shall have occurred
(other than an Event of default that has been waived in writing by Lender or confirmed as having
been cured in writing by Lender), Lender at any time may, at Lender’s sole discretion, proceed at
law or in equity or otherwise to enforce the payment of the Obligations and the Trustee shall have
the right to foreclose the Lien of this Instrument as against all or any part of the Collateral and
to have the same sold under the judgment or decree of a court of competent jurisdiction. Lender
and/or Trustee shall be entitled to recover in such proceedings all costs incident thereto,
including, without limitation, reasonable attorneys’ fees and expenses in such amounts as may be
fixed by the court.

Section 4.04. Power of Sale. If an Event of Default shall have occurred (other than an Event
of default that has been waived in writing by Lender or confirmed as having been cured in writing
by Lender), the Trustee or Lender may (as permitted by law), at Lender’s sole discretion, sell,
assign, transfer and deliver the whole or, from time to time, any part of the Collateral, or any
interest in any part thereof, at any private sale or at public auction, with or without demand,
advertisement or notice, for cash, on credit or for other property, for immediate or future
delivery, and for such price or prices and on such terms as Trustee may determine, or as may be
required by law. Without limiting the authority granted in the immediately preceding sentence,
Trustee shall, without demand on Borrower, after the lapse of such time as may then be required by
law, and notice of default and notice of sale having been given as then required by law, sell the
Collateral on the date and at the time and place designated in the notice of sale, either as a
whole or in separate parcels and in such order as Trustee may determine, but subject to any
statutory right of Borrower to direct the order in which such property, if consisting of several
known lots, parcels or interests, shall be sold, at public auction to the highest bidder, the
purchase price payable in lawful money of the United States at the time of sale. Trustee, or the
one conducting the sale may, for any cause deemed expedient, postpone the sale from time to time
until it shall be completed and, in every such case, notice of postponement shall be given by
public declaration thereof by such person at the time and place last appointed for the sale;
provided that, if the sale is postponed for longer than 10 days beyond the day designated in the
notice of sale, notice of sale and notice of the time, date and place of sale shall be given in the
same manner as the original notice of sale. Trustee shall execute and deliver to the purchaser at
any such sale a deed conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of any matters or facts
shall be conclusive proof of the truthfulness thereof. Any person, including Lender, may bid at
the sale.

 

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Section 4.05. Deficiency. In the event of any foreclosure, to the extent permitted by
applicable law, Lender will be entitled to a judgment which will provide that if the foreclosure
sale proceeds are insufficient to satisfy the judgment, execution may issue for any amount by which
the unpaid balance of the Secured Obligations exceeds the net sale proceeds payable to Lender.

Section 4.06. UCC Remedies. If an Event of Default shall have occurred (other than an Event
of default that has been waived in writing by Lender or confirmed as having been cured in writing
by Lender), Lender may exercise from time to time and at any time any rights and remedies available
to it under applicable law upon default in the payment of indebtedness, including, without
limitation, any right or remedy available to it as a secured party under the UCC. Borrower shall,
promptly upon request by Lender, assemble the Collateral, or any portion thereof generally
described in such request, and make it available to Lender at such place or places designated by
Lender and reasonably convenient to Lender. If Lender elects to proceed under the UCC to dispose
of portions of the Collateral, Lender, at its option, may give Borrower notice of the time and
place of any public sale of any such property, or of the date after which any private sale or other
disposition thereof is to be made, by sending notice by registered or certified first class mail,
postage prepaid, to Borrower at least 10 days before the time of the sale or other disposition. If
any notice of any proposed sale, assignment or transfer by Lender of any portion of the Collateral
or any interest therein is required by law, Borrower conclusively agrees that 10 days’ notice to
Borrower of the date, time and place thereof is reasonable.

Section 4.07. Trustee Authorized To Execute Deeds. Borrower irrevocably appoints Trustee
(which appointment is coupled with an interest) the true and lawful attorney of Borrower, in its
name and stead and on its behalf, for the purpose of effectuating any sale, assignment, transfer or
delivery for the enforcement hereof, whether pursuant to power of sale, foreclosure or otherwise in
connection with enforcing this Instrument after the occurrence of an Event of Default (other than
an Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender), to execute and deliver all such deeds, bills of sale, assignments, releases and
other instruments as may be designated in any such request.

Section 4.08. Purchase of Collateral by Lender. Lender may be a purchaser of the Collateral
or of any part thereof or of any interest therein at any sale thereof, whether pursuant to power of
sale, foreclosure or otherwise, and Lender may apply to the purchase price thereof the Secured
Obligations.

Section 4.09. Receipt a Sufficient Discharge to Purchaser. Upon any sale of the Collateral
or any part thereof or any interest therein, whether pursuant to power of sale, foreclosure or
otherwise, the receipt of Trustee or the officer making the sale under judicial proceedings shall
be a sufficient discharge to the purchaser for the purchase money, and such purchaser shall not be
obliged to see to the application thereof.

Section 4.10. Waivers. To the fullest extent Borrower may lawfully do so, Borrower hereby
agrees with Lender as follows:

(a) Borrower will not at any time, insist on, plead, claim or take the benefit or
advantage of any statute or rule of law now or hereafter in force providing for any
appraisement, valuation, stay, extension, moratorium or redemption, or of any statute of
limitations, and Borrower, for itself and its heirs, devises, representatives, successors
and assigns, and for any and all persons ever claiming an interest in the Property (other
than Lender) hereby, to the extent permitted by applicable law, waives and releases all
rights of redemption, valuation, appraisement, notice of intention to mature or declare due
the whole of the Indebtedness, and all rights to a marshaling of the assets of Borrower,
including the Property, or to a sale in inverse order of alienation, in the event of
foreclosure of the liens and security interests created hereunder. In the event of
foreclosure pursuant to the provisions hereof, Lender may, at Lender’s option, obtain an
appraisal of the Property and any funds expended by Lender for such propose shall become
indebtedness of Borrower to Lender secured by this Instrument and shall be paid by Borrower
to Lender within 10 days of demand.

 

19

 

(b) Borrower shall not have or assert any right under any statute or rule of law
pertaining to any of the matters set forth in this Section 4.10, to the administration of
estates of decedents or to any other matters whatsoever to defeat, reduce or affect any of
the rights or remedies of Trustee and Lender hereunder, including the rights of Trustee
and/or Lender hereunder to a sale of the Property for the collection of the Secured
Obligations without any prior or different resort for collection, or to the payment of the
Indebtedness out of the proceeds of sale of the Property in preference to any other person.

(c) If any statute or rule of law referred to in this Section 4.10 and now in force, of
which Borrower or any of its representatives, successors or assigns and such other persons
claiming any interest in the Property might take advantage despite this Section 4.10, shall
hereafter be repealed or cease to be in force, such statute or rule of law shall not
thereafter be deemed to preclude the application of this Section 4.10.

(d) Borrower shall not be relieved of its obligation to pay the Secured Obligations at
the time and in the manner provided herein and in the other Loan Documents, nor shall the
lien or priority of this Instrument or any other Loan Documents be impaired by any of the
following actions, non-actions or indulgences by Trustee or Lender:

(i) any failure or refusal by Trustee or Lender to comply with any request by
Borrower (X) to consent to any action by Borrower or (Y) to take any action to
foreclose this Instrument or otherwise enforce any of the provisions hereof or of
the other Loan Documents;

(ii) any release, regardless of consideration, of the whole or any part of the
Property or any other security for the Indebtedness or any person liable for payment
of the Indebtedness;

(iii) any waiver by Lender of compliance by Borrower with any provision of this
Instrument or the other Loan Documents, or consent by Lender to the performance by
Borrower of any action which would otherwise be prohibited thereunder, or to the
failure by Borrower to take any action which would otherwise be required hereunder
or thereunder; and

(iv) any agreement or stipulation between Trustee or Lender and Borrower, or,
with or without Borrower’s consent, between Trustee or Lender and any subsequent
owner or owners of the Property or any other security for the Secured Obligations,
renewing, extending or modifying the time of payment or the terms of this Instrument
or any of the other Loan Documents (including a modification of any interest rate),
and in any such event Borrower shall continue to be obligated to pay the
Indebtedness at the time and in the manner provided herein and in the other Loan
Documents, as so renewed, extended or modified, unless expressly released and
discharged by Lender.

(e) Regardless of consideration, and without the necessity for any notice to or consent
by the holder of any subordinate lien, encumbrance, right, title or interest in or to the
Property, Lender may release any person at any time liable for the payment of the
Indebtedness or any portion thereof or any part of the security held for the Indebtedness
and may extend the time of payment or otherwise modify the terms of this Instrument or of
any of the Loan Documents, including a modification of the interest rate payable on the
principal balance of the Note, without in any manner impairing or affecting this Instrument,
as so extended and modified, as security for the Secured Obligations under any such
subordinate lien, encumbrance, right, title or interest. Lender may resort for the payment
of the Secured Obligations to any other security held by Lender (or any trustee for the
benefit of Lender) in such order and manner as Lender in its discretion, may elect. Lender
may take or cause to be taken action to recover the Indebtedness, or any portion thereof, or
to enforce any provision hereof or of the other Loan Documents without prejudice to the
right of Lender thereafter to foreclose or cause to be foreclosed this Instrument. Lender
shall not be limited exclusively to the right and remedies herein stated but shall be
entitled to every additional right and remedy now or hereafter afforded by law or equity.
The rights of Trustee and Lender under this Instrument shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No act of Trustee
and/or Lender shall be construed as an election to proceed under any one provision herein to
the exclusion of any other provision.

 

20

 

Section 4.11. Obligations to Become Due on Sale. Upon any sale of the Collateral or any
portion thereof or interest therein by virtue of the exercise of any remedy by Lender or Trustee
under or by virtue of this Instrument, whether pursuant to power of sale, foreclosure or otherwise
in accordance with this Instrument or by virtue of any other remedy available at law or in equity
or by statute or otherwise, at the option of Lender, all Secured Obligations shall, if not
previously declared due and payable, immediately become due and payable, together with interest
accrued thereon and all other indebtedness secured by this Instrument.

Section 4.12. Application of Proceeds of Sale and Other Moneys. The proceeds of any sale of
the Collateral or any part thereof or any interest therein under or by virtue of this Instrument,
whether pursuant to power of sale, foreclosure or otherwise, and all other moneys at any time held
by Lender or Trustee as part of the Collateral, shall be applied as follows:

FIRST, fees, expenses or indemnities to enforce this Instrument or then due to Lender or
Trustee;

SECOND, to pay Secured Obligations in respect of any other fees, expenses or indemnities then
due to Lender;

THIRD, to pay interest due in respect of the Loan;

FOURTH, to pay the principal outstanding with respect to the Loan;

FIFTH, to the payment of all other Secured Obligations; and

SIXTH, to Borrower.

Section 4.13. Appointment of Receiver. If an Event of Default shall have occurred (other
than an Event of default that has been waived in writing by Lender or confirmed as having been
cured in writing by Lender), Lender shall, as a matter of right and without regard to the adequacy
of any security for the Secured Obligations secured hereby or the solvency of Borrower, be entitled
to the appointment of a receiver for all or any part of the Collateral, whether such receivership
be incidental to a proposed sale of the Collateral or otherwise, and Borrower hereby consents to
the appointment of such a receiver and will not oppose any such appointment.

Section 4.14. Possession, Management and Income. If an Event of Default shall have occurred
(other than an Event of default that has been waived in writing by Lender or confirmed as having
been cured in writing by Lender), in addition to, not in limitation of, the rights and remedies
provided in Section 2.10, Lender, upon five days’ notice to Borrower, may enter upon and take
possession of the Collateral or any part thereof by force, summary proceeding, ejectment or
otherwise and may remove Borrower and all other persons and any and all property therefrom and may
hold, operate, maintain, repair, preserve and manage the same and receive all earnings, income,
Rents, issues and proceeds accruing with respect thereto or any part thereof. Lender shall be
under no liability for or by reason of any such taking of possession, entry, removal or holding,
operation or management.

Section 4.15. Right of Lender to Perform Borrower’s Covenants. During the continuance of an
Event of Default, Lender, without notice to or demand upon Borrower and without waiving or
releasing any obligation or Event of Default, may (but shall be under no obligation to) at any time
thereafter make such payment or perform such act for the account and at the expense of Borrower,
and may enter upon the Collateral for such purpose and take all such action thereon as, in Lender’s
opinion, may be necessary or appropriate therefor. No such entry and no such action shall be
deemed an eviction of any Tenant or other person with the right to use or occupy all or any portion
of the Property or any part thereof. After the occurrence of an Event of Default (other than an
Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender), all sums so paid by Lender and all costs and expenses (including, without
limitation, reasonable attorneys’ fees and expenses) so incurred, together with interest thereon at
the Default Rate from the date of payment or incurring, shall constitute additional indebtedness
secured by this Instrument and shall be paid by Borrower to Lender within 10 days of demand.

 

21

 

Section 4.16. Subrogation. To the extent that Lender, on or after the date hereof, pays any
sum due under any provision of any legal requirement or any instrument creating any Lien prior or
superior to the Lien of this Instrument, or Borrower or any other person pays any such sum with the
proceeds of the Loan evidenced by the Note, Lender shall have and be entitled to a Lien on the
Collateral equal in priority to the Lien discharged, and Lender shall be subrogated to, and receive
and enjoy all rights and liens possessed, held or enjoyed by, the holder of such Lien, that shall
remain in existence and benefit Lender in securing the Obligations.

Section 4.17. Remedies Cumulative. Each right, power and remedy of Lender and Trustee
provided for in this Instrument or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every other right, power
or remedy provided for in this Instrument or the other Loan Documents, or now or hereafter existing
at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by
Lender or Trustee of any one or more of the rights, powers or remedies provided for in this
Instrument, or now or hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by Lender or Trustee of any or all such other rights,
powers or remedies.

Section 4.18. Provisions Subject to Applicable Law. All rights, powers and remedies provided
in this Instrument may be exercised only to the extent that the exercise thereof does not violate
any applicable provisions of law and are intended to be limited to the extent necessary so that
they will not render this Instrument invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law. If any term of this Instrument or
any application thereof shall be invalid or unenforceable, the remainder of this Instrument and any
other application of such term shall not be affected thereby.

Section 4.19. No Waiver, Compromise of Actions. No failure by Lender to insist upon the
strict performance of any term hereof or of any other Loan Documents, or to exercise any right,
power or remedy consequent upon a breach hereof or thereof, shall constitute a waiver of any such
term or of any such breach. No waiver of any breach shall affect or alter this Instrument, which
shall continue in full force and effect with respect to any other then existing or subsequent
breach. By accepting payment or performance of any amount or other Secured Obligation before or
after its due date, Lender shall not be deemed to have waived its right either to require prompt
payment or performance when due of all other amounts payable hereunder and the Secured Obligations
or to declare a default for failure to effect such prompt payment. Any action, suit or proceeding
brought by Lender pursuant to any of the terms of this Instrument, any Loan Document or otherwise,
and any claim made by Lender hereunder or thereunder may be compromised, withdrawn or otherwise
dealt with by Lender without any notice to or approval of Borrower.

Section 4.20. Provisions with Respect to the Leases. Notwithstanding the provisions of
Section 4.01(m) or Section 4.01(n) (each, an “Operator Default”) to the contrary, a termination of
any of the Leases or the occurrence of an event of default or a breach or default (however
defined), after the passage of all applicable notice and cure or grace periods provided therefor
(the “Cure Date”), under any of the Leases shall not constitute and Event of Default hereunder
provided that Borrower shall have complied with the each of following conditions (collectively, the
“Operator Substitution”) in form and substance satisfactory to Lender:

(a) Within 45 days of the Cure Date, Borrower shall have entered a new lease (the “New
Lease”) with a new tenant (the “New Tenant”) on substantially the same terms as the Lease
subject to the Operator Default.

(b) New Tenant shall be a wholly-owned subsidiary (direct or indirect) sub of
Guarantor.

(c) New Tenant’s management team is substantially the same as Tenant’s management team.

(d) Borrower and New Tenant shall have executed such instruments, agreements and other
documents necessary to protect Lender’s security interest in and Lien on the Collateral
(including, without limitation, a subordination agreement with respect to the New Lease) and
to ensure New Tenant’s ability to maintain business operations on the Property (including,
without limitation, a management agreement with respect to the New Lease.

 

22

 

(e) Only one Operator Substitution shall be permitted with respect to the Property
during the term of the Loan.

(f) No Operator Substitution under any other Mortgage (as defined in the Note) shall
have been consummated within the 18-month period immediately preceding the Operator Default.

Upon satisfaction of the foregoing conditions and consummation of the Operator Substitution, the
New Lease shall be deemed to be a Lease under this Instrument, and the New Tenant shall be deemed
to be a Tenant under this Instrument.

Section 4.21. Additional Provisions as to Remedies.

(a) Neither Trustee nor Lender shall have any obligation to pursue any rights or
remedies they may have under any other agreement prior to pursuing their rights or remedies
hereunder or under the other Loan Documents.

(b) No recovery of any judgment by Trustee or Lender and no levy of an execution upon
the Property or any other property of Borrower shall affect, in any manner or to any extent,
the lien of this Instrument upon the Property, or any liens, rights, powers or remedies of
Trustee or Lender hereunder, and such liens, rights, powers and remedies shall continue
unimpaired as before.

(c) Lender may resort or cause Trustee to resort to any security given by this
Instrument or any other security now given or hereafter existing to secure the Secured
Obligations, in whole or in part, in such portions and in such order as Lender may deem
advisable, and no such action shall be construed as a waiver of any of the liens, rights or
benefits granted hereunder.

(d) Acceptance of any payment after the occurrence of any Event of Default shall not be
deemed a waiver or a cure of such Event of Default, and acceptance of any payment less than
any amount then due shall be deemed an acceptance on account only.

(e) In the event that Trustee or Lender shall have proceeded to enforce any right or
remedy hereunder by foreclosure, sale, entry or otherwise, and such proceeding shall be
discontinued, abandoned or determined adversely for any reason, then Borrower, Trustee and
Lender shall be restored to their former positions and rights hereunder with respect to the
Property, subject to the lien hereof.

 

23

 

Section 4.22. Environmental Defaults and Remedies. In the event that any portion of the
Property is determined to be “environmentally impaired” (as “environmentally impaired” is defined
in California Code of Civil Procedure Section 726.5(e)(3)) or to be an “affected parcel” (as
“affected parcel” is defined in California Code of Civil Procedure Section 726.5(e)(1)), then,
without otherwise limiting or in any way affecting Lender’s or Trustee’s rights and remedies under
this Instrument, Lender may elect to exercise its right under California Code of Civil Procedure
Section 726.5(a) to (a) waive its lien on such environmentally impaired or affected parcel portion
of the Property and (b) exercise (i) the rights and remedies of an unsecured creditor, including
reduction of its claim against Borrower to judgment, and (ii) any other rights and remedies
permitted by law. For purposes of determining Lender’s right to proceed as an unsecured creditor
under California Code of Civil Procedure Section 726.5(a), Borrower shall be deemed to have
willfully permitted or acquiesced in a release or threatened release of hazardous materials, within
the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened
release of hazardous materials was knowingly or negligently caused or contributed to by any lessee,
occupant or user of any portion of the Property and Borrower knew or should have known of the
activity by such lessee, occupant or user which caused or contributed to the release or threatened
release. All costs and expenses, including, but not limited to, attorneys’ and paralegals’ fees
and costs and court costs incurred by Lender in connection with any action commenced under this
Section 4.22, including any action required by California Code of Civil Procedure Section 726.5(b)
to determine the degree to which the Property is environmentally impaired, plus interest thereon at
the Default Rate, until paid, shall be added to the Secured Obligations and shall be due and
payable to Lender upon its demand made at any time following the conclusion of such action.

Section 4.23. Request for Notice. Pursuant to California Government Code Section 27321.5(b),
Borrower hereby requests that a copy of any notice of default and a copy of any notice of sale
given pursuant to this Instrument be mailed to Borrower at the address set forth herein above.

Section 4.24. Local Law Provisions. In the event of any conflict between the terms and
provisions of any other section of this Instrument, the terms and provisions of this section shall
govern and continue.

(a) With or without notice, and without releasing Borrower from any obligation
hereunder, to cure any default of Borrower and, in connection therewith, Lender or its
agents, acting by themselves or through a court appointed receiver, may enter upon the
Premises or any part thereof and perform such acts and things as Lender deems necessary or
desirable to inspect, investigate, assess, and protect the security hereof, including
without limitation of any of its other rights:

(i) to obtain a court order to enforce Lender’s right to enter and inspect the
Premises under Section 2929.5 of the California Civil Code, to which the decision of
Lender as to whether there exists a release or threatened release of Hazardous
Materials in or onto the Premises shall be deemed reasonable and conclusive as
between the parties hereto; and

(ii) to have a receiver appointed under Section 564 of the California Code of
Civil Procedure to enforce Lender’s right to enter and inspect the Premises for
Hazardous Materials. All costs and expenses reasonably incurred by Lender with
respect to the audits, tests, inspections, and examinations which Lender or its
agents or employees may conduct, including the fees of the engineers, laboratories,
contractor, consultants, and attorneys, shall be paid by Borrower. All
reimbursement costs and expenses incurred by Trustee and Lender pursuant to this
subparagraph (including, without limitation, court costs, consultant fees and
attorneys’ fees, whether incurred in litigation or not and whether before or after
judgment) shall be added to the Secured Obligations and shall bear interest at the
Default Rate from the date they are incurred until said sums have been paid if not
paid within 10 days after demand.

 

24

 

(b) Lender may seek a judgment that Borrower has breached its covenants,
representations and/or warranties with respect to the environmental matters set forth in the
Environmental Indemnity Agreement or herein, by commencing and maintaining an action or
actions in any court of competent jurisdiction for breach of contract pursuant to Section
736 of the California Code of Civil Procedure, whether commenced prior to foreclosure of
the Premises, and to seek the recovery of any and all costs, damages, expenses, fees,
penalties, fines, judgments, indemnification payments to third parties, and other
out-of-pocket costs or expenses actually incurred by Lender (collectively, the
“Environmental Costs”)
incurred or advanced by Lender relating to the cleanup, remediation or other response
action, required by applicable law or to which Lender believes necessary to protect the
Premises, it being conclusively presumed between Lender and Borrower that all such
Environmental Costs incurred or advanced by Lender relating to the cleanup, remediation, or
other response action of or to the Premises were made by Lender in good faith. All
Environmental Costs incurred by Lender under this subparagraph (including, without
limitation, court costs, consultant fees and attorneys’ fees, whether incurred in litigation
or not and whether before or after judgment) shall bear interest at the Default Rate from
the date of expenditure until said sums have been paid if not paid within 10 days after
demand. Lender shall be entitled to bid, at the sale of the Premises, the amount of said
costs, expenses and interest in addition to the amount of the other obligations hereby
secured as a credit bid, the equivalent of cash.

(c) Borrower acknowledges and agrees that notwithstanding any term or provision
contained herein or elsewhere, the Environmental Costs shall be exceptions to any limited
recourse or exculpatory provision, and Borrower shall be fully and personally liable for the
Environmental Costs hereunder, and such liability shall not be limited to the original
principal amount of the obligations secured by this Instrument, and Borrower’s Premises or
this Instrument. For the purposes of any action brought under this subparagraph, Borrower
hereby waives the defense of laches and any applicable statute of limitations.

(d) Borrower hereby waives all other rights it may now or hereafter have, whether or
not similar to any of the foregoing, by reason of laws of the State of California pertaining
to sureties, including without limitation all rights and defenses that are or may become
available to Borrower by reason of Sections 2787 to 2855, inclusive, 2899, and 3433 of the
California Civil Code.

ARTICLE V

MISCELLANEOUS

Section 5.01. Further Assurances; Financing Statements; Recordation.

(a) Borrower, at its expense, will execute, acknowledge and deliver all such
instruments and take all such other action as Lender from time to time may reasonably
request in order to further effectuate the purposes of this Instrument and to carry out the
terms hereof and to better assure and confirm to Lender its rights, powers and remedies
hereunder.

(b) Notwithstanding any other provision of this Instrument, Borrower hereby agrees
that, without notice to or the consent of Borrower, Lender may file with the appropriate
public officials such financing statements, continuation statements, amendments and similar
documents as are or may become necessary to perfect, preserve or protect the security
interest granted by this Instrument.

(c) Borrower, at its expense, will at all times cause this Instrument and any document,
agreement or instrument amendatory hereof or supplemental hereto or thereof (and any
appropriate financing statements or other instruments and continuations thereof), and each
other document, agreement and instrument delivered in connection with the Loan Documents and
intended thereunder to be recorded, registered and filed, to be kept recorded, registered
and filed, in such manner and in such places, and will pay all such recording, registration,
filing fees, taxes and other charges, and will comply with all such statutes and regulations
as may be required by law in order to establish, preserve, perfect and protect the Lien of
this Instrument as a valid, first mortgage lien and first priority perfected security
interest in the Collateral, subject only to the Permitted Exceptions. Borrower will pay or
cause to be paid, and will indemnify Lender in respect of, all taxes and other fees and
charges (including interest and penalties) at any time payable in connection with the filing
and recording of this Instrument and any and all supplements and amendments hereto.

Section 5.02. Additional Security. Without notice to or consent of Borrower, and without
impairment of the Lien and rights created by this Instrument, Lender may accept from Borrower or
any other person additional security for the Secured Obligations. Neither the giving of this
Instrument nor the acceptance of any such additional
security shall prevent Lender from resorting, first, to such additional security, or, first,
to the security created by this Instrument, or concurrently to both, in any case without affecting
Lender’s Lien and rights under this Instrument.

 

25

 

Section 5.03. Provisions Regarding Trustee. Trustee shall not be liable for any error of
judgment or act done by Trustee, or be otherwise responsible or accountable under any circumstances
whatsoever. Trustee shall not be personally liable in case of entry by it or anyone acting by
virtue of the powers herein granted it upon the Collateral for debts contracted or liability or
damages incurred in the management or operation of the Collateral. All monies received by Trustee
shall, until used or applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other monies (except to the extent
required by law) and Trustee shall be under no liability for interest on any monies received by it
hereunder. Trustee may resign by giving 30 days’ prior written notice of such resignation to
Lender. If Trustee shall die, resign or become disqualified from acting, or shall fail or refuse
to exercise its powers hereunder when requested by Lender so to do, or if for any reason and
without cause Lender shall prefer to appoint a substitute trustee to act instead of the original
Trustee named herein, or any prior successor or substitute trustee, Lender shall have full power to
appoint a substitute trustee and, if preferred, several substitute trustees in succession who shall
succeed to all the estate, rights, powers and duties of the aforenamed Trustee. Upon appointment
by Lender and upon recording of the substitution in the land records of San Diego County,
California, any new Trustee appointed pursuant to any of the provisions hereof shall, without any
further act, deed or conveyance, become vested with all the estates, properties, rights, powers and
trusts of its predecessor in the rights hereunder with the same effect as if originally named as
Trustee herein.

Section 5.04. Notices. All notices, certificates, requests, demands and other
communications provided for hereunder or under any Loan Document shall be in writing and shall be
(a) personally delivered or (b) sent by overnight courier of national reputation, and shall be
deemed to have been given on (i) the date received if personally delivered and (ii) the next
Business Day if sent by overnight courier. All communications shall be addressed to the party to
whom notice is being given at its address set forth in this Instrument.

Section 5.05. Waivers, Amendments. The provisions of this Instrument may be amended,
discharged or terminated only by an instrument in writing executed by Borrower and Lender, and the
observance or performance of any provision of this Instrument may be waived, either generally or in
a particular instance and either retroactively or prospectively, only by an instrument in writing
executed by Lender.

Section 5.06. Governing Law. THIS INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE, WITHOUT REGARD TO THE CONFLICT-OF-LAWS PRINCIPLES THEREOF.

Section 5.07. Successors and Assigns. This Instrument shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and assigns; provided,
however, that Borrower may not assign or transfer its rights or obligations hereunder without the
prior written consent of Lender.

Section 5.08. Waiver of Jury Trial. BORROWER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS INSTRUMENT, ANY
OF THE LOAN DOCUMENTS, ANY DEALINGS BETWEEN LENDER AND BORROWER RELATING TO THE SUBJECT MATTER OF
THE TRANSACTIONS CONTEMPLATED BY THIS INSTRUMENT OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LENDER AND BORROWER. BORROWER ACKNOWLEDGES AND
AGREES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS INSTRUMENT AND
THE OTHER LOAN DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS INSTRUMENT, ANY
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY
THIS INSTRUMENT OR ANY RELATED TRANSACTIONS. IN THE EVENT OF LITIGATION, THIS INSTRUMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

26

 

Section 5.09. Time of Essence. Time is of the essence with respect to Borrower’s obligations
under this Instrument.

Section 5.10. No Offset. Borrower’s obligation to make payments and perform all obligations,
covenants and warranties under this Instrument and under the other Loan Documents shall be absolute
and unconditional and shall not be affected by any circumstance, including without limitation any
setoff, counterclaim, abatement, suspension, recoupment, deduction, defense or other right that
Borrower or any guarantor may have or claim against Lender or any entity participating in making
the loan secured hereby. The foregoing provisions of this section, however, do not constitute a
waiver of any claim or demand which Borrower or any guarantor may have in damages or otherwise
against Lender or any other person, or preclude Borrower from maintaining a separate action
thereon; provided, however, that Borrower waives any right it may have at law or in equity to
consolidate such separate action with any action or proceeding brought by Lender.

Section 5.11. Severability. Any provision of this Instrument or other Loan Documents that is
prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Instrument or such Loan Documents or affecting the validity or
unenforceability of such provision in any other jurisdiction.

Section 5.12. Release and Termination. Upon indefeasible payment in full of the principal of
and premium, if any, and interest on the Secured Obligations in accordance with the terms of this
Instrument, the Note and the other Loan Documents and all other sums payable hereunder and
thereunder by Borrower or Guarantor, this Instrument shall automatically terminate and shall be
(except as provided herein) null and void and of no further force and effect, and the Collateral
shall thereupon be, and be deemed to have been, reconveyed, released and discharged from this
Instrument without further notice on the part of either Borrower or Lender, but upon the request of
Borrower, Lender, at Borrower’s sole cost and expense, shall request Trustee execute a satisfaction
release or deed of reconveyance in recordable form and a termination of this Instrument and Trustee
shall recovey the Collateral without warranty to the person or persons legally entitled thereto.

[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]

 

27

 

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS INSTRUMENT SHOULD BE READ CAREFULLY
BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED
IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS INSTRUMENT ONLY
BY ANOTHER WRITTEN AGREEMENT.

IN WITNESS WHEREOF, Borrower has caused this Instrument to be duly executed as of the day and
year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CM HEALTH HOLDINGS LLC,	 	 
	 	 	a Nevada limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	The Ensign Group, Inc., a Delaware corporation, its

 Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Gregory K. Stapley	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Gregory K. Stapley	 	 
	 

	 	 	 	 	 	Title:	 	Executive Vice President

	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	File No.:	 	 
	 	 	 	 	 	 	APN No.:	 	 

	 	 	 	 	 	 	 	 	 
	STATE OF CALIFORNIA

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	ss.	 	 	 	 
	COUNTY
OF ORANGE

	 	 	)	 	 	 	 	 

On December 30, 2010, before me, Patty Romero,
Notary Public, personally appeared Gregory K. Stapley, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature /s/ Patty Romero     
                    

This area for official notarial seal.

[EXECUTION PAGE OF COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT,

ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING]

 

 

 

Prepared by, recording requested by,

and after recording return to:

Sean Gillen, Esq.

Kutak Rock LLP

The Omaha Building

1650 Farnam Street

Omaha, NE 68102

COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT

OF LEASES AND RENTS AND FIXTURE FILING

	 	 	 
	GRANTOR:

	 	LUFKIN HEALTH HOLDINGS LLC, a Nevada limited liability company
	 
	 	 
	TRUSTEE:

	 	FIDELITY NATIONAL TITLE INSURANCE COMPANY, a California corporation
	 
	 	 
	BENEFICIARY:

	 	RBS ASSET FINANCE, INC., a New York corporation
	 
	 	 
	PROPERTY:

	 	5901 North Medford Drive, Lufkin, TX 75901

Dated: December 31, 2010

NOTICE: THE DEBT SECURED HEREBY IS SUBJECT TO CALL IN FULL OR THE TERMS THEREOF BEING MODIFIED IN
THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY HEREIN CONVEYED.

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE
FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:
YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

THIS DEED OF TRUST, TOGETHER WITH THE NOTE AND OTHER LOAN DOCUMENTS AS THAT TERM IS DEFINED HEREIN,
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN IN THE EVENT OF ANY CONFLICT BETWEEN
THE TERMS OF THIS DEED OF TRUST AND CHAPTER 51 OF THE TEXAS PROPERTY CODE, THE TERMS OF CHAPTER 51
OF THE TEXAS PROPERTY CODE SHALL CONTROL.

THIS COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE
FILING, dated as of December 31, 2010 (this “Instrument”), made by the trustor, LUFKIN HEALTH
HOLDINGS LLC, a Nevada limited liability company (together with its successors and assigns,
“Borrower”), with Federal Tax Identification Number 26-3800438 and Organizational
Identification Number E0727882008-4, having an address at 5901 North Medford Drive, Lufkin, TX
75901, in favor of FIDELITY NATIONAL TITLE INSURANCE COMPANY, a California corporation (together
with its successors and assigns, “Trustee”), whose address is 1300 Dove Street, Suite 310, Newport
Beach, CA 92660, for the benefit of the Beneficiary, RBS ASSET FINANCE, INC., a New York
corporation (together with its successors and assigns, “Lender”), having an address at 71 S. Wacker
Drive, Suite 2800, Chicago, IL 60606.

 

 

 

W I T N E S S E T H  T H A T:

WHEREAS, Borrower is on the date of delivery hereof the holder of a fee simple estate in the
parcel or parcels of land described in Schedule 1 hereto (the “Land”) and of the Improvements (as
defined below); and

WHEREAS, Lender has made a loan (the “Loan”) to Borrower evidenced by that certain Note as
more particularly described below; and

WHEREAS, this Instrument is given by Borrower to secure: (a) the Note dated as of the date
hereof (the “Note”) executed by Borrower in the original principal amount of $35,000,000 and with a
scheduled maturity date of January 1, 2018, together with any renewals, extensions or modifications
thereof; (b) the payment and performance of all obligations of Borrower owed to Lender under the
Loan Documents (as defined below), whether now existing or hereafter arising, including, without
limitation, any renewal, extension or modification thereof and all future advances and readvances
that may subsequently be made to Borrower by Lender under the Loan Documents (collectively, the
“Obligations”); (c) the payment and performance of all obligations under any other document or
instrument that recites that it is secured hereby, whether now existing or hereafter arising,
including, without limitation, any renewal, extension or modification thereof; and (d) the payment
and performance of all obligations of Borrower or Guarantor owed to Lender, whether now existing or
hereafter arising ((a) through (d) are referred to herein as the “Secured Obligations”); and

WHEREAS, as a condition precedent to Lender making the Loan, Borrower is required to execute
and deliver this Instrument for the benefit of Lender to secure the payment and performance of the
Secured Obligations; and

WHEREAS, Borrower has duly authorized the execution, delivery and performance of this
Instrument.

G R A N T:

NOW, THEREFORE, for and in consideration of the premises, and of the mutual covenants herein
contained, and in order to induce Lender to make the Loan to Borrower, and in order to secure the
full, timely and proper payment and performance of and compliance with each and every one of the
Secured Obligations, Borrower hereby irrevocably grants, bargains, sells, mortgages, warrants,
aliens, demises, releases, hypothecates, pledges, assigns, transfers, conveys and grants a security
interest in and to Trustee, in trust, WITH THE POWER OF SALE, all of Borrower’s estate, right,
title and interest, if any, now or hereafter arising, in and to the following (collectively, the
“Collateral”):

(a) Premises. The Land, together with all tenements, rights, easements, hereditaments,
rights of way, privileges, liberties, appendages and appurtenances now or hereafter
belonging or in anywise pertaining to the Land (including, without limitation, all rights
relating to storm and sanitary sewer, water, gas, electric, railway and telephone services);
all development rights, air rights, riparian rights, water, water rights, water stock, all
rights in, to and with respect to any and all oil, gas, coal, minerals and other substances
of any kind or character underlying or relating to the Land and any interest therein; any
street, road, highway or alley, vacated or other, adjoining the Land or any part thereof;
all strips and gores belonging, adjacent or pertaining to the Land; and any after-acquired
title to any of the foregoing (collectively, the “Premises”);

 

2

 

(b) Improvements. All buildings, structures and other improvements and any additions
and alterations thereto or replacements thereof, now or hereafter built, constructed or
located upon the Premises; and all furnishings, fixtures, fittings, appliances, apparatus,
equipment, machinery, building and
construction materials and other articles of property of every kind and nature
whatsoever, now or hereafter affixed or attached to, erected on or used in connection with
the operation of the Premises or such buildings, structures and other improvements,
including, without limitation, all partitions, furnaces, boilers, oil burners, radiators and
piping, plumbing and bathroom fixtures, refrigeration, heating, ventilating, air
conditioning and sprinkler systems, other fire prevention and extinguishing apparatus and
materials, vacuum cleaning systems, gas and electric fixtures, incinerators, compactors,
elevators, engines, motors, generators and all other articles of property that are
considered fixtures under applicable law (collectively together with all additions and
accessions thereto and all replacements and substitutions thereof, the “Improvements”; the
Premises and the Improvements are collectively referred to herein as the “Property”);

(c) Leases. All leases, licenses, occupancy agreements, concessions and other
arrangements, oral or written, now existing or hereafter entered into (including, without
limitation, the leases listed on Schedule 3 hereto), whereby any person agrees to pay money
or any other consideration for the use, possession or occupancy of, or any estate in, the
Property or any portion thereof or interest therein (collectively, the “Leases”);

(d) Permits and Approvals. To the extent assignable under applicable law, all permits,
franchises, licenses, approvals and other authorizations respecting the use, occupation or
operation of the Property or any part thereof and respecting any business or other activity
conducted on or from the Property, and any product or proceed thereof or therefrom,
including, without limitation, all building permits, certificates of occupancy and other
licenses, permits and approvals issued by governmental authorities having jurisdiction;

(e) Rents. All rents, issues, profits, royalties, avails, income, proceeds and other
benefits derived or owned, directly or indirectly, by Borrower from the Collateral,
including, without limitation, all rents and other consideration payable by Tenants, claims
against guarantors, any guaranties with respect to any Tenant’s obligations under any Lease
and any cash or other securities deposited to secure performance by Tenants, under the
Leases (collectively, “Rents”);

(f) Plans. To the extent assignable under applicable law, all plans, specifications,
contracts and agreements relating to the design or construction of the Improvements, any
payment, performance, or other bond provided in connection with the design or construction
of the Improvements, all contracts, agreements and purchase orders with contractors,
subcontractors, suppliers and materialmen incidental to the design or construction of the
Improvements, all other contracts and agreements pertaining to or affecting the Property,
including, without limitation, all options or contracts to acquire other property for use in
connection with operation or development of the Property and management contracts, service
or supply contracts with respect to the Property;

(g) Trademarks and Trade Names. All trademarks, trade names, symbols, assumed names,
and other rights and interest in and to the name and marks used by Borrower in connection
with the Property, together with the goodwill associated therewith;

(h) Deposits. Any moneys on deposit with or for the benefit of Lender in connection
with any of the Collateral, including deposits for the payment of real estate taxes, public
assessments and repairs;

(i) Claims. All claims, demands, judgments, insurance proceeds, awards of damages and
settlements hereafter made resulting from the taking of the Property or any portion thereof
under the power of eminent domain, or for any damage (whether caused by such taking, by
casualty or otherwise) to the Property or any portion thereof;

(j) Other Rights. All other property and rights of Borrower relating to any of the
foregoing; and

(k) Addition; Replacements; Proceeds. All additions, accessions, replacements,
substitutions, proceeds and products of the property, tangible and intangible, described
herein.

 

3

 

AND, without limiting any of the other provisions of this Instrument, Borrower expressly
grants to Lender, as secured party, a security interest in all of those portions of the Collateral
that are or may be subject to the UCC provisions applicable to secured transactions; and

TO HAVE AND TO HOLD the Collateral unto Trustee for the benefit of Lender.

PROVIDED, HOWEVER, that nothing contained herein shall create an obligation on the part of
Lender to make future advances or readvances to Borrower; and

PROVIDED, FURTHER, that the total amount of the Secured Obligations and advances at any one
time secured hereby shall in no event exceed $70,000,000, plus interest thereon and all charges and
expenses of collection incurred by Lender, including court costs and attorneys’ fees and expenses
and advancements for taxes, insurance premiums, public assessments and repairs, if any; and

FURTHER to secure the full, timely and proper payment and performance of the Secured
Obligations, Borrower hereby covenants and agrees with and warrants to Trustee for the benefit of
Lender as follows:

ARTICLE I

DEFINITIONS

The following terms shall have the following meanings for all purposes of this Instrument, and
capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms
in the Note:

“Business Day” means any day on which Lender is open for business and is neither a Saturday
nor Sunday nor a legal holiday on which banks are authorized or required to be closed in New York,
New York or Chicago, Illinois.

“Change of Control” means a change in control of Borrower or Guarantor, including, without
limitation, a change in control resulting from direct or indirect transfers of voting stock or
partnership, membership or other ownership interests, whether in one or a series of transactions.
“Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of Borrower or Guarantor, and a Change of Control shall
occur if any of the following occurs: (a) any person or group (as such term is used in Section
13(d)(3) of the Exchange Act) acquires, after the date of this Instrument, the beneficial ownership
directly or indirectly, of 50% or more of the voting power of the total outstanding stock or other
ownership interests of Borrower or Guarantor or (b) Guarantor ceases to own 100% of the outstanding
membership interests of Borrower.

“Default” means any Event of Default or any condition, occurrence or event that, after notice
or lapse of time or both, would constitute an Event of Default.

“Environmental Indemnity Agreement” means the Environmental Indemnity Agreement dated as of
the date hereof executed by Borrower for the benefit of Lender, and any amendment or supplement
thereto.

“Environmental Laws” means (i) all Federal Toxic Waste Laws, (ii) all local, State or foreign
laws, statutes, regulations, or ordinances analogous to any of the Federal Toxic Waste Laws and
(iii) all other federal, State or local laws (including any common law, consent decrees and
administrative orders), statutes, regulations or ordinances regulating, permitting, prohibiting or
otherwise restricting the placement, discharge, release, generation, treatment or disposal upon or
into any environmental media of any substance, pollutant, contaminant or waste that is now or
hereafter classified or considered to be hazardous or toxic; “Environmental Laws” shall also
include any and all amendments to any of (i), (ii) or (iii).

“Event of Default” has the meaning set forth in Section 4.01.

 

4

 

“Federal Toxic Waste Laws” means any federal law or implementing regulation regulating any
substance, matter, material, waste, contaminant or pollutant, the generation, storage, disposal,
handling, release, treatment, discharge or emission of which is regulated, prohibited or limited,
including, without limitation: (i) the Resource Conservation and Recovery Act, as amended by the
Hazardous and Solid Waste Amendments of 1984, as now or hereafter amended (42 U.S.C. Section 6901
et seq.), (ii) the Comprehensive Environmental Response, Compensation and Liability Act, as amended
by the Superfund Amendments and Reauthorization Act of 1986, as now or hereafter amended (42 U.S.C.
Section 9601 et seq.), (iii) the Clean Water Act, as now or hereafter amended (33 U.S.C. Section
1251 et seq.), (iv) the Toxic Substances and Control Act, as now or hereafter amended (15 U.S.C.
Section 2601 et seq.) and (v) the Clean Air Act, as now or hereafter amended (42 U.S.C. Section
7401 et seq.).

“GAAP” means generally accepted accounting principles in the United States applied on a
consistent basis.

“Guarantor” means The Ensign Group, Inc., a Delaware corporation.

“Guaranty” means the Guaranty of even date herewith executed by Guarantor for the benefit of
Lender, pursuant to which, among other things, Guarantor has guaranteed the payment and performance
obligations of Borrower under the Loan Documents.

“Hazardous Material” means (a) any “hazardous substance” as defined by Environmental Laws, (b)
any hazardous waste” as defined by Environmental Laws, (c) any petroleum product including, without
limitation, waste oil, used oil or wastewater containing petroleum product, (d) any asbestos or
material containing asbestos and (e) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any Environmental Law relating to or imposing
liability or standards of conduct.

“Impositions” has the meaning set forth in Section 2.04.

“Indemnified Liabilities” has the meaning set forth in Section 2.12.

“Indemnified Parties” has the meaning set forth in Section 2.12.

“Loan Documents” means, collectively, this Instrument, the Note and each other instrument or
document executed or delivered pursuant to or in connection with this Instrument and the other Loan
Documents, including, without limitation, any instrument or agreement given to evidence or further
secure the Obligations.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, properties or financial condition of Borrower or Guarantor, (b) the ability of Borrower
to perform or pay its Obligations or any material indebtedness in accordance with the terms
thereof, (c) the ability of Guarantor to perform its obligations under the Guaranty, (d) Lender’s
Lien on the Collateral or the priority of such Lien or (e) the validity or enforceability of any
Loan Document or the rights and remedies available to Lender under any Loan Document.

“Permitted Exceptions” means the exceptions set forth in Schedule 2 hereto.

“Property” has the meaning set forth in the granting clause.

“Premises” has the meaning set forth in the granting clause.

“Release” means a “release” or “threatened release” as such terms are defined in Environmental
Laws of a Hazardous Material.

“Rents” has the meaning set forth in the granting clause.

“State” means the State of Texas.

“Taking” has the meaning set forth in Section 3.02.

 

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“Tenant” means any tenant of the Property, and its successors and assigns.

“UCC” means the Uniform Commercial Code as enacted in the State.

ARTICLE II

COVENANTS AND AGREEMENTS OF BORROWER

Section 2.01. Payment and Performance of Obligations. Borrower agrees that it will duly and
punctually pay and perform or cause to be paid and performed each of the Secured Obligations at the
time and in accordance with the terms specified in the Loan Documents.

Section 2.02. Title to Collateral. Borrower represents and warrants to Lender that:

(a) as of the date hereof and at all times hereafter while this Instrument is
outstanding, Borrower is and shall be the sole, absolute owner and holder of the fee simple
estate in the Property and the absolute owner of the legal and beneficial title to all other
property included in the Collateral, subject in each case only to this Instrument and
Permitted Exceptions;

(b) Borrower has good and lawful right, power and authority to execute this Instrument
and to convey, transfer, assign, mortgage and grant a security interest in the Collateral,
all as provided herein;

(c) this Instrument has been duly executed, acknowledged and delivered on behalf of
Borrower, all consents and other actions required to be taken by the officers, directors,
shareholders, managers and partners, as the case may be, of Borrower have been duly and
fully given and performed and this Instrument constitutes the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its terms; and

(d) Borrower, at its expense, will and hereby does warrant and defend to Lender and any
purchaser under the power of sale herein or at any foreclosure sale such title to the
Collateral (as described in subsection (a) of this Section) and the first mortgage lien and
first priority perfected security interest of this Instrument thereon and therein against
all claims and demands and will maintain, preserve and protect such Lien (as defined below)
and will keep this Instrument a valid, first mortgage lien of record on and a first priority
perfected security interest in the Collateral, subject only to the Permitted Exceptions.

(e) Borrower has duly paid in full all fees, premiums and other charges due in
connection with (i) the recording of this Instrument and the issuance of a loan policy or
policies of title insurance in form and amount satisfactory to Lender naming Lender as the
insured, insuring the title to and the first lien of this Instrument on the Property with
endorsements reasonably requested by Lender and (ii) a survey of the Property in form and
substance acceptable to Lender and title insurer.

Section 2.03. Title Insurance. All proceeds received by and payable to Lender for any loss
under any loan policy or policies of title insurance delivered to Lender shall be the property of
Lender and shall be applied by Lender in accordance with the provisions of Section 3.03 or 3.04, as
applicable.

Section 2.04. Impositions. Borrower will pay or cause to be paid all taxes, insurance
premiums, assessments, water and sewer rates, ground rents, fees and other charges (collectively,
the “Impositions”) that at any time may be assessed, levied, confirmed or imposed or that may
become a Lien upon the Collateral, or any portion thereof, or that are payable with respect
thereto, prior to delinquency, before any fine, penalty or interest may be added for non-payment
and before the commencement of any action to foreclose any Lien against all or any portion of the
Collateral with respect thereto. Borrower will deliver to Lender, upon request, copies of official
receipts or other satisfactory proof evidencing such payments. Borrower shall not be entitled to
any credit against the Secured Obligations by reason of the payment of any Imposition.

 

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Upon the occurrence of an Event of Default (hereinafter defined), and at Lender’s sole option
at any time thereafter, Borrower shall pay in addition to each monthly payment under the Note,
one-twelfth of the Impositions payable during each year (as estimated by Lender in its sole
discretion), to be held by Lender without interest to Borrower, for the payment of such
obligations. If the amount of such additional payments held by Lender (the “Funds”) at the time of
the annual accounting thereof shall exceed the amount deemed necessary by Lender to provide for the
payment of Impositions as they fall due, such excess shall be at Borrower’s option, either repaid
to Borrower or credited to Borrower on the next monthly installment or installments of Funds due.
If at any time the amount of the Funds held by Lender shall be less than the amount deemed
necessary by Lender to pay Impositions as they fall due, Borrower shall pay to Lender any amount
necessary to make up the deficiency within 30 days after notice from Lender to Borrower requesting
payment thereof. Lender may apply, in any amount and in any order as Lender shall determine in
Lender’s sole discretion, any Funds held by Lender at the time of application (i) to pay
Impositions which are now or will hereafter become due or (ii) as a credit against the Secured
Obligations. Upon payment in full of the Secured Obligations, Lender shall refund to Borrower any
Funds held by Lender.

Section 2.05. Liens. Borrower will not directly or indirectly create or permit or suffer to
be created or to remain, and will promptly discharge or cause to be discharged, any deed of trust,
mortgage, encumbrance or charge on, pledge of, security interest in or conditional sale or other
title retention agreement with respect to or any other lien on or in the Collateral or any part
thereof or the interest of Borrower or Lender therein (herein, “Liens”), or any proceeds or Rents
or other sums arising therefrom other than Permitted Exceptions.

Section 2.06. Compliance with Instruments. Borrower, at its expense, will promptly comply
with all rights of way or use, privileges, franchises, servitudes, licenses, easements, tenements,
hereditaments and appurtenances forming a part of the Collateral and all instruments creating or
evidencing the same, in each case, to the extent compliance therewith is required of Borrower under
the terms thereof. Borrower will not terminate, forfeit or materially amend rights afforded to
Borrower under any such instruments, without the prior written consent of Lender.

Section 2.07. Maintenance and Repair. Subject to ordinary wear and tear, Borrower will keep
or cause to be kept all presently and subsequently erected or acquired Improvements and the
sidewalks, curbs, vaults and vault space, if any, located on or adjoining the same, and the streets
and the ways adjoining the same, in good and substantial order and repair and in such a fashion
that the value and utility of the Collateral will not be materially diminished, and, at its sole
cost and expense, will promptly make or cause to be made all necessary and appropriate repairs,
replacements and renewals thereof, whether interior or exterior, structural or nonstructural,
ordinary or extraordinary, foreseen or unforeseen, so that its business carried on in connection
therewith may be properly conducted at all times. All repairs, replacements and renewals shall be
equal or greater in quality and class to the original Improvements. Borrower, at its expense, will
do or cause to be done all shoring of foundations and walls of any building or other Improvements
on the Premises and (to the extent permitted by law) of the ground adjacent thereto, and every
other act necessary or appropriate for the preservation and safety of the Property by reason of or
in connection with any excavation or other building operation upon the Premises and upon any
adjoining property, whether or not Borrower shall be required to take such action or be liable for
failure to do so.

Section 2.08. Alterations, Additions. Borrower shall not make or cause to be made any
alterations of and additions to the Property or any part thereof without prior written consent of
Lender, which consent shall not be unreasonably withheld; provided, however, that Borrower may make
nonstructural additions to the Property costing less than $1,000,000 per year without Lender’s
consent so long as such additions do not diminish the value of the Property. If Lender consents to
any alterations or additions to the Property, such alterations or additions shall be made at
Borrower’s sole expense by a licensed contractor and according to the plans and specifications
approved by Lender and subject to any other conditions required by Lender. Any work commenced on
the Property shall be diligently completed, shall be of good workmanship and materials and shall
comply with the terms of this Instrument. Upon the completion of any alterations or additions,
Borrower shall promptly provide Lender with (a) evidence of full payment to all laborers,
materialmen contributing to the alterations or additions, (b) an architect’s certificate certifying
the alterations conform to the plans and specification approved by Lender, (c) a certificate of
occupancy (if such alterations or additions require the issuance thereof) and (d) any other
documents or information reasonably requested by Lender.

 

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Section 2.09. Acquired Property Subject to Lien. All right, title and interest of Borrower
in and to all alterations, improvements, substitutions, restorations and replacements of, and all
additions and appurtenances to, the Property hereafter acquired by Borrower, whether such property
is acquired by exchange, purchase, construction or otherwise, shall forthwith become subject to the
Lien of this Instrument without further action on the part of Borrower or Lender. Upon the request
of Lender, Borrower, at its expense, will execute and deliver (and will record and file as provided
herein) an instrument or document supplemental to this Instrument satisfactory in substance and
form to Lender, whenever such an instrument or document is necessary under applicable law to
subject to the Lien of this Instrument all right, title and interest of Borrower in and to all
property provided or required by this Instrument to be subject to the Lien hereof.

Section 2.10. Assignment of Rents and Leases.

(a) The assignment, grant and conveyance of the Leases, Rents and all other rents,
income, proceeds and benefits of the Collateral contained in the granting clause of this
Instrument shall constitute an absolute, present and irrevocable assignment, grant and
conveyance, provided that, until an Event of Default has occurred, a license is hereby given
to Borrower to collect, receive and apply Rents, as they become due and payable, but not in
advance thereof, and in accordance with all of the other terms, conditions and provisions
hereof and of the Leases, contracts, agreements and other instruments with respect to which
such payments are made. Upon the occurrence of an Event of Default, such license shall be
revoked and shall terminate, immediately and automatically without notice to Borrower or any
other person (to the extent permitted by law), and shall not be reinstated upon a cure of
such Event of Default without the express written consent of Lender. Such assignment shall
be fully effective without any further action on the part of Borrower or Lender, and Lender
shall be entitled, at its option, upon the occurrence of an Event of Default hereunder, to
collect, receive and apply all Rents and all other rents, income, proceeds and benefits from
the Collateral, including all right, title and interest of Borrower in any escrowed sums or
deposits or any portion thereof or interest therein, whether or not Lender takes possession
of the Collateral or any part thereof. The collection of such amounts by Lender shall in no
way waive the right of Lender to foreclose this Instrument in the event of any Event of
Default. Nothing contained herein and no exercise of any right or privilege hereunder by
Lender shall be construed to constitute Lender as a mortgagee-in-possession. All Rents and
all other rents, income, proceeds and benefits of the Collateral received by Borrower from
or related to the Collateral or any part thereof, from and after the occurrence of an Event
of Default, shall be deemed received in trust and shall be turned over to Lender within one
Business Day after Borrower’s receipt thereof. Borrower further grants to Lender the right,
at Lender’s option, to:

(i) enter upon and take possession of the Property for the purpose of
collecting Rents and all other rents, income, proceeds and other benefits;

(ii) dispossess by the customary summary proceedings any Tenant, purchaser or
other person defaulting in the payment of any amount when and as due and payable, or
in the performance of any other obligation, under the Leases, contract or other
instrument to which said Rents or other rents, income, proceeds or benefits relate;

(iii) let or convey the Collateral or any portion thereof or any interest
therein; and

(iv) apply Rents and such other rents, income, proceeds and benefits, after the
payment of all necessary fees, charges and expenses, on account of the Secured
Obligations in accordance with Section 3.03.

(v) Lender shall be under no obligation to exercise or prosecute any of the
rights or claims assigned to it hereunder or to perform or carry out any of the
obligations of the lessor under any of the Leases and does not assume any of the
liabilities in connection with or arising or growing out of the covenants and
agreements of Borrower in the Leases. It is further understood that the assignment
granted hereunder shall not operate to place responsibility for the control, care,
management or repair of the Property, or parts thereof, upon Lender, nor shall it
operate to make Lender liable for the performance of any of the terms and conditions
of any of the Leases, or for
any waste of the Property by any Tenant under any of the Leases or any other
person, or for any dangerous or defective condition of the Property or for any
negligence in the management, upkeep, repair or control of the Property resulting in
loss or injury or death to any lessee, licensee, employee or stranger.

 

8

 

(b) Borrower represents, warrants, covenants and agrees with Lender that, other than as
set forth on Schedule 3, there are no existing Leases, and Borrower will not enter into any
other Lease without the prior written consent of Lender.

(c) Borrower hereby irrevocably appoints Lender its true and lawful attorney-in-fact
with power of substitution and with full power for Lender in its own name and capacity or in
the name and capacity of Borrower, from and after the occurrence and during the continuance
of an Event of Default, to demand, collect, receive and give complete acquittances for any
and all Rents accruing from the Property that Lender may deem necessary or desirable in
order to collect and enforce the payment of the Rents and to demand, correct, receive,
endorse, and deposit all checks, drafts, money orders or notes given in payment of such
Rents. Such appointment is coupled with an interest and is irrevocable. Lender shall not
be liable for or prejudiced by any loss of any note, checks, drafts, etc., unless such loss
shall have been found by a court of competent jurisdiction to have been due to the gross
negligence or willful misconduct of Lender. Borrower also hereby irrevocably appoints
Lender as its true and lawful attorney-in-fact to appear in any state or federal bankruptcy,
insolvency, or reorganization proceeding in any state or federal court involving any of the
Tenants of the Leases. Lessees of the Property are hereby expressly authorized and
directed, from and after service of a notice by Lender to pay any and all amounts due
Borrower pursuant to the Leases to Lender or such nominee as Lender may designate in writing
delivered to and received by such Tenants, and such Tenants are expressly relieved of any
and all duty, liability or obligation to Borrower in respect of all payments so made.

Section 2.11. No Claims Against Lender. Nothing contained in this Instrument shall
constitute any consent or request by Lender, express or implied, for the performance of any labor
or the furnishing of any materials or other property in respect of the Property or any part
thereof, or be construed to permit the making of any claim against Lender in respect of labor or
services or the furnishing of any materials or other property or any claim that any Lien based on
the performance of such labor or the furnishing of any such materials or other property is prior to
the Lien of this Instrument. Borrower shall make all contractors, subcontractors, vendors and
other persons dealing with the Property, or with any persons interested therein, take notice of the
provisions of this Section.

Section 2.12. Indemnification.

(a) Whether or not covered by insurance, Borrower hereby assumes responsibility for and
agrees to reimburse Lender, its affiliates and its and their respective officers, directors,
employees and agents (individually and collectively, the “Indemnified Parties”) for and will
indemnify, defend and hold the Indemnified Parties harmless from and against any and all
liabilities, obligations, losses, damages, penalties, claims, suits, actions, proceedings,
judgments, awards, amounts paid in settlements, debts, diminutions in value, fines,
penalties, charges, fees, costs and expenses (including reasonable attorneys’ fees and
expenses) of whatsoever kind and nature, imposed on, incurred by or asserted against any
Indemnified Party that in any way relate to or arise out of any of the Loan Documents, the
transactions contemplated thereby and the Collateral, including, without limitation, (i) the
selection, manufacture, construction, acquisition, acceptance or rejection of the
Collateral, (ii) the ownership of the Collateral, (iii) the delivery, installation, lease,
possession, maintenance, use, condition, return or operation of the Collateral, (iv) the
condition of the Collateral sold or otherwise disposed of after possession by Borrower, (v)
any patent or copyright infringement, (vi) any act or omission on the part of Borrower,
Guarantor or any of its or their officers, employees, agents, contractors, lessees,
licensees or invitees, (vii) any misrepresentation or inaccuracy in any representation or
warranty of Borrower or Guarantor, or a breach of Borrower or Guarantor of any of its
covenants or obligations under any of the Loan Documents, (viii) any claim, loss, cost or
expense involving alleged damage to the environment relating to the Collateral, including,
without limitation, investigation, removal, cleanup and remedial costs, (ix) any personal
injury, wrongful death or property damage arising under any statutory or common law or tort
law theory, including, without limitation, damages assessed for the maintenance of a private
or public nuisance or for

 

9

 

the conducting of an abnormally dangerous activity on or near the Collateral, (x) any
past, present or threatened injury to, or destruction of, the Collateral, including, without
limitation, costs to investigate and assess such injury or damage, (xi) any administrative
process or proceeding or judicial or other similar proceeding (including, without
limitation, any alternative dispute resolution process and any bankruptcy proceeding) in any
way connected with any matter addressed in any of the Loan Documents, (xii) any use, non-use
or condition of the Property or any part thereof or the adjoining sidewalks, curbs, vaults
and vault spaces, if any, streets, alleys or ways, (xiii) performance of any labor or
services or the furnishing of any materials or other property in respect of the Collateral
or any part thereof made or suffered to be made by or on behalf of Borrower or any Tenant,
(xiv) any work in connection with any alterations, changes, new construction or demolition
of or additions to the Property or (xv)(A) any Hazardous Materials on, in, under or
affecting all or any portion of the Property, the groundwater, or any surrounding areas, (B)
any violation or claim of violation by Borrower or any Tenant of any Environmental Laws or
(C) the imposition of any Lien for damages caused by or the recovery of any costs for the
cleanup of Hazardous Materials or any Release.

(b) If any action or proceeding be commenced, to which action or proceeding the
Indemnified Parties are made a party by reason of the execution of this Instrument or the
Loan Documents, or in which it becomes necessary to defend or uphold the Lien of this
Instrument, all sums paid by the Indemnified Parties, for the expense of any litigation to
prosecute or defend the rights and Lien created hereby or otherwise, shall be paid by
Borrower to such Indemnified Parties, as the case may be, as hereinafter provided. Borrower
will pay and save the Indemnified Parties harmless against any and all liability with
respect to any intangible personal property tax or similar imposition of the State or any
subdivision or authority thereof now or hereafter in effect, to the extent that the same may
be payable by the Indemnified Parties in respect of this Instrument or any Secured
Obligation.

(c) All amounts payable to the Indemnified Parties under this Section shall be deemed
indebtedness secured by this Instrument, and any such amounts that are not paid within 30
days after written demand therefor by any Indemnified Party shall bear interest at the
highest Default Rate from the date of such demand. In case any action, suit or proceeding
is brought against the Indemnified Parties by reason of any such occurrence, Borrower, upon
request of such Indemnified Parties, will, at Borrower’s expense, resist and defend such
action, suit or proceeding or cause the same to be resisted or defended by counsel
designated by Lender. The obligations of Borrower under this Section shall survive any
satisfaction, discharge or reconveyance of this Instrument and payment in full of the
Obligations. If and to the extent that the foregoing undertaking may be unenforceable for
any reason, Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities that is permissible under applicable
law.

Section 2.13. Hazardous Materials. Borrower covenants and agrees that (a) the Collateral
shall be kept free of Hazardous Materials, except for those Hazardous Materials reasonably
necessary for the operation of the Property and customarily employed in the ordinary course of
businesses similar to the business conducted at the Property and that are used, stored, transported
and disposed of in accordance with all applicable Environmental Laws; (b) Borrower shall comply
with, and ensure compliance by all persons on the Property with, all Environmental Laws relating to
all or any part of the Collateral; (c) Borrower shall keep the Collateral free and clear of any
liens imposed pursuant to such Environmental Laws; (d) Borrower shall conduct and complete all
investigations, studies, sampling and testing, and all remedial actions necessary to clean up and
remove any Hazardous Materials from the Property in accordance with the recommendations contained
in any reports issued in connection with such investigations, studies, sampling and testing and in
accordance with all applicable Environmental Laws’ and (e) Borrower shall cause compliance by all
Tenants and sub-tenants on the Property with Borrower’s covenants and agreements contained in this
Section. Borrower shall immediately notify Lender of any investigation, demand, or claim affecting
the Property made by any third party.

Section 2.14. Right of Lender To Require Appraisal. Following the occurrence of an Event of
Default (other than an Event of default that has been waived in writing by Lender or confirmed as
having been cured in writing by Lender), Lender shall have the right, from time to time during the
term of this Instrument, to obtain one or more fair market value appraisals of the Property from
one or more MAI certified appraisers in such form as is satisfactory to Lender. The cost of any
such appraisal(s) shall be paid by Borrower.

 

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Section 2.15. Instrument as UCC Security Agreement and Fixture Filing. This Instrument shall
constitute a security agreement, a financing statement and a fixture filing pursuant to the UCC for
any of the items specified herein as part of the Collateral that, under applicable law, may be
subject to a security interest pursuant to the UCC. The Collateral includes goods that are or are
to become fixtures. Borrower agrees that Lender may file this Instrument, or a reproduction
thereof, in the real estate records or other appropriate index as a fixture filing or other
financing statement for any of the items specified above as part of the Collateral. Any
reproduction of this Instrument or of any other security agreement or financing statement shall be
sufficient as a financing statement.

Section 2.16. Additional Representations, Warranties and Covenants. Borrower represents,
warrants and covenants for the benefit of Lender, as follows:

(a) Borrower is a limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. Borrower is in good
standing and is duly licensed or qualified to transact business in the State and in each
other jurisdiction where the nature of its business requires such qualification, except for
those jurisdictions in which the failure to qualify could not reasonably be expected to have
a Material Adverse Effect. Borrower’s exact legal name is as set forth on the execution
page hereof.

(b) Borrower has full power and authority and holds all requisite governmental
licenses, permits and other approvals to (i) enter into and perform its obligations under
this Instrument, the Note and each other Loan Document to which it is a party and to own its
property, (ii) use the Collateral and (iii) conduct its business substantially as currently
conducted by it, except as to clause (iii) where the failure to hold such licenses, permits
and approvals could not reasonably be expected to have a Material Adverse Effect.

(c) This Instrument, the Note and the other Loan Documents to which it is a party have
been duly authorized, executed and delivered by Borrower and constitute legal, valid and
binding obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except to the extent limited by bankruptcy, reorganization or other laws
of general application relating to or effecting the enforcement of creditors’ rights.

(d) The execution and delivery of this Instrument, the Note and the other Loan
Documents, the consummation of the transactions contemplated hereby and thereby and the
fulfillment of the terms and conditions hereof and thereof do not and will not violate any
law, rule, regulation or order, conflict with or result in a breach of any of the terms or
conditions of the articles of organization or operating agreement of Borrower or of any
corporate restriction or of any agreement or instrument to which Borrower is now a party and
do not and will not constitute a default under any of the foregoing or result in the
creation or imposition of any liens, charges or encumbrances of any nature upon any of the
property or assets of Borrower other than Liens in favor of Lender.

(e) The authorization, execution, delivery and performance of this Instrument, the Note
and the other Loan Documents by Borrower do not require submission to, approval of, or other
action by any governmental authority or agency, except for such action that has been duly
obtained or taken and is in full force and effect.

(f) There is no action, suit, proceeding, claim, inquiry or investigation, at law or in
equity, before or by any court, regulatory agency, public board or body pending or, to the
best of Borrower’s knowledge, threatened against or affecting Borrower or Guarantor (other
than those described in Guarantor’s public filings with the Securities and Exchange
Commission (“SEC”)), challenging Borrower’s or Guarantor’s authority to enter into this
Instrument, the Note or any of the other Loan Documents or any other action wherein an
unfavorable ruling or finding would adversely affect the enforceability of this Instrument,
the Note or any of the other Loan Documents, or could reasonably be expected to have a
Material Adverse Effect.

(g) Borrower is in compliance with all laws, rules, regulations and orders of
governmental authorities applicable to it and its properties except to the extent the
non-compliance with which could not reasonably be expected to have a Material Adverse
Effect.

 

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(h) Borrower has heretofore furnished to Lender the financial statements of Borrower
and Guarantor for their fiscal year ended December 31, 2009 and the unaudited financial
statement of Borrower and Guarantor and for the nine months ended September 30, 2010 and
those statements fairly present the financial condition of Borrower and Guarantor, if any,
on the dates thereof and the results of its operations and cash flows for the periods then
ended and were prepared in accordance with GAAP. Since the date of the most recent
financial statements, there has been no material adverse change in the business, properties
or condition (financial or otherwise) of Borrower or Guarantor. Except as disclosed in the
Financial Statements or the notes thereto, neither Borrower nor Guarantor, as of the Closing
Date, has or will have any liabilities, contingent or otherwise, that could reasonably be
expected to have a Material Adverse Effect.

(i) Borrower has paid or caused to be paid, and will pay (after giving effect to any
grace periods for which no penalties are incurred), to the proper authorities when due all
federal, state and local taxes required to be withheld by it. Borrower has filed, and will
pay, all federal, state and local tax returns which are required to be filed, and Borrower
has paid or caused to be paid to the respective taxing authorities all taxes as shown on
said returns or on any assessment received by it to the extent such taxes have become due,
except any such taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP have been
set aside on its books.

(j) For purposes of Section 9-307 of the UCC, Borrower is and will remain located in
the State. Borrower’s residence for federal income tax purposes is located at its address
specified in the preamble to this Instrument. Borrower has authorized Lender to file
financing statements that are sufficient when filed to perfect the security interests
created pursuant to this Instrument and the other Loan Documents. When such financing
statements are filed in the offices noted therein, Lender will have a valid and perfected
security interest in the Collateral that constitutes personal property, subject to no other
Lien.

(k) None of the Collateral constitutes a replacement of, substitution for or accessory
to any property of Borrower subject to a lien of any kind.

(l) Except where any failure could not reasonably be expected to result in a Material
Adverse Effect, Borrower has obtained all permits, licenses and other authorizations which
are required under all Environmental Laws at Borrower’s facilities or in connection with the
operation of its business. Except where any failure could not reasonably be expected to
result in a Material Adverse Effect, Borrower and all activities of Borrower at its
facilities comply with all Environmental Laws and with all terms and conditions of any
required permits, licenses and authorizations applicable to Borrower with respect thereto.
Except where any failure could not reasonably be expected to result in a Material Adverse
Effect, Borrower is also in compliance with all limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables contained in
Environmental Laws or contained in any plan, order, decree, judgment or notice of which
Borrower is aware. Borrower is not aware of, nor has Borrower received notice of, any
events, conditions, circumstances, activities, practices, incidents, actions or plans which
may interfere with or prevent continued compliance with, or which may give rise to any
liability under, any Environmental Laws.

(m) All factual information heretofor or contemporaneously furnished by or on behalf of
Borrower or Guarantor in writing to Lender for purposes of or in connection with this
Instrument or any transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of Borrower or Guarantor to Lender will be, true and
correct in all material respects on the date as of which such information is dated or
certified, and such information is not, or shall not be, as the case may be, incomplete by
omitting to state any material fact necessary to make such information not misleading.

(n) Neither Borrower nor Guarantor is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or carrying
“margin stock.” None of the proceeds of the Loan will be used for the purpose of, or be
made available by Borrower or Guarantor in any manner to any other person to enable or
assist such person in, directly or indirectly purchasing or carrying “margin stock”. Terms
for which meanings are provided in F.R.S. Board Regulation T, U or X or any regulations
substituted therefor, as from time to time in effect, are used in this subsection with such
meanings.

 

12

 

(o) Neither Borrower nor Guarantor is an “investment company” nor a “company controlled
by an investment company” within the meaning of the Investment Company Act of 1940, as
amended, or a “holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,”
within the meaning of the Public Utility Holding Company Act of 1935, as amended.

(p) Borrower and Guarantor are solvent and will not be rendered insolvent by the Loan
Documents or the transactions contemplated thereby and, after giving effect to such
transactions, neither Borrower nor Guarantor will be left with an unreasonably small amount
of capital with which to engage in its business, and neither Borrower or Guarantor intends
to incur, or believes that it has incurred, debts beyond its ability to pay as they mature.
Neither Borrower nor Guarantor contemplates the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of Borrower or Guarantor or any of their
assets. Neither Borrower nor Guarantor is entering into the transactions contemplated by
the Loan Documents with any intent to hinder, delay or defraud any of Borrower’s or
Guarantor’s creditors.

(q) Borrower shall deliver to Lender each of the following:

(i) as soon as possible and in any event within three Business Days after the
occurrence of a Default, an Event of Default or an event which could reasonably be
expected to result in a Material Adverse Effect, a statement of Borrower setting
forth reasonably detailed information regarding such Default, Event of Default or
event and the action that Borrower has taken and proposes to take with respect
thereto;

(ii) promptly after the commencement thereof, notice in writing of all
litigation and of all proceedings before any governmental or regulatory agency
affecting Borrower, Guarantor or any of their subsidiaries which seek a monetary
recovery against Borrower in excess of $1,000,000 or against Guarantor in excess of
$5,000,000;

(iii) promptly upon knowledge thereof, notice of any loss, theft or destruction
of or material damage to, any accident involving any, and any action, suit or
proceeding relating to, Collateral having a value in excess of $500,000 (whether in
one occurrence or in aggregate);

(iv) promptly after the amending thereof, copies of any and all amendments to
any of its articles of organization or operating agreement; and

(v) promptly upon knowledge thereof, notice of the violation by Borrower or
Guarantor of any law, rule or regulation applicable to Borrower or Guarantor, which
violation could reasonably be expected to have a Material Adverse Effect.

(r) Borrower and each of its subsidiaries shall comply in all material respects with
all governmental rules and regulations and all other applicable laws, rules, regulations and
orders, including, without limitation, all Environmental Laws.

(s) Borrower will keep books and records that accurately reflect in all material
respects all of its business affairs and transactions. Borrower will, and will cause
Guarantor to, permit Lender or any of its representatives (including outside auditors), at
reasonable times and intervals (but, absent the occurrence of an Event of Default, not to
exceed two times in any fiscal year), to visit all of its offices, to discuss its financial
matters with its officers and independent public accountant (and Borrower hereby authorizes
such independent accountant to discuss Borrower’s financial matters with Lender or its
representatives whether or not any representative of Borrower is present) and to examine
(and, at the expense of Borrower, copy extracts from) books or other corporate records
(including computer records). If Lender exercises its rights under this subsection
following the occurrence of an Event of Default (other than an Event of default that has
been waived in writing by Lender or confirmed as having been cured in writing by Lender),
Borrower shall pay any fees of such independent accountant incurred in connection therewith.
Borrower shall not be required to cause Guarantor to comply with the foregoing for any
period that Guarantor is subject to regulation by the SEC.

(t) Borrower shall permit Lender to make or cause to be made reasonable entries upon
the Property to inspect the interior and exterior thereof. Except in case of emergency or
upon an Event of Default, such inspection shall be with two Business Days’ prior notice.

 

13

 

Section 2.17. Additional Negative Covenants. So long as the Loan shall remain unpaid,
Borrower agrees that:

(a) Borrower will not, and will not permit any of its subsidiaries to, form or acquire
any subsidiary, enter into any merger, consolidation, reorganization, or recapitalization,
or reclassify its capital stock, or liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), or, other than in the ordinary course of its business, convey,
sell assign, lease, transfer, or otherwise dispose of, in one transaction or series of
transactions, all or any substantial part of its property or assets.

(b) Borrower will not, and will not permit any of its subsidiaries to, sell, transfer,
lease, contribute or otherwise convey or dispose of (in each case in one transaction or
series of transactions), or grant options, warrants or other rights with respect to (in each
case in one transaction or series of related transactions), or agree to do any of the
foregoing with respect to, all or any part of the Collateral.

(c) Borrower will not change its location for purposes of Section 9-307 of the UCC or
its name in any manner that could make any financing statement filed in connection with any
Loan Document seriously misleading within the meaning of Section 9-506 of the UCC or any
similar statute, unless it shall have given Lender at least 30 days’ prior written notice
thereof.

ARTICLE III

INSURANCE; DAMAGE, DESTRUCTION OR TAKING

Section 3.01. Insurance.

(a) Borrower will, at its expense, maintain or cause to be maintained with insurance
carriers approved by Lender insurance with respect to the Collateral in such amounts and
against such insurable hazards as Lender from time to time may require, including, without
limitation the following (and with respect to liability insurance specified in subsection
(ii), for a period of two years following indefeasible payment in full of the Loan: (i) “all
risk” property and fire insurance in an amount not less than the full replacement value of
the Property (with a deductible not to exceed $10,000), naming Lender under a lender’s loss
payable endorsement as mortgagee and loss payee and including agreed amount, inflation
guard, replacement cost and waiver of subrogation endorsements; (ii) general liability
insurance in an amount not less than $1,000,000 per claim and on a claims-made basis,
insuring against personal injury, death and property damage and naming Lender as additional
insured, with all such insurance primary and non-contributory for Lender; (iii) business
interruption insurance or rent-loss insurance, as applicable, covering loss of rental or
other income (including all expenses payable by Tenants) for up to 12 months; (iv) boiler
and machinery coverage for mechanical and electrical failure; (v) flood hazard insurance if
the Property is located in an area designated by the Federal Emergency Management Act if and
to the extent that the Property is located within an area that has been or is hereafter
designated or identified as an area having special flood hazards by the Department of
Housing and Urban Development or such other official as shall from time to time be
authorized by federal or state law to make such designation pursuant to any national or
state program of flood insurance, Borrower shall carry flood insurance with respect to the
Property in amounts not less than the maximum limit of coverage then available with respect
to the Property or the amount of the Obligations, whichever is less; (vi) worker’s
compensation insurance to the full extent required by applicable law for all employees of
Borrower engaged in any work on or about the Property and employer’s liability insurance
with a limit of not less than $1,000,000 for each occurrence; (vii) earthquake insurance;
and (viii) such other types of insurance or endorsements to existing insurance as may be
required from time to time by Lender in accordance with its standard commercial lending
practices. Borrower agrees that if Borrower shall change insurers at any time during the
term of the Loan or within two years thereof, Borrower shall purchase a “prior acts”
endorsement from the insurer or shall purchase an “extended reporting” endorsement to
continue coverage from the current insurer.

 

14

 

(b) All insurance maintained by Borrower pursuant to Section 3.01(a) shall (i) (except
for worker’s compensation insurance) name Lender as additional insured and/or loss payee, as
applicable, (ii) (except for worker’s compensation and public liability insurance) provide
that the proceeds for any losses shall be adjusted by Borrower subject to the approval of
Lender and from and after the occurrence of an Event of Default shall be payable to Lender,
to be held and applied as provided in Section 3.03, (iii) include effective waivers by the
insurer of all rights of subrogation against any named insured, the indebtedness secured by
this Instrument and the Collateral and all claims for insurance premiums against Lender,
(iv) provide that any losses shall be payable notwithstanding (A) any act, failure to act or
negligence of or breach of warranties, declarations or conditions contained in such policy
by any named insured, (B) the occupation or use of the Property for purposes more hazardous
than permitted by the terms thereof, (C) any foreclosure or other action or proceeding taken
by Trustee or Lender pursuant to any provision of this Instrument or (D) any change in title
or ownership of the Property, (v) provide that no cancellation, reduction in amount or
material change in coverage thereof or any portion thereof shall be effective until at least
30 days after receipt by Lender of written notice thereof, (vi) provide that any notice
under such policies shall be simultaneously delivered to Lender and (vii) be reasonably
satisfactory in all other respects to Lender. Any insurance maintained pursuant to Section
3.01 may be evidenced by blanket insurance policies covering the Property and other
properties or assets of Borrower, provided that any such policy shall specify the portion,
if less than all, of the total coverage of such policy that is allocated to the Property and
shall in all other respects comply with the requirements of Section 3.01. Borrower’s
obligation to maintain insurance coverage in accordance with the terms hereof shall not be
construed to limit the amount of indemnification or insurance proceeds available to Lender.

(c) Borrower will deliver to Lender, promptly upon request, the certificates of
insurance and, if requested by Lender, copies of all policies (certified by the issuer of
such policies as being true and accurate copies of the original policies), evidencing all
insurance required to be maintained under Section 3.01(a) (or, in the case of blanket
policies, certificates thereof by the insurers together with a counterpart of each blanket
policy). Borrower will also deliver to Lender not later than 30 days prior to the
expiration of any policy a binder or certificate of the insurer evidencing the replacement
thereof; provided that if Borrower does not deliver such replacement insurance at least 30
days prior to such expiration, failure to deliver such replacement insurance shall not be an
Event of Default hereunder unless and until the existing insurance actually lapses so long
as Borrower complies with each of the following: (i) Borrower has delivered notice to Lender
at least 30 days prior to such expiration that Borrower is unable to deliver such
replacement insurance at least 30 days prior to such expiration; (ii) Borrower provides
evidence reasonably acceptable to Lender that Borrower is using best efforts to obtain such
replacement insurance; and (iii) Borrower provides evidence reasonably acceptable to Lender
that Borrower has a good faith belief that such replacement insurance will be obtained prior
to expiration of the existing insurance.

(d) Borrower will not take out separate insurance concurrent in form or contributing in
the event of loss with that required to be maintained pursuant to Section 3.01.

Section 3.02. Damage, Destruction or Taking; Notice; Assignment of Awards. In case of any
damage to or destruction of the Collateral or any material part thereof or any taking, whether for
permanent or temporary use, of all or any part of the Collateral or any interest therein or right
accruing thereto, as the result of or in anticipation of the exercise of the right of condemnation
or eminent domain (a “Taking”), or the commencement of any proceedings or negotiations that may
result in a Taking, Borrower will promptly give written notice thereof to Lender, generally
describing the nature and extent of such damage, destruction or Taking and Borrower’s best estimate
of the cost of restoring the Collateral, or the nature of such proceedings or negotiations and the
nature and extent of the Taking that might result therefrom, as the case may be. Lender shall be
entitled to all insurance proceeds payable on account of such damage or destruction and to all
awards or payments allocable to the Collateral on account of such Taking, and Borrower hereby
irrevocably assigns, transfers and sets over to Lender all rights of Borrower to any such proceeds,
awards or payments and irrevocably authorizes and, in the event Borrower has not filed for such
proceeds by the first to occur of (i) 10 Business Days prior to the expiration of the applicable
time for such filing or (ii) 30 days after damage to the Collateral or any Taking, empowers Lender,
at its option, in the name of Borrower or otherwise, to file and prosecute what would otherwise be
Borrower’s claim for any such proceeds, award or payment and to collect, receipt for and retain the
same for disposition in accordance with Section 3.03 or Section 3.04, as applicable. Borrower will
pay all reasonable costs and expenses, if any, incurred by Lender in
connection with any such damage, destruction or Taking and seeking and obtaining any insurance
proceeds, awards or payments in respect thereof.

 

15

 

Section 3.03. Application of Insurance Proceeds. (a) Subject to Sections 3.03(b) and 3.04,
Lender may, from and after the occurrence of an Event of Default, in its sole discretion, apply all
amounts recovered under any insurance policy required to be maintained by Borrower hereunder in any
one or more of the following ways:

(i) to the payment of the reasonable costs and expenses incurred by Trustee or
Lender in obtaining any such insurance proceeds or awards, including the fees and
expenses of attorneys and insurance and other experts and consultants, the costs of
litigation, arbitration, mediation, investigations and other judicial,
administrative or other proceedings and all other out-of-pocket expenses;

(ii) to the payment of any Secured Obligation;

(iii) to fulfill any of the other covenants contained herein or in any other
Loan Document, in accordance therewith as Lender may determine after the occurrence
of a Default or an Event of Default;

(iv) to Borrower for application to the cost of restoring or replacing the
Collateral destroyed, damaged or taken; or

(v) to Borrower.

(b) Notwithstanding the provisions of subsection (a) of this Section to the contrary (but
subject to the provisions of Section 3.04), if each of the following conditions is satisfied,
Borrower shall apply insurance proceeds received by it to the restoration or replacement of the
Collateral, to the extent necessary for the restoration or replacement thereof:

(i) there shall then exist no uncured Default or Event of Default; and

(ii) Borrower shall furnish to Lender a certificate of an architect or engineer
reasonably acceptable to Lender stating (A) that the Collateral is capable of being
restored, prior to the maturity of the Note, to substantially the same condition as existed
prior to the casualty, (B) the insurance proceeds are sufficient for such restoration and
(C) the restoration or replacement is reasonably capable of being fully completed by no
later than six months prior to the latest Maturity Date for the Note.

(c) In the event that such insurance proceeds are to be utilized in the restoration or
replacement of the Collateral, Borrower shall use such amounts for such restoration or
replacement. In the event that, after the restoration or replacement of the Collateral, any
insurance proceeds shall remain, such amount shall be retained by Borrower.

(d) If, prior to the receipt by Borrower of such insurance proceeds, the Collateral
shall have been sold on foreclosure, Lender shall have the right to receive said insurance
proceeds to the extent of any deficiency found to be due upon such sale, with legal interest
thereon, but only to the extent of a deficiency judgment sought or recovered or denied, and
the reasonable attorneys’ fees, costs and disbursements incurred by Lender in connection
with the collection of such proceeds.

Section 3.04. Taking and Total Destruction. If all or any part of the Property is lost,
stolen, destroyed or damaged beyond repair (and the Property is not fully replaced to Lender’s
satisfaction) or a Taking shall occur, Lender shall apply all amounts recovered under any insurance
policy referred to in Section 3.01(a) and all awards received by it on account of any such Taking
as follows:

(a) first, to the payment of the reasonable costs and expenses incurred by Lender in
obtaining any such insurance proceeds or awards, including the fees and expenses of
attorneys and insurance and
other experts and consultants, the costs of litigation, arbitration, mediation,
investigations and other judicial, administrative or other proceedings and all other
out-of-pocket expenses;

 

16

 

(b) second, to the payment of any Secured Obligation;

(c) third, to fulfill any of the other covenants contained herein or in the Loan
Documents in accordance with such Loan Documents as Lender may determine after the
occurrence of a Default or an Event of Default; and

(d) fourth, the balance, if any, to Borrower.

ARTICLE IV

EVENTS OF DEFAULT; REMEDIES

Section 4.01. Events of Default. Each of the following shall constitute an “Event of
Default” under this Instrument:

(a) The occurrence of an “Event of Default” as defined in the Note or in any other Loan
Document.

(b) The attachment of any Lien on any portion of the Collateral other than Permitted
Exceptions.

(c) Failure of Borrower to maintain insurance as required by Section 3.01.

(d) Borrower, Guarantor or any Tenant shall be or become insolvent, or admit in writing
its inability to pay its debts as they mature, or make an assignment for the benefit of
creditors; or any Borrower, Guarantor or any Tenant shall apply for or consent to the
appointment of any receiver, trustee or similar officer for it or for all or any substantial
part of its property; or such receiver, trustee or similar officer shall be appointed
without the application or consent of Borrower, Guarantor or any Tenant; or Borrower,
Guarantor or any Tenant shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the laws of any
jurisdiction; or any such proceeding shall be instituted (by petition, application or
otherwise) against Borrower, Guarantor or any Tenant.

(e) Borrower shall fail to perform any of its obligations under Section 2.02, 2.05 or
2.17;

(f) Borrower shall default in the due performance and observance of any other agreement
contained herein or in any other Loan Document (other than items set forth elsewhere in this
Section 4.01), and such default shall continue unremedied for a period of 30 days after
Borrower has actual knowledge thereof or has received notice by Lender thereof.

(g) The occurrence of an event of default or a breach or default, after the passage of
all applicable notice and cure or grace periods provided therefor, under any other Mortgage
(as defined in the Note), under any other Loan Document or any other similar agreement
between or among (i) Borrower or Guarantor and (ii) Lender or any of its affiliates or
subsidiaries;

(h) The occurrence of a default or an event of default (however defined) under any
instrument, agreement or other document evidencing or relating to any indebtedness or other
monetary obligation of Borrower, Guarantor or any of its or their affiliates or subsidiaries
having a principal amount (including, without limitation, the amount of any outstanding
letters of credit), individually or in the aggregate, in excess of $20,000,000.

(i) Any judgment or order for the payment of money (not paid or fully covered by
insurance maintained in accordance with the requirements of this Instrument and as to which
the relevant insurance
company has acknowledged coverage) which could reasonably be expected to result in a
Material Adverse Effect shall be rendered against Borrower or Guarantor that remains
undischarged, unvacated, unbounded or unstayed for a period of 60 days.

 

17

 

(j) Guarantor shall repudiate, purport to revoke or fail to perform any of Guarantor’s
obligations under the Guaranty.

(k) Any representation or warranty made by Borrower or Guarantor in any Loan Document
or in any other document executed in connection herewith was untrue in any material respect
when made.

(l) The occurrence of any Change in Control.

(m) Subject to Section 4.20, any of the Leases shall terminate.

(n) Subject to Section 4.20, the occurrence of an event of default or a breach or
default (however defined), after the passage of all applicable notice and cure or grace
periods provided therefor, under any of the Leases.

Section 4.02. Acceleration. Following the occurrence of an Event of Default (other than an
Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender) described in subsection (d) of Section 4.01, all of the outstanding principal
amount of the Secured Obligations shall be due and payable, whereupon the full unpaid amount of
such Secured Obligations which shall be so declared due and payable shall be and become immediately
due and payable, without presentment, notice of dishonor, protest or further notice of any kind,
all of which are hereby expressly waived by Borrower. Following the occurrence of any other Event
of Default (other than an Event of default that has been waived in writing by Lender or confirmed
as having been cured in writing by Lender), Lender may, by notice to Borrower, declare all or any
portion of the outstanding principal amount of the Secured Obligations to be due and payable,
whereupon the full unpaid amount of the Loan and other Secured Obligations which shall be so
declared due and payable shall be and become immediately due and payable, without presentment,
notice of dishonor, protest or further notice of any kind, all of which are hereby expressly waived
by Borrower. Borrower will pay on demand all costs and expenses, including, without limitation,
reasonable attorneys’ fees and expenses of one counsel, incurred by or on behalf of Lender in
enforcing this Instrument, the Secured Obligations or the Loan Documents or occasioned by any Event
of Default hereunder or thereunder.

Section 4.03. Legal Proceedings; Foreclosure. If an Event of Default shall have occurred
(other than an Event of default that has been waived in writing by Lender or confirmed as having
been cured in writing by Lender), Lender at any time may, at Lender’s sole discretion, proceed at
law or in equity or otherwise to enforce the payment of the Obligations and the Trustee shall have
the right to foreclose the Lien of this Instrument as against all or any part of the Collateral and
to have the same sold under the judgment or decree of a court of competent jurisdiction. Lender
and/or Trustee shall be entitled to recover in such proceedings all costs incident thereto,
including, without limitation, reasonable attorneys’ fees and expenses in such amounts as may be
fixed by the court.

Section 4.04. Power of Sale. If an Event of Default shall have occurred (other than an Event
of default that has been waived in writing by Lender or confirmed as having been cured in writing
by Lender), the Trustee or Lender may (as permitted by law), at Lender’s sole discretion, sell,
assign, transfer and deliver the whole or, from time to time, any part of the Collateral, or any
interest in any part thereof, at any private sale or at public auction, with or without demand,
advertisement or notice, for cash, on credit or for other property, for immediate or future
delivery, and for such price or prices and on such terms as Trustee may determine, or as may be
required by law. Without limiting the authority granted in the immediately preceding sentence,
Trustee shall, without demand on Borrower, after the lapse of such time as may then be required by
law, and notice of default and notice of sale having been given as then required by law (including,
without limitation, such notices as may be required by Section 51.002 of the Texas Property Code,
as amended), sell the Collateral on the date and at the time and place designated in the notice of
sale, either as a whole or in separate parcels and in such order as Trustee may determine, but
subject to any statutory right of Borrower to direct the order in which such property, if
consisting of several known lots, parcels or interests, shall be sold, at public auction to the
highest bidder, the purchase price payable in lawful money of the United States at the time of
sale. Trustee, or the one conducting the sale may, for any cause deemed
expedient, postpone the sale from time to time until it shall be completed and, in every such
case, notice of postponement shall be given by public declaration thereof by such person at the
time and place last appointed for the sale; provided that, if the sale is postponed for longer than
10 days beyond the day designated in the notice of sale, notice of sale and notice of the time,
date and place of sale shall be given in the same manner as the original notice of sale. Trustee
shall execute and deliver to the purchaser at any such sale a deed conveying the property so sold,
but without any covenant or warranty, express or implied. The recitals in such deed of any matters
or facts shall be conclusive proof of the truthfulness thereof. Any person, including Lender, may
bid at the sale.

 

18

 

Section 4.05. Deficiency. Notwithstanding the provisions of Sections 51.003, 51.004, and
51.005 of the Texas Property Code, as amended, and to the extent permitted by law, Borrower agrees
that Lender shall be entitled to seek a deficiency judgment from Borrower and any other party
obligated on the Secured Obligations equal to the difference between the amount owing on the
Secured Obligations and the amount for which the Property was sold pursuant to judicial or
nonjudicial foreclosure sale. Borrower expressly recognizes that this section constitutes a waiver
of the above-cited provisions of the Texas Property Code which would otherwise permit Borrower and
other persons against whom recovery of deficiencies is sought or any guarantor independently (even
absent the initiation of deficiency proceedings against them) to present competent evidence of the
fair market value of the Property as of the date of the foreclosure sale and offset against any
deficiency the amount by which the foreclosure sale price is determined to be less than such fair
market value. Borrower further recognizes and agrees that this waiver creates an irrebuttable
presumption that the foreclosure sale price is equal to the fair market value of the Property for
purposes of calculating deficiencies owed by Borrower, any guarantor, and others against whom
recovery of a deficiency is sought.

Alternatively, in the event the waiver provided for above is determined by a court of
competent jurisdiction to be unenforceable, the following shall be the basis for the finder of
fact’s determination of the fair market value of the Property as of the date of the foreclosure
sale in proceedings governed by Sections 51.003, 51.004 and 51.005 of the Texas Property Code, as
amended: (i) the Property shall be valued in an “as is” condition as of the date of the
foreclosure sale, without any assumption or expectation that the Property will be repaired or
improved in any manner before a resale of the Property after foreclosure; (ii) the valuation shall
be based upon an assumption that the foreclosure purchaser desires a resale of the Property for
cash promptly (but no later than twelve (12) months) following the foreclosure sale; (iii) all
reasonable closing costs customarily borne by the seller in commercial real estate transactions
should be deducted from the gross fair market value of the Property, including, without limitation,
brokerage commissions, title insurance, a survey of the Property, tax prorations, attorneys’ fees,
and marketing costs; (iv) the gross fair market value of the Property shall be further discounted
to account for any estimated holding costs associated with maintaining the Property pending sale,
including, without limitation, utilities expenses, property management fees, taxes and assessments
(to the extent not accounted for in (iii) above), and other maintenance, operational and ownership
expenses; and (v) any expert opinion testimony given or considered in connection with a
determination of the fair market value of the Property must be given by persons having at least
five (5) years experience in appraising property similar to the Property and who have conducted and
prepared a complete written appraisal of the Property taking into consideration the factors set
forth above.

Section 4.06. UCC Remedies. If an Event of Default shall have occurred (other than an Event
of default that has been waived in writing by Lender or confirmed as having been cured in writing
by Lender), Lender may exercise from time to time and at any time any rights and remedies available
to it under applicable law upon default in the payment of indebtedness, including, without
limitation, any right or remedy available to it as a secured party under the UCC. Borrower shall,
promptly upon request by Lender, assemble the Collateral, or any portion thereof generally
described in such request, and make it available to Lender at such place or places designated by
Lender and reasonably convenient to Lender. If Lender elects to proceed under the UCC to dispose
of portions of the Collateral, Lender, at its option, may give Borrower notice of the time and
place of any public sale of any such property, or of the date after which any private sale or other
disposition thereof is to be made, by sending notice by registered or certified first class mail,
postage prepaid, to Borrower at least 10 days before the time of the sale or other disposition. If
any notice of any proposed sale, assignment or transfer by Lender of any portion of the Collateral
or any interest therein is required by law, Borrower conclusively agrees that 10 days’ notice to
Borrower of the date, time and place thereof is reasonable.

 

19

 

Section 4.07. Trustee Authorized To Execute Deeds. Borrower irrevocably appoints Trustee
(which appointment is coupled with an interest) the true and lawful attorney of Borrower, in its
name and stead and on its behalf, for the purpose of effectuating any sale, assignment, transfer or
delivery for the enforcement hereof, whether pursuant to power of sale, foreclosure or otherwise in
connection with enforcing this Instrument after the occurrence of an Event of Default (other than
an Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender), to execute and deliver all such deeds, bills of sale, assignments, releases and
other instruments as may be designated in any such request.

Section 4.08. Purchase of Collateral by Lender. Lender may be a purchaser of the Collateral
or of any part thereof or of any interest therein at any sale thereof, whether pursuant to power of
sale, foreclosure or otherwise, and Lender may apply to the purchase price thereof the Secured
Obligations.

Section 4.09. Receipt a Sufficient Discharge to Purchaser. Upon any sale of the Collateral
or any part thereof or any interest therein, whether pursuant to power of sale, foreclosure or
otherwise, the receipt of Trustee or the officer making the sale under judicial proceedings shall
be a sufficient discharge to the purchaser for the purchase money, and such purchaser shall not be
obliged to see to the application thereof.

Section 4.10. Waiver of Appraisement, Valuation, Homestead. Borrower hereby waives, to the
fullest extent it may lawfully do so, the benefit of all appraisement, valuation, stay, extension
and redemption laws now or hereafter in force and all rights of marshalling in the event of any
sale of the Collateral or any part thereof or any interest therein. To the extent allowable by
law, Borrower hereby waives any and all rights to request or require an appraisal of the Property.
In the event of foreclosure pursuant to the provisions hereof, Lender may, at Lender’s option,
obtain an appraisal of the Property and any funds expended by Lender for such propose shall become
indebtedness of Borrower to Lender secured by this Instrument and shall be paid by Borrower to
Lender within 10 days of demand.

Section 4.11. Obligations to Become Due on Sale. Upon any sale of the Collateral or any
portion thereof or interest therein by virtue of the exercise of any remedy by Lender or Trustee
under or by virtue of this Instrument, whether pursuant to power of sale, foreclosure or otherwise
in accordance with this Instrument or by virtue of any other remedy available at law or in equity
or by statute or otherwise, at the option of Lender, all Secured Obligations shall, if not
previously declared due and payable, immediately become due and payable, together with interest
accrued thereon and all other indebtedness secured by this Instrument.

Section 4.12. Application of Proceeds of Sale and Other Moneys. The proceeds of any sale of
the Collateral or any part thereof or any interest therein under or by virtue of this Instrument,
whether pursuant to power of sale, foreclosure or otherwise, and all other moneys at any time held
by Lender or Trustee as part of the Collateral, shall be applied as follows:

FIRST, fees, expenses or indemnities to enforce this Instrument or then due to Lender or
Trustee;

SECOND, to pay Secured Obligations in respect of any other fees, expenses or indemnities then
due to Lender;

THIRD, to pay interest due in respect of the Loan;

FOURTH, to pay the principal outstanding with respect to the Loan;

FIFTH, to the payment of all other Secured Obligations; and

SIXTH, to Borrower.

Section 4.13. Appointment of Receiver. If an Event of Default shall have occurred (other
than an Event of default that has been waived in writing by Lender or confirmed as having been
cured in writing by Lender), Lender shall, as a matter of right and without regard to the adequacy
of any security for the Secured Obligations secured hereby or the solvency of Borrower, be entitled
to the appointment of a receiver for all or any part of the
Collateral, whether such receivership be incidental to a proposed sale of the Collateral or
otherwise, and Borrower hereby consents to the appointment of such a receiver and will not oppose
any such appointment.

 

20

 

Section 4.14. Possession, Management and Income. If an Event of Default shall have occurred
(other than an Event of default that has been waived in writing by Lender or confirmed as having
been cured in writing by Lender), in addition to, not in limitation of, the rights and remedies
provided in Section 2.10, to the extent allowed by Texas law, Lender, upon five days’ notice to
Borrower, may enter upon and take possession of the Collateral or any part thereof by force,
summary proceeding, ejectment or otherwise and may remove Borrower and all other persons and any
and all property therefrom and may hold, operate, maintain, repair, preserve and manage the same
and receive all earnings, income, Rents, issues and proceeds accruing with respect thereto or any
part thereof. Lender shall be under no liability for or by reason of any such taking of
possession, entry, removal or holding, operation or management.

Section 4.15. Right of Lender to Perform Borrower’s Covenants. During the continuance of an
Event of Default, Lender, without notice to or demand upon Borrower and without waiving or
releasing any obligation or Event of Default, may (but shall be under no obligation to) at any time
thereafter make such payment or perform such act for the account and at the expense of Borrower,
and may enter upon the Collateral for such purpose and take all such action thereon as, in Lender’s
opinion, may be necessary or appropriate therefor. No such entry and no such action shall be
deemed an eviction of any Tenant or other person with the right to use or occupy all or any portion
of the Property or any part thereof. After the occurrence of an Event of Default (other than an
Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender), all sums so paid by Lender and all costs and expenses (including, without
limitation, reasonable attorneys’ fees and expenses) so incurred, together with interest thereon at
the Default Rate from the date of payment or incurring, shall constitute additional indebtedness
secured by this Instrument and shall be paid by Borrower to Lender within 10 days of demand.

Section 4.16. Subrogation. To the extent that Lender, on or after the date hereof, pays any
sum due under any provision of any legal requirement or any instrument creating any Lien prior or
superior to the Lien of this Instrument, or Borrower or any other person pays any such sum with the
proceeds of the Loan evidenced by the Note, Lender shall have and be entitled to a Lien on the
Collateral equal in priority to the Lien discharged, and Lender shall be subrogated to, and receive
and enjoy all rights and liens possessed, held or enjoyed by, the holder of such Lien, that shall
remain in existence and benefit Lender in securing the Obligations.

Section 4.17. Remedies Cumulative. Each right, power and remedy of Lender and Trustee
provided for in this Instrument or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every other right, power
or remedy provided for in this Instrument or the other Loan Documents, or now or hereafter existing
at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by
Lender or Trustee of any one or more of the rights, powers or remedies provided for in this
Instrument, or now or hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by Lender or Trustee of any or all such other rights,
powers or remedies.

Section 4.18. Provisions Subject to Applicable Law. All rights, powers and remedies provided
in this Instrument may be exercised only to the extent that the exercise thereof does not violate
any applicable provisions of law and are intended to be limited to the extent necessary so that
they will not render this Instrument invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law. If any term of this Instrument or
any application thereof shall be invalid or unenforceable, the remainder of this Instrument and any
other application of such term shall not be affected thereby.

Section 4.19. No Waiver, Compromise of Actions. No failure by Lender to insist upon the
strict performance of any term hereof or of any other Loan Documents, or to exercise any right,
power or remedy consequent upon a breach hereof or thereof, shall constitute a waiver of any such
term or of any such breach. No waiver of any breach shall affect or alter this Instrument, which
shall continue in full force and effect with respect to any other then existing or subsequent
breach. By accepting payment or performance of any amount or other Secured Obligation before or
after its due date, Lender shall not be deemed to have waived its right either to require prompt
payment or performance when due of all other amounts payable hereunder and the Secured Obligations
or to declare a default for failure to effect such prompt payment. Any action, suit or proceeding
brought by Lender pursuant to
any of the terms of this Instrument, any Loan Document or otherwise, and any claim made by
Lender hereunder or thereunder may be compromised, withdrawn or otherwise dealt with by Lender
without any notice to or approval of Borrower.

 

21

 

Section 4.20. Provisions with Respect to the Leases. Notwithstanding the provisions of
Section 4.01(m) or Section 4.01(n) (each, an “Operator Default”) to the contrary, a termination of
any of the Leases or the occurrence of an event of default or a breach or default (however
defined), after the passage of all applicable notice and cure or grace periods provided therefor
(the “Cure Date”), under any of the Leases shall not constitute and Event of Default hereunder
provided that Borrower shall have complied with the each of following conditions (collectively, the
“Operator Substitution”) in form and substance satisfactory to Lender:

(a) Within 45 days of the Cure Date, Borrower shall have entered a new lease (the “New
Lease”) with a new tenant (the “New Tenant”) on substantially the same terms as the Lease
subject to the Operator Default.

(b) New Tenant shall be a wholly-owned subsidiary (direct or indirect) sub of
Guarantor.

(c) New Tenant’s management team is substantially the same as Tenant’s management team.

(d) Borrower and New Tenant shall have executed such instruments, agreements and other
documents necessary to protect Lender’s security interest in and Lien on the Collateral
(including, without limitation, a subordination agreement with respect to the New Lease) and
to ensure New Tenant’s ability to maintain business operations on the Property (including,
without limitation, a management agreement with respect to the New Lease.

(e) Only one Operator Substitution shall be permitted with respect to the Property
during the term of the Loan.

(f) No Operator Substitution under any other Mortgage (as defined in the Note) shall
have been consummated within the 18-month period immediately preceding the Operator Default.

Upon satisfaction of the foregoing conditions and consummation of the Operator Substitution, the
New Lease shall be deemed to be a Lease under this Instrument, and the New Tenant shall be deemed
to be a Tenant under this Instrument.

ARTICLE V

MISCELLANEOUS

Section 5.01. Further Assurances; Financing Statements; Recordation.

(a) Borrower, at its expense, will execute, acknowledge and deliver all such
instruments and take all such other action as Lender from time to time may reasonably
request in order to further effectuate the purposes of this Instrument and to carry out the
terms hereof and to better assure and confirm to Lender its rights, powers and remedies
hereunder.

(b) Notwithstanding any other provision of this Instrument, Borrower hereby agrees
that, without notice to or the consent of Borrower, Lender may file with the appropriate
public officials such financing statements, continuation statements, amendments and similar
documents as are or may become necessary to perfect, preserve or protect the security
interest granted by this Instrument.

 

22

 

(c) Borrower, at its expense, will at all times cause this Instrument and any document,
agreement or instrument amendatory hereof or supplemental hereto or thereof (and any
appropriate financing statements or other instruments and continuations thereof), and each
other document, agreement and instrument delivered in connection with the Loan Documents and
intended thereunder to be recorded,
registered and filed, to be kept recorded, registered and filed, in such manner and in
such places, and will pay all such recording, registration, filing fees, taxes and other
charges, and will comply with all such statutes and regulations as may be required by law in
order to establish, preserve, perfect and protect the Lien of this Instrument as a valid,
first mortgage lien and first priority perfected security interest in the Collateral,
subject only to the Permitted Exceptions. Borrower will pay or cause to be paid, and will
indemnify Lender in respect of, all taxes and other fees and charges (including interest and
penalties) at any time payable in connection with the filing and recording of this
Instrument and any and all supplements and amendments hereto.

Section 5.02. Additional Security. Without notice to or consent of Borrower, and without
impairment of the Lien and rights created by this Instrument, Lender may accept from Borrower or
any other person additional security for the Secured Obligations. Neither the giving of this
Instrument nor the acceptance of any such additional security shall prevent Lender from resorting,
first, to such additional security, or, first, to the security created by this Instrument, or
concurrently to both, in any case without affecting Lender’s Lien and rights under this Instrument.

Section 5.03. Provisions Regarding Trustee. Trustee shall not be liable for any error of
judgment or act done by Trustee, or be otherwise responsible or accountable under any circumstances
whatsoever. Trustee shall not be personally liable in case of entry by it or anyone acting by
virtue of the powers herein granted it upon the Collateral for debts contracted or liability or
damages incurred in the management or operation of the Collateral. All monies received by Trustee
shall, until used or applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other monies (except to the extent
required by law) and Trustee shall be under no liability for interest on any monies received by it
hereunder. Trustee may resign by giving 30 days’ prior written notice of such resignation to
Lender. If Trustee shall die, resign or become disqualified from acting, or shall fail or refuse
to exercise its powers hereunder when requested by Lender so to do, or if for any reason and
without cause Lender shall prefer to appoint a substitute trustee to act instead of the original
Trustee named herein, or any prior successor or substitute trustee, Lender shall have full power to
appoint a substitute trustee and, if preferred, several substitute trustees in succession who shall
succeed to all the estate, rights, powers and duties of the aforenamed Trustee. Upon appointment
by Lender and upon recording of the substitution in the land records of Angelina County, Texas, any
new Trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed
or conveyance, become vested with all the estates, properties, rights, powers and trusts of its
predecessor in the rights hereunder with the same effect as if originally named as Trustee herein.

Section 5.04. Notices. All notices, certificates, requests, demands and other
communications provided for hereunder or under any Loan Document shall be in writing and shall be
(a) personally delivered or (b) sent by overnight courier of national reputation, and shall be
deemed to have been given on (i) the date received if personally delivered and (ii) the next
Business Day if sent by overnight courier. All communications shall be addressed to the party to
whom notice is being given at its address set forth in this Instrument.

Section 5.05. Waivers, Amendments. The provisions of this Instrument may be amended,
discharged or terminated only by an instrument in writing executed by Borrower and Lender, and the
observance or performance of any provision of this Instrument may be waived, either generally or in
a particular instance and either retroactively or prospectively, only by an instrument in writing
executed by Lender.

Section 5.06. Governing Law. THIS INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE, WITHOUT REGARD TO THE CONFLICT-OF-LAWS PRINCIPLES THEREOF.

Section 5.07. Successors and Assigns. This Instrument shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and assigns; provided,
however, that Borrower may not assign or transfer its rights or obligations hereunder without the
prior written consent of Lender.

 

23

 

Section 5.08. Waiver of Jury Trial. BORROWER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS INSTRUMENT, ANY
OF THE LOAN DOCUMENTS, ANY DEALINGS BETWEEN LENDER AND BORROWER RELATING TO THE SUBJECT MATTER OF
THE TRANSACTIONS CONTEMPLATED BY THIS INSTRUMENT OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LENDER AND BORROWER. BORROWER ACKNOWLEDGES AND
AGREES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS INSTRUMENT AND
THE OTHER LOAN DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS INSTRUMENT, ANY
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY
THIS INSTRUMENT OR ANY RELATED TRANSACTIONS. IN THE EVENT OF LITIGATION, THIS INSTRUMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

Section 5.09. Time of Essence. Time is of the essence with respect to Borrower’s obligations
under this Instrument.

Section 5.10. No Offset. Borrower’s obligation to make payments and perform all obligations,
covenants and warranties under this Instrument and under the other Loan Documents shall be absolute
and unconditional and shall not be affected by any circumstance, including without limitation any
setoff, counterclaim, abatement, suspension, recoupment, deduction, defense or other right that
Borrower or any guarantor may have or claim against Lender or any entity participating in making
the loan secured hereby. The foregoing provisions of this section, however, do not constitute a
waiver of any claim or demand which Borrower or any guarantor may have in damages or otherwise
against Lender or any other person, or preclude Borrower from maintaining a separate action
thereon; provided, however, that Borrower waives any right it may have at law or in equity to
consolidate such separate action with any action or proceeding brought by Lender.

Section 5.11. Severability. Any provision of this Instrument or other Loan Documents that is
prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Instrument or such Loan Documents or affecting the validity or
unenforceability of such provision in any other jurisdiction.

Section 5.12. Release and Termination. Upon indefeasible payment in full of the principal of
and premium, if any, and interest on the Secured Obligations in accordance with the terms of this
Instrument, the Note and the other Loan Documents and all other sums payable hereunder and
thereunder by Borrower or Guarantor, this Instrument shall automatically terminate and shall be
(except as provided herein) null and void and of no further force and effect, and the Collateral
shall thereupon be, and be deemed to have been, reconveyed, released and discharged from this
Instrument without further notice on the part of either Borrower or Lender, but upon the request of
Borrower, Lender, at Borrower’s sole cost and expense, shall request Trustee execute a satisfaction
release or deed of reconveyance in recordable form and a termination of this Instrument and Trustee
shall recovey the Collateral without warranty to the person or persons legally entitled thereto.

[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]

 

24

 

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS INSTRUMENT SHOULD BE READ CAREFULLY
BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED
IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS INSTRUMENT ONLY
BY ANOTHER WRITTEN AGREEMENT.

IN WITNESS WHEREOF, Borrower has caused this Instrument to be duly executed as of the day and
year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	LUFKIN HEALTH HOLDINGS LLC,	 	 
	 	 	a Nevada limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	The Ensign Group, Inc.,
a Delaware corporation, its	 	 
	 	 	 	 	Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Gregory K. Stapley	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Gregory K. Stapley	 	 
	 

	 	 	 	 	 	Title:
	 	 
Executive Vice President
	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	File No.:	 	 
	 	 	 	 	 	 	APN No.:	 	 

	 	 	 	 	 	 	 
	STATE OF CALIFORNIA

	 	 	)	 	 	 
	 

	 	 	)	 	ss.	 	 
	COUNTY OF ORANGE

	 	 	)	 	 	 

On December 30, 2010, before me, Patty Romero,
 Notary Public, personally appeared  ______, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

	 	 	 	 	 
	Signature
	 	/s/ Patty Romero	 	 
	 

	 	 

	 	 

This area for official notarial seal.

[EXECUTION PAGE OF COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT,

ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING]

 

 

 

Prepared by, recording requested by,

and after recording return to:

Sean Gillen, Esq.

Kutak Rock LLP

The Omaha Building

1650 Farnam Street

Omaha, NE 68102

COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT

OF LEASES AND RENTS AND FIXTURE FILING

	 	 	 
	GRANTOR:

	 	MOENIUM HOLDINGS LLC, a Nevada limited liability company
	 
	 	 
	TRUSTEE:

	 	FIDELITY NATIONAL TITLE
INSURANCE COMPANY, a California
corporation
	 
	 	 
	BENEFICIARY:

	 	RBS ASSET FINANCE, INC., a New York corporation
	 
	 	 
	PROPERTY:

	 	262 East Brown Road, Mesa, AZ 85201

Dated: December 31, 2010

THIS INSTRUMENT IS INTENDED TO CONSTITUTE A SECURITY AGREEMENT AND FINANCING STATEMENT UNDER THE
ARIZONA UNIFORM COMMERCIAL CODE. FOR PURPOSES OF ARIZONA REVISED STATUTES (“A.R.S.”) §33-801
THROUGH 821 (THE “DEED OF TRUST ACT”), LENDER AND TRUSTEE SHALL HAVE ALL OF THE RIGHTS, BENEFITS
AND REMEDIES CONFERRED OR CONTEMPLATED BY SUCH DEED OF TRUST ACT. NOTWITHSTANDING THE FOREGOING,
LENDER MAY, AT ITS OPTION, ELECT TO FORECLOSE THIS INSTRUMENT JUDICIALLY AS AUTHORIZED BY A.R.S. §
33-807. IN ADDITION TO, AND NOT IN LIMITATION OF, ANY OTHER REMEDY PROVIDED IN OR AVAILABLE UNDER
THIS INSTRUMENT, LENDER SHALL HAVE ALL OF THE RIGHTS SET FORTH IN A.R.S. § 33-702B (AS AMENDED,
SUPPLEMENTED OR SUPPLANTED) REGARDING ENFORCEMENT OF THE ASSIGNMENT OF LEASES AND RENTS CONTAINED
HEREIN.

THE NAMES OF THE DEBTOR AND THE SECURED PARTY, THE MAILING ADDRESS OF THE SECURED PARTY FROM WHICH
INFORMATION CONCERNING THE SECURITY INTEREST MAY BE OBTAINED, THE MAILING ADDRESS OF THE DEBTOR AND
A DESCRIPTION OF THE ITEMS OF COLLATERAL ENCUMBERED HEREBY ARE SET FORTH BELOW, IN COMPLIANCE WITH
THE REQUIREMENTS OF ARTICLE 9, SECTION 47-9402(E) OF THE UNIFORM COMMERCIAL CODE, AS ENACTED IN THE
STATE OF ARIZONA.

NOTICE: THE DEBT SECURED HEREBY IS SUBJECT TO CALL IN FULL OR THE TERMS THEREOF BEING MODIFIED IN
THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY HEREIN CONVEYED.

 

 

 

THIS COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE
FILING, dated as of December 31, 2010 (this “Instrument”), made by the trustor, MOENIUM HOLDINGS
LLC, a Nevada limited liability company (together with its successors and assigns, “Borrower”),
with Federal Tax Identification Number 68-0538213 and Organizational Identification
NumberLLC846-2003, having an address at 262 East Brown Road, Mesa, AZ 85201, in favor of FIDELITY
NATIONAL TITLE INSURANCE COMPANY, a California corporation (together with its successors and
assigns, “Trustee”), whose address is 1300 Dove Street, Suite 310, Newport Beach, CA 92660, for the
benefit of the Beneficiary, RBS ASSET FINANCE, INC., a New York corporation (together with its
successors and assigns, “Lender”), having an address at 71 S. Wacker Drive, Suite 2800, Chicago, IL
60606.

W I T N E S S E T H  T H A T:

WHEREAS, Borrower is on the date of delivery hereof the holder of a fee simple estate in the
parcel or parcels of land described in Schedule 1 hereto (the “Land”) and of the Improvements (as
defined below); and

WHEREAS, Lender has made a loan (the “Loan”) to Borrower evidenced by that certain Note as
more particularly described below; and

WHEREAS, this Instrument is given by Borrower to secure: (a) the Note dated as of the date
hereof (the “Note”) executed by Borrower in the original principal amount of $35,000,000 and with a
scheduled maturity date of January 1, 2018, together with any renewals, extensions or modifications
thereof; (b) the payment and performance of all obligations of Borrower owed to Lender under the
Loan Documents (as defined below), whether now existing or hereafter arising, including, without
limitation, any renewal, extension or modification thereof and all future advances and readvances
that may subsequently be made to Borrower by Lender under the Loan Documents (collectively, the
“Obligations”); (c) the payment and performance of all obligations under any other document or
instrument that recites that it is secured hereby, whether now existing or hereafter arising,
including, without limitation, any renewal, extension or modification thereof; and (d) the payment
and performance of all obligations of Borrower or Guarantor owed to Lender, whether now existing or
hereafter arising ((a) through (d) are referred to herein as the “Secured Obligations”); and

WHEREAS, as a condition precedent to Lender making the Loan, Borrower is required to execute
and deliver this Instrument for the benefit of Lender to secure the payment and performance of the
Secured Obligations; and

WHEREAS, Borrower has duly authorized the execution, delivery and performance of this
Instrument.

G R A N T:

NOW, THEREFORE, for and in consideration of the premises, and of the mutual covenants herein
contained, and in order to induce Lender to make the Loan to Borrower, and in order to secure the
full, timely and proper payment and performance of and compliance with each and every one of the
Secured Obligations, Borrower hereby irrevocably grants, bargains, sells, mortgages, warrants,
aliens, demises, releases, hypothecates, pledges, assigns, transfers, conveys and grants a security
interest in and to Trustee, in trust, WITH THE POWER OF SALE, all of Borrower’s estate, right,
title and interest, if any, now or hereafter arising, in and to the following (collectively, the
“Collateral”):

(a) Premises. The Land, together with all tenements, rights, easements, hereditaments,
rights of way, privileges, liberties, appendages and appurtenances now or hereafter
belonging or in anywise pertaining to the Land (including, without limitation, all rights
relating to storm and sanitary sewer, water, gas, electric, railway and telephone services);
all development rights, air rights, riparian rights, water, water rights, water stock, all
rights in, to and with respect to any and all oil, gas, coal, minerals and other substances
of any kind or character underlying or relating to the Land and any interest therein; any
street, road, highway or alley, vacated or other, adjoining the Land or any part thereof;
all strips and gores belonging, adjacent or pertaining to the Land; and any after-acquired
title to any of the foregoing (collectively, the “Premises”);

 

 

 

(b) Improvements. All buildings, structures and other improvements and any additions
and alterations thereto or replacements thereof, now or hereafter built, constructed or
located upon the Premises; and all furnishings, fixtures, fittings, appliances, apparatus,
equipment, machinery, building and construction materials and other articles of property of
every kind and nature whatsoever, now or hereafter affixed or attached to, erected on or
used in connection with the operation of the Premises or such buildings, structures and
other improvements, including, without limitation, all partitions, furnaces, boilers, oil
burners, radiators and piping, plumbing and bathroom fixtures, refrigeration, heating,
ventilating, air conditioning and sprinkler systems, other fire prevention and extinguishing
apparatus and materials, vacuum cleaning systems, gas and electric fixtures, incinerators,
compactors, elevators, engines, motors, generators and all other articles of property that
are considered fixtures under applicable law (collectively together with all additions and
accessions thereto and all replacements and substitutions thereof, the “Improvements”; the
Premises and the Improvements are collectively referred to herein as the “Property”);

(c) Leases. All leases, licenses, occupancy agreements, concessions and other
arrangements, oral or written, now existing or hereafter entered into (including, without
limitation, the leases listed on Schedule 3 hereto), whereby any person agrees to pay money
or any other consideration for the use, possession or occupancy of, or any estate in, the
Property or any portion thereof or interest therein (collectively, the “Leases”);

(d) Permits and Approvals. To the extent assignable under applicable law, all permits,
franchises, licenses, approvals and other authorizations respecting the use, occupation or
operation of the Property or any part thereof and respecting any business or other activity
conducted on or from the Property, and any product or proceed thereof or therefrom,
including, without limitation, all building permits, certificates of occupancy and other
licenses, permits and approvals issued by governmental authorities having jurisdiction;

(e) Rents. All rents, issues, profits, royalties, avails, income, proceeds and other
benefits derived or owned, directly or indirectly, by Borrower from the Collateral,
including, without limitation, all rents and other consideration payable by Tenants, claims
against guarantors, any guaranties with respect to any Tenant’s obligations under any Lease
and any cash or other securities deposited to secure performance by Tenants, under the
Leases (collectively, “Rents”);

(f) Plans. To the extent assignable under applicable law, all plans, specifications,
contracts and agreements relating to the design or construction of the Improvements, any
payment, performance, or other bond provided in connection with the design or construction
of the Improvements, all contracts, agreements and purchase orders with contractors,
subcontractors, suppliers and materialmen incidental to the design or construction of the
Improvements, all other contracts and agreements pertaining to or affecting the Property,
including, without limitation, all options or contracts to acquire other property for use in
connection with operation or development of the Property and management contracts, service
or supply contracts with respect to the Property;

(g) Trademarks and Trade Names. All trademarks, trade names, symbols, assumed names,
and other rights and interest in and to the name and marks used by Borrower in connection
with the Property, together with the goodwill associated therewith;

(h) Deposits. Any moneys on deposit with or for the benefit of Lender in connection
with any of the Collateral, including deposits for the payment of real estate taxes, public
assessments and repairs;

(i) Claims. All claims, demands, judgments, insurance proceeds, awards of damages and
settlements hereafter made resulting from the taking of the Property or any portion thereof
under the power of eminent domain, or for any damage (whether caused by such taking, by
casualty or otherwise) to the Property or any portion thereof;

(j) Other Rights. All other property and rights of Borrower relating to any of the
foregoing; and

 

2

 

(k) Addition; Replacements; Proceeds. All additions, accessions, replacements,
substitutions, proceeds and products of the property, tangible and intangible, described
herein.

AND, without limiting any of the other provisions of this Instrument, Borrower expressly
grants to Lender, as secured party, a security interest in all of those portions of the Collateral
that are or may be subject to the UCC provisions applicable to secured transactions; and

TO HAVE AND TO HOLD the Collateral unto Trustee for the benefit of Lender.

PROVIDED, HOWEVER, that nothing contained herein shall create an obligation on the part of
Lender to make future advances or readvances to Borrower; and

PROVIDED, FURTHER, that the total amount of the Secured Obligations and advances at any one
time secured hereby shall in no event exceed $70,000,000, plus interest thereon and all charges and
expenses of collection incurred by Lender, including court costs and attorneys’ fees and expenses
and advancements for taxes, insurance premiums, public assessments and repairs, if any; and

FURTHER to secure the full, timely and proper payment and performance of the Secured
Obligations, Borrower hereby covenants and agrees with and warrants to Trustee for the benefit of
Lender as follows:

ARTICLE I

DEFINITIONS

The following terms shall have the following meanings for all purposes of this Instrument, and
capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms
in the Note:

“Business Day” means any day on which Lender is open for business and is neither a Saturday
nor Sunday nor a legal holiday on which banks are authorized or required to be closed in New York,
New York or Chicago, Illinois.

“Change of Control” means a change in control of Borrower or Guarantor, including, without
limitation, a change in control resulting from direct or indirect transfers of voting stock or
partnership, membership or other ownership interests, whether in one or a series of transactions.
“Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of Borrower or Guarantor, and a Change of Control shall
occur if any of the following occurs: (a) any person or group (as such term is used in Section
13(d)(3) of the Exchange Act) acquires, after the date of this Instrument, the beneficial ownership
directly or indirectly, of 50% or more of the voting power of the total outstanding stock or other
ownership interests of Borrower or Guarantor or (b) Guarantor ceases to own 100% of the outstanding
membership interests of Borrower.

“Default” means any Event of Default or any condition, occurrence or event that, after notice
or lapse of time or both, would constitute an Event of Default.

“Environmental Indemnity Agreement” means the Environmental Indemnity Agreement dated as of
the date hereof executed by Borrower for the benefit of Lender, and any amendment or supplement
thereto.

“Environmental Laws” means (i) all Federal Toxic Waste Laws, (ii) all local, State or foreign
laws, statutes, regulations, or ordinances analogous to any of the Federal Toxic Waste Laws and
(iii) all other federal, State or local laws (including any common law, consent decrees and
administrative orders), statutes, regulations or ordinances regulating, permitting, prohibiting or
otherwise restricting the placement, discharge, release, generation, treatment or disposal upon or
into any environmental media of any substance, pollutant, contaminant or waste that is now or
hereafter classified or considered to be hazardous or toxic; “Environmental Laws” shall also
include any and all amendments to any of (i), (ii) or (iii).

“Event of Default” has the meaning set forth in Section 4.01.

 

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“Federal Toxic Waste Laws” means any federal law or implementing regulation regulating any
substance, matter, material, waste, contaminant or pollutant, the generation, storage, disposal,
handling, release, treatment, discharge or emission of which is regulated, prohibited or limited,
including, without limitation: (i) the Resource Conservation and Recovery Act, as amended by the
Hazardous and Solid Waste Amendments of 1984, as now or hereafter amended (42 U.S.C. Section 6901
et seq.), (ii) the Comprehensive Environmental Response, Compensation and Liability Act, as amended
by the Superfund Amendments and Reauthorization Act of 1986, as now or hereafter amended (42 U.S.C.
Section 9601 et seq.), (iii) the Clean Water Act, as now or hereafter amended (33 U.S.C. Section
1251 et seq.), (iv) the Toxic Substances and Control Act, as now or hereafter amended (15 U.S.C.
Section 2601 et seq.) and (v) the Clean Air Act, as now or hereafter amended (42 U.S.C. Section
7401 et seq.).

“GAAP” means generally accepted accounting principles in the United States applied on a
consistent basis.

“Guarantor” means The Ensign Group, Inc., a Delaware corporation.

“Guaranty” means the Guaranty of even date herewith executed by Guarantor for the benefit of
Lender, pursuant to which, among other things, Guarantor has guaranteed the payment and performance
obligations of Borrower under the Loan Documents.

“Hazardous Material” means (a) any “hazardous substance” as defined by Environmental Laws, (b)
any hazardous waste” as defined by Environmental Laws, (c) any petroleum product including, without
limitation, waste oil, used oil or wastewater containing petroleum product, (d) any asbestos or
material containing asbestos and (e) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any Environmental Law relating to or imposing
liability or standards of conduct.

“Impositions” has the meaning set forth in Section 2.04.

“Indemnified Liabilities” has the meaning set forth in Section 2.12.

“Indemnified Parties” has the meaning set forth in Section 2.12.

“Loan Documents” means, collectively, this Instrument, the Note and each other instrument or
document executed or delivered pursuant to or in connection with this Instrument and the other Loan
Documents, including, without limitation, any instrument or agreement given to evidence or further
secure the Obligations.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, properties or financial condition of Borrower or Guarantor, (b) the ability of Borrower
to perform or pay its Obligations or any material indebtedness in accordance with the terms
thereof, (c) the ability of Guarantor to perform its obligations under the Guaranty, (d) Lender’s
Lien on the Collateral or the priority of such Lien or (e) the validity or enforceability of any
Loan Document or the rights and remedies available to Lender under any Loan Document.

“Permitted Exceptions” means the exceptions set forth in Schedule 2 hereto.

“Property” has the meaning set forth in the granting clause.

“Premises” has the meaning set forth in the granting clause.

“Release” means a “release” or “threatened release” as such terms are defined in Environmental
Laws of a Hazardous Material.

“Rents” has the meaning set forth in the granting clause.

“State” means the State of Arizona.

“Taking” has the meaning set forth in Section 3.02.

 

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“Tenant” means any tenant of the Property, and its successors and assigns.

“UCC” means the Uniform Commercial Code as enacted in the State.

ARTICLE II

COVENANTS AND AGREEMENTS OF BORROWER

Section 2.01. Payment and Performance of Obligations. Borrower agrees that it will duly and
punctually pay and perform or cause to be paid and performed each of the Secured Obligations at the
time and in accordance with the terms specified in the Loan Documents.

Section 2.02. Title to Collateral. Borrower represents and warrants to Lender that:

(a) as of the date hereof and at all times hereafter while this Instrument is
outstanding, Borrower is and shall be the sole, absolute owner and holder of the fee simple
estate in the Property and the absolute owner of the legal and beneficial title to all other
property included in the Collateral, subject in each case only to this Instrument and
Permitted Exceptions;

(b) Borrower has good and lawful right, power and authority to execute this Instrument
and to convey, transfer, assign, mortgage and grant a security interest in the Collateral,
all as provided herein;

(c) this Instrument has been duly executed, acknowledged and delivered on behalf of
Borrower, all consents and other actions required to be taken by the officers, directors,
shareholders, managers and partners, as the case may be, of Borrower have been duly and
fully given and performed and this Instrument constitutes the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its terms; and

(d) Borrower, at its expense, will and hereby does warrant and defend to Lender and any
purchaser under the power of sale herein or at any foreclosure sale such title to the
Collateral (as described in subsection (a) of this Section) and the first mortgage lien and
first priority perfected security interest of this Instrument thereon and therein against
all claims and demands and will maintain, preserve and protect such Lien (as defined below)
and will keep this Instrument a valid, first mortgage lien of record on and a first priority
perfected security interest in the Collateral, subject only to the Permitted Exceptions.

(e) Borrower has duly paid in full all fees, premiums and other charges due in
connection with (i) the recording of this Instrument and the issuance of a loan policy or
policies of title insurance in form and amount satisfactory to Lender naming Lender as the
insured, insuring the title to and the first lien of this Instrument on the Property with
endorsements reasonably requested by Lender and (ii) a survey of the Property in form and
substance acceptable to Lender and title insurer.

Section 2.03. Title Insurance. All proceeds received by and payable to Lender for any loss
under any loan policy or policies of title insurance delivered to Lender shall be the property of
Lender and shall be applied by Lender in accordance with the provisions of Section 3.03 or 3.04, as
applicable.

Section 2.04. Impositions. Borrower will pay or cause to be paid all taxes, insurance
premiums, assessments, water and sewer rates, ground rents, fees and other charges (collectively,
the “Impositions”) that at any time may be assessed, levied, confirmed or imposed or that may
become a Lien upon the Collateral, or any portion thereof, or that are payable with respect
thereto, prior to delinquency, before any fine, penalty or interest may be added for non-payment
and before the commencement of any action to foreclose any Lien against all or any portion of the
Collateral with respect thereto. Borrower will deliver to Lender, upon request, copies of official
receipts or other satisfactory proof evidencing such payments. Borrower shall not be entitled to
any credit against the Secured Obligations by reason of the payment of any Imposition.

 

5

 

Upon the occurrence of an Event of Default (hereinafter defined), and at Lender’s sole option
at any time thereafter, Borrower shall pay in addition to each monthly payment under the Note,
one-twelfth of the Impositions payable during each year (as estimated by Lender in its sole
discretion), to be held by Lender without interest to Borrower, for the payment of such
obligations. If the amount of such additional payments held by Lender (the “Funds”) at the time of
the annual accounting thereof shall exceed the amount deemed necessary by Lender to provide for the
payment of Impositions as they fall due, such excess shall be at Borrower’s option, either repaid
to Borrower or credited to Borrower on the next monthly installment or installments of Funds due.
If at any time the amount of the Funds held by Lender shall be less than the amount deemed
necessary by Lender to pay Impositions as they fall due, Borrower shall pay to Lender any amount
necessary to make up the deficiency within 30 days after notice from Lender to Borrower requesting
payment thereof. Lender may apply, in any amount and in any order as Lender shall determine in
Lender’s sole discretion, any Funds held by Lender at the time of application (i) to pay
Impositions which are now or will hereafter become due or (ii) as a credit against the Secured
Obligations. Upon payment in full of the Secured Obligations, Lender shall refund to Borrower any
Funds held by Lender.

Section 2.05. Liens. Borrower will not directly or indirectly create or permit or suffer to
be created or to remain, and will promptly discharge or cause to be discharged, any deed of trust,
mortgage, encumbrance or charge on, pledge of, security interest in or conditional sale or other
title retention agreement with respect to or any other lien on or in the Collateral or any part
thereof or the interest of Borrower or Lender therein (herein, “Liens”), or any proceeds or Rents
or other sums arising therefrom other than Permitted Exceptions.

Section 2.06. Compliance with Instruments. Borrower, at its expense, will promptly comply
with all rights of way or use, privileges, franchises, servitudes, licenses, easements, tenements,
hereditaments and appurtenances forming a part of the Collateral and all instruments creating or
evidencing the same, in each case, to the extent compliance therewith is required of Borrower under
the terms thereof. Borrower will not terminate, forfeit or materially amend rights afforded to
Borrower under any such instruments, without the prior written consent of Lender.

Section 2.07. Maintenance and Repair. Subject to ordinary wear and tear, Borrower will keep
or cause to be kept all presently and subsequently erected or acquired Improvements and the
sidewalks, curbs, vaults and vault space, if any, located on or adjoining the same, and the streets
and the ways adjoining the same, in good and substantial order and repair and in such a fashion
that the value and utility of the Collateral will not be materially diminished, and, at its sole
cost and expense, will promptly make or cause to be made all necessary and appropriate repairs,
replacements and renewals thereof, whether interior or exterior, structural or nonstructural,
ordinary or extraordinary, foreseen or unforeseen, so that its business carried on in connection
therewith may be properly conducted at all times. All repairs, replacements and renewals shall be
equal or greater in quality and class to the original Improvements. Borrower, at its expense, will
do or cause to be done all shoring of foundations and walls of any building or other Improvements
on the Premises and (to the extent permitted by law) of the ground adjacent thereto, and every
other act necessary or appropriate for the preservation and safety of the Property by reason of or
in connection with any excavation or other building operation upon the Premises and upon any
adjoining property, whether or not Borrower shall be required to take such action or be liable for
failure to do so.

Section 2.08. Alterations, Additions. Borrower shall not make or cause to be made any
alterations of and additions to the Property or any part thereof without prior written consent of
Lender, which consent shall not be unreasonably withheld; provided, however, that Borrower may make
nonstructural additions to the Property costing less than $1,000,000 per year without Lender’s
consent so long as such additions do not diminish the value of the Property. If Lender consents to
any alterations or additions to the Property, such alterations or additions shall be made at
Borrower’s sole expense by a licensed contractor and according to the plans and specifications
approved by Lender and subject to any other conditions required by Lender. Any work commenced on
the Property shall be diligently completed, shall be of good workmanship and materials and shall
comply with the terms of this Instrument. Upon the completion of any alterations or additions,
Borrower shall promptly provide Lender with (a) evidence of full payment to all laborers,
materialmen contributing to the alterations or additions, (b) an architect’s certificate certifying
the alterations conform to the plans and specification approved by Lender, (c) a certificate of
occupancy (if such alterations or additions require the issuance thereof) and (d) any other
documents or information reasonably requested by Lender.

 

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Section 2.09. Acquired Property Subject to Lien. All right, title and interest of Borrower
in and to all alterations, improvements, substitutions, restorations and replacements of, and all
additions and appurtenances to, the Property hereafter acquired by Borrower, whether such property
is acquired by exchange, purchase, construction or otherwise, shall forthwith become subject to the
Lien of this Instrument without further action on the part of Borrower or Lender. Upon the request
of Lender, Borrower, at its expense, will execute and deliver (and will record and file as provided
herein) an instrument or document supplemental to this Instrument satisfactory in substance and
form to Lender, whenever such an instrument or document is necessary under applicable law to
subject to the Lien of this Instrument all right, title and interest of Borrower in and to all
property provided or required by this Instrument to be subject to the Lien hereof.

Section 2.10. Assignment of Rents and Leases.

(a) The assignment, grant and conveyance of the Leases, Rents and all other rents,
income, proceeds and benefits of the Collateral contained in the granting clause of this
Instrument shall constitute an absolute, present and irrevocable assignment, grant and
conveyance, provided that, until an Event of Default has occurred, a license is hereby given
to Borrower to collect, receive and apply Rents, as they become due and payable, but not in
advance thereof, and in accordance with all of the other terms, conditions and provisions
hereof and of the Leases, contracts, agreements and other instruments with respect to which
such payments are made. Upon the occurrence of an Event of Default, such license shall be
revoked and shall terminate, immediately and automatically without notice to Borrower or any
other person (to the extent permitted by law), and shall not be reinstated upon a cure of
such Event of Default without the express written consent of Lender. Such assignment shall
be fully effective without any further action on the part of Borrower or Lender, and Lender
shall be entitled, at its option, upon the occurrence of an Event of Default hereunder, to
collect, receive and apply all Rents and all other rents, income, proceeds and benefits from
the Collateral, including all right, title and interest of Borrower in any escrowed sums or
deposits or any portion thereof or interest therein, whether or not Lender takes possession
of the Collateral or any part thereof. The collection of such amounts by Lender shall in no
way waive the right of Lender to foreclose this Instrument in the event of any Event of
Default. Nothing contained herein and no exercise of any right or privilege hereunder by
Lender shall be construed to constitute Lender as a mortgagee-in-possession. All Rents and
all other rents, income, proceeds and benefits of the Collateral received by Borrower from
or related to the Collateral or any part thereof, from and after the occurrence of an Event
of Default, shall be deemed received in trust and shall be turned over to Lender within one
Business Day after Borrower’s receipt thereof. Borrower further grants to Lender the right,
at Lender’s option, to:

(i) enter upon and take possession of the Property for the purpose of
collecting Rents and all other rents, income, proceeds and other benefits;

(ii) dispossess by the customary summary proceedings any Tenant, purchaser or
other person defaulting in the payment of any amount when and as due and payable, or
in the performance of any other obligation, under the Leases, contract or other
instrument to which said Rents or other rents, income, proceeds or benefits relate;

(iii) let or convey the Collateral or any portion thereof or any interest
therein; and

(iv) apply Rents and such other rents, income, proceeds and benefits, after the
payment of all necessary fees, charges and expenses, on account of the Secured
Obligations in accordance with Section 3.03.

(v) Lender shall be under no obligation to exercise or prosecute any of the
rights or claims assigned to it hereunder or to perform or carry out any of the
obligations of the lessor under any of the Leases and does not assume any of the
liabilities in connection with or arising or growing out of the covenants and
agreements of Borrower in the Leases. It is further understood that the assignment
granted hereunder shall not operate to place responsibility for the control, care,
management or repair of the Property, or parts thereof, upon Lender, nor shall it
operate to make Lender liable for the performance of any of the terms and conditions
of any of the Leases, or for
any waste of the Property by any Tenant under any of the Leases or any other
person, or for any dangerous or defective condition of the Property or for any
negligence in the management, upkeep, repair or control of the Property resulting in
loss or injury or death to any lessee, licensee, employee or stranger.

 

7

 

(b) Borrower represents, warrants, covenants and agrees with Lender that, other than as
set forth on Schedule 3, there are no existing Leases, and Borrower will not enter into any
other Lease without the prior written consent of Lender.

(c) Borrower hereby irrevocably appoints Lender its true and lawful attorney-in-fact
with power of substitution and with full power for Lender in its own name and capacity or in
the name and capacity of Borrower, from and after the occurrence and during the continuance
of an Event of Default, to demand, collect, receive and give complete acquittances for any
and all Rents accruing from the Property that Lender may deem necessary or desirable in
order to collect and enforce the payment of the Rents and to demand, correct, receive,
endorse, and deposit all checks, drafts, money orders or notes given in payment of such
Rents. Such appointment is coupled with an interest and is irrevocable. Lender shall not
be liable for or prejudiced by any loss of any note, checks, drafts, etc., unless such loss
shall have been found by a court of competent jurisdiction to have been due to the gross
negligence or willful misconduct of Lender. Borrower also hereby irrevocably appoints
Lender as its true and lawful attorney-in-fact to appear in any state or federal bankruptcy,
insolvency, or reorganization proceeding in any state or federal court involving any of the
Tenants of the Leases. Lessees of the Property are hereby expressly authorized and
directed, from and after service of a notice by Lender to pay any and all amounts due
Borrower pursuant to the Leases to Lender or such nominee as Lender may designate in writing
delivered to and received by such Tenants, and such Tenants are expressly relieved of any
and all duty, liability or obligation to Borrower in respect of all payments so made.

(d) In addition to, and not in limitation of, any other remedy provided in or available
under this Instrument, Lender shall have all the rights set forth in A.R.S. § 33-702B (as
amended, supplemented or supplanted) regarding enforcement of the assignment of Leases and
Rents contained herein.

Section 2.11. No Claims Against Lender. Nothing contained in this Instrument shall
constitute any consent or request by Lender, express or implied, for the performance of any labor
or the furnishing of any materials or other property in respect of the Property or any part
thereof, or be construed to permit the making of any claim against Lender in respect of labor or
services or the furnishing of any materials or other property or any claim that any Lien based on
the performance of such labor or the furnishing of any such materials or other property is prior to
the Lien of this Instrument. Borrower shall make all contractors, subcontractors, vendors and
other persons dealing with the Property, or with any persons interested therein, take notice of the
provisions of this Section.

Section 2.12. Indemnification.

(a) Whether or not covered by insurance, Borrower hereby assumes responsibility for and
agrees to reimburse Lender, its affiliates and its and their respective officers, directors,
employees and agents (individually and collectively, the “Indemnified Parties”) for and will
indemnify, defend and hold the Indemnified Parties harmless from and against any and all
liabilities, obligations, losses, damages, penalties, claims, suits, actions, proceedings,
judgments, awards, amounts paid in settlements, debts, diminutions in value, fines,
penalties, charges, fees, costs and expenses (including reasonable attorneys’ fees and
expenses) of whatsoever kind and nature, imposed on, incurred by or asserted against any
Indemnified Party that in any way relate to or arise out of any of the Loan Documents, the
transactions contemplated thereby and the Collateral, including, without limitation, (i) the
selection, manufacture, construction, acquisition, acceptance or rejection of the
Collateral, (ii) the ownership of the Collateral, (iii) the delivery, installation, lease,
possession, maintenance, use, condition, return or operation of the Collateral, (iv) the
condition of the Collateral sold or otherwise disposed of after possession by Borrower, (v)
any patent or copyright infringement, (vi) any act or omission on the part of Borrower,
Guarantor or any of its or their officers, employees, agents, contractors, lessees,
licensees or invitees, (vii) any misrepresentation or inaccuracy in any representation or
warranty of Borrower or Guarantor, or a breach of Borrower or Guarantor of any of its
covenants or obligations under any of the Loan

 

8

 

Documents, (viii) any claim, loss, cost or expense involving alleged damage to the environment relating to
the Collateral, including, without limitation, investigation, removal, cleanup and remedial
costs, (ix) any personal injury, wrongful death or property damage arising under any
statutory or common law or tort law theory, including, without limitation, damages assessed
for the maintenance of a private or public nuisance or for the conducting of an abnormally
dangerous activity on or near the Collateral, (x) any past, present or threatened injury to,
or destruction of, the Collateral, including, without limitation, costs to investigate and
assess such injury or damage, (xi) any administrative process or proceeding or judicial or
other similar proceeding (including, without limitation, any alternative dispute resolution
process and any bankruptcy proceeding) in any way connected with any matter addressed in any
of the Loan Documents, (xii) any use, non-use or condition of the Property or any part
thereof or the adjoining sidewalks, curbs, vaults and vault spaces, if any, streets, alleys
or ways, (xiii) performance of any labor or services or the furnishing of any materials or
other property in respect of the Collateral or any part thereof made or suffered to be made
by or on behalf of Borrower or any Tenant, (xiv) any work in connection with any
alterations, changes, new construction or demolition of or additions to the Property or
(xv)(A) any Hazardous Materials on, in, under or affecting all or any portion of the
Property, the groundwater, or any surrounding areas, (B) any violation or claim of violation
by Borrower or any Tenant of any Environmental Laws or (C) the imposition of any Lien for
damages caused by or the recovery of any costs for the cleanup of Hazardous Materials or any
Release.

(b) If any action or proceeding be commenced, to which action or proceeding the
Indemnified Parties are made a party by reason of the execution of this Instrument or the
Loan Documents, or in which it becomes necessary to defend or uphold the Lien of this
Instrument, all sums paid by the Indemnified Parties, for the expense of any litigation to
prosecute or defend the rights and Lien created hereby or otherwise, shall be paid by
Borrower to such Indemnified Parties, as the case may be, as hereinafter provided. Borrower
will pay and save the Indemnified Parties harmless against any and all liability with
respect to any intangible personal property tax or similar imposition of the State or any
subdivision or authority thereof now or hereafter in effect, to the extent that the same may
be payable by the Indemnified Parties in respect of this Instrument or any Secured
Obligation.

(c) All amounts payable to the Indemnified Parties under this Section shall be deemed
indebtedness secured by this Instrument, and any such amounts that are not paid within 30
days after written demand therefor by any Indemnified Party shall bear interest at the
highest Default Rate from the date of such demand. In case any action, suit or proceeding
is brought against the Indemnified Parties by reason of any such occurrence, Borrower, upon
request of such Indemnified Parties, will, at Borrower’s expense, resist and defend such
action, suit or proceeding or cause the same to be resisted or defended by counsel
designated by Lender. The obligations of Borrower under this Section shall survive any
satisfaction, discharge or reconveyance of this Instrument and payment in full of the
Obligations. If and to the extent that the foregoing undertaking may be unenforceable for
any reason, Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities that is permissible under applicable
law.

Section 2.13. Hazardous Materials. Borrower covenants and agrees that (a) the Collateral
shall be kept free of Hazardous Materials, except for those Hazardous Materials reasonably
necessary for the operation of the Property and customarily employed in the ordinary course of
businesses similar to the business conducted at the Property and that are used, stored, transported
and disposed of in accordance with all applicable Environmental Laws; (b) Borrower shall comply
with, and ensure compliance by all persons on the Property with, all Environmental Laws relating to
all or any part of the Collateral; (c) Borrower shall keep the Collateral free and clear of any
liens imposed pursuant to such Environmental Laws; (d) Borrower shall conduct and complete all
investigations, studies, sampling and testing, and all remedial actions necessary to clean up and
remove any Hazardous Materials from the Property in accordance with the recommendations contained
in any reports issued in connection with such investigations, studies, sampling and testing and in
accordance with all applicable Environmental Laws’ and (e) Borrower shall cause compliance by all
Tenants and sub-tenants on the Property with Borrower’s covenants and agreements contained in this
Section. Borrower shall immediately notify Lender of any investigation, demand, or claim affecting
the Property made by any third party.

 

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Section 2.14. Right of Lender To Require Appraisal. Following the occurrence of an Event of
Default (other than an Event of default that has been waived in writing by Lender or confirmed as
having been cured in writing by Lender), Lender shall have the right, from time to time during the
term of this Instrument, to obtain one or more fair market value appraisals of the Property from
one or more MAI certified appraisers in such form as is satisfactory to Lender. The cost of any
such appraisal(s) shall be paid by Borrower.

Section 2.15. Instrument as UCC Security Agreement and Fixture Filing. This Instrument shall
constitute a security agreement, a financing statement and a fixture filing pursuant to the UCC for
any of the items specified herein as part of the Collateral that, under applicable law, may be
subject to a security interest pursuant to the UCC. The Collateral includes goods that are or are
to become fixtures. Borrower agrees that Lender may file this Instrument, or a reproduction
thereof, in the real estate records or other appropriate index as a fixture filing or other
financing statement for any of the items specified above as part of the Collateral. Any
reproduction of this Instrument or of any other security agreement or financing statement shall be
sufficient as a financing statement.

Section 2.16. Additional Representations, Warranties and Covenants. Borrower represents,
warrants and covenants for the benefit of Lender, as follows:

(a) Borrower is a limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. Borrower is in good
standing and is duly licensed or qualified to transact business in the State and in each
other jurisdiction where the nature of its business requires such qualification, except for
those jurisdictions in which the failure to qualify could not reasonably be expected to have
a Material Adverse Effect. Borrower’s exact legal name is as set forth on the execution
page hereof.

(b) Borrower has full power and authority and holds all requisite governmental
licenses, permits and other approvals to (i) enter into and perform its obligations under
this Instrument, the Note and each other Loan Document to which it is a party and to own its
property, (ii) use the Collateral and (iii) conduct its business substantially as currently
conducted by it, except as to clause (iii) where the failure to hold such licenses, permits
and approvals could not reasonably be expected to have a Material Adverse Effect.

(c) This Instrument, the Note and the other Loan Documents to which it is a party have
been duly authorized, executed and delivered by Borrower and constitute legal, valid and
binding obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except to the extent limited by bankruptcy, reorganization or other laws
of general application relating to or effecting the enforcement of creditors’ rights.

(d) The execution and delivery of this Instrument, the Note and the other Loan
Documents, the consummation of the transactions contemplated hereby and thereby and the
fulfillment of the terms and conditions hereof and thereof do not and will not violate any
law, rule, regulation or order, conflict with or result in a breach of any of the terms or
conditions of the articles of organization or operating agreement of Borrower or of any
corporate restriction or of any agreement or instrument to which Borrower is now a party and
do not and will not constitute a default under any of the foregoing or result in the
creation or imposition of any liens, charges or encumbrances of any nature upon any of the
property or assets of Borrower other than Liens in favor of Lender.

(e) The authorization, execution, delivery and performance of this Instrument, the Note
and the other Loan Documents by Borrower do not require submission to, approval of, or other
action by any governmental authority or agency, except for such action that has been duly
obtained or taken and is in full force and effect.

(f) There is no action, suit, proceeding, claim, inquiry or investigation, at law or in
equity, before or by any court, regulatory agency, public board or body pending or, to the
best of Borrower’s knowledge, threatened against or affecting Borrower or Guarantor (other
than those described in Guarantor’s public filings with the Securities and Exchange
Commission (“SEC”)), challenging Borrower’s or Guarantor’s authority to enter into this
Instrument, the Note or any of the other Loan Documents or any other action wherein an
unfavorable ruling or finding would adversely affect the enforceability of this
Instrument, the Note or any of the other Loan Documents, or could reasonably be
expected to have a Material Adverse Effect.

 

10

 

(g) Borrower is in compliance with all laws, rules, regulations and orders of
governmental authorities applicable to it and its properties except to the extent the
non-compliance with which could not reasonably be expected to have a Material Adverse
Effect.

(h) Borrower has heretofore furnished to Lender the financial statements of Borrower
and Guarantor for their fiscal year ended December 31, 2009 and the unaudited financial
statement of Borrower and Guarantor and for the nine months ended September 30, 2010 and
those statements fairly present the financial condition of Borrower and Guarantor, if any,
on the dates thereof and the results of its operations and cash flows for the periods then
ended and were prepared in accordance with GAAP. Since the date of the most recent
financial statements, there has been no material adverse change in the business, properties
or condition (financial or otherwise) of Borrower or Guarantor. Except as disclosed in the
Financial Statements or the notes thereto, neither Borrower nor Guarantor, as of the Closing
Date, has or will have any liabilities, contingent or otherwise, that could reasonably be
expected to have a Material Adverse Effect.

(i) Borrower has paid or caused to be paid, and will pay (after giving effect to any
grace periods for which no penalties are incurred), to the proper authorities when due all
federal, state and local taxes required to be withheld by it. Borrower has filed, and will
pay, all federal, state and local tax returns which are required to be filed, and Borrower
has paid or caused to be paid to the respective taxing authorities all taxes as shown on
said returns or on any assessment received by it to the extent such taxes have become due,
except any such taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP have been
set aside on its books.

(j) For purposes of Section 9-307 of the UCC, Borrower is and will remain located in
the State. Borrower’s residence for federal income tax purposes is located at its address
specified in the preamble to this Instrument. Borrower has authorized Lender to file
financing statements that are sufficient when filed to perfect the security interests
created pursuant to this Instrument and the other Loan Documents. When such financing
statements are filed in the offices noted therein, Lender will have a valid and perfected
security interest in the Collateral that constitutes personal property, subject to no other
Lien.

(k) None of the Collateral constitutes a replacement of, substitution for or accessory
to any property of Borrower subject to a lien of any kind.

(l) Except where any failure could not reasonably be expected to result in a Material
Adverse Effect, Borrower has obtained all permits, licenses and other authorizations which
are required under all Environmental Laws at Borrower’s facilities or in connection with the
operation of its business. Except where any failure could not reasonably be expected to
result in a Material Adverse Effect, Borrower and all activities of Borrower at its
facilities comply with all Environmental Laws and with all terms and conditions of any
required permits, licenses and authorizations applicable to Borrower with respect thereto.
Except where any failure could not reasonably be expected to result in a Material Adverse
Effect, Borrower is also in compliance with all limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables contained in
Environmental Laws or contained in any plan, order, decree, judgment or notice of which
Borrower is aware. Borrower is not aware of, nor has Borrower received notice of, any
events, conditions, circumstances, activities, practices, incidents, actions or plans which
may interfere with or prevent continued compliance with, or which may give rise to any
liability under, any Environmental Laws.

(m) All factual information heretofor or contemporaneously furnished by or on behalf of
Borrower or Guarantor in writing to Lender for purposes of or in connection with this
Instrument or any transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of Borrower or Guarantor to Lender will be, true and
correct in all material respects on the date as of which such information is dated or
certified, and such information is not, or shall not be, as the case may be, incomplete by
omitting to state any material fact necessary to make such information not misleading.

 

11

 

(n) Neither Borrower nor Guarantor is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or carrying
“margin stock.”
None of the proceeds of the Loan will be used for the purpose of, or be made available
by Borrower or Guarantor in any manner to any other person to enable or assist such person
in, directly or indirectly purchasing or carrying “margin stock”. Terms for which meanings
are provided in F.R.S. Board Regulation T, U or X or any regulations substituted therefor,
as from time to time in effect, are used in this subsection with such meanings.

(o) Neither Borrower nor Guarantor is an “investment company” nor a “company controlled
by an investment company” within the meaning of the Investment Company Act of 1940, as
amended, or a “holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,”
within the meaning of the Public Utility Holding Company Act of 1935, as amended.

(p) Borrower and Guarantor are solvent and will not be rendered insolvent by the Loan
Documents or the transactions contemplated thereby and, after giving effect to such
transactions, neither Borrower nor Guarantor will be left with an unreasonably small amount
of capital with which to engage in its business, and neither Borrower or Guarantor intends
to incur, or believes that it has incurred, debts beyond its ability to pay as they mature.
Neither Borrower nor Guarantor contemplates the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of Borrower or Guarantor or any of their
assets. Neither Borrower nor Guarantor is entering into the transactions contemplated by
the Loan Documents with any intent to hinder, delay or defraud any of Borrower’s or
Guarantor’s creditors.

(q) Borrower shall deliver to Lender each of the following:

(i) as soon as possible and in any event within three Business Days after the
occurrence of a Default, an Event of Default or an event which could reasonably be
expected to result in a Material Adverse Effect, a statement of Borrower setting
forth reasonably detailed information regarding such Default, Event of Default or
event and the action that Borrower has taken and proposes to take with respect
thereto;

(ii) promptly after the commencement thereof, notice in writing of all
litigation and of all proceedings before any governmental or regulatory agency
affecting Borrower, Guarantor or any of their subsidiaries which seek a monetary
recovery against Borrower in excess of $1,000,000 or against Guarantor in excess of
$5,000,000;

(iii) promptly upon knowledge thereof, notice of any loss, theft or destruction
of or material damage to, any accident involving any, and any action, suit or
proceeding relating to, Collateral having a value in excess of $500,000 (whether in
one occurrence or in aggregate);

(iv) promptly after the amending thereof, copies of any and all amendments to
any of its articles of organization or operating agreement; and

(v) promptly upon knowledge thereof, notice of the violation by Borrower or
Guarantor of any law, rule or regulation applicable to Borrower or Guarantor, which
violation could reasonably be expected to have a Material Adverse Effect.

(r) Borrower and each of its subsidiaries shall comply in all material respects with
all governmental rules and regulations and all other applicable laws, rules, regulations and
orders, including, without limitation, all Environmental Laws.

(s) Borrower will keep books and records that accurately reflect in all material
respects all of its business affairs and transactions. Borrower will, and will cause
Guarantor to, permit Lender or any of its representatives (including outside auditors), at
reasonable times and intervals (but, absent the occurrence of an Event of Default, not to
exceed two times in any fiscal year), to visit all of its offices, to discuss its financial
matters with its officers and independent public accountant (and Borrower hereby authorizes
such independent accountant to discuss Borrower’s financial matters with Lender or its
representatives whether or not any representative of Borrower is present) and to examine
(and, at the expense of Borrower, copy
extracts from) books or other corporate records (including computer records). If
Lender exercises its rights under this subsection following the occurrence of an Event of
Default (other than an Event of default that has been waived in writing by Lender or
confirmed as having been cured in writing by Lender), Borrower shall pay any fees of such
independent accountant incurred in connection therewith. Borrower shall not be required to
cause Guarantor to comply with the foregoing for any period that Guarantor is subject to
regulation by the SEC.

 

12

 

(t) Borrower shall permit Lender to make or cause to be made reasonable entries upon
the Property to inspect the interior and exterior thereof. Except in case of emergency or
upon an Event of Default, such inspection shall be with two Business Days’ prior notice.

Section 2.17. Additional Negative Covenants. So long as the Loan shall remain unpaid,
Borrower agrees that:

(a) Borrower will not, and will not permit any of its subsidiaries to, form or acquire
any subsidiary, enter into any merger, consolidation, reorganization, or recapitalization,
or reclassify its capital stock, or liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), or, other than in the ordinary course of its business, convey,
sell assign, lease, transfer, or otherwise dispose of, in one transaction or series of
transactions, all or any substantial part of its property or assets.

(b) Borrower will not, and will not permit any of its subsidiaries to, sell, transfer,
lease, contribute or otherwise convey or dispose of (in each case in one transaction or
series of transactions), or grant options, warrants or other rights with respect to (in each
case in one transaction or series of related transactions), or agree to do any of the
foregoing with respect to, all or any part of the Collateral.

(c) Borrower will not change its location for purposes of Section 9-307 of the UCC or
its name in any manner that could make any financing statement filed in connection with any
Loan Document seriously misleading within the meaning of Section 9-506 of the UCC or any
similar statute, unless it shall have given Lender at least 30 days’ prior written notice
thereof.

ARTICLE III

INSURANCE; DAMAGE, DESTRUCTION OR TAKING

Section 3.01. Insurance.

(a) Borrower will, at its expense, maintain or cause to be maintained with insurance
carriers approved by Lender insurance with respect to the Collateral in such amounts and
against such insurable hazards as Lender from time to time may require, including, without
limitation the following (and with respect to liability insurance specified in subsection
(ii), for a period of two years following indefeasible payment in full of the Loan: (i) “all
risk” property and fire insurance in an amount not less than the full replacement value of
the Property (with a deductible not to exceed $10,000), naming Lender under a lender’s loss
payable endorsement as mortgagee and loss payee and including agreed amount, inflation
guard, replacement cost and waiver of subrogation endorsements; (ii) general liability
insurance in an amount not less than $1,000,000 per claim and on a claims-made basis,
insuring against personal injury, death and property damage and naming Lender as additional
insured, with all such insurance primary and non-contributory for Lender; (iii) business
interruption insurance or rent-loss insurance, as applicable, covering loss of rental or
other income (including all expenses payable by Tenants) for up to 12 months; (iv) boiler
and machinery coverage for mechanical and electrical failure; (v) flood hazard insurance if
the Property is located in an area designated by the Federal Emergency Management Act if and
to the extent that the Property is located within an area that has been or is hereafter
designated or identified as an area having special flood hazards by the Department of
Housing and Urban Development or such other official as shall from time to time be
authorized by federal or state law to make such designation pursuant to any national or
state program of flood insurance, Borrower shall carry flood insurance with respect to the
Property in amounts not less than the maximum limit of coverage then available with respect
to the Property or the amount of the Obligations, whichever is less; (vi) worker’s
compensation insurance to the
full extent required by applicable law for all employees of Borrower engaged in any
work on or about the Property and employer’s liability insurance with a limit of not less
than $1,000,000 for each occurrence; and (vii) such other types of insurance or endorsements
to existing insurance as may be required from time to time by Lender in accordance with its
standard commercial lending practices. Borrower agrees that if Borrower shall change
insurers at any time during the term of the Loan or within two years thereof, Borrower shall
purchase a “prior acts” endorsement from the insurer or shall purchase an “extended
reporting” endorsement to continue coverage from the current insurer.

 

13

 

(b) All insurance maintained by Borrower pursuant to Section 3.01(a) shall (i) (except
for worker’s compensation insurance) name Lender as additional insured and/or loss payee, as
applicable, (ii) (except for worker’s compensation and public liability insurance) provide
that the proceeds for any losses shall be adjusted by Borrower subject to the approval of
Lender and from and after the occurrence of an Event of Default shall be payable to Lender,
to be held and applied as provided in Section 3.03, (iii) include effective waivers by the
insurer of all rights of subrogation against any named insured, the indebtedness secured by
this Instrument and the Collateral and all claims for insurance premiums against Lender,
(iv) provide that any losses shall be payable notwithstanding (A) any act, failure to act or
negligence of or breach of warranties, declarations or conditions contained in such policy
by any named insured, (B) the occupation or use of the Property for purposes more hazardous
than permitted by the terms thereof, (C) any foreclosure or other action or proceeding taken
by Trustee or Lender pursuant to any provision of this Instrument or (D) any change in title
or ownership of the Property, (v) provide that no cancellation, reduction in amount or
material change in coverage thereof or any portion thereof shall be effective until at least
30 days after receipt by Lender of written notice thereof, (vi) provide that any notice
under such policies shall be simultaneously delivered to Lender and (vii) be reasonably
satisfactory in all other respects to Lender. Any insurance maintained pursuant to Section
3.01 may be evidenced by blanket insurance policies covering the Property and other
properties or assets of Borrower, provided that any such policy shall specify the portion,
if less than all, of the total coverage of such policy that is allocated to the Property and
shall in all other respects comply with the requirements of Section 3.01. Borrower’s
obligation to maintain insurance coverage in accordance with the terms hereof shall not be
construed to limit the amount of indemnification or insurance proceeds available to Lender.

(c) Borrower will deliver to Lender, promptly upon request, the certificates of
insurance and, if requested by Lender, copies of all policies (certified by the issuer of
such policies as being true and accurate copies of the original policies), evidencing all
insurance required to be maintained under Section 3.01(a) (or, in the case of blanket
policies, certificates thereof by the insurers together with a counterpart of each blanket
policy). Borrower will also deliver to Lender not later than 30 days prior to the
expiration of any policy a binder or certificate of the insurer evidencing the replacement
thereof; provided that if Borrower does not deliver such replacement insurance at least 30
days prior to such expiration, failure to deliver such replacement insurance shall not be an
Event of Default hereunder unless and until the existing insurance actually lapses so long
as Borrower complies with each of the following: (i) Borrower has delivered notice to Lender
at least 30 days prior to such expiration that Borrower is unable to deliver such
replacement insurance at least 30 days prior to such expiration; (ii) Borrower provides
evidence reasonably acceptable to Lender that Borrower is using best efforts to obtain such
replacement insurance; and (iii) Borrower provides evidence reasonably acceptable to Lender
that Borrower has a good faith belief that such replacement insurance will be obtained prior
to expiration of the existing insurance.

(d) Borrower will not take out separate insurance concurrent in form or contributing in
the event of loss with that required to be maintained pursuant to Section 3.01.

Section 3.02. Damage, Destruction or Taking; Notice; Assignment of Awards. In case of any
damage to or destruction of the Collateral or any material part thereof or any taking, whether for
permanent or temporary use, of all or any part of the Collateral or any interest therein or right
accruing thereto, as the result of or in anticipation of the exercise of the right of condemnation
or eminent domain (a “Taking”), or the commencement of any proceedings or negotiations that may
result in a Taking, Borrower will promptly give written notice thereof to Lender, generally
describing the nature and extent of such damage, destruction or Taking and Borrower’s best estimate
of the cost of restoring the Collateral, or the nature of such proceedings or negotiations and the
nature and extent of the Taking that might result therefrom, as the case may be. Lender shall be
entitled to all insurance proceeds payable on

 

14

 

account of such damage or destruction and to all awards or payments
allocable to the Collateral on account of such Taking, and Borrower hereby irrevocably assigns,
transfers and sets over to Lender all rights of Borrower to any such proceeds, awards or payments
and irrevocably authorizes and, in the event Borrower has not filed for such proceeds by the first
to occur of (i) 10 Business Days prior to the expiration of the applicable time for such filing or
(ii) 30 days after damage to the Collateral or any Taking, empowers Lender, at its option, in the
name of Borrower or otherwise, to file and prosecute what would otherwise be Borrower’s claim for
any such proceeds, award or payment and to collect, receipt for and retain the same for disposition
in accordance with Section 3.03 or Section 3.04, as applicable. Borrower will pay all reasonable
costs and expenses, if any, incurred by Lender in connection with any such damage, destruction or
Taking and seeking and obtaining any insurance proceeds, awards or payments in respect thereof.

Section 3.03. Application of Insurance Proceeds. (a) Subject to Sections 3.03(b) and 3.04,
Lender may, from and after the occurrence of an Event of Default, in its sole discretion, apply all
amounts recovered under any insurance policy required to be maintained by Borrower hereunder in any
one or more of the following ways:

(i) to the payment of the reasonable costs and expenses incurred by Trustee or
Lender in obtaining any such insurance proceeds or awards, including the fees and
expenses of attorneys and insurance and other experts and consultants, the costs of
litigation, arbitration, mediation, investigations and other judicial,
administrative or other proceedings and all other out-of-pocket expenses;

(ii) to the payment of any Secured Obligation;

(iii) to fulfill any of the other covenants contained herein or in any other
Loan Document, in accordance therewith as Lender may determine after the occurrence
of a Default or an Event of Default;

(iv) to Borrower for application to the cost of restoring or replacing the
Collateral destroyed, damaged or taken; or

(v) to Borrower.

(b) Notwithstanding the provisions of subsection (a) of this Section to the contrary (but
subject to the provisions of Section 3.04), if each of the following conditions is satisfied,
Borrower shall apply insurance proceeds received by it to the restoration or replacement of the
Collateral, to the extent necessary for the restoration or replacement thereof:

(i) there shall then exist no uncured Default or Event of Default; and

(ii) Borrower shall furnish to Lender a certificate of an architect or engineer
reasonably acceptable to Lender stating (A) that the Collateral is capable of being
restored, prior to the maturity of the Note, to substantially the same condition as existed
prior to the casualty, (B) the insurance proceeds are sufficient for such restoration and
(C) the restoration or replacement is reasonably capable of being fully completed by no
later than six months prior to the latest Maturity Date for the Note.

(c) In the event that such insurance proceeds are to be utilized in the restoration or
replacement of the Collateral, Borrower shall use such amounts for such restoration or
replacement. In the event that, after the restoration or replacement of the Collateral, any
insurance proceeds shall remain, such amount shall be retained by Borrower.

(d) If, prior to the receipt by Borrower of such insurance proceeds, the Collateral
shall have been sold on foreclosure, Lender shall have the right to receive said insurance
proceeds to the extent of any deficiency found to be due upon such sale, with legal interest
thereon, but only to the extent of a deficiency judgment sought or recovered or denied, and
the reasonable attorneys’ fees, costs and disbursements incurred by Lender in connection
with the collection of such proceeds.

 

15

 

Section 3.04. Taking and Total Destruction. If all or any part of the Property is lost,
stolen, destroyed or damaged beyond repair (and the Property is not fully replaced to Lender’s
satisfaction) or a Taking shall occur, Lender shall apply all amounts recovered under any insurance
policy referred to in Section 3.01(a) and all awards received by it on account of any such Taking
as follows:

(a) first, to the payment of the reasonable costs and expenses incurred by Lender in
obtaining any such insurance proceeds or awards, including the fees and expenses of
attorneys and insurance and other experts and consultants, the costs of litigation,
arbitration, mediation, investigations and other judicial, administrative or other
proceedings and all other out-of-pocket expenses;

(b) second, to the payment of any Secured Obligation;

(c) third, to fulfill any of the other covenants contained herein or in the Loan
Documents in accordance with such Loan Documents as Lender may determine after the
occurrence of a Default or an Event of Default; and

(d) fourth, the balance, if any, to Borrower.

ARTICLE IV

EVENTS OF DEFAULT; REMEDIES

Section 4.01. Events of Default. Each of the following shall constitute an “Event of
Default” under this Instrument:

(a) The occurrence of an “Event of Default” as defined in the Note or in any other Loan
Document.

(b) The attachment of any Lien on any portion of the Collateral other than Permitted
Exceptions.

(c) Failure of Borrower to maintain insurance as required by Section 3.01.

(d) Borrower, Guarantor or any Tenant shall be or become insolvent, or admit in writing
its inability to pay its debts as they mature, or make an assignment for the benefit of
creditors; or any Borrower, Guarantor or any Tenant shall apply for or consent to the
appointment of any receiver, trustee or similar officer for it or for all or any substantial
part of its property; or such receiver, trustee or similar officer shall be appointed
without the application or consent of Borrower, Guarantor or any Tenant; or Borrower,
Guarantor or any Tenant shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the laws of any
jurisdiction; or any such proceeding shall be instituted (by petition, application or
otherwise) against Borrower, Guarantor or any Tenant.

(e) Borrower shall fail to perform any of its obligations under Section 2.02, 2.05 or
2.17;

(f) Borrower shall default in the due performance and observance of any other agreement
contained herein or in any other Loan Document (other than items set forth elsewhere in this
Section 4.01), and such default shall continue unremedied for a period of 30 days after
Borrower has actual knowledge thereof or has received notice by Lender thereof.

(g) The occurrence of an event of default or a breach or default, after the passage of
all applicable notice and cure or grace periods provided therefor, under any other Mortgage
(as defined in the Note), under any other Loan Document or any other similar agreement
between or among (i) Borrower or Guarantor and (ii) Lender or any of its affiliates or
subsidiaries;

 

16

 

(h) The occurrence of a default or an event of default (however defined) under any
instrument, agreement or other document evidencing or relating to any indebtedness or other
monetary obligation of Borrower, Guarantor or any of its or their affiliates or subsidiaries
having a principal amount (including, without limitation, the amount of any outstanding
letters of credit), individually or in the aggregate, in excess of $20,000,000.

(i) Any judgment or order for the payment of money (not paid or fully covered by
insurance maintained in accordance with the requirements of this Instrument and as to which
the relevant insurance company has acknowledged coverage) which could reasonably be expected
to result in a Material Adverse Effect shall be rendered against Borrower or Guarantor that
remains undischarged, unvacated, unbounded or unstayed for a period of 60 days.

(j) Guarantor shall repudiate, purport to revoke or fail to perform any of Guarantor’s
obligations under the Guaranty.

(k) Any representation or warranty made by Borrower or Guarantor in any Loan Document
or in any other document executed in connection herewith was untrue in any material respect
when made.

(l) The occurrence of any Change in Control.

(m) Subject to Section 4.20, any of the Leases shall terminate.

(n) Subject to Section 4.20, the occurrence of an event of default or a breach or
default (however defined), after the passage of all applicable notice and cure or grace
periods provided therefor, under any of the Leases.

Section 4.02. Acceleration. Following the occurrence of an Event of Default (other than an
Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender) described in subsection (d) of Section 4.01, all of the outstanding principal
amount of the Secured Obligations shall be due and payable, whereupon the full unpaid amount of
such Secured Obligations which shall be so declared due and payable shall be and become immediately
due and payable, without presentment, notice of dishonor, protest or further notice of any kind,
all of which are hereby expressly waived by Borrower. Following the occurrence of any other Event
of Default (other than an Event of default that has been waived in writing by Lender or confirmed
as having been cured in writing by Lender), Lender may, by notice to Borrower, declare all or any
portion of the outstanding principal amount of the Secured Obligations to be due and payable,
whereupon the full unpaid amount of the Loan and other Secured Obligations which shall be so
declared due and payable shall be and become immediately due and payable, without presentment,
notice of dishonor, protest or further notice of any kind, all of which are hereby expressly waived
by Borrower. Borrower will pay on demand all costs and expenses, including, without limitation,
reasonable attorneys’ fees and expenses of one counsel, incurred by or on behalf of Lender in
enforcing this Instrument, the Secured Obligations or the Loan Documents or occasioned by any Event
of Default hereunder or thereunder.

Section 4.03. Legal Proceedings; Foreclosure. Lender shall have rights, benefits and
remedies conferred or contemplated by the Deed of Trust Act. Notwithstanding the foregoing, Lender
may, at its option in its sole discretion, elect to foreclose this Instrument judicially as
authorized by A.R.S. § 33-807, as hereinafter provided. If an Event of Default shall have occurred
(other than an Event of default that has been waived in writing by Lender or confirmed as having
been cured in writing by Lender), Lender at any time may, at Lender’s sole discretion, proceed at
law or in equity or otherwise to enforce the payment of the Obligations and the Trustee shall have
the right to foreclose the Lien of this Instrument as against all or any part of the Collateral and
to have the same sold under the judgment or decree of a court of competent jurisdiction. Lender
and/or Trustee shall be entitled to recover in such proceedings all costs incident thereto,
including, without limitation, reasonable attorneys’ fees and expenses in such amounts as may be
fixed by the court.

 

17

 

Section 4.04. Power of Sale. If an Event of Default shall have occurred (other than an Event
of default that has been waived in writing by Lender or confirmed as having been cured in writing
by Lender), the Trustee or
Lender may (as permitted by law), at Lender’s sole discretion, sell, assign, transfer and
deliver the whole or, from time to time, any part of the Collateral, or any interest in any part
thereof, at any private sale or at public auction, with or without demand, advertisement or notice,
for cash, on credit or for other property, for immediate or future delivery, and for such price or
prices and on such terms as Trustee may determine, or as may be required by law. Without limiting
the authority granted in the immediately preceding sentence, Trustee shall, without demand on
Borrower, after the lapse of such time as may then be required by law, and notice of default and
notice of sale having been given as then required by law, sell the Collateral on the date and at
the time and place designated in the notice of sale, either as a whole or in separate parcels and
in such order as Trustee may determine, but subject to any statutory right of Borrower to direct
the order in which such property, if consisting of several known lots, parcels or interests, shall
be sold, at public auction to the highest bidder, the purchase price payable in lawful money of the
United States at the time of sale. Trustee, or the one conducting the sale may, for any cause
deemed expedient, postpone the sale from time to time until it shall be completed and, in every
such case, notice of postponement shall be given by public declaration thereof by such person at
the time and place last appointed for the sale; provided that, if the sale is postponed for longer
than 10 days beyond the day designated in the notice of sale, notice of sale and notice of the
time, date and place of sale shall be given in the same manner as the original notice of sale.
Trustee shall execute and deliver to the purchaser at any such sale a deed conveying the property
so sold, but without any covenant or warranty, express or implied. The recitals in such deed of
any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including
Lender, may bid at the sale.

Section 4.05. Deficiency. To the fullest extent allowable under Arizona law, Borrower hereby
expressly waives all provisions of Arizona law (including without limitation those specifically
referenced below) which might otherwise be construed, contrary to the terms of the Loan Documents,
to limit the liability of Borrower with respect to the Secured Obligations, and hereby expressly
agrees that no such provision of law shall be applied to such obligations. To that end, Borrower
expressly:

(a) agrees that the amount of any unpaid or unperformed Secured Obligations remaining
following any sale of collateral (hereinafter referred to as the “Deficiency”) shall be
determined solely by the purchase price (whether cash, credit bid, or otherwise, and net of
all costs and expenses of and relating to the sale) actually received for such collateral,
and waives all provisions of A.R.S. § § 12-1566, 33-725, 33-727 and 33-814 which might
otherwise determine the Deficiency by the “fair market value” of the collateral sold or by
any other valuation in excess of such actual net purchase price;

(b) waives all provisions of A.R.S. § § 33-814 which purport to limit the time within
which an action upon a Deficiency may be commenced, or to eliminate any Deficiency if such
an action is not commenced within such time limits, and agrees that such provisions shall
not apply to any Deficiency following a trustee’s sale under this Instrument;

(c) agrees that if, notwithstanding the foregoing express intention and agreement of
Borrower to the contrary, the provisions of A.R.S. § § 33-814 are held by a court to be
applicable, then:

(i) for purposes of A.R.S. § § 33-814(B), the ninety-day period within which an
action for a deficiency judgment may be brought shall not begin until the date of
the last trustee’s sale or other nonjudicial or judicial foreclosure sale of any
real or personal property collateral under any of Deeds of Trust which secure the
Secured Obligations, whether such collateral is located within or outside of the
State;

(ii) the phrase “full satisfaction of the obligation” in A.R.S. § § 33-814(D)
shall be construed to refer solely to the obligation of Borrower to repay the
indebtedness evidenced by the Note, and not to any separate and independent
obligations (A) of Borrower which were created by this Instrument (including,
without limitation, any covenants, agreements or indemnities which are expressly
stated to survive any foreclosures hereof) or which are created under or evidenced
or secured by any other Loan Document or any other document, instrument or agreement
executed in connection herewith, regardless of whether such separate and independent
obligations are secured hereby by virtue of any cross-collateralization or
cross-default provisions or otherwise, or (B) of any other person which is directly,
indirectly or contingently liable with respect to the Secured
Obligations (all such separate and independent obligations being referred to
herein as the “Separate Obligations”): and

 

18

 

(iii) notwithstanding any application of A.R.S. § § 33-814(D) to limit or bar
any action against Borrower with respect to the monetary indebtedness evidenced by
the Note following a trustee’s sale or sales of the entire Premises, such Section
shall not be applicable to, or in any way limit or impede any action with respect
to, such Separate Obligations or any collateral which might now or hereafter be
given by Borrower as security therefor;

(d) waives all rights of reinstatement following acceleration of the Secured
Obligations secured by this Instrument, including any which might otherwise be available
under A.R.S. § 33-813, it being agreed that Borrower has bargained for the notice and cure
rights given to Borrower hereunder and under the other Loan Documents; that such rights
provide Borrower with sufficient opportunity to prevent acceleration following a breach or
default which could become an Event of Default; and that Borrower has agreed in return to
waive any further right of reinstatement following acceleration should no cure be timely
made; and

(e) waives all rights of redemption Borrower might otherwise have under Arizona law
with respect to the Premises or any other collateral, whether by statute, by subrogation, or
otherwise, including without limitation any rights under A.R.S. § § 12-1281 thorough
12-1283.

Section 4.06. UCC Remedies. If an Event of Default shall have occurred (other than an Event
of default that has been waived in writing by Lender or confirmed as having been cured in writing
by Lender), Lender may exercise from time to time and at any time any rights and remedies available
to it under applicable law upon default in the payment of indebtedness, including, without
limitation, any right or remedy available to it as a secured party under the UCC. Borrower shall,
promptly upon request by Lender, assemble the Collateral, or any portion thereof generally
described in such request, and make it available to Lender at such place or places designated by
Lender and reasonably convenient to Lender. If Lender elects to proceed under the UCC to dispose
of portions of the Collateral, Lender, at its option, may give Borrower notice of the time and
place of any public sale of any such property, or of the date after which any private sale or other
disposition thereof is to be made, by sending notice by registered or certified first class mail,
postage prepaid, to Borrower at least 10 days before the time of the sale or other disposition. If
any notice of any proposed sale, assignment or transfer by Lender of any portion of the Collateral
or any interest therein is required by law, Borrower conclusively agrees that 10 days’ notice to
Borrower of the date, time and place thereof is reasonable.

Section 4.07. Trustee Authorized To Execute Deeds. Borrower irrevocably appoints Trustee
(which appointment is coupled with an interest) the true and lawful attorney of Borrower, in its
name and stead and on its behalf, for the purpose of effectuating any sale, assignment, transfer or
delivery for the enforcement hereof, whether pursuant to power of sale, foreclosure or otherwise in
connection with enforcing this Instrument after the occurrence of an Event of Default (other than
an Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender), to execute and deliver all such deeds, bills of sale, assignments, releases and
other instruments as may be designated in any such request.

Section 4.08. Purchase of Collateral by Lender. Lender may be a purchaser of the Collateral
or of any part thereof or of any interest therein at any sale thereof, whether pursuant to power of
sale, foreclosure or otherwise, and Lender may apply to the purchase price thereof the Secured
Obligations.

Section 4.09. Receipt a Sufficient Discharge to Purchaser. Upon any sale of the Collateral
or any part thereof or any interest therein, whether pursuant to power of sale, foreclosure or
otherwise, the receipt of Trustee or the officer making the sale under judicial proceedings shall
be a sufficient discharge to the purchaser for the purchase money, and such purchaser shall not be
obliged to see to the application thereof.

Section 4.10. Waiver of Appraisement, Valuation, Homestead. Borrower hereby waives, to the
fullest extent it may lawfully do so, the benefit of all appraisement, valuation, stay, extension
and redemption laws now or hereafter in force and all rights of marshalling in the event of any
sale of the Collateral or any part thereof or any interest therein. To the extent allowable by
law, Borrower hereby waives any and all rights to request or require an
appraisal of the Property. In the event of foreclosure pursuant to the provisions hereof,
Lender may, at Lender’s option, obtain an appraisal of the Property and any funds expended by
Lender for such propose shall become indebtedness of Borrower to Lender secured by this Instrument
and shall be paid by Borrower to Lender within 10 days of demand.

 

19

 

Section 4.11. Obligations to Become Due on Sale. Upon any sale of the Collateral or any
portion thereof or interest therein by virtue of the exercise of any remedy by Lender or Trustee
under or by virtue of this Instrument, whether pursuant to power of sale, foreclosure or otherwise
in accordance with this Instrument or by virtue of any other remedy available at law or in equity
or by statute or otherwise, at the option of Lender, all Secured Obligations shall, if not
previously declared due and payable, immediately become due and payable, together with interest
accrued thereon and all other indebtedness secured by this Instrument.

Section 4.12. Application of Proceeds of Sale and Other Moneys. The proceeds of any sale of
the Collateral or any part thereof or any interest therein under or by virtue of this Instrument,
whether pursuant to power of sale, foreclosure or otherwise, and all other moneys at any time held
by Lender or Trustee as part of the Collateral, shall be applied as follows:

FIRST, fees, expenses or indemnities to enforce this Instrument or then due to Lender or
Trustee;

SECOND, to pay Secured Obligations in respect of any other fees, expenses or indemnities then
due to Lender;

THIRD, to pay interest due in respect of the Loan;

FOURTH, to pay the principal outstanding with respect to the Loan;

FIFTH, to the payment of all other Secured Obligations; and

SIXTH, to Borrower.

Section 4.13. Appointment of Receiver. If an Event of Default shall have occurred (other
than an Event of default that has been waived in writing by Lender or confirmed as having been
cured in writing by Lender), Lender shall, as a matter of right and without regard to the adequacy
of any security for the Secured Obligations secured hereby or the solvency of Borrower, be entitled
to the appointment of a receiver for all or any part of the Collateral, whether such receivership
be incidental to a proposed sale of the Collateral or otherwise, and Borrower hereby consents to
the appointment of such a receiver and will not oppose any such appointment.

Section 4.14. Possession, Management and Income. If an Event of Default shall have occurred
(other than an Event of default that has been waived in writing by Lender or confirmed as having
been cured in writing by Lender), in addition to, not in limitation of, the rights and remedies
provided in Section 2.10, Lender, upon five days’ notice to Borrower, may enter upon and take
possession of the Collateral or any part thereof by force, summary proceeding, ejectment or
otherwise and may remove Borrower and all other persons and any and all property therefrom and may
hold, operate, maintain, repair, preserve and manage the same and receive all earnings, income,
Rents, issues and proceeds accruing with respect thereto or any part thereof. Lender shall be
under no liability for or by reason of any such taking of possession, entry, removal or holding,
operation or management.

Section 4.15. Right of Lender to Perform Borrower’s Covenants. During the continuance of an
Event of Default, Lender, without notice to or demand upon Borrower and without waiving or
releasing any obligation or Event of Default, may (but shall be under no obligation to) at any time
thereafter make such payment or perform such act for the account and at the expense of Borrower,
and may enter upon the Collateral for such purpose and take all such action thereon as, in Lender’s
opinion, may be necessary or appropriate therefor. No such entry and no such action shall be
deemed an eviction of any Tenant or other person with the right to use or occupy all or any portion
of the Property or any part thereof. After the occurrence of an Event of Default (other than an
Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender), all sums so paid by Lender and all costs and expenses (including, without
limitation, reasonable attorneys’ fees and expenses)
so incurred, together with interest thereon at the Default Rate from the date of payment or
incurring, shall constitute additional indebtedness secured by this Instrument and shall be paid by
Borrower to Lender within 10 days of demand.

 

20

 

Section 4.16. Subrogation. To the extent that Lender, on or after the date hereof, pays any
sum due under any provision of any legal requirement or any instrument creating any Lien prior or
superior to the Lien of this Instrument, or Borrower or any other person pays any such sum with the
proceeds of the Loan evidenced by the Note, Lender shall have and be entitled to a Lien on the
Collateral equal in priority to the Lien discharged, and Lender shall be subrogated to, and receive
and enjoy all rights and liens possessed, held or enjoyed by, the holder of such Lien, that shall
remain in existence and benefit Lender in securing the Obligations.

Section 4.17. Remedies Cumulative. Each right, power and remedy of Lender and Trustee
provided for in this Instrument or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every other right, power
or remedy provided for in this Instrument or the other Loan Documents, or now or hereafter existing
at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by
Lender or Trustee of any one or more of the rights, powers or remedies provided for in this
Instrument, or now or hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by Lender or Trustee of any or all such other rights,
powers or remedies.

Section 4.18. Provisions Subject to Applicable Law. All rights, powers and remedies provided
in this Instrument may be exercised only to the extent that the exercise thereof does not violate
any applicable provisions of law and are intended to be limited to the extent necessary so that
they will not render this Instrument invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law. If any term of this Instrument or
any application thereof shall be invalid or unenforceable, the remainder of this Instrument and any
other application of such term shall not be affected thereby.

Section 4.19. No Waiver, Compromise of Actions. No failure by Lender to insist upon the
strict performance of any term hereof or of any other Loan Documents, or to exercise any right,
power or remedy consequent upon a breach hereof or thereof, shall constitute a waiver of any such
term or of any such breach. No waiver of any breach shall affect or alter this Instrument, which
shall continue in full force and effect with respect to any other then existing or subsequent
breach. By accepting payment or performance of any amount or other Secured Obligation before or
after its due date, Lender shall not be deemed to have waived its right either to require prompt
payment or performance when due of all other amounts payable hereunder and the Secured Obligations
or to declare a default for failure to effect such prompt payment. Any action, suit or proceeding
brought by Lender pursuant to any of the terms of this Instrument, any Loan Document or otherwise,
and any claim made by Lender hereunder or thereunder may be compromised, withdrawn or otherwise
dealt with by Lender without any notice to or approval of Borrower.

Section 4.20. Provisions with Respect to the Leases. Notwithstanding the provisions of
Section 4.01(m) or Section 4.01(n) (each, an “Operator Default”) to the contrary, a termination of
any of the Leases or the occurrence of an event of default or a breach or default (however
defined), after the passage of all applicable notice and cure or grace periods provided therefor
(the “Cure Date”), under any of the Leases shall not constitute and Event of Default hereunder
provided that Borrower shall have complied with the each of following conditions (collectively, the
“Operator Substitution”) in form and substance satisfactory to Lender:

(a) Within 45 days of the Cure Date, Borrower shall have entered a new lease (the “New
Lease”) with a new tenant (the “New Tenant”) on substantially the same terms as the Lease
subject to the Operator Default.

(b) New Tenant shall be a wholly-owned subsidiary (direct or indirect) sub of
Guarantor.

(c) New Tenant’s management team is substantially the same as Tenant’s management team.

(d) Borrower and New Tenant shall have executed such instruments, agreements and other
documents necessary to protect Lender’s security interest in and Lien on the Collateral
(including, without
limitation, a subordination agreement with respect to the New Lease) and to ensure New
Tenant’s ability to maintain business operations on the Property (including, without
limitation, a management agreement with respect to the New Lease.

 

21

 

(e) Only one Operator Substitution shall be permitted with respect to the Property
during the term of the Loan.

(f) No Operator Substitution under any other Mortgage (as defined in the Note) shall
have been consummated within the 18-month period immediately preceding the Operator Default.

Upon satisfaction of the foregoing conditions and consummation of the Operator Substitution, the
New Lease shall be deemed to be a Lease under this Instrument, and the New Tenant shall be deemed
to be a Tenant under this Instrument.

ARTICLE V

MISCELLANEOUS

Section 5.01. Further Assurances; Financing Statements; Recordation.

(a) Borrower, at its expense, will execute, acknowledge and deliver all such
instruments and take all such other action as Lender from time to time may reasonably
request in order to further effectuate the purposes of this Instrument and to carry out the
terms hereof and to better assure and confirm to Lender its rights, powers and remedies
hereunder.

(b) Notwithstanding any other provision of this Instrument, Borrower hereby agrees
that, without notice to or the consent of Borrower, Lender may file with the appropriate
public officials such financing statements, continuation statements, amendments and similar
documents as are or may become necessary to perfect, preserve or protect the security
interest granted by this Instrument.

(c) Borrower, at its expense, will at all times cause this Instrument and any document,
agreement or instrument amendatory hereof or supplemental hereto or thereof (and any
appropriate financing statements or other instruments and continuations thereof), and each
other document, agreement and instrument delivered in connection with the Loan Documents and
intended thereunder to be recorded, registered and filed, to be kept recorded, registered
and filed, in such manner and in such places, and will pay all such recording, registration,
filing fees, taxes and other charges, and will comply with all such statutes and regulations
as may be required by law in order to establish, preserve, perfect and protect the Lien of
this Instrument as a valid, first mortgage lien and first priority perfected security
interest in the Collateral, subject only to the Permitted Exceptions. Borrower will pay or
cause to be paid, and will indemnify Lender in respect of, all taxes and other fees and
charges (including interest and penalties) at any time payable in connection with the filing
and recording of this Instrument and any and all supplements and amendments hereto.

Section 5.02. Additional Security. Without notice to or consent of Borrower, and without
impairment of the Lien and rights created by this Instrument, Lender may accept from Borrower or
any other person additional security for the Secured Obligations. Neither the giving of this
Instrument nor the acceptance of any such additional security shall prevent Lender from resorting,
first, to such additional security, or, first, to the security created by this Instrument, or
concurrently to both, in any case without affecting Lender’s Lien and rights under this Instrument.

 

22

 

Section 5.03. Provisions Regarding Trustee. Trustee shall not be liable for any error of
judgment or act done by Trustee, or be otherwise responsible or accountable under any circumstances
whatsoever. Trustee shall not be personally liable in case of entry by it or anyone acting by
virtue of the powers herein granted it upon the Collateral for debts contracted or liability or
damages incurred in the management or operation of the Collateral. All monies received by Trustee
shall, until used or applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other monies (except to the extent
required
by law) and Trustee shall be under no liability for interest on any monies received by it
hereunder. Trustee may resign by giving 30 days’ prior written notice of such resignation to
Lender. If Trustee shall die, resign or become disqualified from acting, or shall fail or refuse
to exercise its powers hereunder when requested by Lender so to do, or if for any reason and
without cause Lender shall prefer to appoint a substitute trustee to act instead of the original
Trustee named herein, or any prior successor or substitute trustee, Lender shall have full power to
appoint a substitute trustee and, if preferred, several substitute trustees in succession who shall
succeed to all the estate, rights, powers and duties of the aforenamed Trustee. Upon appointment
by Lender and upon recording of the substitution in the land records of Maricopa County, Arizona,
any new Trustee appointed pursuant to any of the provisions hereof shall, without any further act,
deed or conveyance, become vested with all the estates, properties, rights, powers and trusts of
its predecessor in the rights hereunder with the same effect as if originally named as Trustee
herein.

Section 5.04. Notices. All notices, certificates, requests, demands and other
communications provided for hereunder or under any Loan Document shall be in writing and shall be
(a) personally delivered or (b) sent by overnight courier of national reputation, and shall be
deemed to have been given on (i) the date received if personally delivered and (ii) the next
Business Day if sent by overnight courier. All communications shall be addressed to the party to
whom notice is being given at its address set forth in this Instrument.

Section 5.05. Waivers, Amendments. The provisions of this Instrument may be amended,
discharged or terminated only by an instrument in writing executed by Borrower and Lender, and the
observance or performance of any provision of this Instrument may be waived, either generally or in
a particular instance and either retroactively or prospectively, only by an instrument in writing
executed by Lender.

Section 5.06. Governing Law. THIS INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE, WITHOUT REGARD TO THE CONFLICT-OF-LAWS PRINCIPLES THEREOF.

Section 5.07. Successors and Assigns. This Instrument shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and assigns; provided,
however, that Borrower may not assign or transfer its rights or obligations hereunder without the
prior written consent of Lender.

Section 5.08. Waiver of Jury Trial. BORROWER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS INSTRUMENT, ANY
OF THE LOAN DOCUMENTS, ANY DEALINGS BETWEEN LENDER AND BORROWER RELATING TO THE SUBJECT MATTER OF
THE TRANSACTIONS CONTEMPLATED BY THIS INSTRUMENT OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LENDER AND BORROWER. BORROWER ACKNOWLEDGES AND
AGREES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS INSTRUMENT AND
THE OTHER LOAN DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS INSTRUMENT, ANY
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY
THIS INSTRUMENT OR ANY RELATED TRANSACTIONS. IN THE EVENT OF LITIGATION, THIS INSTRUMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

Section 5.09. Time of Essence. Time is of the essence with respect to Borrower’s obligations
under this Instrument.

 

23

 

Section 5.10. No Offset. Borrower’s obligation to make payments and perform all obligations,
covenants and warranties under this Instrument and under the other Loan Documents shall be absolute
and unconditional and shall not be affected by any circumstance, including without limitation any
setoff, counterclaim, abatement, suspension, recoupment, deduction, defense or other right that
Borrower or any guarantor may have or claim against
Lender or any entity participating in making the loan secured hereby. The foregoing
provisions of this section, however, do not constitute a waiver of any claim or demand which
Borrower or any guarantor may have in damages or otherwise against Lender or any other person, or
preclude Borrower from maintaining a separate action thereon; provided, however, that Borrower
waives any right it may have at law or in equity to consolidate such separate action with any
action or proceeding brought by Lender.

Section 5.11. Severability. Any provision of this Instrument or other Loan Documents that is
prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Instrument or such Loan Documents or affecting the validity or
unenforceability of such provision in any other jurisdiction.

Section 5.12. Release and Termination. Upon indefeasible payment in full of the principal of
and premium, if any, and interest on the Secured Obligations in accordance with the terms of this
Instrument, the Note and the other Loan Documents and all other sums payable hereunder and
thereunder by Borrower or Guarantor, this Instrument shall automatically terminate and shall be
(except as provided herein) null and void and of no further force and effect, and the Collateral
shall thereupon be, and be deemed to have been, reconveyed, released and discharged from this
Instrument without further notice on the part of either Borrower or Lender, but upon the request of
Borrower, Lender, at Borrower’s sole cost and expense, shall request Trustee execute a satisfaction
release or deed of reconveyance in recordable form and a termination of this Instrument and Trustee
shall recovey the Collateral without warranty to the person or persons legally entitled thereto.

[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]

 

24

 

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS INSTRUMENT SHOULD BE READ CAREFULLY
BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED
IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS INSTRUMENT ONLY
BY ANOTHER WRITTEN AGREEMENT.

IN WITNESS WHEREOF, Borrower has caused this Instrument to be duly executed as of the day and
year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	MOENIUM HOLDINGS LLC,	 	 
	 	 	a Nevada limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	The Ensign Group, Inc., a Delaware corporation, its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Gregory K. Stapley	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Gregory K. Stapley	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	Executive Vice President	 	 
	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	STATE OF CALIFORNIA

	 	 	)	 	 	 
	 

	 	 	) SS
	 	 
	COUNTY OF ORANGE

	 	 	)	 	 	 

The foregoing Instrument was acknowledged before me,
a notary public, on the 30th day of December, 2010 by Gregory K. Stapley, the Executive Vice President of The
Ensign Group, Inc., a Delaware corporation, on behalf of the corporation.

	 	 	 	 	 	 	 
	 	 	/s/ Patty Romero	 	 
	 	 	 	 	 
	 

	 	Notary Public
	 	 	 	 
	 

	 	My Commission Expires:	 	April 11, 2013	 	 
	 

	 	 	 	 	 	 

[EXECUTION PAGE OF COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT,

ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING]

 

 

 

Prepared by, recording requested by,

and after recording return to:

Sean Gillen, Esq.

Kutak Rock LLP

The Omaha Building

1650 Farnam Street

Omaha, NE 68102

COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT

OF LEASES AND RENTS AND FIXTURE FILING

	 	 	 
	GRANTOR:

	 	POLK HEALTH HOLDINGS LLC, a Nevada limited liability company
	 
	 	 
	TRUSTEE:

	 	FIDELITY NATIONAL TITLE INSURANCE COMPANY, a California corporation
	 
	 	 
	BENEFICIARY:

	 	RBS ASSET FINANCE, INC., a New York corporation
	 
	 	 
	PROPERTY:

	 	4001 Highway 49 North, Livingston, TX 77351

Dated: December 31, 2010

NOTICE: THE DEBT SECURED HEREBY IS SUBJECT TO CALL IN FULL OR THE TERMS THEREOF BEING MODIFIED IN
THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY HEREIN CONVEYED.

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE
FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:
YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

THIS DEED OF TRUST, TOGETHER WITH THE NOTE AND OTHER LOAN DOCUMENTS AS THAT TERM IS DEFINED HEREIN,
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN IN THE EVENT OF ANY CONFLICT BETWEEN THE
TERMS OF THIS DEED OF TRUST AND CHAPTER 51 OF THE TEXAS PROPERTY CODE, THE TERMS OF CHAPTER 51 OF
THE TEXAS PROPERTY CODE SHALL CONTROL.

THIS COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE
FILING, dated as of December 31, 2010 (this “Instrument”), made by the trustor, POLK HEALTH
HOLDINGS LLC, a Nevada limited liability company (together with its successors and assigns,
“Borrower”), with Federal Tax Identification Number 14-1957383 and Organizational Identification
Number E0254922006-6, having an address at 4001 Highway 49 North, Livingston, TX 77351, in
favor of FIDELITY NATIONAL TITLE INSURANCE COMPANY, a California corporation (together with its
successors and assigns, “Trustee”), whose address is 1300 Dove Street, Suite 310, Newport Beach, CA
92660, for the benefit of the Beneficiary, RBS ASSET FINANCE, INC., a New York corporation
(together with its successors and assigns, “Lender”), having an address at 71 S. Wacker Drive,
Suite 2800, Chicago, IL 60606.

 

 

 

W I T N E S S E T H  T H A T:

WHEREAS, Borrower is on the date of delivery hereof the holder of a fee simple estate in the
parcel or parcels of land described in Schedule 1 hereto (the “Land”) and of the Improvements (as
defined below); and

WHEREAS, Lender has made a loan (the “Loan”) to Borrower evidenced by that certain Note as
more particularly described below; and

WHEREAS, this Instrument is given by Borrower to secure: (a) the Note dated as of the date
hereof (the “Note”) executed by Borrower in the original principal amount of $35,000,000 and with a
scheduled maturity date of January 1, 2018, together with any renewals, extensions or modifications
thereof; (b) the payment and performance of all obligations of Borrower owed to Lender under the
Loan Documents (as defined below), whether now existing or hereafter arising, including, without
limitation, any renewal, extension or modification thereof and all future advances and readvances
that may subsequently be made to Borrower by Lender under the Loan Documents (collectively, the
“Obligations”); (c) the payment and performance of all obligations under any other document or
instrument that recites that it is secured hereby, whether now existing or hereafter arising,
including, without limitation, any renewal, extension or modification thereof; and (d) the payment
and performance of all obligations of Borrower or Guarantor owed to Lender, whether now existing or
hereafter arising ((a) through (d) are referred to herein as the “Secured Obligations”); and

WHEREAS, as a condition precedent to Lender making the Loan, Borrower is required to execute
and deliver this Instrument for the benefit of Lender to secure the payment and performance of the
Secured Obligations; and

WHEREAS, Borrower has duly authorized the execution, delivery and performance of this
Instrument.

G R A N T:

NOW, THEREFORE, for and in consideration of the premises, and of the mutual covenants herein
contained, and in order to induce Lender to make the Loan to Borrower, and in order to secure the
full, timely and proper payment and performance of and compliance with each and every one of the
Secured Obligations, Borrower hereby irrevocably grants, bargains, sells, mortgages, warrants,
aliens, demises, releases, hypothecates, pledges, assigns, transfers, conveys and grants a security
interest in and to Trustee, in trust, WITH THE POWER OF SALE, all of Borrower’s estate, right,
title and interest, if any, now or hereafter arising, in and to the following (collectively, the
“Collateral”):

(a) Premises. The Land, together with all tenements, rights, easements, hereditaments,
rights of way, privileges, liberties, appendages and appurtenances now or hereafter
belonging or in anywise pertaining to the Land (including, without limitation, all rights
relating to storm and sanitary sewer, water, gas, electric, railway and telephone services);
all development rights, air rights, riparian rights, water, water rights, water stock, all
rights in, to and with respect to any and all oil, gas, coal, minerals and other substances
of any kind or character underlying or relating to the Land and any interest therein; any
street, road, highway or alley, vacated or other, adjoining the Land or any part thereof;
all strips and gores belonging, adjacent or pertaining to the Land; and any after-acquired
title to any of the foregoing (collectively, the “Premises”);

 

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(b) Improvements. All buildings, structures and other improvements and any additions
and alterations thereto or replacements thereof, now or hereafter built, constructed or
located upon the Premises; and all furnishings, fixtures, fittings, appliances, apparatus,
equipment, machinery, building and construction materials and other articles of property of every kind and nature
whatsoever, now or hereafter affixed or attached to, erected on or used in connection with
the operation of the Premises or such buildings, structures and other improvements,
including, without limitation, all partitions, furnaces, boilers, oil burners, radiators and
piping, plumbing and bathroom fixtures, refrigeration, heating, ventilating, air
conditioning and sprinkler systems, other fire prevention and extinguishing apparatus and
materials, vacuum cleaning systems, gas and electric fixtures, incinerators, compactors,
elevators, engines, motors, generators and all other articles of property that are
considered fixtures under applicable law (collectively together with all additions and
accessions thereto and all replacements and substitutions thereof, the “Improvements”; the
Premises and the Improvements are collectively referred to herein as the “Property”);

(c) Leases. All leases, licenses, occupancy agreements, concessions and other
arrangements, oral or written, now existing or hereafter entered into (including, without
limitation, the leases listed on Schedule 3 hereto), whereby any person agrees to pay money
or any other consideration for the use, possession or occupancy of, or any estate in, the
Property or any portion thereof or interest therein (collectively, the “Leases”);

(d) Permits and Approvals. To the extent assignable under applicable law, all permits,
franchises, licenses, approvals and other authorizations respecting the use, occupation or
operation of the Property or any part thereof and respecting any business or other activity
conducted on or from the Property, and any product or proceed thereof or therefrom,
including, without limitation, all building permits, certificates of occupancy and other
licenses, permits and approvals issued by governmental authorities having jurisdiction;

(e) Rents. All rents, issues, profits, royalties, avails, income, proceeds and other
benefits derived or owned, directly or indirectly, by Borrower from the Collateral,
including, without limitation, all rents and other consideration payable by Tenants, claims
against guarantors, any guaranties with respect to any Tenant’s obligations under any Lease
and any cash or other securities deposited to secure performance by Tenants, under the
Leases (collectively, “Rents”);

(f) Plans. To the extent assignable under applicable law, all plans, specifications,
contracts and agreements relating to the design or construction of the Improvements, any
payment, performance, or other bond provided in connection with the design or construction
of the Improvements, all contracts, agreements and purchase orders with contractors,
subcontractors, suppliers and materialmen incidental to the design or construction of the
Improvements, all other contracts and agreements pertaining to or affecting the Property,
including, without limitation, all options or contracts to acquire other property for use in
connection with operation or development of the Property and management contracts, service
or supply contracts with respect to the Property;

(g) Trademarks and Trade Names. All trademarks, trade names, symbols, assumed names,
and other rights and interest in and to the name and marks used by Borrower in connection
with the Property, together with the goodwill associated therewith;

(h) Deposits. Any moneys on deposit with or for the benefit of Lender in connection
with any of the Collateral, including deposits for the payment of real estate taxes, public
assessments and repairs;

(i) Claims. All claims, demands, judgments, insurance proceeds, awards of damages and
settlements hereafter made resulting from the taking of the Property or any portion thereof
under the power of eminent domain, or for any damage (whether caused by such taking, by
casualty or otherwise) to the Property or any portion thereof;

(j) Other Rights. All other property and rights of Borrower relating to any of the
foregoing; and

 

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(k) Addition; Replacements; Proceeds. All additions, accessions, replacements,
substitutions, proceeds and products of the property, tangible and intangible, described
herein.

AND, without limiting any of the other provisions of this Instrument, Borrower expressly
grants to Lender, as secured party, a security interest in all of those portions of the Collateral
that are or may be subject to the UCC provisions applicable to secured transactions; and

TO HAVE AND TO HOLD the Collateral unto Trustee for the benefit of Lender.

PROVIDED, HOWEVER, that nothing contained herein shall create an obligation on the part of
Lender to make future advances or readvances to Borrower; and

PROVIDED, FURTHER, that the total amount of the Secured Obligations and advances at any one
time secured hereby shall in no event exceed $70,000,000, plus interest thereon and all charges and
expenses of collection incurred by Lender, including court costs and attorneys’ fees and expenses
and advancements for taxes, insurance premiums, public assessments and repairs, if any; and

FURTHER to secure the full, timely and proper payment and performance of the Secured
Obligations, Borrower hereby covenants and agrees with and warrants to Trustee for the benefit of
Lender as follows:

ARTICLE I

DEFINITIONS

The following terms shall have the following meanings for all purposes of this Instrument, and
capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms
in the Note:

“Business Day” means any day on which Lender is open for business and is neither a Saturday
nor Sunday nor a legal holiday on which banks are authorized or required to be closed in New York,
New York or Chicago, Illinois.

“Change of Control” means a change in control of Borrower or Guarantor, including, without
limitation, a change in control resulting from direct or indirect transfers of voting stock or
partnership, membership or other ownership interests, whether in one or a series of transactions.
“Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of Borrower or Guarantor, and a Change of Control shall
occur if any of the following occurs: (a) any person or group (as such term is used in Section
13(d)(3) of the Exchange Act) acquires, after the date of this Instrument, the beneficial ownership
directly or indirectly, of 50% or more of the voting power of the total outstanding stock or other
ownership interests of Borrower or Guarantor or (b) Guarantor ceases to own 100% of the outstanding
membership interests of Borrower.

“Default” means any Event of Default or any condition, occurrence or event that, after notice
or lapse of time or both, would constitute an Event of Default.

“Environmental Indemnity Agreement” means the Environmental Indemnity Agreement dated as of
the date hereof executed by Borrower for the benefit of Lender, and any amendment or supplement
thereto.

“Environmental Laws” means (i) all Federal Toxic Waste Laws, (ii) all local, State or foreign
laws, statutes, regulations, or ordinances analogous to any of the Federal Toxic Waste Laws and
(iii) all other federal, State or local laws (including any common law, consent decrees and
administrative orders), statutes, regulations or ordinances regulating, permitting, prohibiting or
otherwise restricting the placement, discharge, release, generation, treatment or disposal upon or
into any environmental media of any substance, pollutant, contaminant or waste that is now or
hereafter classified or considered to be hazardous or toxic; “Environmental Laws” shall also
include any and all amendments to any of (i), (ii) or (iii).

“Event of Default” has the meaning set forth in Section 4.01.

 

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“Federal Toxic Waste Laws” means any federal law or implementing regulation regulating any
substance, matter, material, waste, contaminant or pollutant, the generation, storage, disposal,
handling, release, treatment, discharge or emission of which is regulated, prohibited or limited,
including, without limitation: (i) the Resource Conservation and Recovery Act, as amended by the
Hazardous and Solid Waste Amendments of 1984, as now or hereafter amended (42 U.S.C. Section 6901
et seq.), (ii) the Comprehensive Environmental Response, Compensation and Liability Act, as amended
by the Superfund Amendments and Reauthorization Act of 1986, as now or hereafter amended (42 U.S.C.
Section 9601 et seq.), (iii) the Clean Water Act, as now or hereafter amended (33 U.S.C. Section
1251 et seq.), (iv) the Toxic Substances and Control Act, as now or hereafter amended (15 U.S.C.
Section 2601 et seq.) and (v) the Clean Air Act, as now or hereafter amended (42 U.S.C. Section
7401 et seq.).

“GAAP” means generally accepted accounting principles in the United States applied on a
consistent basis.

“Guarantor” means The Ensign Group, Inc., a Delaware corporation.

“Guaranty” means the Guaranty of even date herewith executed by Guarantor for the benefit of
Lender, pursuant to which, among other things, Guarantor has guaranteed the payment and performance
obligations of Borrower under the Loan Documents.

“Hazardous Material” means (a) any “hazardous substance” as defined by Environmental Laws, (b)
any hazardous waste” as defined by Environmental Laws, (c) any petroleum product including, without
limitation, waste oil, used oil or wastewater containing petroleum product, (d) any asbestos or
material containing asbestos and (e) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any Environmental Law relating to or imposing
liability or standards of conduct.

“Impositions” has the meaning set forth in Section 2.04.

“Indemnified Liabilities” has the meaning set forth in Section 2.12.

“Indemnified Parties” has the meaning set forth in Section 2.12.

“Loan Documents” means, collectively, this Instrument, the Note and each other instrument or
document executed or delivered pursuant to or in connection with this Instrument and the other Loan
Documents, including, without limitation, any instrument or agreement given to evidence or further
secure the Obligations.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, properties or financial condition of Borrower or Guarantor, (b) the ability of Borrower
to perform or pay its Obligations or any material indebtedness in accordance with the terms
thereof, (c) the ability of Guarantor to perform its obligations under the Guaranty, (d) Lender’s
Lien on the Collateral or the priority of such Lien or (e) the validity or enforceability of any
Loan Document or the rights and remedies available to Lender under any Loan Document.

“Permitted Exceptions” means the exceptions set forth in Schedule 2 hereto.

“Property” has the meaning set forth in the granting clause.

“Premises” has the meaning set forth in the granting clause.

“Release” means a “release” or “threatened release” as such terms are defined in Environmental
Laws of a Hazardous Material.

“Rents” has the meaning set forth in the granting clause.

“State” means the State of Texas.

“Taking” has the meaning set forth in Section 3.02.

 

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“Tenant” means any tenant of the Property, and its successors and assigns.

“UCC” means the Uniform Commercial Code as enacted in the State.

ARTICLE II

COVENANTS AND AGREEMENTS OF BORROWER

Section 2.01. Payment and Performance of Obligations. Borrower agrees that it will duly and
punctually pay and perform or cause to be paid and performed each of the Secured Obligations at the
time and in accordance with the terms specified in the Loan Documents.

Section 2.02. Title to Collateral. Borrower represents and warrants to Lender that:

(a) as of the date hereof and at all times hereafter while this Instrument is
outstanding, Borrower is and shall be the sole, absolute owner and holder of the fee simple
estate in the Property and the absolute owner of the legal and beneficial title to all other
property included in the Collateral, subject in each case only to this Instrument and
Permitted Exceptions;

(b) Borrower has good and lawful right, power and authority to execute this Instrument
and to convey, transfer, assign, mortgage and grant a security interest in the Collateral,
all as provided herein;

(c) this Instrument has been duly executed, acknowledged and delivered on behalf of
Borrower, all consents and other actions required to be taken by the officers, directors,
shareholders, managers and partners, as the case may be, of Borrower have been duly and
fully given and performed and this Instrument constitutes the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its terms; and

(d) Borrower, at its expense, will and hereby does warrant and defend to Lender and any
purchaser under the power of sale herein or at any foreclosure sale such title to the
Collateral (as described in subsection (a) of this Section) and the first mortgage lien and
first priority perfected security interest of this Instrument thereon and therein against
all claims and demands and will maintain, preserve and protect such Lien (as defined below)
and will keep this Instrument a valid, first mortgage lien of record on and a first priority
perfected security interest in the Collateral, subject only to the Permitted Exceptions.

(e) Borrower has duly paid in full all fees, premiums and other charges due in
connection with (i) the recording of this Instrument and the issuance of a loan policy or
policies of title insurance in form and amount satisfactory to Lender naming Lender as the
insured, insuring the title to and the first lien of this Instrument on the Property with
endorsements reasonably requested by Lender and (ii) a survey of the Property in form and
substance acceptable to Lender and title insurer.

Section 2.03. Title Insurance. All proceeds received by and payable to Lender for any loss
under any loan policy or policies of title insurance delivered to Lender shall be the property of
Lender and shall be applied by Lender in accordance with the provisions of Section 3.03 or 3.04, as
applicable.

Section 2.04. Impositions. Borrower will pay or cause to be paid all taxes, insurance
premiums, assessments, water and sewer rates, ground rents, fees and other charges (collectively,
the “Impositions”) that at any time may be assessed, levied, confirmed or imposed or that may
become a Lien upon the Collateral, or any portion thereof, or that are payable with respect
thereto, prior to delinquency, before any fine, penalty or interest may be added for non-payment
and before the commencement of any action to foreclose any Lien against all or any portion of the
Collateral with respect thereto. Borrower will deliver to Lender, upon request, copies of official
receipts or other satisfactory proof evidencing such payments. Borrower shall not be entitled to
any credit against the Secured Obligations by reason of the payment of any Imposition.

 

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Upon the occurrence of an Event of Default (hereinafter defined), and at Lender’s sole option
at any time thereafter, Borrower shall pay in addition to each monthly payment under the Note,
one-twelfth of the Impositions payable during each year (as estimated by Lender in its sole
discretion), to be held by Lender without interest to Borrower, for the payment of such
obligations. If the amount of such additional payments held by Lender (the “Funds”) at the time of
the annual accounting thereof shall exceed the amount deemed necessary by Lender to provide for the
payment of Impositions as they fall due, such excess shall be at Borrower’s option, either repaid
to Borrower or credited to Borrower on the next monthly installment or installments of Funds due.
If at any time the amount of the Funds held by Lender shall be less than the amount deemed
necessary by Lender to pay Impositions as they fall due, Borrower shall pay to Lender any amount
necessary to make up the deficiency within 30 days after notice from Lender to Borrower requesting
payment thereof. Lender may apply, in any amount and in any order as Lender shall determine in
Lender’s sole discretion, any Funds held by Lender at the time of application (i) to pay
Impositions which are now or will hereafter become due or (ii) as a credit against the Secured
Obligations. Upon payment in full of the Secured Obligations, Lender shall refund to Borrower any
Funds held by Lender.

Section 2.05. Liens. Borrower will not directly or indirectly create or permit or suffer to
be created or to remain, and will promptly discharge or cause to be discharged, any deed of trust,
mortgage, encumbrance or charge on, pledge of, security interest in or conditional sale or other
title retention agreement with respect to or any other lien on or in the Collateral or any part
thereof or the interest of Borrower or Lender therein (herein, “Liens”), or any proceeds or Rents
or other sums arising therefrom other than Permitted Exceptions.

Section 2.06. Compliance with Instruments. Borrower, at its expense, will promptly comply
with all rights of way or use, privileges, franchises, servitudes, licenses, easements, tenements,
hereditaments and appurtenances forming a part of the Collateral and all instruments creating or
evidencing the same, in each case, to the extent compliance therewith is required of Borrower under
the terms thereof. Borrower will not terminate, forfeit or materially amend rights afforded to
Borrower under any such instruments, without the prior written consent of Lender.

Section 2.07. Maintenance and Repair. Subject to ordinary wear and tear, Borrower will keep
or cause to be kept all presently and subsequently erected or acquired Improvements and the
sidewalks, curbs, vaults and vault space, if any, located on or adjoining the same, and the streets
and the ways adjoining the same, in good and substantial order and repair and in such a fashion
that the value and utility of the Collateral will not be materially diminished, and, at its sole
cost and expense, will promptly make or cause to be made all necessary and appropriate repairs,
replacements and renewals thereof, whether interior or exterior, structural or nonstructural,
ordinary or extraordinary, foreseen or unforeseen, so that its business carried on in connection
therewith may be properly conducted at all times. All repairs, replacements and renewals shall be
equal or greater in quality and class to the original Improvements. Borrower, at its expense, will
do or cause to be done all shoring of foundations and walls of any building or other Improvements
on the Premises and (to the extent permitted by law) of the ground adjacent thereto, and every
other act necessary or appropriate for the preservation and safety of the Property by reason of or
in connection with any excavation or other building operation upon the Premises and upon any
adjoining property, whether or not Borrower shall be required to take such action or be liable for
failure to do so.

Section 2.08. Alterations, Additions. Borrower shall not make or cause to be made any
alterations of and additions to the Property or any part thereof without prior written consent of
Lender, which consent shall not be unreasonably withheld; provided, however, that Borrower may make
nonstructural additions to the Property costing less than $1,000,000 per year without Lender’s
consent so long as such additions do not diminish the value of the Property. If Lender consents to
any alterations or additions to the Property, such alterations or additions shall be made at
Borrower’s sole expense by a licensed contractor and according to the plans and specifications
approved by Lender and subject to any other conditions required by Lender. Any work commenced on
the Property shall be diligently completed, shall be of good workmanship and materials and shall
comply with the terms of this Instrument. Upon the completion of any alterations or additions,
Borrower shall promptly provide Lender with (a) evidence of full payment to all laborers,
materialmen contributing to the alterations or additions, (b) an architect’s certificate certifying
the alterations conform to the plans and specification approved by Lender, (c) a certificate of
occupancy (if such alterations or additions require the issuance thereof) and (d) any other
documents or information reasonably requested by Lender.

 

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Section 2.09. Acquired Property Subject to Lien. All right, title and interest of Borrower
in and to all alterations, improvements, substitutions, restorations and replacements of, and all
additions and appurtenances to, the Property hereafter acquired by Borrower, whether such property
is acquired by exchange, purchase, construction or otherwise, shall forthwith become subject to the
Lien of this Instrument without further action on the part of Borrower or Lender. Upon the request
of Lender, Borrower, at its expense, will execute and deliver (and will record and file as provided
herein) an instrument or document supplemental to this Instrument satisfactory in substance and
form to Lender, whenever such an instrument or document is necessary under applicable law to
subject to the Lien of this Instrument all right, title and interest of Borrower in and to all
property provided or required by this Instrument to be subject to the Lien hereof.

Section 2.10. Assignment of Rents and Leases.

(a) The assignment, grant and conveyance of the Leases, Rents and all other rents,
income, proceeds and benefits of the Collateral contained in the granting clause of this
Instrument shall constitute an absolute, present and irrevocable assignment, grant and
conveyance, provided that, until an Event of Default has occurred, a license is hereby given
to Borrower to collect, receive and apply Rents, as they become due and payable, but not in
advance thereof, and in accordance with all of the other terms, conditions and provisions
hereof and of the Leases, contracts, agreements and other instruments with respect to which
such payments are made. Upon the occurrence of an Event of Default, such license shall be
revoked and shall terminate, immediately and automatically without notice to Borrower or any
other person (to the extent permitted by law), and shall not be reinstated upon a cure of
such Event of Default without the express written consent of Lender. Such assignment shall
be fully effective without any further action on the part of Borrower or Lender, and Lender
shall be entitled, at its option, upon the occurrence of an Event of Default hereunder, to
collect, receive and apply all Rents and all other rents, income, proceeds and benefits from
the Collateral, including all right, title and interest of Borrower in any escrowed sums or
deposits or any portion thereof or interest therein, whether or not Lender takes possession
of the Collateral or any part thereof. The collection of such amounts by Lender shall in no
way waive the right of Lender to foreclose this Instrument in the event of any Event of
Default. Nothing contained herein and no exercise of any right or privilege hereunder by
Lender shall be construed to constitute Lender as a mortgagee-in-possession. All Rents and
all other rents, income, proceeds and benefits of the Collateral received by Borrower from
or related to the Collateral or any part thereof, from and after the occurrence of an Event
of Default, shall be deemed received in trust and shall be turned over to Lender within one
Business Day after Borrower’s receipt thereof. Borrower further grants to Lender the right,
at Lender’s option, to:

(i) enter upon and take possession of the Property for the purpose of
collecting Rents and all other rents, income, proceeds and other benefits;

(ii) dispossess by the customary summary proceedings any Tenant, purchaser or
other person defaulting in the payment of any amount when and as due and payable, or
in the performance of any other obligation, under the Leases, contract or other
instrument to which said Rents or other rents, income, proceeds or benefits relate;

(iii) let or convey the Collateral or any portion thereof or any interest
therein; and

(iv) apply Rents and such other rents, income, proceeds and benefits, after the
payment of all necessary fees, charges and expenses, on account of the Secured
Obligations in accordance with Section 3.03.

(v) Lender shall be under no obligation to exercise or prosecute any of the
rights or claims assigned to it hereunder or to perform or carry out any of the
obligations of the lessor under any of the Leases and does not assume any of the
liabilities in connection with or arising or growing out of the covenants and
agreements of Borrower in the Leases. It is further understood that the assignment
granted hereunder shall not operate to place responsibility for the control, care,
management or repair of the Property, or parts thereof, upon Lender, nor shall it
operate to make Lender liable for the performance of any of the terms and conditions
of any of the Leases, or for any waste of the Property by any Tenant under any of the Leases or any other
person, or for any dangerous or defective condition of the Property or for any
negligence in the management, upkeep, repair or control of the Property resulting in
loss or injury or death to any lessee, licensee, employee or stranger.

 

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(b) Borrower represents, warrants, covenants and agrees with Lender that, other than as
set forth on Schedule 3, there are no existing Leases, and Borrower will not enter into any
other Lease without the prior written consent of Lender.

(c) Borrower hereby irrevocably appoints Lender its true and lawful attorney-in-fact
with power of substitution and with full power for Lender in its own name and capacity or in
the name and capacity of Borrower, from and after the occurrence and during the continuance
of an Event of Default, to demand, collect, receive and give complete acquittances for any
and all Rents accruing from the Property that Lender may deem necessary or desirable in
order to collect and enforce the payment of the Rents and to demand, correct, receive,
endorse, and deposit all checks, drafts, money orders or notes given in payment of such
Rents. Such appointment is coupled with an interest and is irrevocable. Lender shall not
be liable for or prejudiced by any loss of any note, checks, drafts, etc., unless such loss
shall have been found by a court of competent jurisdiction to have been due to the gross
negligence or willful misconduct of Lender. Borrower also hereby irrevocably appoints
Lender as its true and lawful attorney-in-fact to appear in any state or federal bankruptcy,
insolvency, or reorganization proceeding in any state or federal court involving any of the
Tenants of the Leases. Lessees of the Property are hereby expressly authorized and
directed, from and after service of a notice by Lender to pay any and all amounts due
Borrower pursuant to the Leases to Lender or such nominee as Lender may designate in writing
delivered to and received by such Tenants, and such Tenants are expressly relieved of any
and all duty, liability or obligation to Borrower in respect of all payments so made.

Section 2.11. No Claims Against Lender. Nothing contained in this Instrument shall
constitute any consent or request by Lender, express or implied, for the performance of any labor
or the furnishing of any materials or other property in respect of the Property or any part
thereof, or be construed to permit the making of any claim against Lender in respect of labor or
services or the furnishing of any materials or other property or any claim that any Lien based on
the performance of such labor or the furnishing of any such materials or other property is prior to
the Lien of this Instrument. Borrower shall make all contractors, subcontractors, vendors and
other persons dealing with the Property, or with any persons interested therein, take notice of the
provisions of this Section.

Section 2.12. Indemnification.

(a) Whether or not covered by insurance, Borrower hereby assumes responsibility for and
agrees to reimburse Lender, its affiliates and its and their respective officers, directors,
employees and agents (individually and collectively, the “Indemnified Parties”) for and will
indemnify, defend and hold the Indemnified Parties harmless from and against any and all
liabilities, obligations, losses, damages, penalties, claims, suits, actions, proceedings,
judgments, awards, amounts paid in settlements, debts, diminutions in value, fines,
penalties, charges, fees, costs and expenses (including reasonable attorneys’ fees and
expenses) of whatsoever kind and nature, imposed on, incurred by or asserted against any
Indemnified Party that in any way relate to or arise out of any of the Loan Documents, the
transactions contemplated thereby and the Collateral, including, without limitation, (i) the
selection, manufacture, construction, acquisition, acceptance or rejection of the
Collateral, (ii) the ownership of the Collateral, (iii) the delivery, installation, lease,
possession, maintenance, use, condition, return or operation of the Collateral, (iv) the
condition of the Collateral sold or otherwise disposed of after possession by Borrower, (v)
any patent or copyright infringement, (vi) any act or omission on the part of Borrower,
Guarantor or any of its or their officers, employees, agents, contractors, lessees,
licensees or invitees, (vii) any misrepresentation or inaccuracy in any representation or
warranty of Borrower or Guarantor, or a breach of Borrower or Guarantor of any of its
covenants or obligations under any of the Loan Documents, (viii) any claim, loss, cost or
expense involving alleged damage to the environment relating to the Collateral, including,
without limitation, investigation, removal, cleanup and remedial costs, (ix) any personal
injury, wrongful death or property damage arising under any statutory or common law or tort
law theory, including, without limitation, damages assessed

 

9

 

for the maintenance of a private
or public nuisance or for the conducting of an abnormally dangerous activity on or near the Collateral, (x) any
past, present or threatened injury to, or destruction of, the Collateral, including, without
limitation, costs to investigate and assess such injury or damage, (xi) any administrative
process or proceeding or judicial or other similar proceeding (including, without
limitation, any alternative dispute resolution process and any bankruptcy proceeding) in any
way connected with any matter addressed in any of the Loan Documents, (xii) any use, non-use
or condition of the Property or any part thereof or the adjoining sidewalks, curbs, vaults
and vault spaces, if any, streets, alleys or ways, (xiii) performance of any labor or
services or the furnishing of any materials or other property in respect of the Collateral
or any part thereof made or suffered to be made by or on behalf of Borrower or any Tenant,
(xiv) any work in connection with any alterations, changes, new construction or demolition
of or additions to the Property or (xv)(A) any Hazardous Materials on, in, under or
affecting all or any portion of the Property, the groundwater, or any surrounding areas, (B)
any violation or claim of violation by Borrower or any Tenant of any Environmental Laws or
(C) the imposition of any Lien for damages caused by or the recovery of any costs for the
cleanup of Hazardous Materials or any Release.

(b) If any action or proceeding be commenced, to which action or proceeding the
Indemnified Parties are made a party by reason of the execution of this Instrument or the
Loan Documents, or in which it becomes necessary to defend or uphold the Lien of this
Instrument, all sums paid by the Indemnified Parties, for the expense of any litigation to
prosecute or defend the rights and Lien created hereby or otherwise, shall be paid by
Borrower to such Indemnified Parties, as the case may be, as hereinafter provided. Borrower
will pay and save the Indemnified Parties harmless against any and all liability with
respect to any intangible personal property tax or similar imposition of the State or any
subdivision or authority thereof now or hereafter in effect, to the extent that the same may
be payable by the Indemnified Parties in respect of this Instrument or any Secured
Obligation.

(c) All amounts payable to the Indemnified Parties under this Section shall be deemed
indebtedness secured by this Instrument, and any such amounts that are not paid within 30
days after written demand therefor by any Indemnified Party shall bear interest at the
highest Default Rate from the date of such demand. In case any action, suit or proceeding
is brought against the Indemnified Parties by reason of any such occurrence, Borrower, upon
request of such Indemnified Parties, will, at Borrower’s expense, resist and defend such
action, suit or proceeding or cause the same to be resisted or defended by counsel
designated by Lender. The obligations of Borrower under this Section shall survive any
satisfaction, discharge or reconveyance of this Instrument and payment in full of the
Obligations. If and to the extent that the foregoing undertaking may be unenforceable for
any reason, Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities that is permissible under applicable
law.

Section 2.13. Hazardous Materials. Borrower covenants and agrees that (a) the Collateral
shall be kept free of Hazardous Materials, except for those Hazardous Materials reasonably
necessary for the operation of the Property and customarily employed in the ordinary course of
businesses similar to the business conducted at the Property and that are used, stored, transported
and disposed of in accordance with all applicable Environmental Laws; (b) Borrower shall comply
with, and ensure compliance by all persons on the Property with, all Environmental Laws relating to
all or any part of the Collateral; (c) Borrower shall keep the Collateral free and clear of any
liens imposed pursuant to such Environmental Laws; (d) Borrower shall conduct and complete all
investigations, studies, sampling and testing, and all remedial actions necessary to clean up and
remove any Hazardous Materials from the Property in accordance with the recommendations contained
in any reports issued in connection with such investigations, studies, sampling and testing and in
accordance with all applicable Environmental Laws’ and (e) Borrower shall cause compliance by all
Tenants and sub-tenants on the Property with Borrower’s covenants and agreements contained in this
Section. Borrower shall immediately notify Lender of any investigation, demand, or claim affecting
the Property made by any third party.

Section 2.14. Right of Lender To Require Appraisal. Following the occurrence of an Event of
Default (other than an Event of default that has been waived in writing by Lender or confirmed as
having been cured in writing by Lender), Lender shall have the right, from time to time during the
term of this Instrument, to obtain one or more fair market value appraisals of the Property from
one or more MAI certified appraisers in such form as is satisfactory to Lender. The cost of any
such appraisal(s) shall be paid by Borrower.

 

10

 

Section 2.15. Instrument as UCC Security Agreement and Fixture Filing. This Instrument shall
constitute a security agreement, a financing statement and a fixture filing pursuant to the UCC for
any of the items specified herein as part of the Collateral that, under applicable law, may be
subject to a security interest pursuant to the UCC. The Collateral includes goods that are or are
to become fixtures. Borrower agrees that Lender may file this Instrument, or a reproduction
thereof, in the real estate records or other appropriate index as a fixture filing or other
financing statement for any of the items specified above as part of the Collateral. Any
reproduction of this Instrument or of any other security agreement or financing statement shall be
sufficient as a financing statement.

Section 2.16. Additional Representations, Warranties and Covenants. Borrower represents,
warrants and covenants for the benefit of Lender, as follows:

(a) Borrower is a limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. Borrower is in good
standing and is duly licensed or qualified to transact business in the State and in each
other jurisdiction where the nature of its business requires such qualification, except for
those jurisdictions in which the failure to qualify could not reasonably be expected to have
a Material Adverse Effect. Borrower’s exact legal name is as set forth on the execution
page hereof.

(b) Borrower has full power and authority and holds all requisite governmental
licenses, permits and other approvals to (i) enter into and perform its obligations under
this Instrument, the Note and each other Loan Document to which it is a party and to own its
property, (ii) use the Collateral and (iii) conduct its business substantially as currently
conducted by it, except as to clause (iii) where the failure to hold such licenses, permits
and approvals could not reasonably be expected to have a Material Adverse Effect.

(c) This Instrument, the Note and the other Loan Documents to which it is a party have
been duly authorized, executed and delivered by Borrower and constitute legal, valid and
binding obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except to the extent limited by bankruptcy, reorganization or other laws
of general application relating to or effecting the enforcement of creditors’ rights.

(d) The execution and delivery of this Instrument, the Note and the other Loan
Documents, the consummation of the transactions contemplated hereby and thereby and the
fulfillment of the terms and conditions hereof and thereof do not and will not violate any
law, rule, regulation or order, conflict with or result in a breach of any of the terms or
conditions of the articles of organization or operating agreement of Borrower or of any
corporate restriction or of any agreement or instrument to which Borrower is now a party and
do not and will not constitute a default under any of the foregoing or result in the
creation or imposition of any liens, charges or encumbrances of any nature upon any of the
property or assets of Borrower other than Liens in favor of Lender.

(e) The authorization, execution, delivery and performance of this Instrument, the Note
and the other Loan Documents by Borrower do not require submission to, approval of, or other
action by any governmental authority or agency, except for such action that has been duly
obtained or taken and is in full force and effect.

(f) There is no action, suit, proceeding, claim, inquiry or investigation, at law or in
equity, before or by any court, regulatory agency, public board or body pending or, to the
best of Borrower’s knowledge, threatened against or affecting Borrower or Guarantor (other
than those described in Guarantor’s public filings with the Securities and Exchange
Commission (“SEC”)), challenging Borrower’s or Guarantor’s authority to enter into this
Instrument, the Note or any of the other Loan Documents or any other action wherein an
unfavorable ruling or finding would adversely affect the enforceability of this Instrument,
the Note or any of the other Loan Documents, or could reasonably be expected to have a
Material Adverse Effect.

(g) Borrower is in compliance with all laws, rules, regulations and orders of
governmental authorities applicable to it and its properties except to the extent the
non-compliance with which could not reasonably be expected to have a Material Adverse
Effect.

 

11

 

(h) Borrower has heretofore furnished to Lender the financial statements of Borrower
and Guarantor for their fiscal year ended December 31, 2009 and the unaudited financial
statement of Borrower and Guarantor and for the nine months ended September 30, 2010 and
those statements fairly present the financial condition of Borrower and Guarantor, if any,
on the dates thereof and the results of its operations and cash flows for the periods then
ended and were prepared in accordance with GAAP. Since the date of the most recent
financial statements, there has been no material adverse change in the business, properties
or condition (financial or otherwise) of Borrower or Guarantor. Except as disclosed in the
Financial Statements or the notes thereto, neither Borrower nor Guarantor, as of the Closing
Date, has or will have any liabilities, contingent or otherwise, that could reasonably be
expected to have a Material Adverse Effect.

(i) Borrower has paid or caused to be paid, and will pay (after giving effect to any
grace periods for which no penalties are incurred), to the proper authorities when due all
federal, state and local taxes required to be withheld by it. Borrower has filed, and will
pay, all federal, state and local tax returns which are required to be filed, and Borrower
has paid or caused to be paid to the respective taxing authorities all taxes as shown on
said returns or on any assessment received by it to the extent such taxes have become due,
except any such taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP have been
set aside on its books.

(j) For purposes of Section 9-307 of the UCC, Borrower is and will remain located in
the State. Borrower’s residence for federal income tax purposes is located at its address
specified in the preamble to this Instrument. Borrower has authorized Lender to file
financing statements that are sufficient when filed to perfect the security interests
created pursuant to this Instrument and the other Loan Documents. When such financing
statements are filed in the offices noted therein, Lender will have a valid and perfected
security interest in the Collateral that constitutes personal property, subject to no other
Lien.

(k) None of the Collateral constitutes a replacement of, substitution for or accessory
to any property of Borrower subject to a lien of any kind.

(l) Except where any failure could not reasonably be expected to result in a Material
Adverse Effect, Borrower has obtained all permits, licenses and other authorizations which
are required under all Environmental Laws at Borrower’s facilities or in connection with the
operation of its business. Except where any failure could not reasonably be expected to
result in a Material Adverse Effect, Borrower and all activities of Borrower at its
facilities comply with all Environmental Laws and with all terms and conditions of any
required permits, licenses and authorizations applicable to Borrower with respect thereto.
Except where any failure could not reasonably be expected to result in a Material Adverse
Effect, Borrower is also in compliance with all limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables contained in
Environmental Laws or contained in any plan, order, decree, judgment or notice of which
Borrower is aware. Borrower is not aware of, nor has Borrower received notice of, any
events, conditions, circumstances, activities, practices, incidents, actions or plans which
may interfere with or prevent continued compliance with, or which may give rise to any
liability under, any Environmental Laws.

(m) All factual information heretofor or contemporaneously furnished by or on behalf of
Borrower or Guarantor in writing to Lender for purposes of or in connection with this
Instrument or any transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of Borrower or Guarantor to Lender will be, true and
correct in all material respects on the date as of which such information is dated or
certified, and such information is not, or shall not be, as the case may be, incomplete by
omitting to state any material fact necessary to make such information not misleading.

(n) Neither Borrower nor Guarantor is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or carrying
“margin stock.” None of the proceeds of the Loan will be used for the purpose of, or be
made available by Borrower or Guarantor in any manner to any other person to enable or
assist such person in, directly or indirectly purchasing or carrying “margin stock”. Terms
for which meanings are provided in F.R.S. Board Regulation T, U or X or any regulations
substituted therefor, as from time to time in effect, are used in this subsection with such
meanings.

 

12

 

(o) Neither Borrower nor Guarantor is an “investment company” nor a “company controlled
by an investment company” within the meaning of the Investment Company Act of 1940, as
amended, or a “holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,”
within the meaning of the Public Utility Holding Company Act of 1935, as amended.

(p) Borrower and Guarantor are solvent and will not be rendered insolvent by the Loan
Documents or the transactions contemplated thereby and, after giving effect to such
transactions, neither Borrower nor Guarantor will be left with an unreasonably small amount
of capital with which to engage in its business, and neither Borrower or Guarantor intends
to incur, or believes that it has incurred, debts beyond its ability to pay as they mature.
Neither Borrower nor Guarantor contemplates the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of Borrower or Guarantor or any of their
assets. Neither Borrower nor Guarantor is entering into the transactions contemplated by
the Loan Documents with any intent to hinder, delay or defraud any of Borrower’s or
Guarantor’s creditors.

(q) Borrower shall deliver to Lender each of the following:

(i) as soon as possible and in any event within three Business Days after the
occurrence of a Default, an Event of Default or an event which could reasonably be
expected to result in a Material Adverse Effect, a statement of Borrower setting
forth reasonably detailed information regarding such Default, Event of Default or
event and the action that Borrower has taken and proposes to take with respect
thereto;

(ii) promptly after the commencement thereof, notice in writing of all
litigation and of all proceedings before any governmental or regulatory agency
affecting Borrower, Guarantor or any of their subsidiaries which seek a monetary
recovery against Borrower in excess of $1,000,000 or against Guarantor in excess of
$5,000,000;

(iii) promptly upon knowledge thereof, notice of any loss, theft or destruction
of or material damage to, any accident involving any, and any action, suit or
proceeding relating to, Collateral having a value in excess of $500,000 (whether in
one occurrence or in aggregate);

(iv) promptly after the amending thereof, copies of any and all amendments to
any of its articles of organization or operating agreement; and

(v) promptly upon knowledge thereof, notice of the violation by Borrower or
Guarantor of any law, rule or regulation applicable to Borrower or Guarantor, which
violation could reasonably be expected to have a Material Adverse Effect.

(r) Borrower and each of its subsidiaries shall comply in all material respects with
all governmental rules and regulations and all other applicable laws, rules, regulations and
orders, including, without limitation, all Environmental Laws.

(s) Borrower will keep books and records that accurately reflect in all material
respects all of its business affairs and transactions. Borrower will, and will cause
Guarantor to, permit Lender or any of its representatives (including outside auditors), at
reasonable times and intervals (but, absent the occurrence of an Event of Default, not to
exceed two times in any fiscal year), to visit all of its offices, to discuss its financial
matters with its officers and independent public accountant (and Borrower hereby authorizes
such independent accountant to discuss Borrower’s financial matters with Lender or its
representatives whether or not any representative of Borrower is present) and to examine
(and, at the expense of Borrower, copy extracts from) books or other corporate records
(including computer records). If Lender exercises its rights under this subsection
following the occurrence of an Event of Default (other than an Event of default that has
been waived in writing by Lender or confirmed as having been cured in writing by Lender),
Borrower shall pay any fees of such independent accountant incurred in connection therewith.
Borrower shall not be required to cause Guarantor to comply with the foregoing for any
period that Guarantor is subject to regulation by the SEC.

 

13

 

(t) Borrower shall permit Lender to make or cause to be made reasonable entries upon
the Property to inspect the interior and exterior thereof. Except in case of emergency or
upon an Event of Default, such inspection shall be with two Business Days’ prior notice.

Section 2.17. Additional Negative Covenants. So long as the Loan shall remain unpaid,
Borrower agrees that:

(a) Borrower will not, and will not permit any of its subsidiaries to, form or acquire
any subsidiary, enter into any merger, consolidation, reorganization, or recapitalization,
or reclassify its capital stock, or liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), or, other than in the ordinary course of its business, convey,
sell assign, lease, transfer, or otherwise dispose of, in one transaction or series of
transactions, all or any substantial part of its property or assets.

(b) Borrower will not, and will not permit any of its subsidiaries to, sell, transfer,
lease, contribute or otherwise convey or dispose of (in each case in one transaction or
series of transactions), or grant options, warrants or other rights with respect to (in each
case in one transaction or series of related transactions), or agree to do any of the
foregoing with respect to, all or any part of the Collateral.

(c) Borrower will not change its location for purposes of Section 9-307 of the UCC or
its name in any manner that could make any financing statement filed in connection with any
Loan Document seriously misleading within the meaning of Section 9-506 of the UCC or any
similar statute, unless it shall have given Lender at least 30 days’ prior written notice
thereof.

ARTICLE III

INSURANCE; DAMAGE, DESTRUCTION OR TAKING

Section 3.01. Insurance.

(a) Borrower will, at its expense, maintain or cause to be maintained with insurance
carriers approved by Lender insurance with respect to the Collateral in such amounts and
against such insurable hazards as Lender from time to time may require, including, without
limitation the following (and with respect to liability insurance specified in subsection
(ii), for a period of two years following indefeasible payment in full of the Loan: (i) “all
risk” property and fire insurance in an amount not less than the full replacement value of
the Property (with a deductible not to exceed $10,000), naming Lender under a lender’s loss
payable endorsement as mortgagee and loss payee and including agreed amount, inflation
guard, replacement cost and waiver of subrogation endorsements; (ii) general liability
insurance in an amount not less than $1,000,000 per claim and on a claims-made basis,
insuring against personal injury, death and property damage and naming Lender as additional
insured, with all such insurance primary and non-contributory for Lender; (iii) business
interruption insurance or rent-loss insurance, as applicable, covering loss of rental or
other income (including all expenses payable by Tenants) for up to 12 months; (iv) boiler
and machinery coverage for mechanical and electrical failure; (v) flood hazard insurance if
the Property is located in an area designated by the Federal Emergency Management Act if and
to the extent that the Property is located within an area that has been or is hereafter
designated or identified as an area having special flood hazards by the Department of
Housing and Urban Development or such other official as shall from time to time be
authorized by federal or state law to make such designation pursuant to any national or
state program of flood insurance, Borrower shall carry flood insurance with respect to the
Property in amounts not less than the maximum limit of coverage then available with respect
to the Property or the amount of the Obligations, whichever is less; (vi) worker’s
compensation insurance to the full extent required by applicable law for all employees of
Borrower engaged in any work on or about the Property and employer’s liability insurance
with a limit of not less than $1,000,000 for each occurrence; (vii) earthquake insurance;
and (viii) such other types of insurance or endorsements to existing insurance as may be
required from time to time by Lender in accordance with its standard commercial lending
practices. Borrower agrees that if Borrower shall change insurers at any time during the
term of the Loan or within two years thereof, Borrower shall purchase a “prior acts”
endorsement from the insurer or shall purchase an “extended reporting” endorsement to
continue coverage from the current insurer.

 

14

 

(b) All insurance maintained by Borrower pursuant to Section 3.01(a) shall (i) (except
for worker’s compensation insurance) name Lender as additional insured and/or loss payee, as
applicable, (ii) (except for worker’s compensation and public liability insurance) provide
that the proceeds for any losses shall be adjusted by Borrower subject to the approval of
Lender and from and after the occurrence of an Event of Default shall be payable to Lender,
to be held and applied as provided in Section 3.03, (iii) include effective waivers by the
insurer of all rights of subrogation against any named insured, the indebtedness secured by
this Instrument and the Collateral and all claims for insurance premiums against Lender,
(iv) provide that any losses shall be payable notwithstanding (A) any act, failure to act or
negligence of or breach of warranties, declarations or conditions contained in such policy
by any named insured, (B) the occupation or use of the Property for purposes more hazardous
than permitted by the terms thereof, (C) any foreclosure or other action or proceeding taken
by Trustee or Lender pursuant to any provision of this Instrument or (D) any change in title
or ownership of the Property, (v) provide that no cancellation, reduction in amount or
material change in coverage thereof or any portion thereof shall be effective until at least
30 days after receipt by Lender of written notice thereof, (vi) provide that any notice
under such policies shall be simultaneously delivered to Lender and (vii) be reasonably
satisfactory in all other respects to Lender. Any insurance maintained pursuant to Section
3.01 may be evidenced by blanket insurance policies covering the Property and other
properties or assets of Borrower, provided that any such policy shall specify the portion,
if less than all, of the total coverage of such policy that is allocated to the Property and
shall in all other respects comply with the requirements of Section 3.01. Borrower’s
obligation to maintain insurance coverage in accordance with the terms hereof shall not be
construed to limit the amount of indemnification or insurance proceeds available to Lender.

(c) Borrower will deliver to Lender, promptly upon request, the certificates of
insurance and, if requested by Lender, copies of all policies (certified by the issuer of
such policies as being true and accurate copies of the original policies), evidencing all
insurance required to be maintained under Section 3.01(a) (or, in the case of blanket
policies, certificates thereof by the insurers together with a counterpart of each blanket
policy). Borrower will also deliver to Lender not later than 30 days prior to the
expiration of any policy a binder or certificate of the insurer evidencing the replacement
thereof; provided that if Borrower does not deliver such replacement insurance at least 30
days prior to such expiration, failure to deliver such replacement insurance shall not be an
Event of Default hereunder unless and until the existing insurance actually lapses so long
as Borrower complies with each of the following: (i) Borrower has delivered notice to Lender
at least 30 days prior to such expiration that Borrower is unable to deliver such
replacement insurance at least 30 days prior to such expiration; (ii) Borrower provides
evidence reasonably acceptable to Lender that Borrower is using best efforts to obtain such
replacement insurance; and (iii) Borrower provides evidence reasonably acceptable to Lender
that Borrower has a good faith belief that such replacement insurance will be obtained prior
to expiration of the existing insurance.

(d) Borrower will not take out separate insurance concurrent in form or contributing in
the event of loss with that required to be maintained pursuant to Section 3.01.

Section 3.02. Damage, Destruction or Taking; Notice; Assignment of Awards. In case of any
damage to or destruction of the Collateral or any material part thereof or any taking, whether for
permanent or temporary use, of all or any part of the Collateral or any interest therein or right
accruing thereto, as the result of or in anticipation of the exercise of the right of condemnation
or eminent domain (a “Taking”), or the commencement of any proceedings or negotiations that may
result in a Taking, Borrower will promptly give written notice thereof to Lender, generally
describing the nature and extent of such damage, destruction or Taking and Borrower’s best estimate
of the cost of restoring the Collateral, or the nature of such proceedings or negotiations and the
nature and extent of the Taking that might result therefrom, as the case may be. Lender shall be
entitled to all insurance proceeds payable on account of such damage or destruction and to all
awards or payments allocable to the Collateral on account of such Taking, and Borrower hereby
irrevocably assigns, transfers and sets over to Lender all rights of Borrower to any such proceeds,
awards or payments and irrevocably authorizes and, in the event Borrower has not filed for such
proceeds by the first to occur of (i) 10 Business Days prior to the expiration of the applicable
time for such filing or (ii) 30 days after damage to the Collateral or any Taking, empowers Lender,
at its option, in the name of Borrower or otherwise, to file and prosecute what would otherwise be
Borrower’s claim for any such proceeds, award or payment and to collect, receipt for and retain the
same for disposition in accordance with Section 3.03 or Section 3.04, as applicable. Borrower will
pay all reasonable costs and expenses, if any, incurred by Lender in
connection with any such damage, destruction or Taking and seeking and obtaining any insurance
proceeds, awards or payments in respect thereof.

 

15

 

Section 3.03. Application of Insurance Proceeds. (a) Subject to Sections 3.03(b) and 3.04,
Lender may, from and after the occurrence of an Event of Default, in its sole discretion, apply all
amounts recovered under any insurance policy required to be maintained by Borrower hereunder in any
one or more of the following ways:

(i) to the payment of the reasonable costs and expenses incurred by Trustee or
Lender in obtaining any such insurance proceeds or awards, including the fees and
expenses of attorneys and insurance and other experts and consultants, the costs of
litigation, arbitration, mediation, investigations and other judicial,
administrative or other proceedings and all other out-of-pocket expenses;

(ii) to the payment of any Secured Obligation;

(iii) to fulfill any of the other covenants contained herein or in any other
Loan Document, in accordance therewith as Lender may determine after the occurrence
of a Default or an Event of Default;

(iv) to Borrower for application to the cost of restoring or replacing the
Collateral destroyed, damaged or taken; or

(v) to Borrower.

(b) Notwithstanding the provisions of subsection (a) of this Section to the contrary (but
subject to the provisions of Section 3.04), if each of the following conditions is satisfied,
Borrower shall apply insurance proceeds received by it to the restoration or replacement of the
Collateral, to the extent necessary for the restoration or replacement thereof:

(i) there shall then exist no uncured Default or Event of Default; and

(ii) Borrower shall furnish to Lender a certificate of an architect or engineer
reasonably acceptable to Lender stating (A) that the Collateral is capable of being
restored, prior to the maturity of the Note, to substantially the same condition as existed
prior to the casualty, (B) the insurance proceeds are sufficient for such restoration and
(C) the restoration or replacement is reasonably capable of being fully completed by no
later than six months prior to the latest Maturity Date for the Note.

(c) In the event that such insurance proceeds are to be utilized in the restoration or
replacement of the Collateral, Borrower shall use such amounts for such restoration or
replacement. In the event that, after the restoration or replacement of the Collateral, any
insurance proceeds shall remain, such amount shall be retained by Borrower.

(d) If, prior to the receipt by Borrower of such insurance proceeds, the Collateral
shall have been sold on foreclosure, Lender shall have the right to receive said insurance
proceeds to the extent of any deficiency found to be due upon such sale, with legal interest
thereon, but only to the extent of a deficiency judgment sought or recovered or denied, and
the reasonable attorneys’ fees, costs and disbursements incurred by Lender in connection
with the collection of such proceeds.

Section 3.04. Taking and Total Destruction. If all or any part of the Property is lost,
stolen, destroyed or damaged beyond repair (and the Property is not fully replaced to Lender’s
satisfaction) or a Taking shall occur, Lender shall apply all amounts recovered under any insurance
policy referred to in Section 3.01(a) and all awards received by it on account of any such Taking
as follows:

(a) first, to the payment of the reasonable costs and expenses incurred by Lender in
obtaining any such insurance proceeds or awards, including the fees and expenses of
attorneys and insurance and other experts and consultants, the costs of litigation, arbitration, mediation,
investigations and other judicial, administrative or other proceedings and all other
out-of-pocket expenses;

 

16

 

(b) second, to the payment of any Secured Obligation;

(c) third, to fulfill any of the other covenants contained herein or in the Loan
Documents in accordance with such Loan Documents as Lender may determine after the
occurrence of a Default or an Event of Default; and

(d) fourth, the balance, if any, to Borrower.

ARTICLE IV

EVENTS OF DEFAULT; REMEDIES

Section 4.01. Events of Default. Each of the following shall constitute an “Event of
Default” under this Instrument:

(a) The occurrence of an “Event of Default” as defined in the Note or in any other Loan
Document.

(b) The attachment of any Lien on any portion of the Collateral other than Permitted
Exceptions.

(c) Failure of Borrower to maintain insurance as required by Section 3.01.

(d) Borrower, Guarantor or any Tenant shall be or become insolvent, or admit in writing
its inability to pay its debts as they mature, or make an assignment for the benefit of
creditors; or any Borrower, Guarantor or any Tenant shall apply for or consent to the
appointment of any receiver, trustee or similar officer for it or for all or any substantial
part of its property; or such receiver, trustee or similar officer shall be appointed
without the application or consent of Borrower, Guarantor or any Tenant; or Borrower,
Guarantor or any Tenant shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the laws of any
jurisdiction; or any such proceeding shall be instituted (by petition, application or
otherwise) against Borrower, Guarantor or any Tenant.

(e) Borrower shall fail to perform any of its obligations under Section 2.02, 2.05 or
2.17;

(f) Borrower shall default in the due performance and observance of any other agreement
contained herein or in any other Loan Document (other than items set forth elsewhere in this
Section 4.01), and such default shall continue unremedied for a period of 30 days after
Borrower has actual knowledge thereof or has received notice by Lender thereof.

(g) The occurrence of an event of default or a breach or default, after the passage of
all applicable notice and cure or grace periods provided therefor, under any other Mortgage
(as defined in the Note), under any other Loan Document or any other similar agreement
between or among (i) Borrower or Guarantor and (ii) Lender or any of its affiliates or
subsidiaries;

(h) The occurrence of a default or an event of default (however defined) under any
instrument, agreement or other document evidencing or relating to any indebtedness or other
monetary obligation of Borrower, Guarantor or any of its or their affiliates or subsidiaries
having a principal amount (including, without limitation, the amount of any outstanding
letters of credit), individually or in the aggregate, in excess of $20,000,000.

(i) Any judgment or order for the payment of money (not paid or fully covered by
insurance maintained in accordance with the requirements of this Instrument and as to which
the relevant insurance company has acknowledged coverage) which could reasonably be expected to result in a
Material Adverse Effect shall be rendered against Borrower or Guarantor that remains
undischarged, unvacated, unbounded or unstayed for a period of 60 days.

 

17

 

(j) Guarantor shall repudiate, purport to revoke or fail to perform any of Guarantor’s
obligations under the Guaranty.

(k) Any representation or warranty made by Borrower or Guarantor in any Loan Document
or in any other document executed in connection herewith was untrue in any material respect
when made.

(l) The occurrence of any Change in Control.

(m) Subject to Section 4.20, any of the Leases shall terminate.

(n) Subject to Section 4.20, the occurrence of an event of default or a breach or
default (however defined), after the passage of all applicable notice and cure or grace
periods provided therefor, under any of the Leases.

Section 4.02. Acceleration. Following the occurrence of an Event of Default (other than an
Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender) described in subsection (d) of Section 4.01, all of the outstanding principal
amount of the Secured Obligations shall be due and payable, whereupon the full unpaid amount of
such Secured Obligations which shall be so declared due and payable shall be and become immediately
due and payable, without presentment, notice of dishonor, protest or further notice of any kind,
all of which are hereby expressly waived by Borrower. Following the occurrence of any other Event
of Default (other than an Event of default that has been waived in writing by Lender or confirmed
as having been cured in writing by Lender), Lender may, by notice to Borrower, declare all or any
portion of the outstanding principal amount of the Secured Obligations to be due and payable,
whereupon the full unpaid amount of the Loan and other Secured Obligations which shall be so
declared due and payable shall be and become immediately due and payable, without presentment,
notice of dishonor, protest or further notice of any kind, all of which are hereby expressly waived
by Borrower. Borrower will pay on demand all costs and expenses, including, without limitation,
reasonable attorneys’ fees and expenses of one counsel, incurred by or on behalf of Lender in
enforcing this Instrument, the Secured Obligations or the Loan Documents or occasioned by any Event
of Default hereunder or thereunder.

Section 4.03. Legal Proceedings; Foreclosure. If an Event of Default shall have occurred
(other than an Event of default that has been waived in writing by Lender or confirmed as having
been cured in writing by Lender), Lender at any time may, at Lender’s sole discretion, proceed at
law or in equity or otherwise to enforce the payment of the Obligations and the Trustee shall have
the right to foreclose the Lien of this Instrument as against all or any part of the Collateral and
to have the same sold under the judgment or decree of a court of competent jurisdiction. Lender
and/or Trustee shall be entitled to recover in such proceedings all costs incident thereto,
including, without limitation, reasonable attorneys’ fees and expenses in such amounts as may be
fixed by the court.

Section 4.04. Power of Sale. If an Event of Default shall have occurred (other than an Event
of default that has been waived in writing by Lender or confirmed as having been cured in writing
by Lender), the Trustee or Lender may (as permitted by law), at Lender’s sole discretion, sell,
assign, transfer and deliver the whole or, from time to time, any part of the Collateral, or any
interest in any part thereof, at any private sale or at public auction, with or without demand,
advertisement or notice, for cash, on credit or for other property, for immediate or future
delivery, and for such price or prices and on such terms as Trustee may determine, or as may be
required by law. Without limiting the authority granted in the immediately preceding sentence,
Trustee shall, without demand on Borrower, after the lapse of such time as may then be required by
law, and notice of default and notice of sale having been given as then required by law (including,
without limitation, such notices as may be required by Section 51.002 of the Texas Property Code),
as amended, sell the Collateral on the date and at the time and place designated in the notice of
sale, either as a whole or in separate parcels and in such order as Trustee may determine, but
subject to any statutory right of Borrower to direct the order in which such property, if
consisting of several known lots, parcels or interests, shall be sold, at public auction to the
highest bidder, the purchase price payable in lawful money of the United States at the time of
sale. Trustee, or the one conducting the sale may, for any cause deemed
expedient, postpone the sale from time to time until it shall be completed and, in every such
case, notice of postponement shall be given by public declaration thereof by such person at the
time and place last appointed for the sale; provided that, if the sale is postponed for longer than
10 days beyond the day designated in the notice of sale, notice of sale and notice of the time,
date and place of sale shall be given in the same manner as the original notice of sale. Trustee
shall execute and deliver to the purchaser at any such sale a deed conveying the property so sold,
but without any covenant or warranty, express or implied. The recitals in such deed of any matters
or facts shall be conclusive proof of the truthfulness thereof. Any person, including Lender, may
bid at the sale

 

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Section 4.05. Deficiency. Notwithstanding the provisions of Sections 51.003, 51.004, and
51.005 of the Texas Property Code, as amended, and to the extent permitted by law, Borrower agrees
that Lender shall be entitled to seek a deficiency judgment from Borrower and any other party
obligated on the Secured Obligations equal to the difference between the amount owing on the
Secured Obligations and the amount for which the Property was sold pursuant to judicial or
nonjudicial foreclosure sale. Borrower expressly recognizes that this section constitutes a waiver
of the above-cited provisions of the Texas Property Code which would otherwise permit Borrower and
other persons against whom recovery of deficiencies is sought or any guarantor independently (even
absent the initiation of deficiency proceedings against them) to present competent evidence of the
fair market value of the Property as of the date of the foreclosure sale and offset against any
deficiency the amount by which the foreclosure sale price is determined to be less than such fair
market value. Borrower further recognizes and agrees that this waiver creates an irrebuttable
presumption that the foreclosure sale price is equal to the fair market value of the Property for
purposes of calculating deficiencies owed by Borrower, any guarantor, and others against whom
recovery of a deficiency is sought.

Alternatively, in the event the waiver provided for above is determined by a court of
competent jurisdiction to be unenforceable, the following shall be the basis for the finder of
fact’s determination of the fair market value of the Property as of the date of the foreclosure
sale in proceedings governed by Sections 51.003, 51.004 and 51.005 of the Texas Property Code, as
amended: (i) the Property shall be valued in an “as is” condition as of the date of the
foreclosure sale, without any assumption or expectation that the Property will be repaired or
improved in any manner before a resale of the Property after foreclosure; (ii) the valuation shall
be based upon an assumption that the foreclosure purchaser desires a resale of the Property for
cash promptly (but no later than twelve (12) months) following the foreclosure sale; (iii) all
reasonable closing costs customarily borne by the seller in commercial real estate transactions
should be deducted from the gross fair market value of the Property, including, without limitation,
brokerage commissions, title insurance, a survey of the Property, tax prorations, attorneys’ fees,
and marketing costs; (iv) the gross fair market value of the Property shall be further discounted
to account for any estimated holding costs associated with maintaining the Property pending sale,
including, without limitation, utilities expenses, property management fees, taxes and assessments
(to the extent not accounted for in (iii) above), and other maintenance, operational and ownership
expenses; and (v) any expert opinion testimony given or considered in connection with a
determination of the fair market value of the Property must be given by persons having at least
five (5) years experience in appraising property similar to the Property and who have conducted and
prepared a complete written appraisal of the Property taking into consideration the factors set
forth above.

Section 4.06. UCC Remedies. If an Event of Default shall have occurred (other than an Event
of default that has been waived in writing by Lender or confirmed as having been cured in writing
by Lender), Lender may exercise from time to time and at any time any rights and remedies available
to it under applicable law upon default in the payment of indebtedness, including, without
limitation, any right or remedy available to it as a secured party under the UCC. Borrower shall,
promptly upon request by Lender, assemble the Collateral, or any portion thereof generally
described in such request, and make it available to Lender at such place or places designated by
Lender and reasonably convenient to Lender. If Lender elects to proceed under the UCC to dispose
of portions of the Collateral, Lender, at its option, may give Borrower notice of the time and
place of any public sale of any such property, or of the date after which any private sale or other
disposition thereof is to be made, by sending notice by registered or certified first class mail,
postage prepaid, to Borrower at least 10 days before the time of the sale or other disposition. If
any notice of any proposed sale, assignment or transfer by Lender of any portion of the Collateral
or any interest therein is required by law, Borrower conclusively agrees that 10 days’ notice to
Borrower of the date, time and place thereof is reasonable.

 

19

 

Section 4.07. Trustee Authorized To Execute Deeds. Borrower irrevocably appoints Trustee
(which appointment is coupled with an interest) the true and lawful attorney of Borrower, in its
name and stead and on its behalf, for the purpose of effectuating any sale, assignment, transfer or
delivery for the enforcement hereof, whether pursuant to power of sale, foreclosure or otherwise in
connection with enforcing this Instrument after the occurrence of an Event of Default (other than
an Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender), to execute and deliver all such deeds, bills of sale, assignments, releases and
other instruments as may be designated in any such request.

Section 4.08. Purchase of Collateral by Lender. Lender may be a purchaser of the Collateral
or of any part thereof or of any interest therein at any sale thereof, whether pursuant to power of
sale, foreclosure or otherwise, and Lender may apply to the purchase price thereof the Secured
Obligations.

Section 4.09. Receipt a Sufficient Discharge to Purchaser. Upon any sale of the Collateral
or any part thereof or any interest therein, whether pursuant to power of sale, foreclosure or
otherwise, the receipt of Trustee or the officer making the sale under judicial proceedings shall
be a sufficient discharge to the purchaser for the purchase money, and such purchaser shall not be
obliged to see to the application thereof.

Section 4.10. Waiver of Appraisement, Valuation, Homestead. Borrower hereby waives, to the
fullest extent it may lawfully do so, the benefit of all appraisement, valuation, stay, extension
and redemption laws now or hereafter in force and all rights of marshalling in the event of any
sale of the Collateral or any part thereof or any interest therein. To the extent allowable by
law, Borrower hereby waives any and all rights to request or require an appraisal of the Property.
In the event of foreclosure pursuant to the provisions hereof, Lender may, at Lender’s option,
obtain an appraisal of the Property and any funds expended by Lender for such propose shall become
indebtedness of Borrower to Lender secured by this Instrument and shall be paid by Borrower to
Lender within 10 days of demand.

Section 4.11. Obligations to Become Due on Sale. Upon any sale of the Collateral or any
portion thereof or interest therein by virtue of the exercise of any remedy by Lender or Trustee
under or by virtue of this Instrument, whether pursuant to power of sale, foreclosure or otherwise
in accordance with this Instrument or by virtue of any other remedy available at law or in equity
or by statute or otherwise, at the option of Lender, all Secured Obligations shall, if not
previously declared due and payable, immediately become due and payable, together with interest
accrued thereon and all other indebtedness secured by this Instrument.

Section 4.12. Application of Proceeds of Sale and Other Moneys. The proceeds of any sale of
the Collateral or any part thereof or any interest therein under or by virtue of this Instrument,
whether pursuant to power of sale, foreclosure or otherwise, and all other moneys at any time held
by Lender or Trustee as part of the Collateral, shall be applied as follows:

FIRST, fees, expenses or indemnities to enforce this Instrument or then due to Lender or
Trustee;

SECOND, to pay Secured Obligations in respect of any other fees, expenses or indemnities then
due to Lender;

THIRD, to pay interest due in respect of the Loan;

FOURTH, to pay the principal outstanding with respect to the Loan;

FIFTH, to the payment of all other Secured Obligations; and

SIXTH, to Borrower.

Section 4.13. Appointment of Receiver. If an Event of Default shall have occurred (other
than an Event of default that has been waived in writing by Lender or confirmed as having been
cured in writing by Lender), Lender shall, as a matter of right and without regard to the adequacy
of any security for the Secured Obligations secured hereby or the solvency of Borrower, be entitled
to the appointment of a receiver for all or any part of the
Collateral, whether such receivership be incidental to a proposed sale of the Collateral or
otherwise, and Borrower hereby consents to the appointment of such a receiver and will not oppose
any such appointment.

 

20

 

Section 4.14. Possession, Management and Income. If an Event of Default shall have occurred
(other than an Event of default that has been waived in writing by Lender or confirmed as having
been cured in writing by Lender), in addition to, not in limitation of, the rights and remedies
provided in Section 2.10, to the extent allowed by Texas law, Lender, upon five days’ notice to
Borrower, may enter upon and take possession of the Collateral or any part thereof by force,
summary proceeding, ejectment or otherwise and may remove Borrower and all other persons and any
and all property therefrom and may hold, operate, maintain, repair, preserve and manage the same
and receive all earnings, income, Rents, issues and proceeds accruing with respect thereto or any
part thereof. Lender shall be under no liability for or by reason of any such taking of
possession, entry, removal or holding, operation or management.

Section 4.15. Right of Lender to Perform Borrower’s Covenants. During the continuance of an
Event of Default, Lender, without notice to or demand upon Borrower and without waiving or
releasing any obligation or Event of Default, may (but shall be under no obligation to) at any time
thereafter make such payment or perform such act for the account and at the expense of Borrower,
and may enter upon the Collateral for such purpose and take all such action thereon as, in Lender’s
opinion, may be necessary or appropriate therefor. No such entry and no such action shall be
deemed an eviction of any Tenant or other person with the right to use or occupy all or any portion
of the Property or any part thereof. After the occurrence of an Event of Default (other than an
Event of default that has been waived in writing by Lender or confirmed as having been cured in
writing by Lender), all sums so paid by Lender and all costs and expenses (including, without
limitation, reasonable attorneys’ fees and expenses) so incurred, together with interest thereon at
the Default Rate from the date of payment or incurring, shall constitute additional indebtedness
secured by this Instrument and shall be paid by Borrower to Lender within 10 days of demand.

Section 4.16. Subrogation. To the extent that Lender, on or after the date hereof, pays any
sum due under any provision of any legal requirement or any instrument creating any Lien prior or
superior to the Lien of this Instrument, or Borrower or any other person pays any such sum with the
proceeds of the Loan evidenced by the Note, Lender shall have and be entitled to a Lien on the
Collateral equal in priority to the Lien discharged, and Lender shall be subrogated to, and receive
and enjoy all rights and liens possessed, held or enjoyed by, the holder of such Lien, that shall
remain in existence and benefit Lender in securing the Obligations.

Section 4.17. Remedies Cumulative. Each right, power and remedy of Lender and Trustee
provided for in this Instrument or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every other right, power
or remedy provided for in this Instrument or the other Loan Documents, or now or hereafter existing
at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by
Lender or Trustee of any one or more of the rights, powers or remedies provided for in this
Instrument, or now or hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by Lender or Trustee of any or all such other rights,
powers or remedies.

Section 4.18. Provisions Subject to Applicable Law. All rights, powers and remedies provided
in this Instrument may be exercised only to the extent that the exercise thereof does not violate
any applicable provisions of law and are intended to be limited to the extent necessary so that
they will not render this Instrument invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law. If any term of this Instrument or
any application thereof shall be invalid or unenforceable, the remainder of this Instrument and any
other application of such term shall not be affected thereby.

Section 4.19. No Waiver, Compromise of Actions. No failure by Lender to insist upon the
strict performance of any term hereof or of any other Loan Documents, or to exercise any right,
power or remedy consequent upon a breach hereof or thereof, shall constitute a waiver of any such
term or of any such breach. No waiver of any breach shall affect or alter this Instrument, which
shall continue in full force and effect with respect to any other then existing or subsequent
breach. By accepting payment or performance of any amount or other Secured Obligation before or
after its due date, Lender shall not be deemed to have waived its right either to require prompt
payment or performance when due of all other amounts payable hereunder and the Secured Obligations
or to declare a default for failure to effect such prompt payment. Any action, suit or proceeding
brought by Lender pursuant to any of the terms of this Instrument, any Loan Document or otherwise, and any claim made by
Lender hereunder or thereunder may be compromised, withdrawn or otherwise dealt with by Lender
without any notice to or approval of Borrower.

 

21

 

Section 4.20. Provisions with Respect to the Leases. Notwithstanding the provisions of
Section 4.01(m) or Section 4.01(n) (each, an “Operator Default”) to the contrary, a termination of
any of the Leases or the occurrence of an event of default or a breach or default (however
defined), after the passage of all applicable notice and cure or grace periods provided therefor
(the “Cure Date”), under any of the Leases shall not constitute and Event of Default hereunder
provided that Borrower shall have complied with the each of following conditions (collectively, the
“Operator Substitution”) in form and substance satisfactory to Lender:

(a) Within 45 days of the Cure Date, Borrower shall have entered a new lease (the “New
Lease”) with a new tenant (the “New Tenant”) on substantially the same terms as the Lease
subject to the Operator Default.

(b) New Tenant shall be a wholly-owned subsidiary (direct or indirect) sub of
Guarantor.

(c) New Tenant’s management team is substantially the same as Tenant’s management team.

(d) Borrower and New Tenant shall have executed such instruments, agreements and other
documents necessary to protect Lender’s security interest in and Lien on the Collateral
(including, without limitation, a subordination agreement with respect to the New Lease) and
to ensure New Tenant’s ability to maintain business operations on the Property (including,
without limitation, a management agreement with respect to the New Lease.

(e) Only one Operator Substitution shall be permitted with respect to the Property
during the term of the Loan.

(f) No Operator Substitution under any other Mortgage (as defined in the Note) shall
have been consummated within the 18-month period immediately preceding the Operator Default.

Upon satisfaction of the foregoing conditions and consummation of the Operator Substitution, the
New Lease shall be deemed to be a Lease under this Instrument, and the New Tenant shall be deemed
to be a Tenant under this Instrument.

ARTICLE V

MISCELLANEOUS

Section 5.01. Further Assurances; Financing Statements; Recordation.

(a) Borrower, at its expense, will execute, acknowledge and deliver all such
instruments and take all such other action as Lender from time to time may reasonably
request in order to further effectuate the purposes of this Instrument and to carry out the
terms hereof and to better assure and confirm to Lender its rights, powers and remedies
hereunder.

(b) Notwithstanding any other provision of this Instrument, Borrower hereby agrees
that, without notice to or the consent of Borrower, Lender may file with the appropriate
public officials such financing statements, continuation statements, amendments and similar
documents as are or may become necessary to perfect, preserve or protect the security
interest granted by this Instrument.

 

22

 

(c) Borrower, at its expense, will at all times cause this Instrument and any document,
agreement or instrument amendatory hereof or supplemental hereto or thereof (and any
appropriate financing statements or other instruments and continuations thereof), and each
other document, agreement and instrument delivered in connection with the Loan Documents and
intended thereunder to be recorded, registered and filed, to be kept recorded, registered and filed, in such manner and in
such places, and will pay all such recording, registration, filing fees, taxes and other
charges, and will comply with all such statutes and regulations as may be required by law in
order to establish, preserve, perfect and protect the Lien of this Instrument as a valid,
first mortgage lien and first priority perfected security interest in the Collateral,
subject only to the Permitted Exceptions. Borrower will pay or cause to be paid, and will
indemnify Lender in respect of, all taxes and other fees and charges (including interest and
penalties) at any time payable in connection with the filing and recording of this
Instrument and any and all supplements and amendments hereto.

Section 5.02. Additional Security. Without notice to or consent of Borrower, and without
impairment of the Lien and rights created by this Instrument, Lender may accept from Borrower or
any other person additional security for the Secured Obligations. Neither the giving of this
Instrument nor the acceptance of any such additional security shall prevent Lender from resorting,
first, to such additional security, or, first, to the security created by this Instrument, or
concurrently to both, in any case without affecting Lender’s Lien and rights under this Instrument.

Section 5.03. Provisions Regarding Trustee. Trustee shall not be liable for any error of
judgment or act done by Trustee, or be otherwise responsible or accountable under any circumstances
whatsoever. Trustee shall not be personally liable in case of entry by it or anyone acting by
virtue of the powers herein granted it upon the Collateral for debts contracted or liability or
damages incurred in the management or operation of the Collateral. All monies received by Trustee
shall, until used or applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other monies (except to the extent
required by law) and Trustee shall be under no liability for interest on any monies received by it
hereunder. Trustee may resign by giving 30 days’ prior written notice of such resignation to
Lender. If Trustee shall die, resign or become disqualified from acting, or shall fail or refuse
to exercise its powers hereunder when requested by Lender so to do, or if for any reason and
without cause Lender shall prefer to appoint a substitute trustee to act instead of the original
Trustee named herein, or any prior successor or substitute trustee, Lender shall have full power to
appoint a substitute trustee and, if preferred, several substitute trustees in succession who shall
succeed to all the estate, rights, powers and duties of the aforenamed Trustee. Upon appointment
by Lender and upon recording of the substitution in the land records of Polk County, Texas, any new
Trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed or
conveyance, become vested with all the estates, properties, rights, powers and trusts of its
predecessor in the rights hereunder with the same effect as if originally named as Trustee herein.

Section 5.04. Notices. All notices, certificates, requests, demands and other
communications provided for hereunder or under any Loan Document shall be in writing and shall be
(a) personally delivered or (b) sent by overnight courier of national reputation, and shall be
deemed to have been given on (i) the date received if personally delivered and (ii) the next
Business Day if sent by overnight courier. All communications shall be addressed to the party to
whom notice is being given at its address set forth in this Instrument.

Section 5.05. Waivers, Amendments. The provisions of this Instrument may be amended,
discharged or terminated only by an instrument in writing executed by Borrower and Lender, and the
observance or performance of any provision of this Instrument may be waived, either generally or in
a particular instance and either retroactively or prospectively, only by an instrument in writing
executed by Lender.

Section 5.06. Governing Law. THIS INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE, WITHOUT REGARD TO THE CONFLICT-OF-LAWS PRINCIPLES THEREOF.

Section 5.07. Successors and Assigns. This Instrument shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and assigns; provided,
however, that Borrower may not assign or transfer its rights or obligations hereunder without the
prior written consent of Lender.

 

23

 

Section 5.08. Waiver of Jury Trial. BORROWER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS INSTRUMENT, ANY
OF THE LOAN DOCUMENTS, ANY DEALINGS BETWEEN LENDER AND BORROWER RELATING TO THE SUBJECT MATTER OF
THE TRANSACTIONS CONTEMPLATED BY THIS INSTRUMENT OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LENDER AND BORROWER. BORROWER ACKNOWLEDGES AND
AGREES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS INSTRUMENT AND
THE OTHER LOAN DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS INSTRUMENT, ANY
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY
THIS INSTRUMENT OR ANY RELATED TRANSACTIONS. IN THE EVENT OF LITIGATION, THIS INSTRUMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

Section 5.09. Time of Essence. Time is of the essence with respect to Borrower’s obligations
under this Instrument.

Section 5.10. No Offset. Borrower’s obligation to make payments and perform all obligations,
covenants and warranties under this Instrument and under the other Loan Documents shall be absolute
and unconditional and shall not be affected by any circumstance, including without limitation any
setoff, counterclaim, abatement, suspension, recoupment, deduction, defense or other right that
Borrower or any guarantor may have or claim against Lender or any entity participating in making
the loan secured hereby. The foregoing provisions of this section, however, do not constitute a
waiver of any claim or demand which Borrower or any guarantor may have in damages or otherwise
against Lender or any other person, or preclude Borrower from maintaining a separate action
thereon; provided, however, that Borrower waives any right it may have at law or in equity to
consolidate such separate action with any action or proceeding brought by Lender.

Section 5.11. Severability. Any provision of this Instrument or other Loan Documents that is
prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Instrument or such Loan Documents or affecting the validity or
unenforceability of such provision in any other jurisdiction.

Section 5.12. Release and Termination. Upon indefeasible payment in full of the principal of
and premium, if any, and interest on the Secured Obligations in accordance with the terms of this
Instrument, the Note and the other Loan Documents and all other sums payable hereunder and
thereunder by Borrower or Guarantor, this Instrument shall automatically terminate and shall be
(except as provided herein) null and void and of no further force and effect, and the Collateral
shall thereupon be, and be deemed to have been, reconveyed, released and discharged from this
Instrument without further notice on the part of either Borrower or Lender, but upon the request of
Borrower, Lender, at Borrower’s sole cost and expense, shall request Trustee execute a satisfaction
release or deed of reconveyance in recordable form and a termination of this Instrument and Trustee
shall recovey the Collateral without warranty to the person or persons legally entitled thereto.

[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]

 

24

 

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS INSTRUMENT SHOULD BE READ CAREFULLY
BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED
IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS INSTRUMENT ONLY
BY ANOTHER WRITTEN AGREEMENT.

IN WITNESS WHEREOF, Borrower has caused this Instrument to be duly executed as of the day and
year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	POLK HEALTH HOLDINGS LLC,	 	 
	 	 	a Nevada limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	The Ensign Group, Inc., a Delaware corporation, its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Gregory K. Stapley	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	Name: Gregory K. Stapley	 	 
	 	 	 	 	 
	 	 
	 

	 	 	 	 	 	Title:   Executive Vice President	 	 
	 	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	File No.:	 	 
	 	 	 	 	 	 	APN No.:	 	 

	 	 	 	 	 
	STATE OF CALIFORNIA

	 	)
	 

	 	) ss.

	COUNTY OF ORANGE

	 	)

On December 30, 2010,
before me, Patty Romero, Notary Public, personally appeared Gregory K. Stapley, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

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

	 	 	 	 	 
	WITNESS my hand and official seal.	 	 
	 
	 	 	 	 
	Signature
	 	/s/ Patty Romero	 	 
	 

	 	 

	 	 
	 

	 	 	 	This area for official notarial seal.

[EXECUTION PAGE OF COMMERCIAL DEED OF TRUST, SECURITY AGREEMENT,

ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING]Exhibit 10.2

Exhibit 10.2

NOTE

			
	 	 	 
	$35,000,000
	 	December 31, 2010

FOR VALUE RECEIVED, each of the undersigned, MOENIUM HOLDINGS LLC, a Nevada limited liability
company (“Moenium”), CM HEALTH HOLDINGS LLC, a Nevada limited liability company (“CM Health”), POLK
HEALTH HOLDINGS LLC, a Nevada limited liability company (“Polk”), and LUFKIN HEALTH HOLDINGS LLC, a
Nevada limited liability company (“Lufkin”; Moenium, CM Health, Polk and Lufkin, each, a “Borrower”
and, collectively, “Borrowers”), jointly and severally, unconditionally promises to pay to the
order of RBS ASSET FINANCE, INC. (“Lender”) the principal sum of THIRTY FIVE MILLION DOLLARS
($35,000,000), which is the original principal amount of the Loan made by Lender on the date
hereof. Principal shall be payable on each payment date (each, a “Payment Date”) in installments
as set forth on Schedule A hereto, with a final installment (in the amount necessary to pay in full
this Note) due and payable on January 1, 2018 the (“Maturity Date”), or earlier upon acceleration
pursuant hereto or pursuant to each Commercial Deed of Trust, Security Agreement, Assignment of
Leases and Rents and Fixture Filing of even date herewith (each, a “Mortgage” and, collectively,
the “Mortgages”) executed by the respective Borrower for the benefit of Lender securing the loan
(the “Loan”) evidenced by this Note. Borrowers also promise to pay interest on the unpaid
principal amount hereof from the date hereof (the “Closing Date”) until maturity (whether by
acceleration or otherwise) and, after maturity, until paid. Except as otherwise provided herein,
interest shall accrue on this Note at a rate per annum equal to 6.04% and shall be payable on each
Payment Date as set forth on Schedule A hereto. In addition, interest for the period from the
Closing Date through and including the last day of the calendar month immediately preceding January
1, 2011 shall be payable on January 1, 2011. Unless otherwise defined in this Note, all
capitalized terms used in this Note shall have the meanings ascribed to such terms in the
Mortgages.

Payments of both principal and interest are to be made without set-off or counterclaim in
lawful money of the United States of America in same day or immediately available funds to the
account designated by Lender. Borrowers shall authorize and make such arrangements as may be
necessary to enable Lender to obtain payments due under this Note and the other Loan Documents
through the automated clearinghouse system (“ACH System”). Such authorizations and arrangements
shall include, without limitation, establishing and maintaining an account with a commercial bank
that is a member of the ACH System and entering into an ACH System agreement with Lender. Whenever
any payment to be made hereunder shall be stated to be due on a day which is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension of time shall not
be included in the computation of interest or the fees hereunder, as the case may be.

If any payment (other than the final, balloon payment on the Maturity Date) shall not be
received by Lender within 10 days after its due date, Borrower shall pay interest on the delinquent
payment at the rate of the lesser of (i) the sum of (A) the stated interest rate of this Note plus
(B) 2.00% per annum or (ii) the maximum interest rate permitted by law (the “Default Rate”);
provided that such amount shall not be less than $1,000.00.

Each of the following shall constitute an event of default (“Event of Default”) hereunder and
under the other Loan Documents:

(a) Failure of Lender to receive any payment of principal, interest or Prepayment Fee
upon this Note when due, and such failure shall continue for 10 days; or

(b) The occurrence of an “Event of Default” as defined in any Loan Document (other than
this Note).

Upon the occurrence of any Event of Default, Lender shall have the option to declare the entire
amount of principal and interest due under this Note immediately due and payable without notice or
demand, and Lender may exercise any of its rights under this Note, the Mortgage and any document
executed or delivered herewith. After acceleration or the Maturity Date, Borrowers shall pay
interest on the outstanding principal balance of this Note at the Default Rate.

 

 

 

Prior to the Maturity Date, Borrowers may, from time to time on any Payment Date after the
second anniversary of the Closing Date of this Note make a voluntary prepayment of the outstanding
principal amount of the Loan; provided, however that: (a) any such voluntary prepayment shall be
made only of the Loan in full; (b) any such voluntary prepayment shall require notice on or before
the date that is 10 Business Days in advance of any prepayment of the Loan; and (c) in connection
with such voluntary prepayment, Borrowers shall pay all accrued interest on the outstanding
principal amount of the Loan, all other amounts owed under any Loan Document and, except as
otherwise provided in any Loan Document, the aggregate Prepayment Fee for the Loan, which shall not
be refundable.

Upon any acceleration of the Loan pursuant to any of the Mortgage, Borrowers shall immediately
repay all of (or if only a portion is accelerated thereunder, such portion of) the Loan then
outstanding, including accrued and unpaid interest thereon, plus the aggregate Prepayment Fee for
the Loan and all other amounts owed under the Loan Documents.

As used herein, the “Prepayment Fee” shall be an amount equal to 5% of the amount prepaid if
prepayment is on or prior to the third anniversary of the Closing Date of this Note, 4% of the
amount prepaid if prepayment is after the third anniversary of the Closing Date of this Note but on
or prior to the fourth anniversary of the Closing Date of this Note, 3% of the amount prepaid if
prepayment is after the fourth anniversary of the Closing Date of this Note but on or prior to the
fifth anniversary of the Closing Date of this Note, 2% of the amount prepaid if prepayment is after
the fifth anniversary of the Closing Date of this Note but on or prior to the sixth anniversary of
the Closing Date of this Note and 1% of the amount prepaid if prepayment is after the sixth
anniversary of the Closing Date of this Note but prior to the Maturity Date.

This Note evidences Secured Obligations described in the Mortgage and is secured by the
Collateral described in the Mortgage. This Note is subject to the terms and conditions set forth
in the Mortgage.

Borrowers hereby irrevocably authorize Lender to make (or cause to be made) appropriate
notations on the Schedule A attached to this Note (or on any continuation of or supplements to such
schedule), which notations, if made, shall evidence, inter alia, the date of, the outstanding
principal of, and the interest rate applicable to, the Loan evidenced hereby (including, without
limitation, upon any applicable extension of the Maturity Date of the Loan, to amend Schedule A to
provide for the amended scheduled payments of principal and interest). Such notations shall be,
absent manifest error, evidence of the information so set forth therein; provided, however, that
the failure of Lender to make any such notations shall not limit or otherwise affect any
Obligations of any Borrower.

If this Note is placed in the hands of an attorney for collection, Borrowers shall pay
reasonable attorneys’ fees and expenses incurred by Lender in connection therewith, and in the
event suit or action is instituted to enforce or interpret this Note (including, without
limitation, efforts to modify or vacate any automatic stay or injunction), the prevailing party
shall be entitled to recover all expenses reasonably incurred at, before or after trial and on
appeal, whether or not taxable as costs, or in any bankruptcy proceeding, or in connection with
postjudgment collection efforts, including, without limitation, reasonable attorneys’ fees, witness
fees (expert and otherwise), deposition costs, copying charges and other expenses.

All parties hereto, whether as makers, endorsers, or otherwise, severally waive presentment
for payment, demand, protest and notice of dishonor.

All of the obligations, promises, agreements and covenants of Borrowers under this Note are
joint and several.

Each Borrower hereby agrees to comply with the covenants applicable to such Borrower set forth
in Exhibit A to the Guaranty of even date herewith executed by The Ensign Group, Inc. for the
benefit of Lender.

Delivery of an executed signature page of this Note by facsimile transmission or by means of
electronic mail (or in so-called “pdf” format) shall be effective as an in-hand delivery of an
original executed original hereof.

THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT-OF-LAWS PRINCIPLES THEREOF.

 

 

 

EACH BORROWER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE LOAN DOCUMENTS, ANY DEALINGS
BETWEEN OR AMONG LENDER AND ANY BORROWER RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS
CONTEMPLATED BY THIS NOTE OR ANY LOAN DOCUMENT, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN OR AMONG LENDER AND ANY BORROWER. EACH BORROWER ACKNOWLEDGES AND AGREES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR LENDER MAKING THE LOAN. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY LOAN DOCUMENT, OR TO ANY OTHER DOCUMENT OR AGREEMENT
RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY RELATED TRANSACTION. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE FEDERAL OR STATE
COURTS OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY PROPERTY OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. EACH BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION. EACH BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, SUCH BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS NOTE AND THE OTHER LOAN DOCUMENTS.

[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]

 

 

 

IN WITNESS WHEREOF, each Borrower has caused this Note to be executed by its officer and duly
authorized as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	BORROWERS:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	MOENIUM HOLDINGS LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	The Ensign Group, Inc., a Delaware corporation, its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Gregory K. Stapley	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	Name: Gregory K. Stapley	 	 
	 

	 	 	 	 	 	Title:   Executive Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	CM HEALTH HOLDINGS LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	The Ensign Group, Inc., a Delaware corporation, its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Gregory K. Stapley	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	Name: Gregory K. Stapley	 	 
	 

	 	 	 	 	 	Title:   Executive Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	POLK HEALTH HOLDINGS LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	The Ensign Group, Inc., a Delaware corporation, its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Gregory K. Stapley	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	Name: Gregory K. Stapley	 	 
	 

	 	 	 	 	 	Title:   Executive Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	LUFKIN HEALTH HOLDINGS LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	The Ensign Group, Inc., a Delaware corporation, its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Gregory K. Stapley	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	Name: Gregory K. Stapley	 	 
	 

	 	 	 	 	 	Title:   Executive Vice President	 	 

[EXECUTION PAGE OF NOTE]

 

 

 

SCHEDULE A

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Payment	 	 	 	 	 	Beginning	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Ending	 
	Number	 	Date	 	Balance	 	 	Payment	 	 	Principal	 	 	Interest	 	 	Balance	 
	1
	 	February 1, 2011	 	$	35,000,000.00	 	 	$	251,559.21	 	 	$	75,392.54	 	 	$	176,166.67	 	 	$	34,924,607.46	 
	2
	 	March 1, 2011	 	$	34,924,607.46	 	 	$	251,559.21	 	 	$	75,772.02	 	 	$	175,787.19	 	 	$	34,848,835.44	 
	3
	 	April 1, 2011	 	$	34,848,835.44	 	 	$	251,559.21	 	 	$	76,153.40	 	 	$	175,405.81	 	 	$	34,772,682.04	 
	4
	 	May 1, 2011	 	$	34,772,682.04	 	 	$	251,559.21	 	 	$	76,536.71	 	 	$	175,022.50	 	 	$	34,696,145.33	 
	5
	 	June 1, 2011	 	$	34,696,145.33	 	 	$	251,559.21	 	 	$	76,921.94	 	 	$	174,637.26	 	 	$	34,619,223.39	 
	6
	 	July 1, 2011	 	$	34,619,223.39	 	 	$	251,559.21	 	 	$	77,309.12	 	 	$	174,250.09	 	 	$	34,541,914.27	 
	7
	 	August 1, 2011	 	$	34,541,914.27	 	 	$	251,559.21	 	 	$	77,698.24	 	 	$	173,860.97	 	 	$	34,464,216.03	 
	8
	 	September 1, 2011	 	$	34,464,216.03	 	 	$	251,559.21	 	 	$	78,089.32	 	 	$	173,469.89	 	 	$	34,386,126.71	 
	9
	 	October 1, 2011	 	$	34,386,126.71	 	 	$	251,559.21	 	 	$	78,482.37	 	 	$	173,076.84	 	 	$	34,307,644.34	 
	10
	 	November 1, 2011	 	$	34,307,644.34	 	 	$	251,559.21	 	 	$	78,877.40	 	 	$	172,681.81	 	 	$	34,228,766.94	 
	11
	 	December 1, 2011	 	$	34,228,766.94	 	 	$	251,559.21	 	 	$	79,274.41	 	 	$	172,284.79	 	 	$	34,149,492.52	 
	12
	 	January 1, 2012	 	$	34,149,492.52	 	 	$	251,559.21	 	 	$	79,673.43	 	 	$	171,885.78	 	 	$	34,069,819.09	 
	13
	 	February 1, 2012	 	$	34,069,819.09	 	 	$	251,559.21	 	 	$	80,074.45	 	 	$	171,484.76	 	 	$	33,989,744.64	 
	14
	 	March 1, 2011	 	$	33,989,744.64	 	 	$	251,559.21	 	 	$	80,477.49	 	 	$	171,081.71	 	 	$	33,909,267.15	 
	15
	 	April 1, 2012	 	$	33,909,267.15	 	 	$	251,559.21	 	 	$	80,882.56	 	 	$	170,676.64	 	 	$	33,828,384.58	 
	16
	 	May 1, 2012	 	$	33,828,384.58	 	 	$	251,559.21	 	 	$	81,289.67	 	 	$	170,269.54	 	 	$	33,747,094.91	 
	17
	 	June 1, 2012	 	$	33,747,094.91	 	 	$	251,559.21	 	 	$	81,698.83	 	 	$	169,860.38	 	 	$	33,665,396.08	 
	18
	 	July 1, 2012	 	$	33,665,396.08	 	 	$	251,559.21	 	 	$	82,110.05	 	 	$	169,449.16	 	 	$	33,583,286.03	 
	19
	 	August 1, 2012	 	$	33,583,286.03	 	 	$	251,559.21	 	 	$	82,523.34	 	 	$	169,035.87	 	 	$	33,500,762.70	 
	20
	 	September 1, 2012	 	$	33,500,762.70	 	 	$	251,559.21	 	 	$	82,938.70	 	 	$	168,620.51	 	 	$	33,417,824.00	 
	21
	 	October 1, 2012	 	$	33,417,824.00	 	 	$	251,559.21	 	 	$	83,356.16	 	 	$	168,203.05	 	 	$	33,334,467.83	 
	22
	 	November 1, 2012	 	$	33,334,467.83	 	 	$	251,559.21	 	 	$	83,775.72	 	 	$	167,783.49	 	 	$	33,250,692.11	 
	23
	 	December 1, 2012	 	$	33,250,692.11	 	 	$	251,559.21	 	 	$	84,197.39	 	 	$	167,361.82	 	 	$	33,166,494.72	 
	24
	 	January 1, 2013	 	$	33,166,494.72	 	 	$	251,559.21	 	 	$	84,621.18	 	 	$	166,938.02	 	 	$	33,081,873.54	 
	25
	 	February 1, 2013	 	$	33,081,873.54	 	 	$	251,559.21	 	 	$	85,047.11	 	 	$	166,512.10	 	 	$	32,996,826.43	 
	26
	 	March 1, 2013	 	$	32,996,826.43	 	 	$	251,559.21	 	 	$	85,475.18	 	 	$	166,084.03	 	 	$	32,911,351.25	 
	27
	 	April 1, 2013	 	$	32,911,351.25	 	 	$	251,559.21	 	 	$	85,905.41	 	 	$	165,653.80	 	 	$	32,825,445.84	 
	28
	 	May 1, 2013	 	$	32,825,445.84	 	 	$	251,559.21	 	 	$	86,337.80	 	 	$	165,221.41	 	 	$	32,739,108.04	 
	29
	 	June 1, 2013	 	$	32,739,108.04	 	 	$	251,559.21	 	 	$	86,772.36	 	 	$	164,786.84	 	 	$	32,652,335.68	 
	30
	 	July 1, 2013	 	$	32,652,335.68	 	 	$	251,559.21	 	 	$	87,209.12	 	 	$	164,350.09	 	 	$	32,565,126.56	 
	31
	 	August 1, 2013	 	$	32,565,126.56	 	 	$	251,559.21	 	 	$	87,648.07	 	 	$	163,911.14	 	 	$	32,477,478.49	 
	32
	 	September 1, 2013	 	$	32,477,478.49	 	 	$	251,559.21	 	 	$	88,089.23	 	 	$	163,469.98	 	 	$	32,389,389.25	 
	33
	 	October 1, 2013	 	$	32,389,389.25	 	 	$	251,559.21	 	 	$	88,532.62	 	 	$	163,026.59	 	 	$	32,300,856.64	 
	34
	 	November 1, 2013	 	$	32,300,856.64	 	 	$	251,559.21	 	 	$	88,978.23	 	 	$	162,580.98	 	 	$	32,211,878.41	 
	35
	 	December 1, 2013	 	$	32,211,878.41	 	 	$	251,559.21	 	 	$	89,426.09	 	 	$	162,133.12	 	 	$	32,122,452.32	 
	36
	 	January 1, 2014	 	$	32,122,452.32	 	 	$	251,559.21	 	 	$	89,876.20	 	 	$	161,683.01	 	 	$	32,032,576.12	 
	37
	 	February 1, 2014	 	$	32,032,576.12	 	 	$	251,559.21	 	 	$	90,328.58	 	 	$	161,230.63	 	 	$	31,942,247.55	 
	38
	 	March 1, 2014	 	$	31,942,247.55	 	 	$	251,559.21	 	 	$	90,783.23	 	 	$	160,775.98	 	 	$	31,851,464.32	 
	39
	 	April 1, 2014	 	$	31,851,464.32	 	 	$	251,559.21	 	 	$	91,240.17	 	 	$	160,319.04	 	 	$	31,760,224.15	 
	40
	 	May 1, 2014	 	$	31,760,224.15	 	 	$	251,559.21	 	 	$	91,699.41	 	 	$	159,859.79	 	 	$	31,668,524.73	 
	41
	 	June 1, 2014	 	$	31,668,524.73	 	 	$	251,559.21	 	 	$	92,160.97	 	 	$	159,398.24	 	 	$	31,576,363.77	 
	42
	 	July 1, 2014	 	$	31,576,363.77	 	 	$	251,559.21	 	 	$	92,624.84	 	 	$	158,934.36	 	 	$	31,483,738.92	 
	43
	 	August 1, 2014	 	$	31,483,738.92	 	 	$	251,559.21	 	 	$	93,091.06	 	 	$	158,468.15	 	 	$	31,390,647.87	 
	44
	 	September 1, 2014	 	$	31,390,647.87	 	 	$	251,559.21	 	 	$	93,559.61	 	 	$	157,999.59	 	 	$	31,297,088.25	 
	45
	 	October 1, 2014	 	$	31,297,088.25	 	 	$	251,559.21	 	 	$	94,030.53	 	 	$	157,528.68	 	 	$	31,203,057.72	 
	46
	 	November 1, 2014	 	$	31,203,057.72	 	 	$	251,559.21	 	 	$	94,503.82	 	 	$	157,055.39	 	 	$	31,108,553.90	 
	47
	 	December 1, 2014	 	$	31,108,553.90	 	 	$	251,559.21	 	 	$	94,979.49	 	 	$	156,579.72	 	 	$	31,013,574.42	 

 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Payment	 	 	 	 	 	Beginning	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Ending	 
	Number	 	Date	 	Balance	 	 	Payment	 	 	Principal	 	 	Interest	 	 	Balance	 
	48
	 	January 1, 2015	 	$	31,013,574.42	 	 	$	251,559.21	 	 	$	95,457.55	 	 	$	156,101.66	 	 	$	30,918,116.87	 
	49
	 	February 1, 2015	 	$	30,918,116.87	 	 	$	251,559.21	 	 	$	95,938.02	 	 	$	155,621.19	 	 	$	30,822,178.85	 
	50
	 	March 1, 2015	 	$	30,822,178.85	 	 	$	251,559.21	 	 	$	96,420.91	 	 	$	155,138.30	 	 	$	30,725,757.94	 
	51
	 	April 1, 2015	 	$	30,725,757.94	 	 	$	251,559.21	 	 	$	96,906.23	 	 	$	154,652.98	 	 	$	30,628,851.71	 
	52
	 	May 1, 2015	 	$	30,628,851.71	 	 	$	251,559.21	 	 	$	97,393.99	 	 	$	154,165.22	 	 	$	30,531,457.72	 
	53
	 	June 1, 2015	 	$	30,531,457.72	 	 	$	251,559.21	 	 	$	97,884.20	 	 	$	153,675.00	 	 	$	30,433,573.52	 
	54
	 	July 1, 2015	 	$	30,433,573.52	 	 	$	251,559.21	 	 	$	98,376.89	 	 	$	153,182.32	 	 	$	30,335,196.63	 
	55
	 	August 1, 2015	 	$	30,335,196.63	 	 	$	251,559.21	 	 	$	98,872.05	 	 	$	152,687.16	 	 	$	30,236,324.58	 
	56
	 	September 1, 2015	 	$	30,236,324.58	 	 	$	251,559.21	 	 	$	99,369.71	 	 	$	152,189.50	 	 	$	30,136,954.87	 
	57
	 	October 1, 2015	 	$	30,136,954.87	 	 	$	251,559.21	 	 	$	99,869.87	 	 	$	151,689.34	 	 	$	30,037,085.00	 
	58
	 	November 1, 2015	 	$	30,037,085.00	 	 	$	251,559.21	 	 	$	100,372.55	 	 	$	151,186.66	 	 	$	29,936,712.45	 
	59
	 	December 1, 2015	 	$	29,936,712.45	 	 	$	251,559.21	 	 	$	100,877.76	 	 	$	150,681.45	 	 	$	29,835,834.70	 
	60
	 	January 1, 2016	 	$	29,835,834.70	 	 	$	251,559.21	 	 	$	101,385.51	 	 	$	150,173.70	 	 	$	29,734,449.19	 
	61
	 	February 1, 2016	 	$	29,734,449.19	 	 	$	251,559.21	 	 	$	101,895.81	 	 	$	149,663.39	 	 	$	29,632,553.38	 
	62
	 	March 1, 2016	 	$	29,632,553.38	 	 	$	251,559.21	 	 	$	102,408.69	 	 	$	149,150.52	 	 	$	29,530,144.69	 
	63
	 	April 1, 2016	 	$	29,530,144.69	 	 	$	251,559.21	 	 	$	102,924.15	 	 	$	148,635.06	 	 	$	29,427,220.54	 
	64
	 	May 1, 2016	 	$	29,427,220.54	 	 	$	251,559.21	 	 	$	103,442.20	 	 	$	148,117.01	 	 	$	29,323,778.34	 
	65
	 	June 1, 2016	 	$	29,323,778.34	 	 	$	251,559.21	 	 	$	103,962.86	 	 	$	147,596.35	 	 	$	29,219,815.49	 
	66
	 	July 1, 2016	 	$	29,219,815.49	 	 	$	251,559.21	 	 	$	104,486.14	 	 	$	147,073.07	 	 	$	29,115,329.35	 
	67
	 	August 1, 2016	 	$	29,115,329.35	 	 	$	251,559.21	 	 	$	105,012.05	 	 	$	146,547.16	 	 	$	29,010,317.30	 
	68
	 	September 1, 2016	 	$	29,010,317.30	 	 	$	251,559.21	 	 	$	105,540.61	 	 	$	146,018.60	 	 	$	28,904,776.69	 
	69
	 	October 1, 2016	 	$	28,904,776.69	 	 	$	251,559.21	 	 	$	106,071.83	 	 	$	145,487.38	 	 	$	28,798,704.85	 
	70
	 	November 1, 2016	 	$	28,798,704.85	 	 	$	251,559.21	 	 	$	106,605.73	 	 	$	144,953.48	 	 	$	28,692,099.13	 
	71
	 	December 1, 2016	 	$	28,692,099.13	 	 	$	251,559.21	 	 	$	107,142.31	 	 	$	144,416.90	 	 	$	28,584,956.82	 
	72
	 	January 1, 2017	 	$	28,584,956.82	 	 	$	251,559.21	 	 	$	107,681.59	 	 	$	143,877.62	 	 	$	28,477,275.23	 
	73
	 	February 1, 2017	 	$	28,477,275.23	 	 	$	251,559.21	 	 	$	108,223.59	 	 	$	143,335.62	 	 	$	28,369,051.64	 
	74
	 	March 1, 2017	 	$	28,369,051.64	 	 	$	251,559.21	 	 	$	108,768.32	 	 	$	142,790.89	 	 	$	28,260,283.32	 
	75
	 	April 1, 2017	 	$	28,260,283.32	 	 	$	251,559.21	 	 	$	109,315.78	 	 	$	142,243.43	 	 	$	28,150,967.54	 
	76
	 	May 1, 2017	 	$	28,150,967.54	 	 	$	251,559.21	 	 	$	109,866.01	 	 	$	141,693.20	 	 	$	28,041,101.53	 
	77
	 	June 1, 2017	 	$	28,041,101.53	 	 	$	251,559.21	 	 	$	110,419.00	 	 	$	141,140.21	 	 	$	27,930,682.54	 
	78
	 	July 1, 2017	 	$	27,930,682.54	 	 	$	251,559.21	 	 	$	110,974.77	 	 	$	140,584.44	 	 	$	27,819,707.76	 
	79
	 	August 1, 2017	 	$	27,819,707.76	 	 	$	251,559.21	 	 	$	111,533.35	 	 	$	140,025.86	 	 	$	27,708,174.42	 
	80
	 	September 1, 2017	 	$	27,708,174.42	 	 	$	251,559.21	 	 	$	112,094.73	 	 	$	139,464.48	 	 	$	27,596,079.69	 
	81
	 	October 1, 2017	 	$	27,596,079.69	 	 	$	251,559.21	 	 	$	112,658.94	 	 	$	138,900.27	 	 	$	27,483,420.75	 
	82
	 	November 1, 2017	 	$	27,483,420.75	 	 	$	251,559.21	 	 	$	113,225.99	 	 	$	138,333.22	 	 	$	27,370,194.76	 
	83
	 	December 1, 2017	 	$	27,370,194.76	 	 	$	251,559.21	 	 	$	113,795.89	 	 	$	137,763.31	 	 	$	27,256,398.86	 
	84
	 	January 1, 2018	 	$	27,256,398.86	 	 	$	27,393,589.40	 	 	 	 	 	 	$	137,190.54	 	 	$	—

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]