TERM LOAN AND SECURITY AGREEMENT

Exhibit 10.63

TERM LOAN AND SECURITY AGREEMENT

     This TERM LOAN AND SECURITY AGREEMENT (this “ Agreement ”), dated as of May 31, 2002, is by and among RE BAYONET POINT, INC., RE JACKSONVILLE, INC., RE PORT CHARLOTTE, INC., RE SARASOTA, INC., RE ORANGE PARK, INC., RE ST. PETERSBURG, INC., AND RE SAFETY HARBOR, INC., each a Florida corporation (individually and collectively, the “ Borrower ”), and LASALLE BANK NATIONAL ASSOCIATION, a national banking association (together with its successors and assigns, the “ Lender ”).

WITNESSETH:

      WHEREAS, the Borrower desires to acquire (the “ Acquisition ”) the Real Estate (as defined herein) from certain Affiliates of Extendicare Health Services, Inc. as listed on Schedule 7.8 attached hereto (collectively, the “ Seller ”);

      WHEREAS, the Borrower has requested that the Lender provide the Borrower with a term loan in the amount of Twenty-One Million and No/100 Dollars ($21,000,000.00), to partially finance the Acquisition; and

      WHEREAS, the Lender is willing to make such term loan to the Borrower, upon the terms and provisions and subject to the conditions set forth herein.

      NOW, THEREFORE, in consideration of the mutual agreements contained herein, and of any loans or other financial accommodations now or hereafter made to or for the benefit of the Borrower by the Lender, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto (intending to be legally bound) hereby agree as follows:

           1. DEFINITIONS.

          1.1 General Terms . When used herein, the following terms shall have the following meanings:

     “ Acquisition ” has the meaning contained in the Recitals to this Agreement.

     “ Acquisition Agreements ” means, collectively, each of those seven Leases dated as of January 1, 2001 between Seller and Borrower, respectively, as amended pursuant to those certain First Amendments to Exhibit 34.1 Option To Purchase Terms and that certain Global Agreement dated as of May 31, 2002 among Seller, Tandem, Operating Companies and Borrower.

     “ Acquisition Documents ” means, collectively, the Acquisition Agreements and the documents, instruments and agreements executed or delivered in connection therewith or otherwise in connection with the Acquisition, in each case as the same may be amended or modified in conformity with Section 9.15 of this Agreement.

     “ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling (including, without limitation, all shareholders, members, directors, managers, and officers of such Person), controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if such first Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through ownership of voting securities, by contract or otherwise.

     “ Agreement ” means this Term Loan and Security Agreement, as the same may be modified, supplemented or amended from time to time.

     “ Applicable Base Rate Margin ” means with respect to any part of the Term Loan that is a Base Rate Loan, an amount equal to fifty (50) basis points.

     “ Applicable Libor Margin ” means with respect to any part of the Term Loan that is a Libor Loan, an amount equal to three hundred fifty (350) basis points.

     “ Assignments of Leases and Rents ” means, collectively, each of those certain Assignment of Leases and Rents dated of even date herewith by the Borrower in favor of the Lender, as the same may be amended, reaffirmed, modified or supplemented from time to time.

     “ Base Rate ” means the corporate base rate of interest per annum identified from time to time by the Lender, as its base or prime rate, which rate shall not necessarily be the lowest rate of interest which the Lender charges its customers. Any change in the Base Rate shall be effective as of the effective date of such change.

     “ Base Rate Loan ” means a part of the Term Loan that bears interest at an interest rate based on the Base Rate.

     “ Borrowing Date ” means a date on which Borrower requests a Libor Rate on all or a portion of the Term Loan, as applicable.

     “ Borrowing Notice ” shall have the meaning ascribed to such term in Section 2.9 hereof.

     “ Business Day ” means (i) with respect to any borrowing, payment or rate selection of Libor Loans, a day other than Saturday or Sunday on which banks are open for business in Chicago, Illinois and on which dealings in United States dollars are carried on in the London interbank market, and (ii) for all other purposes, a day other than Saturday or Sunday on which banks are open for business in Chicago, Illinois.

     “ CERCLA ” means the Comprehensive Environmental Release Compensation and Liability Act, 42 U.S.C. § 9601 et seq ., as amended.

     “ Closing Date ” means May 31, 2002.

     “ Closing Fee ” shall have the meaning ascribed to such term in Section 2.12 hereof.

     “ Code ” means Revised Article 9 of the Uniform Commercial Code, in substantially the form approved in 1998 by the American Law Institute and the National Conference of Commissioners on Uniform State Law and as adopted in the State of Illinois.

     “ Collateral ” shall have the meaning ascribed to such term in Section 6.1 hereof.

     “ Collateral Assignment of Acquisition Agreement ” means that certain Collateral Assignment of Acquisition Agreement of even date herewith by and among the Borrower, the Operating Companies, the Seller, and the Lender, in form and substance reasonably acceptable to the Lender, which shall provide for an assignment of the rights of the Borrower and the Operating Companies under certain of the Acquisition Agreements in favor of the Lender (including, without limitation, rights of indemnification from the Seller).

     “ Credit Termination Date ” means the earlier of (i) the Stated Maturity Date, (ii) such other date on which the Term Loan Commitment shall terminate pursuant to Section 10.2 hereof, or (iii) such other date as is mutually agreed in writing between the Borrower and the Lender.

     “ Default ” means an event which through the passage of time or the service of notice or both would (assuming no action is taken to cure the same) mature into an Event of Default.

     “ Default Rate ” shall have the meaning ascribed to such term in Section 2.4(a) hereof.

     “ Duly Authorized Officer ” means the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Vice President and the Secretary of the Borrower.

     “ Environmental Indemnity Agreement ” means that certain Environmental Indemnity Agreement dated of even date herewith by the Borrower, the Operating Companies, and Tandem in favor of the Lender, as the same may be amended, reaffirmed, modified or supplemented from time to time.

     “ Environmental Laws ” means all federal, state and local laws, statutes, rules, regulations, ordinances, programs, permits, guidances, orders and consent decrees relating to health, safety and environmental matters applicable to the Borrower and its business, assets and property, including, without limitation, the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq ., as amended; CERCLA; the Toxic Substance Act, 15 U.S.C. § 2601 et seq ., as amended; the Clean Water Act, 33 U.S.C. § 466 et seq ., as amended; the Clean Air Act, 42 U.S.C. § 7401 et seq ., as amended; state and federal superlien and environmental cleanup programs; and U. S. Department of Transportation regulations.

     “ Environmental Notice ” means any summons, citation, directive, information request, notice of potential responsibility, notice of violation or deficiency, order, claim, complaint, investigation, proceeding, judgment, letters or other communication, written or oral to the Borrower or any officer thereof, actual or threatened, from the United States Environmental Protection Agency or other federal, state or local agency or authority, or any other entity or individual, public or private, concerning any intentional or unintentional act or omission which involves Management of Hazardous Substances on or off the property of the Borrower which could result in the Borrower incurring a material liability or which could have a Material Adverse Effect, or the imposition of any Lien on property, or any alleged violation of or responsibility under Environmental Laws which could result in the Borrower incurring a material liability or which could have a Material Adverse Effect, and, after due inquiry and investigation, any knowledge of any facts which could give rise to any of the foregoing.

     “ Equipment ” means “equipment” as defined in the Code that is owned by the Borrower, including, without limitation, any and all of the Borrower’s machinery, equipment, vehicles, fixtures, furniture, computers, appliances, tools, and other tangible personal property (other than Inventory), whether located on the Borrower’s premises or located elsewhere, together with any and all accessions, parts and appurtenances thereto, whether presently owned or hereafter acquired by the Borrower.

     “ Event of Default ” shall have the meaning ascribed to such term in Section 10.1 hereof.

     “ Financing Agreements ” means any and all agreements, instruments, certificates and documents, including, without limitation, security agreements, loan agreements, notes, guarantees, keep well agreements, landlord waivers, mortgages, deeds of trust, subordination agreements, intercreditor agreements, pledges, powers of attorney, consents, assignments, collateral assignments, reimbursement agreements, contracts, notices, leases, collateral assignments of key man life insurance policies, financing statements and all other written matter (including, without limitation, the Term Loan Note, the Mortgages, the Assignments of Leases and Rents, the Environmental Indemnity Agreement, the Subordination and Attornment Agreements, the Limited Guaranty, the Subordination Agreement, the Collateral Assignment of Acquisition Agreement, and the Revolving Loan Documents), in each case evidencing, securing or relating to the Term Loan and the Liabilities, whether heretofore, now, or hereafter executed by or on behalf of the Borrower, any Affiliate (including, without limitation, the Operating Companies), or any other Person, and delivered to or in favor of the Lender, together with all agreements and documents referred to therein or contemplated thereby, as each may be amended, modified or supplemented from time to time.

     “ Fiscal Quarter ” means the three (3) month period ending on March 31, June 30, September 30 and December 31 of each calendar year.

     “ Fiscal Year ” means the twelve (12) month period commencing on January 1 and ending on December 31 of each calendar year.

     “ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or any successor authority) that are applicable to the circumstances as of the date of determination.

     “ General Intangibles ” means any and all general intangibles, choses in action, causes of action, rights to the payment of money (other than Accounts), and all other intangible personal property of the Borrower of every kind and nature wherever located and whether currently owned or hereafter acquired by the Borrower (other than Accounts), including, without limitation, corporate or other business records, inventions, designs, patents, patent applications, service marks, service mark applications, trademark applications, brand names, tradenames, trademarks and all goodwill symbolized thereby and relating thereto, tradestyles, trade secrets, registrations, computer software, advertising materials, distributions on certificated and uncertificated securities, investment property, securities entitlements, goodwill, operational manuals, product formulas for industrial processes, blueprints, drawings, copyrights, copyright applications, rights and benefits under contracts, licenses, license agreements, permits, approvals, authorizations which are associated with the operation of the Borrower’s business and granted by any Person, franchises, customer lists, deposit accounts, tax refunds, tax refund claims, and any letters of credit, guarantee claims, security interests or other security held by or granted to the Borrower to secure payment by a Person obligated under any of Borrower’s Accounts, and, to the maximum extent permitted by applicable law, any recoveries or amounts received in connection with any litigation or settlement of any litigation.

     “ Hazardous Substances ” means hazardous substances, materials, wastes, and waste constituents and reaction by-products, pesticides, oil and other petroleum products, and toxic substances, including, without limitation, asbestos and PCBs, as those terms are defined pursuant to Environmental Laws.

     “ Indebtedness ” with respect to any Person means, as of the date of determination thereof, (i) all of such Person’s indebtedness for borrowed money, (ii) all indebtedness of such Person or any other Person secured by any Lien with respect to any property or asset owned or held by such Person, regardless whether the indebtedness secured thereby shall have been assumed by such Person or such Person has become liable for the payment thereof, (iii) all obligations or liabilities created or arising under any lease of real or personal property, or conditional sale or other title retention agreement with respect to property used and/or acquired by Borrower even though the rights and remedies of the lessor, seller and/or lender thereunder are limited to repossession of such property, (iv) all unfunded pension fund obligations and liabilities, (v) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (vi) all obligations in respect of letters of credit, whether or not drawn, and bankers’ acceptances issued for the account of such Person, (vii) deferred and/or accrued taxes and all unfunded pension fund obligations and liabilities, (viii) all guarantees by such Person,

or any undertaking by such Person to be liable for, the debts or obligations of any other Person, and (ix) all other indebtedness, liabilities and obligations of such Person, now or hereafter owing, due or payable, however evidenced, created, incurred or owing and however arising.

     “ Indemnified Parties ” shall have the meaning ascribed to such term in Section 11.16 hereof.

     “ Junior Mortgages ” means, collectively, those certain Mortgages made by the Borrower in favor of the Seller, which provide the Seller with a second position mortgage lien in the Real Estate (such Mortgages being junior and subject to the Mortgages in favor of the Lender in the Real Estate) in order to secure the obligations to the Seller pursuant to the Seller Notes.

     “ Liabilities ” means any and all of the Borrower’s liabilities, obligations and Indebtedness to the Lender of any and every kind and nature, whether heretofore, now or hereafter owing, arising, due or payable and howsoever evidenced, created, incurred, acquired, or owing, whether primary, secondary, direct, indirect, contingent, absolute, fixed or otherwise (including, without limitation, payments of or for principal, interest, fees, costs, expenses, and/or indemnification, and obligations of performance) and whether arising or existing under written agreement, oral agreement, or by operation of law, including, without limitation, all the Borrower’s Indebtedness, liabilities and obligations to the Lender under this Agreement (whether relating to the Term Loan or otherwise) or the Financing Agreements to which the Borrower is a party, and any refinancings, substitutions, extensions, renewals, replacements and modifications for or of any or all of the foregoing.

     “ Libor Base Rate ” means, with respect to a Libor Loan for the relevant Libor Interest Period, the offered rate per annum for deposits of U.S. dollars for a period equal to such Libor Interest Period that appears on Telerate Page 3750 as of 11:00 A.M. (London, England time) two (2) Business Days prior to the first day in such Libor Interest Period. If no such offered rate exists, such rate will be the rate at which deposits in U.S. dollars on immediately available funds are offered to the Lender by major lenders in the interlender Libor market at approximately 10:00 a.m. (Chicago time) two (2) Business Days prior to the first day of such Libor Interest Period, in the approximate amount of the Libor Loan and having a maturity approximately equal to the Libor Interest Period, less any reserve required under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System with respect to liabilities consisting of or including eurocurrency liabilities.

     “ Libor Interest Period ” means, with respect to a Libor Loan, a period of thirty (30), sixty (60) or ninety (90) days commencing on a Business Day selected by the Borrower pursuant to this Agreement. Such Libor Interest Period shall end on (but exclude) the day which corresponds numerically to the date thirty (30), sixty (60) or ninety (90) days thereafter; provided, however, that if a Libor Interest Period would otherwise end on a day that is not a Business Day, such Libor Interest Period shall end on the next succeeding Business Day;

provided, further, that if such next succeeding Business Day occurs after the applicable period, such Libor Interest Period shall end on the immediately preceding Business Day.

     “ Libor Loan ” means all or a part of the Term Loan, as applicable, which bears interest at a Libor Rate.

     “ Libor Rate ” means, with respect to a Libor Loan for the relevant Libor Interest Period, the sum of the Libor Base Rate applicable to that Libor Interest Period, plus the Applicable Libor Margin.

     “ Lien ” means any lien, security interest, mortgage, pledge, hypothecation, collateral assignment, or other charge, encumbrance or preferential arrangement, including, without limitation, the retained security title of a conditional vendor or lessor.

     “ Limited Guaranty ” means that certain Limited Guaranty dated of even date herewith by Tandem in favor of the Lender, as the same may be amended, reaffirmed, modified or supplemented from time to time.

     “ Loan Account ” shall have the meaning ascribed to such term in Section 2.2 hereof.

     “ Manage ” or “ Management ” means to generate, handle, manufacture, process, treat, store, use, re-use, refine, recycle, reclaim, blend or burn for energy recovery, incinerate, accumulate speculatively, transport, transfer, dispose of, release, threaten to release or abandon Hazardous Substances.

     “ Material Adverse Change ” or “ Material Adverse Effect ” means any change, event, action, condition or effect which, individually or in the aggregate, (i) impairs the legality, validity or enforceability of this Agreement or any Financing Agreement or any Revolving Loan Document, (ii) impairs the fully perfected first priority status of the Liens granted or made hereunder and under the Financing Agreements and the Revolving Loan Documents in favor of the Lender in any of the assets or property (whether real or personal) of the Borrower or the Operating Companies to secure the Liabilities or any portion thereof (subject only to the Permitted Liens), or (iii) materially and adversely affects the business, property (whether real or personal), operations, performance, or condition (financial or otherwise) of the Borrower, the Operating Companies or the Collateral or the Real Estate, or the ability of the Borrower to repay the Liabilities when due or declared due and perform the Borrower’s obligations under this Agreement and the Financing Agreements to which it is a party.

     “ Mortgages ” means, collectively, each of those certain Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Financing Statement made by each of the Borrowers, each dated of even date herewith, granting and conveying to the Lender a first mortgage Lien on the Real Estate, as the same may be amended, supplemented or modified from time to time.

     “ Operating Companies ” means, collectively, Tandem Health Care of Bayonet Point, Inc., Tandem Health Care of Jacksonville, Inc., Tandem Health Care of Port Charlotte, Inc., Tandem Health Care of Sarasota, Inc., Tandem Health Care of Orange Park, Inc., Tandem Health Care of St. Petersburg, Inc., and Tandem Health Care of Safety Harbor, Inc., each a Florida corporation.

     “ Permitted Liens ” shall have the meaning ascribed to such term in Section 9.1 hereof.

     “ Person ” means any individual, sole proprietorship, partnership, cooperative, joint venture, trust, limited liability company, unincorporated organization, association, corporation, institution, entity, party, or government (whether national, federal, state, provincial, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof).

     “ Prepayment Premium ” means with respect to a prepayment of the Term Loan (i) three percent (3%) of the amount of the Term Loan prepaid if such prepayment occurs on or prior to the first anniversary of the Closing Date, (ii) two percent (2%) of the amount of the Term Loan prepaid if such prepayment occurs after the first anniversary of the Closing Date but on or prior to the second anniversary of the Closing Date and (iii) one percent (1%) of the amount of the Term Loan prepaid if such prepayment occurs at any time after the second anniversary of the Closing Date.

     “ Property ” means any and all real property owned, leased, sub-leased or used at any time by Borrower, including, without limitation, the Real Estate.

     “ Rate Option ” means the Libor Rate or the Base Rate.

     “ Real Estate ” means the properties subject to the Mortgages and located at the common addresses set forth on Schedule 1.1 attached hereto.

     “ Real Estate Leases ” means, collectively, those certain real estate leases dated as of May 31, 2002 between the Borrower, as landlord, and the Operating Companies, as tenant, with respect to the Real Estate.

     “ Release ” means any actual or threatened spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing of Hazardous Substances into the environment, as “environment” is defined in CERCLA.

     “ Respond ” or “ Response ” means any action taken pursuant to Environmental Laws to correct, remove, remediate, cleanup, prevent, mitigate, monitor, evaluate, investigate or assess the Release of a Hazardous Substance.

     “ Revolving Loan and Security Agreement ” means that certain Revolving Loan and Security Agreement dated of even date herewith by and among the Operating Companies and the Lender, as the same may be amended, modified or supplemented from time to time.

     “ Revolving Loan Documents ” means collectively the Revolving Loan and Security Agreement and the “Financing Agreements” (as such term is defined in the Revolving Loan and Security Agreement), as the same may be amended, modified or supplemented from time to time.

     “ Revolving Loan Liabilities ” means any and all liabilities, obligations and Indebtedness to the Lender of any and every kind and nature, whether heretofore, now or hereafter owing, arising, due or payable and howsoever evidenced, created, incurred, acquired, or owing, whether primary, secondary, direct, indirect, contingent, absolute, fixed or otherwise (including, without limitation, payments of or for principal, interest, fees, costs, expenses, and/or indemnification, and obligations of performance) arising under the Revolving Loan Documents, and any refinancings, substitutions, extensions, renewals, replacements and modifications for or of any or all of the foregoing.

     “ Seller ” has the meaning contained in the Recitals hereto.

     “ Seller Notes ” means those certain promissory notes dated of even date herewith from the Operating Companies and the Borrower in favor of the Sellers in the aggregate original principal amount of Thirteen Million Dollars ($13,000,000).

     “ Stated Maturity Date ” means May 31, 2007.

     “ Subordinated Debt ” means any and all Indebtedness owing by the Borrower to a third party that has been subordinated to the Liabilities in writing on terms and conditions satisfactory to the Lender in its sole and absolute determination, including, without limitation, certain indebtedness owing to the Seller by the Borrower pursuant to the Seller Notes.

     “ Subordination and Attornment Agreements ” means, collectively, those certain Subordination and Attornment Agreements of even date herewith respectively among the Borrower, the Operating Companies and the Lender, as the same may be modified, supplemented or amended from time to time, which must be in form and substance acceptable to the Lender.

     “ Subordination Agreement ” means that certain Subordination and Intercreditor Agreement of even date herewith among the Seller, the Borrower, the Operating Companies and the Lender, as the same may be modified, supplemented or amended from time to time, which must be in form and substance acceptable to the Lender.

     “ Tandem ” means Tandem Health Care Inc., a Pennsylvania corporation and the legal and beneficial owner of one hundred percent (100%) of the capital stock of the Borrower.

     “ Taxes ” shall have the meaning ascribed to such term in Section 3.3 hereof.

     “ Term Loan ” shall have the meaning ascribed to such term in Section 2.1 hereof.

     “ Term Loan Commitment ” shall have the meaning ascribed to such term in Section 2.1 hereof.

     “ Term Loan Note ” shall have the meaning ascribed to such term in Section 2.1 hereof.

     1.2 Accounting Terms . Any accounting terms used in this Agreement which are not specifically defined herein shall have the meanings customarily given to such terms in accordance with GAAP.

     1.3 Others Defined in Code . All terms contained in this Agreement (and which are not otherwise specifically defined herein) shall have the meanings provided by the Code to the extent the same are used or defined therein.

           2.  TERM LOAN COMMITMENT; INTEREST; FEES .

     2.1 Term Loan . (a) On the terms and subject to the conditions set forth in this Agreement, and provided there does not then exist a Default or an Event of Default, the Lender shall, immediately following the execution of this Agreement by the Borrower and the Lender, extend in one (1) advance a term loan (the “ Term Loan ”) to the Borrower in an aggregate principal amount equal to Twenty-One Million and No/100 Dollars ($21,000,000.00). The principal balance of the Term Loan shall be amortized over a twenty-five (25) year period and shall be repaid in consecutive monthly installments as follows:

		Principal Annual				Principal Monthly
Year 1		$	280,000			$	23,333.33
Year 2		$	300,000			$	25,000.00
Year 3		$	330,000			$	27,500.00
Year 4		$	350,000			$	29,166.67
Year 5		$	380,000			$	31,666.67

together with interest accrued thereon, each payable on the first day of each calendar month, commencing on the first day of the first month immediately following the Closing Date, and otherwise in accordance with Section. 2.4 hereof, with a final installment of the aggregate unpaid principal balance of the Term Loan, together with interest accrued thereon, payable on the Credit Termination Date. Monthly interest payments on the Term Loan shall be computed using the interest rate then in effect and based on the outstanding principal balance of the Term Loan. Any amounts paid or applied to the principal balance of the Term Loan (whether by mandatory prepayment or otherwise) may not be reborrowed hereunder. The Lender’s commitment

hereunder to make the Term Loan is hereinafter called the “ Term Loan Commitment” . Upon maturity, the outstanding principal balance of the Term Loan shall be immediately due and payable, together with any remaining accrued interest thereon, to Lender by Borrower. The payment obligations of the Borrower to the Lender hereunder are and shall be joint and several as provided in Section 11.21 hereof.

     (b) The Term Loan shall be evidenced by a promissory note (hereinafter, as the same may be amended, modified or supplemented from time to time, and together with any renewals or extensions thereof or exchanges or substitutions therefor, called the “ Term Loan Note ”), duly executed and delivered by the Borrower, substantially in the form set forth in Exhibit A attached hereto, with appropriate insertions, dated the Closing Date, payable to the order of the Lender in the principal amount of Twenty-One Million and No/100 Dollars ($21,000,000.00). THE PROVISIONS OF THE TERM LOAN NOTE NOTWITHSTANDING, THE TERM LOAN SHALL BECOME IMMEDIATELY DUE AND PAYABLE UPON THE EARLIEST TO OCCUR OF (X) THE STATED MATURITY DATE; (Y) THE ACCELERATION OF THE LIABILITIES PURSUANT TO SECTION 10.2 HEREOF; AND (Z) THE TERMINATION OF THIS AGREEMENT (WHETHER BY PREPAYMENT OR OTHERWISE) IN ACCORDANCE WITH ITS TERMS.

     2.2 The Borrower’s Loan Account . The Lender shall maintain a loan account (the “ Loan Account ”) on its books for the Borrower in which shall be recorded (a) the Term Loan made by the Lender to the Borrower pursuant to this Agreement, (b) all payments made by the Borrower on the Term Loan, and (c) all other appropriate debits and credits as provided in this Agreement, including, without limitation, all fees, charges, expenses and interest. All entries in the Loan Account shall be made in accordance with the Lender’s customary accounting practices as in effect from time to time. The Borrower promises to pay the amount reflected as owing by Borrower under its Loan Account and all of its other obligations hereunder as such amounts become due or are declared due pursuant to the terms of this Agreement. Notwithstanding the foregoing, the failure so to record any such amount or any error in so recording any such amount shall not limit or otherwise affect the Borrower’s obligations under this Agreement or under the Term Loan Note to repay the outstanding principal amount of the Term Loan together with all interest accruing thereon.

     2.3 Statements . The Term Loan to the Borrower, and all other debits and credits provided for in this Agreement, shall be evidenced by entries made by the Lender in its internal data control systems showing the date, amount and reason for each such debit or credit. Until such time as the Lender shall have rendered to the Borrower written statements of account as provided herein, the balance in the Loan Account, as set forth on the Lender’s most recent computer printout, shall be rebuttably presumptive evidence of the amounts due and owing the Lender by the Borrower. From time to time the Lender shall render to the Borrower a statement setting forth the balance of the Loan Account, including principal, interest, expenses and fees. Each such statement shall be subject to subsequent adjustment by the Lender but shall, absent manifest errors or omissions, be presumed correct and binding upon the Borrower.

     2.4 Interest . (a) The Borrower agrees to pay to the Lender interest on the daily outstanding principal balance of (i) the Base Rate Loans at the Base Rate from time to time in effect, plus the Applicable Base Rate Margin, and (ii) the Libor Loans at the Libor Rate; provided, however, that immediately following the occurrence and during the continuance of an Event of Default, and notwithstanding any other provisions of this Agreement to the contrary, the Borrower agrees to pay to the Lender interest on the outstanding principal balance of the Term Loan at the per annum rate of three percent (3%) plus the rate otherwise payable hereunder with respect to the Term Loan (the “ Default Rate ”).

     (b) Accrued interest on each Base Rate Loan shall be payable on the first calendar day of each month and at maturity, commencing with the first day of the calendar month after the initial disbursement of such loan; provided, however, accrued interest on each Libor Loan shall be payable on the last day of the Libor Interest Period relating to such Libor Loan and at maturity, commencing with the first such last day of the initial Libor Interest Period. Monthly interest payments on the Term Loan shall be computed using the interest rate then in effect and based on the outstanding principal balance of the Term Loan. Upon maturity, the outstanding principal balance of the Term Loan shall be immediately due and payable, together with any remaining accrued interest thereon. Interest shall be computed on the basis of a year of three hundred sixty (360) days for the actual number of days elapsed. If any payment of principal of, or interest on, the Term Loan Note falls due on a day that is not a Business Day, then such due date shall be extended to the next following Business Day, and additional interest shall accrue and be payable for the period of such extension.

     2.5 Method for Making Payments . All payments that the Borrower is required to make to the Lender under this Agreement or under any of the other Financing Agreements shall be made in immediately available funds not later than 1:00 p.m. (Chicago time) on the date of payment at the Lender’s office at 135 South LaSalle Street, Chicago, Illinois 60603, or at such other place as the Lender directs in writing from time to time, or, in the Lender’s sole and absolute discretion after the occurrence and during the continuance of any Default, by appropriate debits to the Loan Account. Borrower hereby irrevocably authorizes and instructs Lender after the occurrence and during the continuance of any Default to direct debit any of Borrower’s operating accounts with Lender for all principal, interest, fees and expenses due hereunder with respect to the Term Loan and the Liabilities. Payments made after 1:00 p.m. (Chicago time) shall be deemed to have been made on the next succeeding Business Day.

     2.6 Term of this Agreement . The Borrower shall have the right to terminate this Agreement following prepayment of all of the Liabilities as provided under Section 2.7 hereof; provided, however, that (a) all of the Lender’s rights and remedies under this Agreement, and (b) the Liens created under Section 6.1 hereof and under any of the other Financing Agreements, shall survive such termination until all of the Liabilities under this Agreement and the other Financing Agreements and the Revolving Loan Liabilities have been indefeasibly paid in full. In addition, the Liabilities may be accelerated as set forth in Section 10.2 hereof. Upon the

effective date of termination, all of the Liabilities shall become immediately due and payable without notice or demand. Notwithstanding any termination, until all of the Liabilities hereunder and the Revolving Loan Liabilities shall have been indefeasibly paid and satisfied, the Lender shall be entitled to retain its Liens in and to all existing and future Collateral and the Mortgages on the Real Estate.

     2.7 Optional Prepayment; Prepayment Premium . The Borrower may, at its option, permanently prepay, at any time during the term of this Agreement all or any portion of the Term Loan, subject to the following conditions: (a) not less than ten (10) days prior to the date upon which the Borrower desires to make such prepayment, Borrower shall deliver to the Lender a written notice of its intention to prepay all or such portion of the Term Loan, which notice shall be irrevocable and state the amount of the prepayment and the prepayment date and (b) the Borrower shall pay to the Lender, concurrently with such prepayment, the Prepayment Premium (in view of the impracticality and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of Lender’s lost profits), as well as any amounts charged in accordance with Section 3.4 hereof. Prepayments of the Term Loan shall be applied against installments payable under the Term Loan Note in the inverse order of maturity. Amounts prepaid on account of the Term Loan may not be reborrowed.

     2.8 Limitation on Charges. It being the intent of the parties that the rate of interest and all other charges to the Borrower be lawful, if for any reason the payment of a portion of the interest or other charges otherwise required to be paid under this Agreement would exceed the limit which the Lender may lawfully charge the Borrower, then the obligation to pay interest or other charges shall automatically be reduced to such limit and, if any amounts in excess of such limit shall have been paid, then such amounts shall at the sole option of the Lender either be refunded to the Borrower or credited to the principal amount of the Liabilities (or any combination of the foregoing) so that under no circumstances shall the interest or other charges required to be paid by the Borrower hereunder exceed the maximum rate allowed by applicable law, and Borrower shall not have any action against Lender for any damages arising out of the payment or collection of any such excess interest.

     2.9 Method of Selecting Rate Options: Additional Provisions Regarding Libor Loans . The Borrower may select a Libor Rate with respect to any part of the Term Loan as provided in this Section 2.9; provided, however, that with respect to each and all Libor Loans made hereunder (i) the initial advance shall be in an amount not less than Five Hundred Thousand Dollars ($500,000) and in integral multiples of One Hundred Thousand Dollars ($100,000) thereafter; and (ii) there shall not exist at any one time outstanding more than three (3) separate tranches of Libor Loans. The Term Loan shall bear interest at the Base Rate plus the Applicable Base Rate Margin unless the Borrower provides a Borrowing Notice to the Lender in the form of Exhibit B, signed by a Duly Authorized Officer of the Borrower, irrevocably electing that all or a portion of the Term Loan is to bear interest at a Libor Rate (the “ Borrowing Notice ”). The Borrowing Notice shall be delivered to the Lender not later than two (2) Business Days before the Borrowing Date for each Libor Loan, specifying:

	(a)		The Borrowing Date, which shall be a Business Day, of such part of the Term Loan;
	(b)		The type and aggregate amount of such part of the Term Loan;
	(c)		The Rate Option selected for such part of the Term Loan; and
	(d)		The Libor Interest Period applicable thereto.

Each Libor Loan shall bear interest from and including the first day of the Libor Interest Period applicable thereto to (but not including) the last day of such Libor Interest Period at the interest rate determined as applicable to such Libor Loan. If at the end of an Libor Interest Period for an outstanding Libor Loan, the Borrower has failed to select a new Rate Option or to pay such Libor Loan, then that part of the Term Loan shall continue as a Libor Loan with the same Libor Interest Period duration on and after the last day of such ending Libor Interest Period until paid or until the effective date of a new Rate Option with respect thereto selected by the Borrower. An outstanding Base Rate Loan may be converted to a Libor Loan at any time subject to the notice provisions applicable to the type of Term Loan selected. The Borrower may not select a Libor Rate for the Term Loan if there exists a Default or Event of Default. The Borrower shall select Libor Interest Periods with respect to Libor Loans so that such Libor Interest Period does not expire after the end of the Credit Termination Date.

     2.10 Setoff . (a) Borrower agrees that Lender has all rights of setoff and banker’s liens provided by applicable law. The Borrower agrees that, if at any time (i) any amount owing by it under this Agreement or any Financing Agreement is then due and payable to the Lender, or (ii) a Default or an Event of Default shall have occurred and be continuing, then the Lender or the holder of any promissory note issued hereunder, in its sole discretion, may set off against and apply to the payment of any and all Liabilities, any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter with the Lender or such holder.

     (b) Without limitation of Section 2.10(a) hereof, the Borrower agrees that, upon and after the occurrence of any Event of Default or Default, the Lender is hereby authorized, at any time and from time to time, without prior notice to the Borrower (provided, however, prior to an Event of Default the Lender shall use reasonable efforts to provide notice of any such action within a reasonable time thereafter but the Lender shall not be liable for any failure to provide such notice), (i) to set off against and to appropriate and apply to the payment of any and all Liabilities any and all amounts which the Lender is obligated to pay over to the Borrower (whether matured or unmatured, and, in the case of deposits, whether general or special, time or demand and however evidenced), and (ii) pending any such action, to the extent necessary, to deposit such amounts with the Lender as Collateral to secure such Liabilities and to dishonor any and all checks and other items drawn against any deposits so held as the Lender in its sole discretion may elect.

     (c) The rights of the Lender under this Section 2.10 are in addition to all other rights and remedies which the Lender may otherwise have in equity or at law.

     2.11 Termination of Term Loan Commitment by the Lender . On the date on which the Term Loan Commitment terminates pursuant to Section 10.2 hereof, the Term Loan and other Liabilities shall become immediately due and payable, without presentment, demand or notice of any kind.

     2.12 Closing Fee . On the Closing Date, the Borrower shall pay to the Lender a one-time closing fee in the amount of Two Hundred Ten Thousand and No/100 Dollars ($210,000.00) in immediately available funds, which fee shall be nonrefundable and deemed fully earned as of such date (“ Closing Fee ”).

     2.13 Late Charge . If any installment of principal or interest due hereunder shall become overdue for five (5) days after the date when due, the Borrower shall pay to the Lender on demand a “late charge” of five cents ($.05) for each dollar so overdue in order to defray part of the increased cost of collection occasioned by any such late payment, as liquidated damages and not as a penalty.

      3.   CHANGE IN CIRCUMSTANCES .

     3.1 Yield Protection . If, after the date of this Agreement, the adoption of any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any change therein, or any change in the interpretation or administration thereof, or the compliance of the Lender therewith, or Regulation D of the Board of Governors of the Federal Reserve System,

     (a) subjects the Lender to any tax, duty, charge or withholding on or from payments due from the Borrower (excluding taxation of the overall net income of the Lender), or changes the basis of taxation of payments to the Lender in respect of its Term Loan or other amounts due it hereunder, or

     (b) imposes, modifies or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, the Lender (other than reserves and assessments taken into account in determining the interest rate applicable to Libor Loans), or

     (c) imposes any other condition the result of which is to increase the cost to the Lender of making, funding or maintaining advances or reduces any amount receivable by the Lender in connection with advances, or requires the Lender to make any payment calculated by reference to the amount of advances held or interest received by it, by an amount deemed material by the Lender, or

     (d) affects the amount of capital required or expected to be maintained by the Lender or any corporation controlling the Lender and the Lender determines the amount of capital required is increased by or based upon the existence of this Agreement or its obligation to make the Term Loan hereunder or of commitments of this type,

then, within three (3) Business Days of demand by the Lender, the Borrower agrees to pay the Lender that portion of such increased expense incurred (including, in the case of clause (d) , any reduction in the rate of return on capital to an amount below that which it could have achieved but for such law, rule, regulation, policy, guideline or directive and after taking into account the Lender’s policies as to capital adequacy) or reduction in an amount received which the Lender determines is attributable to making, funding and maintaining the Term Loan.

     3.2 Availability of Rate Options . If the Lender determines that maintenance of any of its Libor Loans would violate any applicable law, rule, regulation or directive of any government or any division, agency, body or department thereof, whether or not having the force of law, the Lender shall suspend the availability of the Libor Rate option and require any Libor Loans outstanding to be promptly converted to a Base Rate Loan subject to the Borrower’s compliance with Section 3.4 hereof; or if the Lender determines that (i) deposits of a type or maturity appropriate to match fund Libor Loans are not available, the Lender shall suspend the availability of the Libor Rate after the date of any such determination, or (ii) the Libor Rate does not accurately reflect the cost of making a Libor Loan, then, if for any reason whatsoever the provisions of Section 3.1 hereof are inapplicable, the Lender shall, at its option, suspend the availability of the Libor Rate after the date of any such determination or permit (solely in the case of clause (ii)) the Borrower to pay the Lender for any increased cost it may incur.

     3.3 Taxes . All payments by the Borrower under this Agreement shall be made free and clear of, and without deduction for, any present or future income, excise, stamp or other taxes, fees, levies, duties, withholdings or other charges of any nature whatsoever, now or hereafter imposed by any taxing authority, other than franchise taxes and taxes imposed on or measured by the Lender’s net income or receipts (such non-excluded items being called “ Taxes ”). If any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the Borrower shall:

     (a) pay directly to the relevant authority the full amount required to be so withheld or deducted;

     (b) promptly forward to the Lender an official receipt or other documentation satisfactory to the Lender evidencing such payment to such authority; and

     (c) pay to the Lender such additional amount or amounts as is necessary to ensure that the net amount actually received by the Lender will equal the full amount the Lender would have received had no such withholding or deduction been required.

Moreover, if any Taxes are directly asserted against the Lender with respect to any payment received by the Lender hereunder, the Lender may pay such Taxes and the Borrower agrees to promptly pay such additional amounts (including, without limitation, any penalties, interest or expenses) as is necessary in order that the net amount received by the Lender after the payment of such Taxes (including, without limitation, any Taxes on such additional amount) shall equal the amount the Lender would have received had not such Taxes been asserted.

     3.4 Funding Indemnification . If any payment of a Libor Loan occurs on a date that is not the last day of the applicable Libor Interest Period, whether because of acceleration, prepayment or otherwise, or a Libor Loan is not made on the date specified by the Borrower, the Borrower shall indemnify the Lender for any loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain the Libor Loan.

     3.5 Lender Statements . The Lender shall deliver a written statement to the Borrower as to the amount due, if any, under Sections 3.1 , 3.3 or 3.4 hereof. Such written statement shall set forth in reasonable detail the calculations upon which the Lender determined such amount and shall be final, conclusive and binding on the Borrower in the absence of demonstrable error. Unless otherwise provided herein, the amount specified in the written statement shall be payable on demand after receipt by the Borrower of the written statement.

     3.6 Basis for Determining Interest Rate Inadequate or Unfair . If with respect to any Libor Interest Period: (a) Lender reasonably determines (which determination shall be binding and conclusive on the Borrower) that, by reason of circumstances affecting the interbank libor market, adequate and reasonable means do not exist for ascertaining the applicable Libor Base Rate; or (b) Lender determines that the Libor Base Rate will not adequately and fairly reflect the cost to Lender of maintaining or funding the Term Loan or any portion thereof for such Libor Interest Period, or that the making or funding of Libor Loans has become impracticable as a result of an event occurring after the date of this Agreement which in the opinion of Lender adversely affects such Loans, then, in either case, so long as such circumstances shall continue: (i) Lender shall not be under any obligation to make, convert into or continue Libor Loans and (ii) on the last day of the then current Libor Interest Period for each Libor Loan, each such Loan shall, unless then repaid in full, automatically convert to a Base Rate Loan. Lender shall promptly give the Borrower written notice of any determination made by it under this Section accompanied by a statement setting forth in reasonable detail the basis of such determination.

     3.7 Illegality . If any applicable law or regulation, or any interpretation thereof by any court or any governmental or other regulatory body charged with the administration thereof, should make it unlawful for Lender or its lending office to make, maintain or fund any Libor

Loan, then the obligation of Lender to make, convert into or continue such Libor Loan shall, upon the effectiveness of such event, be suspended for the duration of such unlawfulness, and on the last day of the current Libor Interest Period for such Libor Loan (or, in any event, if Lender so requests, on such earlier date as may be required by the relevant law, regulation or interpretation), the Libor Loans shall, unless then repaid in full, automatically convert to Base Rate Loans.

      4.   ATTORNEY-IN-FACT . The Borrower hereby irrevocably designates, makes, constitutes and appoints the Lender (and all Persons designated by the Lender in writing to the Borrower) as the Borrower’s true and lawful attorney-in-fact, and authorizes the Lender, in the Borrower’s or the Lender’s name, after a Default to do all acts and things which are necessary, in the Lender’s reasonable discretion, to fulfill the Borrower’s obligations under this Agreement. The Borrower hereby ratifies and approves all acts under such power of attorney and neither Lender nor any other Person acting as Borrower’s attorney hereunder will be liable for any acts or omissions or for any error of judgment or mistake of fact or law made in good faith except as result of gross negligence or willful misconduct. The appointment of Lender (and any of the Lender’s officers, employees or agents designated by the Lender) as Borrower’s attorney, and each and every one of Lender’s rights and powers, being coupled with an interest, are irrevocable until all of the Liabilities have been fully repaid and this Agreement shall have expired or been terminated in accordance with the terms hereunder.

      5.   CONDITIONS .

     5.1 Conditions to Term Loan . The Lender’s obligation to make the Term Loan hereunder is subject to the satisfaction of each of the following conditions precedent:

     (a)  Fees and Expenses . The Borrower shall have paid all fees owed to the Lender and reimbursed the Lender for all costs, disbursements, fees and expenses due and payable hereunder on or before the Closing Date, including, without limitation, the Lender’s counsel fees provided for in Section 11.2(a) hereof.

     (b)  Documents . The Lender shall have received all of the following, each duly executed and delivered and dated the Closing Date, or such earlier date as shall be satisfactory to the Lender, each in form and substance reasonably satisfactory to the Lender in its sole determination:

          (1)  Financing Agreements . This Agreement, the Term Loan Note, the Mortgages, the Assignments of Leases and Rents, the Environmental Indemnity Agreement, the Subordination Agreement, the Subordination and Attornment Agreements, the Limited Guaranty, the Collateral Assignment of Acquisition Agreement, and such other Financing Agreements as the Lender may reasonably require.

          (2)  Resolutions; Incumbency and Signatures . Copies of resolutions of the Board of Directors of the Borrower authorizing or ratifying the execution, delivery and performance by the Borrower of this Agreement, the Financing Agreements to which the Borrower is a party and any other document provided for herein or therein to be executed by Borrower, certified by a Duly Authorized Officer. A certificate of a Duly Authorized Officer certifying the names of the officers of the Borrower authorized to make a borrowing request and sign this Agreement and the Financing Agreements to which the Borrower is a party, together with a sample of the true signature of each officer; the Lender may conclusively rely on each such certificate until formally advised by a like certificate of any changes therein.

          (3)  Consents . Certified copies of all documents evidencing any necessary consents and governmental approvals, if any, with respect to this Agreement, the Financing Agreements, and any other documents provided for herein or therein to be executed by Borrower.

          (4)  Opinions of Counsel . An opinion of Buchanan Ingersoll Professional Corporation, the legal counsel to the Borrower and Tandem, in form and substance reasonably satisfactory to Lender, and an opinion of legal counsel to Seller delivered in connection with the Acquisition that specifically provides that the Lender may rely on such opinion.

          (5)  Title Insurance . A title insurance policy in the form of ALTA Form Mortgagee Title Insurance Policy shall be issued by an insurer (reasonably acceptable to the Lender) in favor of the Lender for each parcel of Real Estate. Each title insurance policy shall contain such endorsements as deemed appropriate by the Lender that are available in the State of Florida. Copies of all documents of record concerning the Real Estate as identified on the commitment for the ALTA Policy referred to above.

          (6)  Financial Condition Certificate . A Financial Condition Certificate, in form and substance satisfactory to the Lender, signed on behalf of the Borrower by a Duly Authorized Officer of the Borrower.

          (7)  Constitutive Documents . Certified copies of the Borrower’s Articles of of Incorporation certified by the Florida Secretary of State as of a recent date, together with an active status certificate from such Secretary of State and, if applicable, a good standing certificate from the Secretaries of State (or the equivalent thereof) of each other State in which the Borrower is required to be qualified to transact business. A true, correct and complete copy of the Bylaws of the Borrower, certified by a Duly Authorized Officer of such entity, shall also be delivered to the Lender on the Closing Date.

          (8)  UCC Financing Statements; Termination Statements; UCC Searches . UCC Financing Statements, as requested by the Lender, naming the Borrower as debtor and the Lender as secured party with respect to the Collateral, together with such UCC termination statements necessary to release all Liens (other than Permitted Liens) and other

rights in favor of any Person, if any, in any of the Collateral except the Lender, and other documents as the Lender deems necessary or appropriate, shall have been filed in all jurisdictions that the Lender deems necessary or advisable. If applicable, releases of Mortgages of lender to the Seller, with respect to the Real Estate. UCC tax, lien, pending suit and judgment searches for (i) the Borrower (and under any of its trade or assumed names, if any), and (ii) the Seller, each dated a date reasonably near to the Closing Date in all jurisdictions deemed necessary by the Lender, the results of which shall be satisfactory to the Lender in its sole and absolute determination.

          (9)  Surveys . An ALTA plat of survey shall be prepared on each parcel of Real Estate.

          (10)  Insurance Certificates . Certificates from the Borrower’s insurance carriers evidencing that all required insurance coverage is in effect, including, without limitation, multi-hazard insurance, public liability insurance, business interruption insurance, flood hazard determination and applicable insurance, and general liability insurance, each designating the Lender as loss payee and additional insured thereunder.

          (11)  [Intentionally Omitted.]

          (12)  Release or Payoff Letter . Release or Payoff Letter from any lender of the Seller providing a release of any security interest in the personal property being sold by the Seller in connection with the Acquisition.

          (13)  Appraisals . An appraisal prepared by an independent appraiser of the Real Estate, which appraisal shall satisfy the requirements of the Financial Institutions Reform, Recovery and Enforcement Act, if applicable, and shall evidence compliance with the supervisory loan-to-value limits set forth in the Federal Deposit Insurance Corporation Improvement Act of 1991, if applicable. Each appraisal (and the results thereof) shall be satisfactory to the Lender in its sole and absolute determination.

          (14)  Acquisition Documents . True, correct and complete copies of the fully-executed Acquisition Documents (including all Exhibits and Schedules thereto).

          (15)  Revolving Loan Documents . True, correct and complete copies of the fully-executed Revolving Loan Documents.

          (16)  Real Estate Leases . True, correct and complete copies of the fully-executed Real Estate Leases.

          (17)  Seller Notes and Junior Mortgages . A true, correct and complete copy of the fully-executed Seller Notes and the Junior Mortgages and any other document executed by or

in favor of any Seller in connection therewith (including, without limitation, any Security Agreement).

          (18)  Flood Insurance . A flood insurance policy, if applicable, concerning the Real Estate, reasonably satisfactory to the Lender, if required by the Flood Disaster Protection Act of 1973.

          (19)  Termination of Liens . The Lender shall have received evidence satisfactory to it in its sole discretion of the termination of all Liens on the assets of the Borrower (after giving effect to the consummation of the Acquisition) other than Permitted Liens.

          (20)  Other . Such other documents, certificates and instruments as the Lender may reasonably request.

     (c)  Field Examinations . The Lender shall have completed its field examinations of the Borrower’s books and records and operations which examinations will be satisfactory to the Lender in its sole and absolute discretion.

     (d)  Certificate . The Lender shall have received a certificate signed on behalf of the Borrower by a Duly Authorized Officer and dated the Closing Date certifying satisfaction of the conditions specified in Section 5.1 hereof.

     (e)  Closing Fee . The Borrower shall have paid the Lender the Closing Fee.

     (f)  Miscellaneous . The capitalization of the Borrower shall be satisfactory to the Lender after consummation of the Acquisition, and the transactions contemplated thereby shall have closed and funded concurrently with the transactions contemplated by this Agreement. All of the representations and warranties contained in this Agreement (including, without limitation, those set forth in Section 7 hereof) and in the Financing Agreements to which the Borrower is a party shall be true and correct.

      6.   COLLATERAL .

     6.1 Security Interest . As security for the prompt and complete payment and performance of all of the Liabilities and the Revolving Loan Liabilities when due or declared due, the Borrower hereby grants, pledges, conveys and transfers to the Lender a continuing security interest in and to all of the Borrower’s right, title and interest in and to the following property and interests in property, whether now owned or existing or hereafter owned, arising or acquired, and wheresoever located (collectively, the “ Collateral ”): (a) all of the assets and personal property of the Borrower, and all of Borrower’s Accounts, including, without limitation, Health-Care-Insurance Receivables (as defined in the Code), contract rights, General Intangibles, tax refunds, chattel paper, instruments, notes, letters of credit, bills of lading, warehouse receipts, shipping documents, documents and documents of title, and all of the Borrower’s Tangible

Chattel Paper, Documents, Electronic Chattel Paper, Letter-of-Credit Rights, Software, Supporting Obligations, Payment Intangibles, and Goods (each as defined in the Code); (b) all of the motor vehicles, Inventory and Equipment (each as defined in the Code) in each case owned by Borrower; (c) all of Borrower’s Deposit Accounts (as defined in the Code), including, without limitation, any and all deposit, securities, operating, lockbox and/or cash collateral account, and any other deposit accounts (general or special) with, and credits and other claims against, the Lender, or any other financial institution with which the Borrower maintains deposits; (d) all of the Borrower’s monies, and any and all other property and interests in property of the Borrower, including, without limitation, Investment Property, Instruments, Security Entitlements, Uncertificated Securities, Certificated Securities, Financial Assets, Chattel Paper and Documents (each as defined in the Code), now or hereafter coming into the actual possession, custody or control of the Lender or any agent or