LOAN AGREEMENT

Loan Agreement

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WINDROSE MEDICAL PROPERTI | WMPT BELLAIRE POB, L.P. | THE HUNTINGTON NATIONAL BANK

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Title: LOAN AGREEMENT
Governing Law: Texas Date: 3/14/2005
Industry: Real Estate Operations Law Firm: Barnes & Thornburg LLP Sector: Services

LOAN AGREEMENT, Parties: windrose medical properti , wmpt bellaire pob l.p. , the huntington national bank

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EXHIBIT 10.23

LOAN AGREEMENT

BETWEEN

WMPT BELLAIRE POB, L.P.,

a Virginia limited partnership,

as Borrower

and

THE HUNTINGTON NATIONAL BANK

a national banking association,

as Lender

December 2, 2004

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TABLE OF CONTENTS

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SECTION PAGE NO.

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1. DEFINITIONS............................................................ 1

2. COMMITMENT TO LEND; COMMITMENT FEE..................................... 6

2.1 Maximum Loan Amount.............................................. 6

2.2 Loan Advances Evidenced by Note.................................. 6

2.3 Payment of Interest and Principal................................ 6

2.4 Default Rate..................................................... 6

2.5 Late Charge...................................................... 6

2.6 Commitment Fee................................................... 6

3. LOAN DOCUMENTS......................................................... 7

4. DISBURSEMENT OF THE LOAN............................................... 10

4.1 Conditions Precedent............................................. 10

4.2 Use of Loan Proceeds............................................. 11

4.3 Disbursement Requests............................................ 12

4.4 Certifications; Representations and Warranties................... 13

4.5 Costs............................................................ 13

4.6 Development Fees................................................. 14

4.7 Loan In Balance.................................................. 14

4.8 Application of Disbursements..................................... 14

4.9 Payment of Interest by Lender.................................... 15

5. REPRESENTATIONS AND WARRANTIES......................................... 15

5.1 Borrower......................................................... 16

5.2 Guarantor........................................................ 16

5.3 Title............................................................ 16

5.4 Improvements..................................................... 16

5.5 Validity and Enforceability of Documents......................... 16

5.6 Litigation....................................................... 16

5.7 Utilities; Authorities........................................... 17

5.8 Financial Statements; Solvency................................... 17

5.9 Compliance with Laws............................................. 17

5.10 Construction Contract............................................ 18

5.11 Subcontracts..................................................... 18

5.12 Plans and Specifications......................................... 18

5.13 Budget........................................................... 18

5.14 Hazardous Materials.............................................. 18

5.15 Financing Statements............................................. 19

5.16 Event of Default................................................. 19

5.17 Sale Agreements.................................................. 19

5.18 Environmental Matters............................................ 19

5.19 Continuation of Representations and Warranties................... 19

6. CASUALTIES AND CONDEMNATION............................................ 20

6.1 Lender's Election to Apply Proceeds on Indebtedness.............. 20

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6.2 Borrower's Obligation to Rebuild and Use of Proceeds Therefor.... 20

7. BORROWER'S COVENANTS................................................... 21

7.1 Manner of Construction........................................... 21

7.2 Certificate of Completion........................................ 21

7.3 Change Orders.................................................... 21

7.4 Compliance with Laws............................................. 22

7.5 Inspection....................................................... 22

7.6 Mechanics' Liens................................................. 22

7.7 Release by Lender................................................ 22

7.8 Financial Statements; Reports.................................... 23

7.9 Affirmation of Representations and Warranties.................... 23

7.10 Title............................................................ 23

7.11 Proceedings Affecting Property................................... 23

7.12 Disposal and Encumbrance of Property............................. 24

7.13 Insurance........................................................ 24

7.14 Performance of Obligations; Notice of Default.................... 24

7.15 Subcontracts..................................................... 24

7.16 Restrictions Affecting Borrower.................................. 25

7.17 Use of Receipts.................................................. 25

7.18 Additional Documents............................................. 25

8. LOAN EXPENSES.......................................................... 25

9. LENDER'S REPRESENTATIVES............................................... 25

10. EVENTS OF DEFAULT...................................................... 26

11. EXERCISE OF REMEDIES................................................... 27

11.1 Remedies......................................................... 27

12. MISCELLANEOUS.......................................................... 29

12.1 Additional Indebtedness.......................................... 29

12.2 Additional Acts.................................................. 29

12.3 Loan Agreement Governs........................................... 29

12.4 Additional Advances.............................................. 29

12.5 Amendment; Waiver; Approval...................................... 29

12.6 Notice........................................................... 30

12.7 Benefit; Assignment.............................................. 30

12.8 Governing Law.................................................... 30

12.9 Indemnity........................................................ 31

12.10 Headings......................................................... 31

12.11 No Partnership or Joint Venture.................................. 31

12.12 Time is of the Essence........................................... 31

12.13 Invalid Provisions............................................... 31

12.14 Offset........................................................... 31

12.15 Acts by Lender................................................... 32

12.16 Joint and Several Liability; Binding Provisions.................. 32

12.17 Counterparts..................................................... 32

12.18 No Third Party Borrower.......................................... 32

12.19 Sign............................................................. 32

12.20 WAIVER OF RIGHT TO JURY TRIAL.................................... 32

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13. ASSIGNMENTS AND PARTICIPATIONS......................................... 33

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iii

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LOAN AGREEMENT

This Loan Agreement ("Agreement") is dated as of December 2, 2004, by and

between WMPT BELLAIRE POB, L.P. a Virginia limited partnership ("Borrower"), and

THE HUNTINGTON NATIONAL BANK, a national banking association ("Lender").

1. DEFINITIONS.

As used in this Agreement, the following terms shall have the following

meanings:

"Applicable Rate" shall have the meaning ascribed thereto in the Note.

"Assignment of Rents and Leases" shall mean the collateral assignment of

the rents and leases of the Project, or any part thereof, to be made by Borrower

to Lender to secure the Loan.

"Borrower's Equity" shall mean the sum of $5,677,204, inclusive of

proceeds of the Subordinate Loan.

"Budget" shall mean the detailed budget of all costs to be incurred in

connection with the Work, including both hard costs and soft costs, as set forth

in EXHIBIT "A" attached hereto and made a part hereof.

"Business Day" shall mean each day excluding Saturdays, Sundays and any

other day on which Lender is closed for business to the public.

"Commitment Fee" shall mean the sum of One Hundred Twelve Thousand Five

Hundred Dollars ($112,500).

"Completion Date" shall mean January 31, 2006.

"Construction Contract" shall mean that certain agreement between Borrower

and the General Contractor dated November 30, 2004, regarding the construction

of the Improvements.

"Consultant" shall mean C.D. Construction Consulting, Inc. or such other

Person hereafter designated as such by the Lender.

"Deed of Trust" shall mean the Deed of Trust, Security Agreement and

Fixture Filing encumbering the Real Property of even date herewith made by

Borrower to Lender to secure the Loan.

"Default Rate" shall mean the Interest Rate plus four percent (4.0%) per

annum.

"Event of Default" shall have the meaning ascribed to it in Section 10 of

this Agreement.

"Force Majeure" shall mean acts of God, acts of a public enemy, terrorist

activities, fires, floods, wars, civil disturbances, sabotage, accidents,

insurrections, blockades, embargoes, storms, severe weather, explosions, damage

to improvements constructed, labor disputes (whether or not the employees'

demands are reasonable and within the party's power to satisfy), government

restrictions or regulations, acts of any Governmental Authority (whether civil

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military, foreign or domestic), all perils of the seas and other waters, failure

or delay of third parties or Governmental Authorities from whom a party is

obtaining or must obtain licenses, permits, approvals, rights of way, easements,

franchises, machinery, materials, equipment, transportation, independent

contractor's services or supplies to grant or deliver the same, or inability to

obtain labor, services, materials, equipment or transportation or other causes

beyond the control of the party responsible for performing an obligation

hereunder.

"General Contract Assignment" shall mean the Assignment of even date

herewith by Borrower to Lender of the Construction Contract, together with all

plans, specifications, permits and licenses relating to the Project.

"General Contractor" shall mean J.T. Vaughn Construction Company, Inc.

"Guarantor" shall mean the Trust.

"Guaranty" shall mean the unconditional guaranty of payment and completion

executed by the Trust.

"Hazardous Materials" shall mean and include any and all hazardous, toxic

or dangerous substances, wastes and materials and other pollutants and

contaminants as defined or described in any or all applicable federal, state or

local statutes, laws, ordinances, codes, rules, regulations, orders or decrees

(other than medical wastes created and disposed in accordance with applicable

laws in the ordinary course of business of any tenant hereafter occupying any

part of the Improvements) now or hereafter regulating, relating to or imposing

liability or standards of conduct with respect to environmental matters,

including, without limitation the Comprehensive Environmental Response,

Compensation, and Liability Act of 1980, as amended by the Superfund Amendments

and Reauthorization Act of 1986 (42 U.S.C. Section 9601 et seq.), the Hazardous

Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the Solid Waste

Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976,

as amended by the Solid and Hazardous Waste Amendments of 1984 (42 U.S.C.

Section 6901 et seq.), the Federal Water Pollution Control Act, as amended by

the Clean Water Act of 1977 and the Water Quality Act of 1987 (33 U.S.C. Section

1251 et seq.), the Toxic Substances Control Act of 1976 (15 U.S.C. Section 2601

et seq.), the Emergency Planning and Community Right-to-Know Act of 1986 (42

U.S.C. Section 11001 et seq.), the Clear Air Act of 1966, as amended (42 U.S.C.

Section 7401 et seq.), the National Environmental Policy Act of 1970 (42 U.S.C.

Section 43 21 et seq.), the Rivers and Harbours Act of 1899 (33 U.S.C. Section

401 et seq.), the Endangered Species Act of 1973, as amended (16 U.S.C. Section

1531 et seq.), the Safe Drinking Water Act of 1974, as amended (42 U.S.C.

Section 300(f)-9 seq.), the Occupational Safety and Health Act of 1970, as

amended (29 U.S.C. Section 651 et seq.) and all rules, regulations and guidance

documents promulgated or published thereunder, all as amended or hereinafter

amended. Without intending to limit the scope or breadth of the foregoing

definition, the term Hazardous Materials shall include asbestos, urea

formaldehyde, polychlorinated biphenyls, crude oil, radioactive materials and

underground storage tanks.

"Improvements" shall mean the medical office facility containing

approximately 102,781 gross square feet of floor space and a parking deck with

418 parking spaces to be constructed upon the Land, all paving, lighting,

landscaping, amenities, utility lines and equipment and all

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other site improvements and all other improvements located on the Land in

substantial accordance with the Plans and Specifications.

"Indemnity Agreement" shall mean the environmental indemnity agreement of

even date herewith made by Borrower and Guarantor in favor of Lender.

"Intercreditor Agreement" shall mean, collectively, that certain

Intercreditor Agreement and that certain Standstill Agreement, both between

Lender and Subordinate Lender of even date herewith relating to the Loan and the

Subordinate Loan.

"Interest Rate" shall have the meaning set forth in the Note.

"Initial Advance" shall mean the first draw or disbursement made from the

proceeds of the Loan.

"Land" shall mean the tract of land consisting of approximately 2.331

acres of real estate, located in Harris County, Texas and legally described in

EXHIBIT "B" attached hereto in which Borrower has a fee simple interest.

"Loan Advance" shall mean a disbursement of all or any portion of the

Loan.

"Loan" shall mean the Eighteen Million Dollar ($18,000,000) construction

loan to be made by Lender to Borrower pursuant to the terms hereof.

"Loan Documents" shall mean this Agreement, the Deed of Trust, the Note,

the Assignment of Rents and Leases, the Contract Assignment, the Guaranty, the

Indemnity Agreement, and every other document now or hereafter evidencing,

securing or otherwise executed in conjunction with the Loan, together with all

amendments and modifications thereof.

"Loan Expenses" shall mean the expenses, charges, costs (including both

hard costs and soft costs) and fees of Lender relating to the making,

administration, negotiation, documentation or any other aspect of the Loan or

relating to the performance of the Work, including, without limitation, Lender's

reasonable attorneys' fees and costs in connection with the negotiation,

documentation and enforcement of the Loan, the fees of the Consultant, all

recording fees and charges, title insurance charges and premiums, escrow fees,

costs of surveys and of other bonds required by the Title Company in connection

with clearing title to the Real Property or the issuance of title reports,

binders, policies and the like, and all other costs, expenses, charges and fees

referred to in or necessitated by the terms of this Agreement or any of the

other Loan Documents.

"Maturity Date" shall mean December 1, 2006.

"Maximum Amount" shall mean $18,000,000 being the maximum aggregate amount

of the Loan, as such amount may be reduced in accordance with the terms of this

Agreement.

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"Note" shall mean that certain promissory note of even date herewith

evidencing the Loan, executed by Borrower payable to the order of Lender in the

original principal amount of $18,000,000.

"Permitted Exceptions" shall mean the exceptions to the title of the Real

Property listed on EXHIBIT "C" attached hereto and the Subordinated Loan

Documents.

"Person" shall mean any individual, firm, corporation, business

enterprise, trust, association, joint venture, partnership, governmental body or

other entity, whether acting in an individual, fiduciary or other capacity.

"Personal Property" shall mean and include any and all furniture,

furnishings, appliances, equipment and all fixtures (to the extent such fixtures

are attached in a manner so as not to be deemed to be part of the Real Property)

owned by Borrower to be located in the Improvements or otherwise at the Land

which will be used or usable in connection with the operation of the

Improvements and which will be owned, leased or otherwise possessed by Borrower

or any of its affiliates, including all of such personal property contemplated

under the Plans and Specifications.

"Plans and Specifications" shall mean, collectively, the architectural and

engineering plans and specifications relating to the Work or any portion

thereof, all of which must be acceptable to Lender in its reasonable discretion,

as listed on EXHIBIT "D" attached hereto as the same are supplemented from time

to time.

"Principal Balance" shall mean the unpaid principal balance of the Loan

outstanding from time to time.

"Project" shall mean the medical office facility consisting of the Land

and the Improvements, together with the Personal Property.

"Project Costs" shall mean the following, all as more specifically set

forth in the Budget:

(a) The actual hard costs of completing construction of the

Improvements and the costs of the Personal Property;

(b) Premiums for title, casualty, liability and other insurance

required by Lender;

(d) Interest, fees and similar charges payable by Borrower to Lender

hereunder or under the Note;

(e) Legal and other closing costs;

(f) Government fees for permits or other matters, Architectural,

engineering, survey, geotechnical, environmental and other consulting fees

and testing fees;

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(g) Pre-construction developments costs as set forth in the Budget;

(h) The direct costs of HADC personnel assigned to the Project and

on site costs of its project manager and reimbursable expenses related

thereto;

(i) Such other soft costs (including contingency) as may be set

forth in the Budget or as may be hereafter approved in writing by Lender;

and

(j) All other Loan Expenses.

"Real Property" shall mean the Land, the Improvements and all easements

and appurtenants thereto.

"Soil Report" shall mean the soil test report as described in Section 3(v)

below.

"Subcontracts" shall mean all subcontracts now or hereafter entered into

by the Contractor for the construction of any of the Improvements or the

installation of any of the Personal Property.

"Subordinate Lender" shall mean The Huntington Real Estate Investment

Company, an Ohio corporation.

"Subordinate Loan" shall mean the One Million Five Hundred Thousand Dollar

($1,500,000) loan to Borrower by the Subordinate Lender.

"Subordinated Loan Documents" shall mean, collectively, all loan documents

and agreements by and between Borrower and Subordinate Lender evidencing the

Subordinate Loan including the Intercreditor Agreement

"Survey" shall mean the plat of survey of the Real Property as described

in Section 3(h) below.

"Tenant Improvement Contract Assignment" shall mean the Assignment of even

date herewith by Borrower to Lender of the Construction Contract, together with

all plans, specifications, permits and licenses relating to the Project.

"Tenant Improvement Contractor" shall mean J.D. Franks, Inc.

"Title Company" shall mean Fidelity National Title Insurance Company.

"Title Policy" shall mean the title insurance policy described in Section

3(j) below.

"Trust" shall mean Windrose Medical Properties Trust, a Maryland real

estate investment trust.

"Work" shall mean the performance of all work to be performed and the

supplying of all materials to be supplied in connection with the building,

furnishing, fixturing and equipping of

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the Improvements, all in accordance with the provisions of this Agreement and

with the Plans and Specifications, the Budget and other documentation approved

by Lender.

2. COMMITMENT TO LEND; COMMITMENT FEE.

2.1 Maximum Loan Amount.

Lender agrees to lend to Borrower, and Borrower agrees to borrow from Lender,

an amount not to exceed the Maximum Amount for the purposes, upon the terms and

subject to the conditions contained in this Agreement. Notwithstanding anything

contained in this Article 2 to the contrary, Loan Advances shall be limited to

such amounts as Borrower is eligible to receive pursuant to, and upon compliance

with, the conditions of Article 4 hereof. The proceeds of the Loan disbursed to

Borrower shall be used by Borrower solely for the purpose of paying the Project

Costs. Borrower may prepay the Loan in accordance with the terms of the Note.

2.2 Loan Advances Evidenced by Note.

All Loan Advances of the Loan hereunder shall be evidenced by the Note, which

shall be executed and delivered by Borrower simultaneously with the execution of

this Agreement.

2.3 Payment of Interest and Principal.

The payment of interest and principal shall be governed by the provisions of

the Note; provided, however, that Borrower hereby unconditionally and

irrevocably authorizes and directs Lender, to disburse from the Interest Reserve

established pursuant to Section 4.9 below, the amount of the monthly interest

payments then owing to Lender under the Note and to apply said amounts to said

interest payments. Any amounts disbursed from the Interest Reserve shall become

part of the outstanding principal balance and interest thereon shall accrue and

be payable as provided in the Note. Principal and interest on the Loan shall be

due and payable in accordance with the terms of the Note.

2.4 Default Rate.

At any time after the Maturity Date or otherwise when an Event of Default

exists under this Agreement or any of the other Loan Documents, the Principal

Balance and any other amounts then owing by Borrower to Lender shall bear

interest at the Default Rate.

2.5 Late Charge.

If any payment of interest or principal due under a Note is not made within

five days after such payment is due, then, in addition to the payment of the

amount so due, Borrower shall pay to Lender a "late charge" of three cents

(3(cent)) for each whole dollar so overdue to defray part of the cost of

collecting and handling such late payment.

2.6 Commitment Fee.

Concurrently herewith, Borrower shall pay the Commitment Fee to Lender.

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3. LOAN DOCUMENTS.

Prior to the first Loan Advance pursuant to this Agreement, Borrower shall

execute and deliver to Lender those of the following documents required to be

executed by Borrower, and shall cause to be executed and delivered to Lender

those of the following documents required to be executed by others, all of which

documents shall contain such provisions as shall be required to conform to this

Agreement and otherwise shall be satisfactory in form and substance to Lender:

(a) The Note.

(b) The Guaranty.

perfecting the security interests created by the security agreement

granted thereunder.

(d) The Assignment of Rents and Leases.

(e) The Indemnity Agreement.

(f) The Contract Assignment, together with the consents thereto by

the Contractors.

(g) Three copies of a plat of survey (the "Survey") prepared and

certified by a registered surveyor licensed in Texas in compliance with

the minimum detail requirements most recently established by ALTA/ACSM

(for a Class A Survey), including, without limitation: the boundaries and

legal descriptions of the Land; the location of all existing improvements

on the Land; the area of the Land in square feet and acres (to the nearest

one one-hundredth of an acre); the location of all set-back lines,

rights-of-way, easements and public utilities; the location of all

abutting roadways, streets, and alleys; the location of utility services

and storm drain and sewer facilities; and showing any encroachments by

improvements on the Land over easements or adjoining property and showing

any encroachments from adjoining property onto the Land. The Survey shall

be as of a current date and shall be certified in favor of Lender and the

Title Company. All matters shown on the Survey must be reasonably

acceptable to Lender.

(h) Evidence that the following insurance coverages are in effect

with respect to the Project and in a form satisfactory to Lender:

(i) All-Risk Builder's Risk Insurance issued with respect to

the Project in an amount equal to not less than the full aggregate

amount of the Construction Contract, together with extended

coverage, vandalism and malicious mischief coverage, and such other

coverage as may be required by Lender;

(ii) Comprehensive general public liability insurance in such

an amount as may be required by Lender;

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(iii) Workers' compensation insurance and employer's liability

insurance for all contractors and subcontractors in such amounts as

may be required by Lender;

(iv) Flood Insurance if the Land is located in an area

designated as a special flood hazard area by any governmental

authority having jurisdiction over the Land; and

(v) Such other insurance coverages as Lender may reasonably

require.

All policies of insurance required to be maintained by Borrower shall be issued

by companies satisfactory to Lender and shall have coverages and endorsements

and be written for such amounts as Lender may reasonably require. All policies

of insurance shall (x) name Lender as mortgagee or additional named insured, as

the case may require, and (y) provide that the policies may not be canceled or

modified without thirty days prior written notice to Lender.

(i) An ALTA Loan Policy of Title Insurance issued by the Title

Company in the full amount of the Loan insuring that the Deed of Trust

will be a prior lien upon the fee simple title to the Real Property to the

extent of advances made by Lender from time to time under this Agreement,

subject to no liens, claims, exceptions or encumbrances except the

Permitted Exceptions and mechanic lien claims insured over by the Title

Company in a manner satisfactory to Lender and containing the following

endorsements:

(i) Endorsements for Interim Certification;

(ii) Comprehensive Endorsement No. 1 (in form modified for

construction loans);

(iii) Vehicular Access Endorsement;

(iv) Survey/Legal Description Endorsement;

(v) Environmental Lien Endorsement;

(vi) Contiguity Endorsement; and

(vii) Such additional endorsements as may be reasonably

required by Lender based upon its review of the Title Policy and

Survey.

(j) Copies of such documents, if any, as Borrower has provided the

Title Company in connection with the issuance of the Title Policy.

(k) Copies of all recorded documents described in the Title Policy.

(l) Uniform Commercial Code searches covering the Guarantor and

federal and state tax lien and judgment searches covering the Guarantor.

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(m) Certificate of the general partner of Borrower with (i)

Certificate of Limited Partnership, (ii) Limited Partnership Agreement,

(iii) Incumbency Certificate, (iv) Certificate of Existence issued by the

Secretary of State of Virginia, (v) a Certificate of Qualification issued

by the Texas Secretary of State and (vi) Resolutions authorizing this

transaction.

(n) Certificate of an officer of Guarantor with Resolutions

authorizing the Guaranty.

(o) An executed copy of the Construction Contract.

(p) Copies of all applicable zoning ordinances and all zoning

proceedings relating to the Project.

(q) One or more certificates executed by the Contractor certifying

the following:

(i) the Plans and Specifications prepared by the Architect and

the Engineer, as applicable, are significantly complete and to

provide a Guaranteed Maximum Price ("GMP") and build the Project and

to conform to all applicable laws;

(ii) if the Project is constructed in accordance with such

Plans and Specifications (as completed), upon completion the Project

will comply with all applicable zoning, subdivision, land use,

building, landmark, occupational health and safety, environmental

and pollution control laws, statutes, codes, ordinances and

regulations; and

(iii) all permits necessary to start the construction of the

Project have been issued or can be obtained or sufficient evidence

thereof can be obtained.

(r) One set of the Plans and Specifications, which have been

approved by Borrower and the Contractor. The Plans and Specifications are

subject to approval by Lender, which will not be unreasonably withheld.

(s) Certified copies of the Construction Contracts, all licenses,

permits and governmental approvals necessary to start the construction,

use or operation of the Project and all other documents and instruments

relating to performance of the Work.

(t) Opinion letter from counsel for Borrower and the Guarantor in a

form satisfactory to Lender.

(u) A soil test report prepared by a licensed soil engineer approved

by Lender and otherwise satisfactory in all respects to Lender containing,

among other things, boring logs and the locations of all borings and

confirming that no condition exists with respect to the Land which would

cause subsidence of any portion of the Land and showing that no state of

facts exists which would adversely affect the completion of the

<PAGE>

Work in accordance with the Plans and Specifications or would require any

costs with respect thereto not otherwise provided for in the Budget.

(v) Evidence that (i) no portion of the Project on which

Improvements are to be built under the Plans and Specifications is located

in an area designated by the Secretary of Housing and Urban Development as

having special flood hazards, or if any portion of the Project is so

located, evidence that flood insurance is in effect; and (ii) no portion

of the Land is located in a federally, state or locally designated wetland

or other type of government protected area.

(w) Certified copies of all service contracts, management

agreements, development agreements and other agreements affecting the use,

development or operation of the Project, if any.

(x) A satisfactory report prepared by an environmental engineer

approved by Lender and otherwise satisfactory in all respects to Lender.

(y) An appraisal prepared by an appraiser satisfactory to Lender and

indicating that the fair market value of the Project, as stabilized, is

not less than $24,000,000, which has been received and approved by Lender.

(z) Satisfactory leases for not less than 80,991 gross square feet

of floor space in the Project.

(aa) The Intercreditor Agreement.

(bb) Such other assignments, certificates, opinions and other

documents, instruments and information affecting or relating to Lender's

interest in the Project or the use, operation, development or construction

of the Project as Lender may reasonably require.

4. DISBURSEMENT OF THE LOAN.

4.1 Conditions Precedent.

The obligation of Lender to make the initial and each subsequent disbursement

of the Loan under this Agreement shall be conditioned upon and subject to the

payment to Lender of all loan fees then owing from Borrower to Lender and to

satisfaction of all of the following conditions:

(a) All representations and warranties contained in this Agreement

and in the other Loan Documents shall be true in all material respects on

and as of the date of such disbursement.

(b) Borrower shall have performed all of its obligations under all

Loan Documents which are required to be performed on or prior to the date

of such disbursement.

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Section 4.7 below, and the disbursement shall not cause the Loan to be

"out of balance."

(d) Lender shall have received an inspection report of the

Consultant certifying the percentages of completion of the components of

the Work and setting forth the amount authorized for disbursement and such

other matters as Lender may reasonably require (including compliance of

the Work with the Plans and Specifications). Notwithstanding anything

contained in this Agreement to the contrary, all inspections of the Work

made by Lender, the Consultant or their respective agents, employees and

designees shall be solely for Lender's own information and shall not be

deemed to have been made for or on account of Borrower or any other party.

Borrower hereby relieves Lender of any and all liability or responsibility

relating in any way whatsoever to the construction of the Project,

including but not limited to, the work thereat, the material or labor

supplied in connection therewith, and any errors, inconsistencies or other

defects in the Project or the Plans and Specifications.

(e) There shall be no material adverse change in the financial

condition of any of Borrower, Guarantor or the Project from that reflected

in the financial statements of Borrower, Guarantor and the Project

furnished to Lender in connection with the Lease.

(f) Borrower shall have delivered to Lender certificates from the

Contractor stating that the portion of the Project that has been completed

was constructed in substantial accordance with the Plans and

Specifications prepared by the Architect and Engineer, as applicable, and

complies with all applicable zoning, subdivision, land use, building,

landmark, occupational health and safety, environmental and pollution

control laws, statutes, codes, ordinances or regulations, and does not

require any variances therefrom, or is in compliance therewith, as the

case may be. In addition, Borrower shall have delivered to Lender copies

of all licenses and building permits necessary for commencement and

completion of the Work for which such disbursement is being requested, all

of which shall be unconditional.

(g) If any portion of the requested disbursement is for the payment

of fees owing by Borrower to any broker, then Borrower shall have

delivered to Lender a waiver of lien rights executed by such broker and

otherwise in a form satisfactory to Lender.

(h) No Event of Default shall have occurred and no event or

condition, which with the giving of notice or the passage of time, or

both, would constitute an Event of Default shall then exist.

(i) Borrower shall have provided satisfactory evidence to Lender of

its investment in the Project, including the Subordinate Loan, of not less

than the Borrower's Equity.

4.2 Use of Loan Proceeds.

The proceeds of the Loan disbursed to Borrower shall be used by Borrower

solely for the purpose of paying (or reimbursement to others for payment of)

items of Project Costs actually

<PAGE>

incurred by Borrower. No disbursement of the Loan will be made until such time

as the Borrower's Equity is fully disbursed.

4.3 Disbursement Requests.

(a) During each month, Borrower shall, subject to the conditions set

forth herein and in the Loan Documents, request disbursements of the Loan

to pay the actual costs incurred in connection with the construction and

development of the Project. All disbursements shall be made by Lender

within ten days of receiving a draw request and all other documentation or

information required hereunder, from Borrower.

(b) Lender shall not be required to make more than one Loan

disbursement in any given 30 day period. Lender may at any time take such

action as it deems appropriate to verify that the conditions precedent to

each disbursement have been satisfied, including, without limitation,

verification of any amounts due under the Construction Contract or any

Subcontract. Borrower agrees to cooperate with Lender in any such action.

If in the course of any such verification, any amount shown on the

contract entered into for the performance of any portion of the Work

(including the Construction Contract or any Subcontract), or any

application for payment, sworn statement or waiver of lien is subject to a

possible discrepancy, such discrepancy shall be eliminated by Borrower to

Lender's reasonable satisfaction. Each request for disbursement shall be

made by a letter from an authorized agent of Borrower addressed to Lender,

specifying in detail the amount and mode of each disbursement and

accompanied by the following, all in form and substance satisfactory to

Lender:

(i) An Owner's Sworn Statement and disbursement request,

including an allocation among line items in the Budget, of all hard

costs of construction so requested;

(ii) A Contractor's Application for Payment and Sworn

Contractor's Statement, together with (A) a statement of a duly

authorized agent of the Contractor that all items of construction

cost have been incorporated into the Project in accordance with the

Plans and Specifications, and (B) waivers of lien from each

contractor, subcontractor to whom payment is to be made, with

respect to previous disbursements;

(iii) Evidence (including invoices and contracts) showing the

propriety of each non-construction cost item for which payment is

requested and such supporting data as Lender may reasonably require

to enable Lender to verify the correctness thereof;

(iv) Certificates of the Contractor and the Consultant stating

that each of them has made diligent investigation and that based on

such investigation all Work performed to the date of the request for

disbursement has been completed in substantial accordance with the

Plans and Specifications and certifying (A) the percentage of

completion of each component of the Work, (B) that there has been no

material deviation from the contract amount under the Construction

Contract

<PAGE>

or any Subcontract or the projected time of completion of any

component of the Work, (C) the total cost to complete the Work, (D)

and that after giving effect to all amounts previously certified for

payment, plus the amount then requested, the remaining uncertified

and undisbursed funds will be sufficient to pay all known costs

required to complete the Work in accordance with the Plans and

Specifications;

(v) Copies of all licenses and permits (including building

permits) necessary for construction and completion of the Work with

respect thereto; and

(vi) Such other documents, assignments, certificates and

opinions as are required by the Title Company, or as may be

reasonably required by Lender.

contrary, Lender shall not be required to make any disbursement of the

Loan pursuant to this Agreement until the Title Company is prepared to

issue an endorsement to the Title Policy updating the same to the date of

such disbursement and increasing the amount of coverage (including

mechanic's lien coverage) thereunder by the amount so disbursed, and

insuring the lien of the Deed of Trust to be superior to all defects in

title other than the Permitted Exceptions.

4.4 Certifications; Representations and Warranties.

Each request for disbursement by Borrower shall constitute (a) Borrower's

certification that the representations and warranties contained in Article 5

below are true and correct in all material respects as of the date of such

request, (b) Borrower's certification that Borrower is in compliance with the

conditions contained in this Article 4, and (c) Borrower's representation and

warranty to Lender, with respect to the Work, materials and other items for

which payment is requested that (i) such Work and materials have been

incorporated into the Project, free and clear of liens and encumbrances, (ii)

the value thereof is as estimated therein, (iii) such Work and materials

substantially conform to the Plans and Specifications, this Agreement and all

applicable statutes, laws, ordinances, rules and regulations, and (iv) the

requisitioned value of such Work and materials and the amounts of all other

items of cost for which payment is requested by Borrower have theretofore been

in fact paid for in cash by Borrower or the same are then due and owing by

Borrower and (unless Lender disburses funds directly to the parties performing

the Work or to the Title Company) will in fact be paid in cash by Borrower

within five days after Borrower's receipt of the requested disbursement. Neither

review nor approval by Lender of requests for disbursement or any information

contained therein or any other information provided to Lender in accordance with

the other provisions of this Article 4 shall constitute the acceptance or

approval by Lender of any portion of the Work or any such information except for

the purpose of making the requested disbursement.

4.5 Costs.

For purposes of this Agreement, including without limitation, Section 4.3

hereof, (a) the cost of labor and material furnished for the Work shall be

deemed to be incurred by Borrower when the labor and material have been

incorporated into the Project and the payment therefor is due and

<PAGE>

payable, (b) the cost of services (other than labor included in the Work) shall

be deemed to be incurred by Borrower when the services are actually rendered and

the payment therefor is due and payable, (c) real estate taxes, interest and

insurance premiums shall be deemed to be incurred by Borrower when such items

become due and payable, and (d) any other costs shall be deemed to be incurred

by Borrower when the payment therefor is due and payable, but not before the

value to be received in return for such cost has been received by Borrower.

4.6 Development Fees.

No proceeds of the Loan will be disbursed for development fees but project

management direct costs and reimbursable expenses will be paid to HADC as set

forth in the Budget.

4.7 Loan In Balance.

(a) At all times prior to the Maturity Date, (i) the undisbursed

proceeds from the Loan together with the undisbursed amount of the

Borrower's Equity and the Subordinate Loan, shall be sufficient to pay all

Project Costs remaining unpaid through the projected date on which the

Improvements will be substantially completed.

(b) If Lender reasonably determines that the undisbursed proceeds

from the Loan together with the undisbursed amount of the Borrower's

Equity and the Subordinate Loan, are insufficient to pay all Project Costs

remaining unpaid through the projected date on which the Improvements will

be substantially completed, then the Loan shall be deemed "out of balance"

to the extent of such excess.

aforesaid, Borrower shall, within ten days after written request by

Lender, deposit with Lender an amount equal to the excess amount. The sums

thus deposited with Lender will be disbursed by Lender to complete the

Work prior to any further disbursement of proceeds of the Loan (or, if the

Work has been completed, to the repayment of the Principal Balance). If

such deposit is not made within such time, an Event of Default shall be

deemed to have occurred. No interest shall be payable to Lender on such

amounts when disbursed to pay the cost of any Work.

(d) Borrower shall be entitled to reallocate among line items in the

Budget without obtaining Lender's prior written consent, so long as such

reallocation does not result in an increase in the Project Budget. The

amount allocated to the contingency and the interest reserves line shall,

at all times, be an amount reasonably acceptable to the Lender.

4.8 Application of Disbursements.

(a) Lender shall make each requested disbursement of the Loan to an

account maintained by Borrower with Lender within ten days after all of

the conditions precedent to such disbursement set forth in Section 4.1

above have been satisfied and all documentation required under Section 4.3

above has been delivered to Lender.

<PAGE>

(b) Notwithstanding the foregoing, Lender shall not be responsible,

liable or obligated to the contractors, sub-contractors, suppliers,

materialmen, laborers, architects, engineers, or any other parties, for

services or work performed, or for goods delivered by them or any of them,

in and upon the Land or employed directly or indirectly in the performance

of the Work, or for any debts or claims whatsoever accruing in favor of

any such parties and against Borrower or others, or against the Project.

It is expressly understood and agreed that Borrower is not and shall not

be an agent of Lender for any purpose whatsoever. Without limiting the

generality of the foregoing, advances made at Lender's option, directly to

any contractor, subcontractor or supplier of labor or materials, or any

other party, shall not be deemed a recognition by Lender of any third

party beneficiary status of any such person or entity.

Advances to be made hereunder by Lender as a trust fund and that Borrower

shall withdraw and use said funds solely for the payment of the bills for

the labor and materials used in the performance of the Work for which such

Loan funds were requested by Borrower, and for the payment of the other

items of Project Cost for which such Loan proceeds were requested by

Borrower, and for no other purpose whatsoever; however, nothing herein

shall impose upon Lender any obligation whatsoever to see to the proper

application of any such monies by Borrower.

(d) Whenever so requested by Lender, Borrower shall promptly furnish

Lender written evidence reasonably satisfactory to Lender that all monies

theretofore advanced by Lender pursuant to this Agreement have actually

been paid or applied in payment of the cost of performance of the Work and

in payment of the other items of Project Cost for which such funds were

advanced by Lender, and until such evidence is produced, at the option of

Lender, no future or additional payments or Loan Advances need be made

hereunder.

4.9 Payment of Interest by Lender.

Proceeds of the Loan shall be allocated to an interest reserve (the "Interest

Reserve") as set forth in the Budget approved by Lender. All accrued interest on

the Loan shall be paid from the Interest Reserve until fully disbursed and

thereafter from rental income received by Borrower. Borrower hereby authorizes

Lender on the first day of each month during the term of the Loan (and on any

other date on which interest is due under the Note) to disburse to itself from

the undisbursed proceeds of the Interest Reserve to pay all then accrued and

unpaid interest on the Loan; provided, however, that such authorization shall

not be deemed to limit, reduce or otherwise affect Borrower's obligation to pay

interest if (a) there are no remaining amounts in the Interest Reserve, or (b)

Lender is entitled to withhold disbursement of the Interest Reserve for any

reason.

5. REPRESENTATIONS AND WARRANTIES.

In order to induce Lender to execute this Agreement and to make the Loan,

Borrower represents and warrants to Lender as follows:

<PAGE>

5.1 Borrower.

Borrower is a duly formed limited liability partnership validly existing in

the State of Virginia, duly qualified to conduct business in the State of Texas,

and has full power and authority to execute and deliver the Loan Documents and

to perform its obligations hereunder and thereunder. The Limited Partnership

Agreement of Borrower dated as of August 26, 2003, a copy of which has been

furnished to Lender, is in effect, unamended and are the true, correct and

complete documents relating to Borrower's governance. The Certificate of Limited

Partnership dated as of November 6, 2003 creating Borrower, a copy of which has

been furnished to Lender, is in effect, unamended and is the true, correct and

complete document relating to Borrower's creation and governance. Borrower has

fully complied with all applicable securities and other laws and regulations in

connection with the formation of Borrower and the sale and offer for sale of

interests therein.

5.2 Guarantor.

Guarantor has full power and authority to execute the Guaranty, the Indemnity

Agreement and all other Loan Documents executed by it and to perform its

obligations thereunder.

5.3 Title.

At closing Borrower will own good and marketable fee simple title to the Real

Property. The Real Property is owned free and clear of all liens, claims and

encumbrances, except the Permitted Exceptions.

5.4 Improvements.

Subject to the terms and conditions contained in this Agreement, Borrower

intends to improve the Land with the Improvements. The Work will be performed in

substantial accordance with the provisions of the Plans and Specifications and

the Budget and all of the other requirements of this Agreement.

5.5 Validity and Enforceability of Documents.

Upon the execution and delivery of the Loan Documents, the Loan Documents

shall be valid and binding upon the Borrower and Guarantor in accordance with

the respective provisions thereof, and enforceable in accordance with the

respective provisions thereof, subject only to applicable bankruptcy,

reorganization, insolvency, moratorium and other similar laws affecting the

enforcement of creditor's rights. Execution, delivery and performance of the

Loan Documents do not and will not contravene, conflict with, violate or

constitute a default under the Certificate of Limited Partnership creating

Borrower, the Limited Partnership Agreement of Borrower, or any applicable law,

rule, regulation, judgment, decree or order or any agreement, indenture or

instrument to which Borrower or Guarantor is a party or is bound or which is

binding upon or applicable to the Project or any portion thereof.

5.6 Litigation.

<PAGE>

There is not any condition, event or circumstance existing, or any

litigation, arbitration, governmental or administrative proceeding, action,

examination, claims or demand pending or, to the best of Borrower's knowledge

after due inquiry, threatened affecting Borrower, Guarantor or the Project, or

involving the validity or enforceability of the Loan Documents or involving any

risk of a judgment or liability which, if satisfied, would have a material

adverse effect on the financial condition, business or properties of Borrower,

Guarantor or the priority of the lien of the Deed of Trust, or which would

prevent Borrower or Guarantor from complying with or performing its obligations

under this Agreement, the Note, the Guaranty or any of the other Loan Documents

within the time limits set forth therein for such compliance or performance and

no basis for any such matter exists.

5.7 Utilities; Authorities.

All utilities necessary for use, operation and occupancy of the Project

(including, without limitation, water, storm sewer, sanitary sewer and drainage,

electric, gas and telephone facilities) are or will, as a result of the

development of the Project, be available at the boundaries of the Land (or in

the streets adjoining the Land), and all requirements for the use of such

utilities have been fulfilled. All building, zoning, safety, health, fire, water

district, sewerage and environmental protection agency permits and other

licenses and permits which are required by any governmental authority for

construction of the Improvements, and the use, occupancy and operation of the

Project as a medical office facility in accordance with the Plans and

Specifications have been obtained by or furnished to Borrower and are in full

force and effect or will be obtained by and maintained in full force and effect

by Borrower when and as required by any governmental authority.

5.8 Financial Statements; Solvency.

All financial statements submitted to Lender relating to Borrower and the

Guarantor are true, complete and correct, and have been prepared in accordance

with sound accounting principles consistently applied and fairly present the

financial condition of the Person to which they pertain and the other

information therein described and do not contain any untrue statement of a

material fact or omit to state a fact material to the financial statement

submitted or this Agreement. No material adverse change has occurred in the

financial condition of Borrower, or Guarantor since the dates of each such

financial statements. Borrower and Guarantor are able to pay their respective

debts as such debts become due, and they have capital sufficient to carry on

their respective present businesses and transactions and all businesses and

transactions in which they are about to engage and neither Borrower nor

Guarantor (i) are bankrupt or insolvent, (ii) have made an assignment for the

benefit of its or his creditors, (iii) have had a trustee or receiver appointed,

(iv) have had any bankruptcy, reorganization or insolvency proceedings

instituted by or against it or him, or (v) shall be rendered insolvent by its or

his execution, delivery or performance of this Agreement, the Loan Documents or

by the transactions contemplated hereunder and thereunder.

5.9 Compliance with Laws.

Upon completion of the Work in substantial accordance with the Plans and

Specifications, the

<PAGE>

Project and the use, occupancy and operation (subject to the acquisition of

appropriate healthcare governmental authorities approvals and certifications by

the owner of the hospital operations) thereof for their intended purposes will

not, violate any laws, statutes, ordinances, rules, orders or regulations of any

kind whatsoever (including without limitation, those relating to environmental

protection, water use, zoning, building, fire, health or safety), any

contractual arrangements with third parties or any covenants, conditions,

easements, rights of way or restrictions of record. Neither Borrower nor any

agent thereof has received any notice, written or otherwise, alleging any such

violation, which violation has not previously been cured. Upon completion of the

Work in accordance with the Plans and Specifications, the Project will be in

full compliance and conformity with all zoning requirements, including without

limitation, those relating to setbacks, height, parking, floor area ratio, fire

lanes and percentage of land coverage. No right to any off-site facilities will

be necessary to insure compliance by the Project with all environmental

protection, public highway, water use, zoning, building, fire, health, safety or

similar statutes, laws, ordinances, codes, rules, regulations, orders and

decrees.

5.10 Construction Contract.

Pursuant to the Construction Contract, the Contractor has agreed to construct

the Improvements. The Construction Contract is in full force and effect,

unamended, and no default exists thereunder by either party thereto. In the

event of any conflict between the terms of the Construction Contract, other

Subcontracts and this Agreement or any other Loan Document, Borrower shall abide

by and shall cause the applicable Contractor to act in accordance with the

provisions of the Loan Documents.

5.11 Subcontracts.

Pursuant to the requirements of Paragraph 7.15 below, Borrower will promptly

deliver to Lender true, complete and correct copies of all Subcontracts that are

entered into after the date hereof.

5.12 Plans and Specifications.

Borrower has delivered to Lender true, complete and correct copies of all of

the Plans and Specifications listed in EXHIBIT "D" attached hereto and the plans

and specifications listed in EXHIBIT "D" are the Plans and Specifications which

have been approved by Lender.

5.13 Budget.

The Budget is a true, complete and correct budget with respect to Project

Costs. The total of all Project Costs as specified in the Budget will not exceed

$23,677,204.

5.14 Hazardous Materials.

Except as set forth in the Reports (as defined in the Deed of Trust) and

otherwise disclosed to Lender, neither Borrower nor Guarantor has any knowledge

of any Hazardous Materials that have been generated, released, stored or

deposited over, beneath or on the Land or in any structure located on the Land.

No Hazardous Materials will be used in the construction of all or

<PAGE>

any portion of the Project, nor, to the best of Borrower's knowledge after due

inquiry, has any part of the Land been used for or as a land fill, the result of

which could impose any liability against Borrower, Lender or the Project under

any applicable law or regulation, including, without limitation the laws and

regulations mentioned in the definition of "Hazardous Materials" set forth

above. Borrower covenants that it shall indemnify, hold harmless and defend

Lender from any and all claims, losses, damages, response costs and expenses

(collectively, "Claims") arising out of or in any way relating to the past,

present or future presence, removal or disposal of any Hazardous Materials over,

beneath, in or on the Project regardless of whether such presence, removal or

disposal constitutes a breach of the representations, warranties, covenants and

agreements set forth in this paragraph, including, but not limited to: (a)

claims of third parties (including governmental agencies) for damages,

penalties, response costs, injunctive or other relief; (b) costs of removal and

restoration, including fees of attorneys and experts and costs of reporting the

existence of any Hazardous Materials to any governmental agency; and (c) any and

all expenses or obligations incurred at, before and after any trial or appeal

therefrom, including without limitation, attorneys' fees, witness fees,

deposition costs, photocopying charges and other expenses, all of which shall be

paid by Borrower when incurred. The provisions of the foregoing representations,

warranties and covenants shall not limit the provisions of the Indemnity

Agreement and the rights, remedies and protections herein and therein shall be

cumulative.

5.15 Financing Statements.

There are no UCC financing statements in effect other than those to be filed

and/or recorded by Lender which name Borrower as debtor and pertaining to any

rights in any of the Personal Property.

5.16 Event of Default.

No Event of Default has occurred, and no event or condition exists, that with

the giving of notice, the passage of time or both could constitute an Event of

Default.

5.17 Sale Agreements.

There are no sale contracts affecting all or any portion of the Project as of

the date hereof.

5.18 Environmental Matters.

There are no facilities on the Real Estate that are subject to reporting

under ss.312 of the federal Emergency Planning and Community Right-To-Know Act

of 1986, 43 U.S.C. Section 11022, and federal regulations promulgated

thereunder. Except as set forth in the Reports or otherwise disclosed by

Borrower to Lender, the Real Estate does not contain any underground storage

tanks.

5.19 Continuation of Representations and Warranties.

All representations and warranties which have been made by Borrower shall be

true in all respects at the time of each disbursement of the Loan, and in the

event of any material breach,

<PAGE>

misrepresentation or omission, Lender shall

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