Exhibit 10.8

SUBORDINATE PROMISSORY NOTE

 

U.S. $10,000,000.00    April 13, 2012

FOR VALUE RECEIVED, Cole Credit Property Trust IV, Inc., a Maryland corporation
(“Borrower”), hereby promises to pay to the order of Series C, LLC, an Arizona
limited liability company (“Lender”), at the office of Lender located at 2325
East Camelback Road, Suite 1100, Phoenix, AZ 85016, the principal amount of
$10,000,000.00, together with interest on the principal balance outstanding
hereunder, from (and including) the date of disbursement until (but not
including) the date of payment, at a per annum rate equal to the Stated Interest
Rate specified below or, to the extent applicable, the Default Interest Rate
specified below, in accordance with the following terms and conditions:

1. Revolving Line of Credit. The principal balance of this Note represents a
revolving line of credit all or any part of which may be advanced to Borrower,
repaid by Borrower, and re-advanced to Borrower from time to time, subject to
the other terms hereof, and provided that the principal balance outstanding at
any one time shall not exceed the face amount hereof.

2. Contracted For Rate of Interest The contracted for rate of interest of the
indebtedness evidenced hereby, without limitation, shall consist of the
following:

(a) The Stated Interest Rate (as hereinafter defined), as from time to time in
effect, calculated daily on the basis of actual days elapsed over a 360-day
year, applied to the principal balance from time to time outstanding hereunder;

(b) The Default Interest Rate (as hereinafter defined), as from time to time in
effect, calculated daily on the basis of actual days elapsed over a 360-day
year, applied to the principal balance from time to time outstanding hereunder;
and

(c) All Additional Sums (as hereinafter defined), if any.

Borrower agrees to pay an effective contracted for rate of interest which is the
sum of the Stated Interest Rate referred to in Subsection 2(a) above, plus any
additional rate of interest resulting from the application of the Default
Interest Rate referred to in Subsection 2(b) above, and the Additional Sums, if
any, referred to in Subsection 2(c) above.

3. Stated Interest Rate. Except as provided in Section 4 below, interest shall
accrue on the principal balance outstanding hereunder during each Interest
Period (as hereinafter defined) at the Stated Interest Rate. The Stated Interest
Rate shall be a rate per annum equal to 4.5%. “Interest Period” means each
period commencing on the first day of the calendar month and ending on the first
day of the next succeeding calendar month; provided (i) the first Interest
Period shall commence on the date hereof and end on the first day of the next
succeeding calendar month and (ii) any Interest Period that would otherwise
extend past the maturity date of this Note shall end on the maturity date of
this Note.

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4. Default Interest Rate. The Default Interest Rate shall be the Stated Interest
Rate plus 4.0% per annum. The principal balance outstanding hereunder from time
to time shall bear interest at the Default Interest Rate from the date of the
occurrence of an Event of Default (as hereinafter defined) hereunder until the
earlier of: (a) the date on which the principal balance outstanding hereunder,
together with all accrued interest and other amounts payable hereunder, are paid
in full; or (b) the date on which such Event of Default is timely cured in a
manner satisfactory to Lender, (i) if Borrower is specifically granted a right
to cure such Event of Default herein or (ii) if no such right to cure is
specifically granted, then Lender, in its sole and absolute discretion, permits
such Event of Default to be cured.

5. Payments. Accrued interest under this Note shall be due and payable in
arrears on the last day of each Interest Period. The principal balance
outstanding hereunder, together with all accrued interest and other amounts
payable hereunder, if not sooner paid as provided herein, shall be due and
payable on April 12, 2013.

6. Application and Place of Payments. Payments received by Lender with respect
to the indebtedness evidenced hereby shall be applied in such order and manner
as Lender in its sole and absolute discretion may elect. Unless otherwise
elected by Lender, all such payments shall first be applied to accrued and
unpaid interest at the Stated Interest Rate and, to the extent applicable, the
Default Interest Rate, next to the principal balance then outstanding hereunder,
and the remainder to any Additional Sums or other costs or added charges
provided for herein. Payments hereunder shall be made at the address for Lender
first set forth above, or at such other address as Lender may specify to
Borrower in writing.

7. Prepayments. Payments of principal hereof may be made at any time, or from
time to time, in whole or in part, without penalty, provided that all previously
matured interest and other charges accrued to the date of prepayment are also
paid in full. Notwithstanding any partial prepayment of principal hereof, there
will be no change in the due date or amount of scheduled payments due hereunder
unless Lender, in its sole and absolute discretion, agrees in writing to such
change.

8. Subordinate Loan. Notwithstanding anything to the contrary contained herein,
this Note is subject and subordinate to the Credit Facility and all of
Borrower’s obligations in connection therewith. The term “Credit Facility” shall
mean that certain revolving credit facility in an amount not to exceed
$250,000,000 pursuant to that certain Borrowing Base Revolving Line of Credit
Agreement dated as of April 13, 2012 by and among Cole Operating Partnership IV,
LP, as borrower, the lenders from time to time that are parties thereto, and
JPMorgan Chase Bank, N.A., as administrative agent, and the other loan documents
executed or delivered in connection therewith, including a repayment guaranty
from Borrower with respect thereto (each as amended, supplemented or replaced).
As long as the Credit Facility, or any portion thereof, remains outstanding,
Borrower shall not, and shall not be obligated to, make any payments under or
with respect to this Note unless all amounts then due and owing under the Credit
Facility, including, without limitation, monthly debt service payments and
deposits to reserve accounts, if any, have been paid.

 

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9. Events of Default; Acceleration. The occurrence of any one or more of the
following events shall constitute an “Event of Default” hereunder, and upon such
Event of Default, the entire principal balance outstanding hereunder, together
with all accrued interest and other amounts payable hereunder, at the election
of Lender, shall become immediately due and payable, without any notice to
Borrower:

(a) The failure of Borrower to pay any principal, interest or other amounts when
the same shall become due and payable hereunder, and such failure is not cured
within five (5) business days after notice from Lender;

(b) The failure of Borrower to comply with any other provision of this Note, and
such failure is not cured within five (5) business days after notice from
Lender;

(c) The dissolution, winding-up or termination of the existence of Borrower;

(d) The making by Borrower of an assignment for the benefit of its creditors; or

(e) The filing by Borrower of a petition or application for relief under federal
bankruptcy law or any similar state or federal law.

10. Additional Sums. All fees, charges, goods, things in action or any other
sums or things of value, other than the interest resulting from the Stated
Interest Rate and the Default Interest Rate, as applicable, paid or payable by
Borrower (collectively, the “Additional Sums”), whether pursuant to this Note or
otherwise with respect to this lending transaction, that, under the laws of the
State of Arizona, may be deemed to be interest with respect to this lending
transaction, for the purpose of any laws of the State of Arizona that may limit
the maximum amount of interest to be charged with respect to this lending
transaction, shall be payable by Borrower as, and shall be deemed to be,
additional interest, and for such purposes only, the agreed upon and “contracted
for rate of interest” of this lending transaction shall be deemed to be
increased by the rate of interest resulting from the Additional Sums. Borrower
understands and believes that this lending transaction complies with the usury
laws of the State of Arizona; however, if any interest or other charges in
connection with this lending transaction are ever determined to exceed the
maximum amount permitted by law, then Borrower agrees that: (a) the amount of
interest or charges payable pursuant to this lending transaction shall be
reduced to the maximum amount permitted by law; and (b) any excess amount
previously collected from Borrower in connection with this lending transaction
that exceeded the maximum amount permitted by law, will be credited against the
principal balance then outstanding hereunder. If the outstanding principal
balance hereunder has been paid in full, the excess amount paid will be refunded
to Borrower.

11. Waivers. Except as set forth in this Note, to the extent permitted by
applicable law, Borrower, and each person who is or may become liable hereunder,
severally waive and agree not to assert: (a) any exemption rights; (b) demand,
diligence, grace, presentment for payment, protest, notice of nonpayment,
nonperformance, extension, dishonor, maturity, protest and default; and
(c) recourse to guaranty or suretyship defenses (including, without limitation,
the right to require the Lender to bring an action on this Note). Lender may
extend the time for payment of or renew this Note, release collateral as
security for the indebtedness evidenced hereby or release any party from
liability hereunder, and any such extension, renewal, release or other
indulgence shall not alter or diminish the liability of Borrower or any other
person or entity who is or may become liable on this Note except to the extent
expressly set forth in a writing evidencing or constituting such extension,
renewal, release or other indulgence.

 

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12. Costs of Collection. Borrower agrees to pay all reasonable costs of
collection, including, without limitation, attorneys’ fees, whether or not suit
is filed, and all costs of suit and preparation for suit (whether at trial or
appellate level), in the event any payment of principal, interest or other
amount is not paid when due. In the event of any court proceeding, attorneys’
fees shall be set by the court and not by the jury and shall be included in any
judgment obtained by Lender.

13. No Waiver by Lender. No delay or failure of Lender in exercising any right
hereunder shall affect such right, nor shall any single or partial exercise of
any right preclude further exercise thereof.

14. Governing Law. This Note shall be construed in accordance with and governed
by the laws of the State of Arizona, without regard to the choice of law rules
of the State of Arizona.

15. Time of Essence. Time is of the essence of this Note and each and every
provision hereof.

16. Amendments. No amendment, modification, change, waiver, release or discharge
hereof and hereunder shall be effective unless evidenced by an instrument in
writing and signed by the party against whom enforcement is sought.

17. Severability. If any provision hereof is invalid or unenforceable, the other
provisions hereof shall remain in full force and effect and shall be liberally
construed in favor of Lender in order to effectuate the other provisions hereof.

18. Binding Nature. The provisions of this Note shall be binding upon Borrower
and the heirs, personal representatives, successors and assigns of Borrower, and
shall inure to the benefit of Lender and any subsequent holder of all or any
portion of this Note, and their respective successors and assigns. Lender may
from time to time transfer all or any part of its interest in this Note without
notice to Borrower.

19. Notice. Any notice or other communication with respect to this Note shall:
(a) be in writing; (b) be effective on the day of hand-delivery thereof to the
party to whom directed, one day following the day of deposit thereof with
delivery charges prepaid, with a national overnight delivery service, or two
days following the day of deposit thereof with postage prepaid, with the United
States Postal Service, by regular first class, certified or registered mail;
(c) if directed to Lender, be addressed to Lender at the office of Lender set
forth above, or to such other address as Lender shall have specified to Borrower
by like notice; and (d) if directed to Borrower, be addressed to Borrower at the
address for Borrower set forth below Borrower’s name, or to such other address
as Borrower shall have specified by like notice.

20. Section Headings. The section headings set forth in this Note are for
convenience only and shall not have substantive meaning hereunder or be deemed
part of this Note.

 

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21. Construction. This Note shall be construed as a whole, in accordance with
its fair meaning, and without regard to or taking into account any presumption
or other rule of law requiring construction against the party preparing this
Note.

IN WITNESS WHEREOF, Borrower has executed this Note as of the date first set
forth above.

 

COLE CREDIT PROPERTY TRUST IV, INC.,

a Maryland corporation

By:   /s/ D. Kirk McAllaster, Jr. Name:   D. Kirk McAllaster, Jr. Title:   Chief
Financial Officer Address of Borrower:

2325 E. Camelback Road, Suite 1100

Phoenix, AZ 85016

 

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