MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING

NNN Gallery Medical, LLC,
a Delaware limited liability company,
Borrower

To

LaSalle Bank National Association,
a national banking association,
as Lender

The maximum principal indebtedness secured by this mortgage is $6,000,000.00

This instrument was prepared by and
after recording return to:

KATTEN MUCHIN ROSENMAN LLP
401 South Tryon Street, Suite 2600
Charlotte, North Carolina 28202
Attention: Daniel S. Huffenus, Esq.

1

MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING

Table of Contents

                                  ParagraphPage             1.   Payment of
Indebtedness; Performance of Obligations   5             2.   Taxes and Other
Obligations   5             3.   Reserves for Taxes/Ground
Rents/Insurance/Replacement Reserve/Tenant Improvements and Leasing Reserve.    
      5 4.   Use of Property   9             5.   Insurance and Condemnation.  
9             6.   Preservation and Maintenance of Property   14             7.
  Protection of Lender’s Security; Leases   14             8.   Inspection   16
            9.   Books and Records   16             10.   Financial Statements  
16             11.   Hazardous Substances   18             12.   Representations
and Covenants.   18             13.   Lease Assignment   23             14.  
Subordination, Non-Disturbance and Attornment Agreements/Estoppel
Certificates.23                     15.   Transfers of the Property or Ownership
Interests in Borrower; Assumption; Due on           23            
Sale/Encumbrance.                     16.   No Additional Liens   31            
   
17.
  Single Asset Entity     32                  
18.
  Borrower and Lien Not Released     36                  
19.
  Uniform Commercial Code Security Agreement and Fixture Filing     37          
       
20.
  Events of Default; Acceleration of Indebtedness; Remedies     38              
   
21.
  Entry; Foreclosure; Remedies     40                  
22.
  Expenditures and Expenses     43                  
23.
  Application of Proceeds of Foreclosure Sale     43                  
24.
  Appointment of Receiver or Mortgagee in Possession     43                  
25.
  Forbearance by Lender Not a Waiver     44                  
26.
  Waiver of Statute of Limitations     44                  
27.
  Waiver of Homestead and Redemption     44                  
28.
  Jury Trial Waiver     44                  
29.
  Indemnification     45                  
30.
  Duty to Defend     45                  
31.
  ERISA     46                  
32.
  No Oral Change     46                  
33.
  Notice     46                  
34.
  Successors and Assigns Bound; Joint and Several Liability; Agents; Captions  
  46                  
35.
  Governing Law; Jurisdiction; Severability     47                  
36.
  Release     47                  
37.
  Covenants Running with the Land     47                  
38.
  Terms     47                  
39.
  Loss of Note     47                  
40.
  Changes in the Laws Regarding Taxation     48                  
41.
  Exculpation     48                  
42.
  Disclosure of Information     48                  
43.
  Sale of Loan; Securitization     48                  
44.
  Actions and Proceedings     49                  
45.
  No Third Party Beneficiaries     49                  
46.
  Exhibits and Riders     49                  
47.
  Customer Identification – USA Patriot Act Notice; OFAC     49                
 
48.
  Counterparts     50                  
49.
  Disclaimers     50                  
50.
  Maximum Principal Amount.     50                  
51.
  Non-Agricultural Use. .     51                  

Exhibit A — Legal Description

Exhibit B — Personal Property Description

Exhibit C — Pending and Threatened Litigation

2

Defined Terms

As used in this Mortgage, the following terms shall have the following meanings
assigned to them:

         
Borrower
  NNN Gallery Medical, LLC (“Borrower”) having its principal places of business
at 1551 N. Tustin

 
  Avenue, Suite 300, Santa Ana, California 92705.

Borrower’s Address
  1551 N. Tustin Avenue, Suite 300
 
  Santa Ana, California 92705

Property Address
  17 W Exchange Street
 
  St. Paul, Minnesota 55102-1045

Lender
  LaSalle Bank National Association, a national banking association, and its
successors and assigns

 
  as holders of the Note

Lender’s Address
  135 S. LaSalle Street, Suite 3410
 
  Chicago, Illinois 60603

 
  Attention: Real Estate Capital Markets

 
  Re: Gallery Medical Office

Note
  That Promissory Note of even date herewith made by Borrower to the order of
Lender in the

 
  Principal Amount, together with all notes issued in substitution or exchange
therefor, as any of

 
  the foregoing may be amended, consolidated, modified or supplemented from time
to time

Principal Amount
  $ 6,000,000.00  
Maturity Date
  March 1, 2017

Land
  The property described on Exhibit A to this Mortgage

Personal Property
  The property described on Exhibit B to this Mortgage

Replacement Reserve Monthly Payment
  $1,757.22, subject to the provisions of subparagraph 3(c) of this Mortgage
TI and Leasing Reserve Monthly Payment
  $8,786.08, subject to the provisions of subparagraph 3(d) of this Mortgage
Permitted Use
  Office

Guarantor
  NNN Realty Advisors, Inc., a Delaware corporation

Required Rating
  A General Policy Rating of A: VIII or better in A.M. Best’s Key Rating Guide

3

THIS MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING (“Mortgage”) is made as of
the 5th day of February, 2007, by Borrower to Lender.

R E C I T A L S:

A. Borrower has executed and delivered to Lender the Note (which is hereinafter
referred to as the “Note”), providing for monthly installments of principal
and/or interest, with the balance thereof, if not sooner due or paid as set
forth in the Note, due and payable on the Maturity Date;

B. Lender wishes to secure (i) the prompt payment of the Note, together with all
interest thereon in accordance with the terms of the Note, as well as the prompt
payment of any additional indebtedness accruing to Lender on account of any
future payments, advances or expenditures made by Lender pursuant to the Note or
this Mortgage or any other agreement, document, or instrument securing the
payment of the indebtedness evidenced by the Note (the Note, this Mortgage, and
any other documents evidencing or securing the indebtedness evidenced by the
Note or executed in connection therewith, and any modification, renewal, and/or
extension thereof, are hereinafter collectively referred to as the “Loan
Documents”), and (ii) the prompt performance of each and every covenant,
condition, and agreement now or hereafter arising contained in the Loan
Documents of Borrower. All payment obligations of Borrower are hereinafter
sometimes collectively referred to as the “Indebtedness” and all other
obligations of Borrower are hereinafter sometimes collectively referred to as
the “Obligations”; and

C. The Schedule of Defined Terms appearing immediately before this page is
incorporated into this Mortgage by reference with the same force and effect as
if contained in the body hereof.

D. Subsequent to the closing of the “Loan” (as defined in the Note), subject to
the terms of Paragraph 15 of this Mortgage, Borrower may transfer undivided
tenant in common interests in the Property (provided, however, there may be no
more than thirty-five (35) tenants in common (“Tenants in Common”) in the
aggregate including Borrower (collectively “permitted TICs”) with the consent of
Lender, as more specifically set forth in one or more Loan Assumption,
Ratification and Consent Agreements(s) by and between Borrower, Guarantor, the
Tenants in Common and Lender (individually and collectively, the “Assumption
Agreement”), and upon the execution of such Assumption Agreement, “Borrower”
shall thereafter be deemed to collectively include Borrower under this Mortgage
and all then existing Tenants in Common.

NOW, THEREFORE, TO SECURE TO LENDER the repayment of the Indebtedness and the
performance of the Obligations, Borrower has mortgaged, given, granted,
bargained, sold, alienated, enfeoffed, transferred, conveyed, confirmed,
warranted, pledged, assigned, hypothecated and granted and by these presents
does hereby irrevocably mortgage, give, grant, bargain, sell, alien, enfeoff,
transfer, convey, confirm, warrant, pledge, assign, hypothecate and grant a
security interest in and to Lender, with power of sale, the following described
property and all proceeds thereof (which property is hereinafter sometimes
collectively referred to as the “Property”):

A. The Land;

B. All improvements of every nature whatsoever now or hereafter situated on the
Land and owned by Borrower (the “Improvements”), and all machinery, furnishings,
equipment, fixtures (the “Fixtures”), mechanical systems and other personal
property now or hereafter owned by Borrower and used in connection with the
operation of the Improvements;

C. All easements, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
air rights and development rights, and all estates, rights, titles, interests,
privileges, liberties, tenements, hereditaments and appurtenances of any nature
whatsoever, in any way belonging, relating or pertaining to the Land and the
Improvements and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road or avenue, opened or proposed, in
front of or adjoining the Land, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Borrower of, in and to the Land and the Improvements and every part
and parcel thereof, with the appurtenances thereto;

D. All agreements affecting the use, enjoyment or occupancy of the Land and/or
Improvements now or hereafter entered into (the “Leases”), including any and all
guaranties of such Leases, and the immediate and continuing right to collect all
rents, income, receipts, royalties, profits, issues, service reimbursements,
fees, accounts receivables, revenues and prepayments of any of the same from or
related to the Land and/or Improvements from time to time accruing under the
Leases and/or the operation of the Land and/or Improvements (the “Rents”),
reserving to Borrower, however, so long as no “Event of Default” (hereinafter
defined) has occurred hereunder, a revocable license to receive and apply the
Rents in accordance with the terms and conditions of Paragraph 13 of this
Mortgage;

E. The Personal Property;

F. All awards or payments, including interest thereon, which may heretofore and
hereafter be made with respect to the Land and the Improvements, whether from
the exercise of the right of eminent domain or condemnation (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
said rights), or for a change of grade, or for any other injury to or decrease
in the value of the Land and Improvements;

G. All proceeds of and any unearned premiums on any insurance policies covering
the Property, including, without limitation, the right to receive and apply the
proceeds of any insurance, judgments, or settlements made in lieu thereof, for
damage to the Property;

H. All proceeds of the conversion, voluntary or involuntary, of any of the
foregoing including, without limitation, proceeds of insurance and condemnation
awards, into cash or liquidation claims;

I. Any and all proceeds and products of any of the foregoing and any and all
other security and collateral of any nature whatsoever, now or hereafter given
for the repayment of the Indebtedness and the performance of Borrower’s
obligations under the Loan Documents, including (without limitation) the
Replacement Reserve, the TI and Leasing Reserve, and all other escrows
established with Lender by Borrower; and

J. All property management agreements and tenants in common agreements relating
to the Property.

AND without limiting any of the other provisions of this Mortgage, to the extent
permitted by applicable law, Borrower expressly grants to Lender, as a secured
party, a security interest in the portion of the Property that is or may be
subject to the provisions of the Uniform Commercial Code that are applicable to
secured transactions; it being understood and agreed that the Improvements and
Fixtures are part and parcel of the Land (the Land, the Improvements and the
Fixtures are collectively referred to as the “Real Property”) appropriated to
the use thereof and, whether affixed or annexed to the Real Property or not,
shall for the purposes of this Mortgage be deemed conclusively to be real estate
and mortgaged hereby.

TO HAVE AND TO HOLD the Property and all parts thereof, together with the rents,
issues, profits and proceeds thereof, unto Lender and to the use, benefit and
advantage of Lender, forever, subject, however, to the terms, covenants, and
conditions herein.

Borrower covenants and agrees with Lender as follows:

1. Payment of Indebtedness; Performance of Obligations. Borrower shall promptly
pay when due the Indebtedness and shall promptly perform all Obligations.

2. Taxes and Other Obligations. Borrower shall pay, when due, and before any
interest, collection fees or penalties shall accrue, all taxes, assessments,
fines, impositions and other charges and obligations, including charges and
obligations for any present or future repairs or improvements made on the
Property, or for any other goods or services or utilities furnished to the
Property, which may become a lien on or charge against the Property prior to
this Mortgage, subject, however, to Borrower’s right to contest such lien or
charge upon the posting of security reasonably satisfactory to Lender so long as
such contest stays the enforcement or collection of such lien or charge. Should
Borrower fail to make such payments, Lender may, at its option and at the
expense of Borrower, pay the amounts due for the account of Borrower. Upon the
request of Lender, Borrower shall immediately furnish to Lender all notices of
amounts due and receipts evidencing payment. Borrower shall promptly notify
Lender of any lien on all or any part of the Property and shall promptly
discharge any unpermitted lien or encumbrance.

3. Reserves for Taxes/Ground Rents/Insurance/Replacement Reserve/Tenant
Improvements and Leasing Reserve.

(a) Borrower shall pay to Lender, at the time of and in addition to the monthly
installments of principal and/or interest due under the Note, a sum equal to
1/12 of the amount estimated by Lender from time to time to be sufficient to
enable Lender to pay at least 30 days before they become due and payable, all
taxes, assessments and other similar charges levied against the Property
(collectively, the “Taxes”), and all ground rents, if applicable. So long as no
Event of Default exists hereunder, Lender shall apply the sums so paid by
Borrower to pay such tax items and ground rents, if applicable. In making any
such payments, Lender may do so according to any bill, statement or estimate
obtained by Lender in good faith, without inquiry into the accuracy of such
bill, statement or estimate or into the validity thereof. These sums may be
commingled with the general funds of Lender, and no interest shall be payable
thereon nor shall these sums constitute trust funds. If such amount on deposit
with Lender is insufficient to fully pay such tax items and ground rents, if
applicable, Borrower shall, within 10 days following notice at any time from
Lender, deposit such additional sum as may be required for the full payment of
such tax items and ground rents, if applicable. Borrower hereby represents and
warrants that Lender has a security interest in such funds and Borrower shall
execute any other documents and take any other actions necessary to provide
Lender with a perfected security interest. Upon the Maturity Date, the moneys
then remaining on deposit with Lender or its agent shall, at Lender’s option, be
applied against the Indebtedness. The obligation of Borrower to pay such tax
items and ground rents is not affected or modified by the provisions of this
paragraph.

(b) Borrower shall pay to Lender, at the time of and in addition to the monthly
installments of principal and/or interest due under the Note, a sum equal to
1/12 of the amount estimated by Lender from time to time to be sufficient to
enable Lender to pay at least 30 days before they become due and payable, all
insurance premiums due for the renewal, on an annual basis, of the coverage
afforded by the insurance policies required hereunder upon the expiration
thereof. So long as no Event of Default exists hereunder, Lender shall apply the
sums so paid by Borrower to pay such insurance premiums. In making any such
payment, Lender may do so according to any bill, statement or estimate obtained
by Lender in good faith, without inquiry into the accuracy of such bill,
statement or estimate or into the validity thereof. These sums may be commingled
with the general funds of Lender, and no interest shall be payable thereon nor
shall these sums constitute trust funds. If such amount on deposit with Lender
is insufficient to fully pay such insurance premiums, Borrower shall, within
10 days following notice at any time from Lender, deposit such additional sum as
may be required for the full payment of such insurance premiums. Borrower hereby
represents and warrants that Lender has a security interest in such funds and
Borrower shall execute any other documents and take any other actions necessary
to provide Lender with a perfected security interest. Upon the Maturity Date,
the moneys then remaining on deposit with Lender or its agent shall, at Lender’s
option, be applied against the Indebtedness. The obligation of Borrower to pay
such insurance premiums is not affected or modified by the provisions of this
paragraph.

(c) At the time of and in addition to the monthly installments of principal
and/or interest due under the Note, Borrower shall pay to Lender the Replacement
Reserve Monthly Payment (such payments shall be referred to as the “Replacement
Reserve”). The Replacement Reserve may be commingled with the general funds of
Lender and such Replacement Reserve shall not constitute trust funds. The funds
contained in the Replacement Reserve shall bear interest for the benefit of
Borrower at the rate of interest which is the lower of (i) the amount paid from
time to time by Lender on commercial money market accounts; or (ii) the return
on permitted investments to be made with the funds by any third party servicer,
rating agency or loan purchaser (“Reserve Interest Rate”), and all such interest
shall be added to and become part of the Replacement Reserve, provided Lender
shall make no representation or warranty as to the actual rate of interest. The
funds contained in the Replacement Reserve shall be utilized by Borrower solely
for exterior, structural, HVAC and mechanical improvements that are customarily
accounted for as capital expenses (“Capital Expenses”), and other capital
improvements approved in advance by Lender. Lender shall make disbursements from
the Replacement Reserve for the actual cost of such items and approved capital
improvements upon Borrower’s providing Lender with receipts, invoices, lien
waivers, photographs and other documentation deemed necessary by Lender to
insure that the work and/or materials related to the requested disbursement have
been completed and/or provided, with minimum draws of $10,000.00, which shall
occur no more frequently than once per month. Upon the Maturity Date, the moneys
then remaining on deposit with Lender or its agent shall, at Lender’s option, be
applied against the Indebtedness. Borrower hereby represents and warrants that
Lender has a security interest in the Replacement Reserve and Borrower shall
execute any other documents and take any other actions necessary to provide
Lender with a perfected security interest in the Replacement Reserve.

Notwithstanding the foregoing, without waiving any of Borrower’s repair and
maintenance obligations under the Loan Documents, Lender agrees to defer its
right under this Mortgage to require monthly deposits of the Replacement Reserve
Monthly Payment into the Replacement Reserve until March 1, 2010, as long as
there exists no event of default (or event with which notice or lapse of time or
both could constitute an event of default) under the Loan Documents. If Lender
determines that such condition is not satisfied, then in addition to Lender’s
other remedies under applicable law and under the Loan Documents, Lender may
require that Borrower immediately commence making monthly deposits of the
Replacement Reserve Monthly Payments in an amount determined by Lender for such
purpose into the Replacement Reserve.

(d) On the date hereof Borrower shall deposit with Lender the sum of $     and
at the time of and in addition to the monthly installments of principal and/or
interest due under the Note, Borrower shall pay to Lender monthly deposits in
the amount of the TI and Leasing Reserve Monthly Payment for approved tenant
improvements and leasing commissions (such payments shall be referred to as the
“TI and Leasing Reserve”) until such time as the balance in the TI and Leasing
Reserve equals $     (the “Minimum TI and Leasing Reserve Balance”). Thereafter,
if at any time there is a draw causing the TI and Leasing Reserve to contain
less than the Minimum TI and Leasing Reserve Balance (whether on account of
expenditures approved by Lender or its servicer or otherwise), Borrower shall
continue to pay Lender for deposit into the TI and Leasing Reserve, the TI and
Leasing Reserve Monthly Payment until the balance in the TI and Leasing Reserve
again equals the Minimum TI and Leasing Reserve Balance. Whenever the balance in
the TI and Leasing Reserve again equals the Minimum TI and Leasing Reserve
Balance, Borrower may suspend making monthly payments into the TI and Leasing
Reserve. The TI and Leasing Reserve may be commingled with the general funds of
Lender and such TI and Leasing Reserve shall not constitute trust funds. [The
funds contained in the TI and Leasing Reserve shall bear interest for the
benefit of Borrower at the Reserve Interest Rate and all such interest shall be
added to and become a part of the TI and Leasing Reserve, provided Lender shall
make no representation or warranty as to the actual rate of interest. The funds
contained in the TI and Leasing Reserve shall be disbursed to Borrower solely to
pay for tenant improvements and leasing commissions due pursuant to leases
entered into in accordance with the requirements of Paragraph 7 hereof or
otherwise approved by Lender, but only when the tenants under such leases are in
occupancy, open for business, and paying full contractual rent without any right
of offset or rent abatement. Lender shall make disbursements from the TI and
Leasing Reserve for the actual cost of such approved tenant improvements and
leasing commissions upon Borrower’s providing Lender with receipts, invoices,
lien waivers, photographs and other documentation deemed necessary by Lender to
insure that the work and/or materials related to the requested disbursement have
been completed and/or provided, with minimum draws of $10,000.00, which shall
occur no more frequently than once per month. Upon the Maturity Date, the moneys
then remaining on deposit with Lender or its agent shall, at Lender’s option, be
applied against the Indebtedness. Borrower hereby grants Lender a first priority
security interest in the TI and Leasing Reserve and shall execute any other
documents and take any other actions necessary to provide Lender with such a
perfected security interest in the TI and Leasing Reserve.

In the event that (i) the Loan is not fully transferred to and assumed by NNN
Healthcare/Office REIT Holdings, L.P., a Delaware Limited Partnership (the
“REIT”) or to a newly formed entity that is owned and controlled by the REIT, or
(ii) the membership interests in Borrower are not transferred to the REIT or to
a newly formed entity that is owned and controlled by the REIT, on or before
June 5, 2007, the following conditions must be satisfied; (i) the Required
Balance will immediately increase to $     , (ii) Borrower will within three
(3) Business Days make a payment of $500,000.00 into the TI and Leasing Reserve
and (iii) Borrower will within ten (10) Business Days fully satisfy and pay off
any and all additional debt on the Property and cause to be released any and all
liens associated with the additional debt.

Notwithstanding the foregoing, without waiving any of Borrower’s leasing
restrictions and obligations under the Loan Documents, Lender agrees to defer
its right under this Mortgage to require monthly deposits of the TI and Leasing
Reserve Monthly Payment into the TI and Leasing Reserve until the Release
Requirements are met as long as there exists no Event of Default (or event with
which notice or lapse of time or both could constitute an Event of Default)
under the Loan Documents. Notwithstanding the foregoing, without waiving any of
Borrower’s repair and maintenance obligations under the Loan Documents, Lender
agrees to defer its right under this Mortgage to require monthly deposits of the
Pfizer Reserve Monthly Payment into the TI and Leasing Reserve for a period of
sixteen (16) months from the date hereof as long as there exists no Event of
Default (or event with which notice or lapse of time or both could constitute an
Event of Default) under the Loan Documents.

(e) Upon the occurrence of an Event of Default, Lender may apply any amounts
then held in any of the Reserves described above to the payment of the
Indebtedness in such order as Lender may elect, in its sole and absolute
discretion.

(f) On the date hereof, Borrower shall have deposited with Lender the sum of
$     .00 (“Security Reserve”). The Security Reserve shall constitute additional
security for the Loan. The Security Reserve may be commingled with the general
funds of Lender and shall not constitute trust funds. No interest shall be paid
to Borrower on the Security Reserve. No disbursement from the Security Reserve
shall be made to the Borrower. Upon the Maturity Date, the moneys then remaining
on deposit with Lender or its agent shall, at Lender’s option, be applied
against the Indebtedness. Borrower hereby grants Lender a security interest in
the Security Reserve and shall execute any other documents and take any other
actions necessary to provide Lender with a perfected security interest in the
Security Reserve.

4. Use of Property. Unless required by applicable law, Borrower shall not permit
changes in the use of any part of the Property from the use existing at the time
this Mortgage was executed, which use Borrower represents and warrants is
limited to the Permitted Use and related uses. Borrower shall not initiate or
acquiesce in a change in the zoning classification of the Property without
Lender’s prior written consent.

5. Insurance and Condemnation. Borrower shall obtain and maintain, or cause to
be maintained, insurance for Borrower and the Property providing at least the
following coverages:

(a) comprehensive all risk insurance (“Special Form”) including, but not limited
to, loss caused by any type of windstorm or hail on the Improvements and the
Personal Property, (i) in an amount equal to one hundred percent (100%) of the
“Full Replacement Cost,” which for purposes of this Mortgage shall mean actual
replacement value (exclusive of costs of excavations, foundations, underground
utilities and footings) with a waiver of depreciation, but the amount shall in
no event be less than the outstanding principal balance of the Loan;
(ii) containing an agreed amount endorsement with respect to the Improvements
and Personal Property waiving all co-insurance provisions or to be written on a
no co-insurance form; (iii) providing for no deductible in excess of Ten
Thousand and 00/100 Dollars ($10,000.00) for all such insurance coverage
excluding windstorm and earthquake, and (iv) if any of the Improvements or the
use of the Property shall at any time constitute legal non-conforming structures
or uses, coverage for loss due to operation of law in an amount equal to the
Full Replacement Cost, coverage for demolition costs and coverage for increased
costs of construction. In addition, Borrower shall obtain: (A) if any portion of
the Improvements is currently or at any time in the future located in a
federally designated “special flood hazard area”, flood hazard insurance in an
amount equal to the lesser of (1) the outstanding principal balance of the Note
or (2) the maximum amount of such insurance available under the National Flood
Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National
Flood Insurance Reform Act of 1994, as each may be amended or such greater
amount as Lender shall require and (B) earthquake insurance in amounts and in
form and substance satisfactory to Lender in the event the Property is located
in an area with a high degree of seismic activity;

(b) business income insurance (i) with loss payable to Lender; (ii) covering all
risks required to be covered by the insurance provided for in subparagraph
(a) above; (iii) in an amount equal to one hundred percent (100%) of the
projected gross revenues from the operation of the Property (as reduced to
reflect expenses not incurred during a period of restoration or repair) for a
period of at least twelve (12) months after the date of the loss or damage by
fire or other casualty; and (iv) containing an extended period of indemnity
endorsement which provides that after the physical loss to the Improvements and
Personal Property has been repaired, the continued loss of income will be
insured until such income either returns to the same level it was at prior to
the loss, or the expiration of six (6) months from the date that the Property is
repaired or replaced and operations are resumed, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such period. The
amount of such business income insurance shall be determined prior to the date
hereof and at least once each year thereafter based on Borrower’s reasonable
estimate of the gross revenues from the Property for the succeeding twelve
(12) month period. All proceeds payable to Lender pursuant to this subsection
shall be held by Lender and shall be applied to the obligations secured by the
Loan Documents from time to time due and payable hereunder and under the Note;
provided, however, that nothing herein contained shall be deemed to relieve
Borrower of its obligations to pay the obligations secured by the Loan Documents
on the respective dates of payment provided for in this Mortgage and the other
Loan Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;

(c) at all times during which structural construction, repairs or alterations
are being made with respect to the Improvements, and only if the Property
coverage form does not otherwise apply, (i) owner’s contingent or protective
liability insurance, otherwise known as Owner Contractor’s Protective Liability,
covering claims not covered by or under the terms or provisions of the above
mentioned commercial general liability insurance policy and (ii) the insurance
provided for in subparagraph (a) above written in a so-called builder’s risk
completed value form (A) on a non-reporting basis, (B) against all risks insured
against pursuant to subparagraph (a) above, (C) including permission to occupy
the Property and (D) with an agreed amount endorsement waiving co-insurance
provisions;

(d) comprehensive boiler and machinery insurance, if steam boilers or other
pressure-fixed vessels are in operation, in amounts as shall be reasonably
required by Lender on terms consistent with the commercial property insurance
policy required under subparagraph (a) above;

(e) commercial general liability insurance against claims for personal injury,
bodily injury, death or property damage occurring upon, in or about the
Property, such insurance (i) to be on the so-called “occurrence” form with a
combined limit of not less than Two Million and 00/100 Dollars ($2,000,000.00)
in the aggregate and One Million and 00/100 Dollars ($1,000,000.00) per
occurrence; (ii) to continue at not less than the aforesaid limit until required
to be changed by Lender in writing by reason of changed economic conditions
making such protection inadequate and (iii) to cover at least the following
hazards: (A) premises and operations; (B) products and completed operations on
an “if any” basis; (C) independent contractors; (D) blanket contractual
liability for all written contracts and (E) contractual liability covering the
indemnities contained in Paragraph 29 of this Mortgage to the extent the same is
available;

(f) automobile liability coverage for all owned and non-owned vehicles,
including rented and leased vehicles containing minimum limits per occurrence of
One Million Dollars and 00/100 Dollars ($1,000,000.00);

(g) worker’s compensation and employee’s liability subject to the worker’s
compensation laws of the applicable state;

(h) umbrella and excess liability insurance in an amount not less than Three
Million and 00/100 Dollars ($3,000,000.00) per occurrence on terms consistent
with the commercial general liability insurance policy required under
subparagraph (e) above, including, but not limited to, supplemental coverage for
employer liability and automobile liability, which umbrella liability coverage
shall apply in excess of the automobile liability coverage in subparagraph
(f) above;

(i) the insurance required under this Paragraph 5 above shall cover perils of
terrorism and acts of terrorism and Borrower shall maintain insurance for loss
resulting from perils and acts of terrorism on terms (including amounts)
consistent with those required under Paragraph 5 above at all times during the
term of the Loan; and

(j) upon sixty (60) days written notice, such other reasonable insurance,
including, but not limited to, sinkhole or land subsidence insurance, if
available at commercially reasonable costs, and in such reasonable amounts as
Lender from time to time may reasonably request against such other insurable
hazards which at the time are commonly insured against for property similar to
the Property located in or around the region in which the Property is located.

All insurance provided for in this Paragraph 5, shall be obtained under valid
and enforceable policies (collectively, the “Policies” or in the singular, the
“Policy”), and shall be subject to the approval of Lender as to insurance
companies, amounts, deductibles, loss payees and insureds. The Policies shall be
issued by financially sound and responsible insurance companies authorized to do
business in the State and having a claims paying ability rating of “AA” or
better (and the equivalent thereof) by at least two (2) of the rating agencies
rating the Securities (one (1) of which shall be S&P if they are rating the
Securities and one (1) of which will be Moody’s if they are rating the
Securities), or if only one (1) rating agency is rating the Securities, then
only by such rating agency. The Policies described in this Paragraph 5 (other
than those strictly limited to liability protection) shall designate Lender as
loss payee. Not less than ten (10) days prior to the expiration dates of the
Policies theretofore furnished to Lender, certificates of insurance evidencing
the Policies accompanied by evidence satisfactory to Lender of payment of the
premiums due thereunder (the “Insurance Premiums”), shall be delivered by
Borrower to Lender. Any blanket insurance Policy shall specifically allocate to
the Property the amount of coverage from time to time required hereunder and
shall otherwise provide the same protection as would a separate Policy insuring
only the Property in compliance with the provisions of this Paragraph 5. All
Policies provided for or contemplated by this Paragraph 5, except for the Policy
referenced in Paragraph 5(g) of this Mortgage, shall name Borrower as the
insured and Lender as the additional insured, as its interests may appear, and
in the case of property damage, boiler and machinery, flood and earthquake
insurance, shall contain a so-called New York standard non-contributing
mortgagee clause in favor of Lender providing that the loss thereunder shall be
payable to Lender. All Policies shall contain clauses or endorsements to the
effect that: (1) no act or negligence of Borrower, or anyone acting for
Borrower, or of any tenant or other occupant, or failure to comply with the
provisions of any Policy, which might otherwise result in a forfeiture of the
insurance or any part thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is concerned; (2) the Policy
shall not be materially changed (other than to increase the coverage provided
thereby) or canceled without at least ten (10) days written notice to Lender and
any other party named therein as an additional insured; (3) the issuers thereof
shall give written notice to Lender if the Policy has not been renewed thirty
(30) days prior to its expiration; and (4) Lender shall not be liable for any
Insurance Premiums thereon or subject to any assessments thereunder.

Borrower shall keep the Improvements insured, and shall maintain during the
entire term of this Mortgage, comprehensive general liability coverage and such
other coverages requested by Lender, by carrier(s), in amounts and in form at
all times satisfactory to Lender, which carrier(s), amounts and form shall not
be changed without the prior written consent of Lender. All such policies of
insurance shall be issued by insurers qualified under the laws of the state in
which the Land is located, duly authorized and licensed to transact business in
such state and reflecting the Required Rating. Borrower shall maintain all
coverages on the Property as are required by Lender at the closing of the Loan,
and all other coverages as may be deemed necessary by Lender from time to time
during the term of the Loan. Any failure by Lender to insist on full compliance
with all of the above insurance requirements at closing does not constitute a
waiver of Lender’s right to subsequently require full compliance with these
requirements. All policies required hereunder shall be indicated by evidence of
insurance on the Accord 28 form of certificate (as such form may be updated and
renamed from time to time), naming Lender as loss payee and as additional
insured. Unless Borrower provides Lender with evidence of the insurance coverage
required by this Mortgage, Lender may purchase insurance at Borrower’s expense
to protect Lender’s interests in the Property and to maintain the insurance
required by this Mortgage. This insurance may, but need not, protect Borrower’s
interests. The coverage purchased by Lender may not pay any claim made by
Borrower or any claim that is made against Borrower in connection with the
Property or any required insurance policy. Borrower may later cancel any
insurance purchased by Lender, but only after providing Lender with evidence
that Borrower has obtained insurance as required by this Mortgage. If Lender
purchases insurance for the Property or insurance otherwise required by this
Mortgage, Borrower will be responsible for the costs of that insurance,
including interest and other charges imposed by Lender in connection with the
placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to the
Indebtedness. The costs of the insurance may be more than the cost of insurance
Borrower is able to obtain on its own.

In case of loss or damage by fire or other casualty, Borrower shall give
immediate written notice thereof to the insurance carrier(s) and to Lender.
Lender is authorized and empowered to make or file proofs of loss or damage (in
each case only so long as such loss or damage is equal to or greater than
$120,000.00 and to settle and adjust any claim under insurance policies which
insure against such risks, or to direct Borrower, in writing, to agree with the
insurance carrier(s) on the amount to be paid in regard to such loss. The
proceeds of any insurance claim are hereby assigned to and shall be paid to
Lender as further security for the payment of the Indebtedness and performance
of the Obligations and applied as set forth herein.

Borrower shall immediately notify Lender of any action or proceeding relating to
any condemnation or other taking, whether direct or indirect, of the Property,
or part thereof, and Borrower shall appear in and prosecute any such action or
proceeding unless otherwise directed by Lender in writing. Borrower authorizes
Lender, at Lender’s option, as attorney-in-fact for Borrower, to commence,
appear in and prosecute, in Lender’s or Borrower’s name, any action or
proceeding relating to any condemnation or other taking of the Property, whether
direct or indirect, and to settle or compromise any claim in connection with
such condemnation or other taking, provided such claim is for an amount equal to
or greater than $120,000.00. The proceeds of any award, payment or claim for
damages, direct or consequential, in connection with any condemnation or other
taking, whether direct or indirect, of the Property, or part thereof, or for
conveyances in lieu of condemnation, are hereby assigned to and shall be paid to
Lender as further security for the payment of the Indebtedness and performance
of the Obligations and applied as set forth herein.

Provided no Event of Default then exists hereunder, the net insurance proceeds
and net proceeds of any condemnation award (in each case after deducting only
Lender’s reasonable costs and expenses, if any, in collecting the same) shall be
made available for the restoration or repair of the Property if, in Lender’s
sole judgment (a) restoration or repair and the continued operation of the
Property is economically feasible, as determined by Lender, (b) the value of
Lender’s security is not reduced, (c) the loss or condemnation, as applicable,
does not occur in the 6-month period preceding the stated Maturity Date and
Lender’s independent consultant certifies that the restoration of the Property
can be completed at least 90 days prior to the Maturity Date, and (d) Borrower
deposits with Lender an amount, in cash, which Lender, in its sole discretion,
determines is necessary, in addition to the net insurance proceeds or net
proceeds of any condemnation award, as applicable, to pay in full the cost of
the restoration or repair, including the cost to carry the Property and make all
required payments due under the Loan during the period of restoration or repair.
Notwithstanding the foregoing, it shall be a condition precedent to any
disbursement of insurance proceeds held by Lender hereunder that Lender shall
have approved (x) all plans and specifications for any proposed repair or
restoration, (y) the construction schedule and (z) the architect’s and general
contractor’s contract for all restoration that exceeds $25,000.00 in the
aggregate. Lender may establish other conditions it deems reasonably necessary
to assure the work is fully completed in a good and workmanlike manner free of
all liens or claims by reason thereof. Borrower’s deposits made pursuant to this
paragraph shall be used before the net insurance proceeds or net proceeds of any
condemnation award, as applicable, for such restoration or repair. If the net
insurance proceeds or net proceeds of any condemnation award, as applicable, are
made available for restoration or repair, such work shall be completed by
Borrower in an expeditious and diligent fashion, and in compliance with all
applicable laws, rules and regulations. At Lender’s option, the net insurance
proceeds or net proceeds of any condemnation award, as applicable, shall be
disbursed pursuant to a construction escrow acceptable to Lender. If following
the final payments for the completion of such restoration or repair there are
any net insurance proceeds or net proceeds of any condemnation award, as
applicable, remaining, such proceeds shall be paid (i) to Borrower to the extent
Borrower was required to make a deposit pursuant to this paragraph, (ii) then to
fund any shortfall in the Replacement Reserve, (iii) then to Lender to be
applied to the Indebtedness, whether or not due and payable until paid in full,
and (iv) then to Borrower. If an Event of Default then exists, or any of the
conditions set forth in subparagraphs (a) through (d) of this Paragraph 5 have
not been met or satisfied, the net insurance proceeds or net proceeds of any
condemnation award, as applicable, shall be applied to the Indebtedness, whether
or not due and payable, with any excess paid to Borrower.

6. Preservation and Maintenance of Property. Borrower (a) shall not commit waste
or permit impairment or deterioration of the Property; (b) shall not abandon the
Property; (c) shall keep the Property in good repair and restore or repair
promptly, in a good and workmanlike manner, all or any part of the Property to
the equivalent of its original condition, ordinary wear and tear excepted, or
such other condition as Lender may approve in writing, upon any damage or loss
thereto, if net insurance proceeds are made available to cover in whole or in
part the costs of such restoration or repair; (d) shall comply with all laws,
ordinances, regulations and requirements of any governmental body, and all
requirements of any documents applicable to the Property; (e) shall provide for
management of the Property by Borrower or by a property manager satisfactory to
Lender pursuant to a contract in form and substance satisfactory to Lender; (f)
shall not take any steps whatsoever to convert the Property, or any portion
thereof, to a condominium or cooperative form of management; (g) shall not
install or permit to be installed on the Property any underground storage tank
or above-ground storage tank without the written consent of Lender; and
(h) shall give notice in writing to Lender of and, unless otherwise directed in
writing by Lender, appear in and defend any action or proceeding purporting to
affect the Property, the security granted by the Loan Documents or the rights or
powers of Lender. Neither Borrower nor any tenant or other person shall remove,
demolish or alter any Improvement or any Fixture, equipment, machinery or
appliance in or on the Land and owned or leased by Borrower except when incident
to the replacement of Fixtures, equipment, machinery and appliances with items
of like kind.

7. Protection of Lender’s Security; Leases. If Borrower fails to pay the
Indebtedness or perform the Obligations, or if any action or proceeding is
commenced which affects the Property, Lender may make such appearances, disburse
such sums and take such action as Lender deems necessary, in its sole
discretion, to protect the Property or Lender’s interests herein, including
entry upon the Property to make repairs and perform environmental tests and
studies. Any amounts disbursed by Lender pursuant to this Paragraph 7 (including
attorneys’ costs and expenses), with interest thereon at the “Default Rate”
(defined in the Note) from the date of disbursement, shall become additional
Indebtedness of Borrower secured by the Loan Documents and shall be due and
payable on demand. Nothing contained in this Paragraph 7 shall require Lender to
incur any expense or take any action hereunder.

Borrower shall not be authorized to enter into any ground lease of the Property,
without Lender’s prior written approval. Borrower shall not, without Lender’s
prior written consent, modify, amend, surrender or terminate any Lease, which
approval shall not be unreasonably withheld or delayed. All Leases of space in
the Property shall be on the form of lease previously approved by Lender with
tenants and for a use acceptable to Lender. All Leases of space in the Property
executed or renewed after the date hereof must be approved by Lender prior to
the execution thereof by Borrower.

Notwithstanding anything contained herein to the contrary, Borrower may enter
into a proposed Lease (including the amendment, renewal or extension of an
existing Lease (a “Renewal Lease”) without the prior written consent of Lender,
provided such proposed Lease or Renewal Lease (i) provides for rental rates and
terms comparable to existing local market rates and terms (taking into account
the type and quality of the tenant) as of the date such Lease or Renewal Lease
is executed by Borrower (unless, in the case of a Renewal Lease, the rent
payable during such renewal, or a formula or other method to compute such rent,
is provided for in the original Lease), (ii) is an arms-length transaction with
a bona fide, independent third party tenant, (iii) is written on the standard
form of lease previously approved by Lender, (iv) is not for premises greater
than or ten percent (10%) of the gross leaseable area of the Property, (v) is
not for a rental greater than or equal to ten percent (10%) of the total gross
rental revenues of the Property; (vi) shall have an initial term of not less
than three (3) years or greater than ten (10) years, (vii) is for the same use
as the current use of the Property, (viii) shall not contain any options for
renewal or expansion by the tenant thereunder at rental rates which are either
below comparable market levels or less than the rental rates paid by the tenant
during initial lease term; and (ix) shall be to a tenant which is experienced,
creditworthy and reputable. If Lender consents to any new Lease of space in the
Property or the renewal of any existing Lease of space in the Property, at
Lender’s request, Borrower shall cause the tenant thereunder to execute a
subordination and attornment agreement in form and substance satisfactory to
Lender contemporaneously with the execution of such Lease. Borrower expressly
understands that any and all new or proposed leases or Renewal Leases are
included in the definition of “Lease” or “Leases” as such terms may be used
throughout this Mortgage or any of the other Loan Documents. Notwithstanding
anything contained herein to the contrary, Borrower may terminate a Lease
without Lender’s request in the ordinary course of business if (a) the related
tenant is in default and (b) either (x) such Lease is for less than ten percent
(10%) of the then currently occupied and rentable square feet of space at the
Property, or (y) Borrower has executed a lease with a replacement tenant for the
premises in question. To the extent Lender’s consent is required under this
Paragraph 7, and the lease in question is for less than 25% of both the gross
leaseable area of the Property and the total gross rental revenues of the
Property, Borrower shall submit a request to Lender with the following language
prominently displayed at the top and on the cover of any such request in
allcaps, boldface, 14 point type or larger: “IMMEDIATE RESPONSE REQUIRED,
CONSENT DEEMED GIVEN IF NO RESPONSE WITHIN 10 BUSINESS DAYS.” If no response has
been received within 10 Business Days of Lender’s receipt of such request,
Borrower shall submit a second request to Lender with the following language
prominently displayed at the top and on the cover of any such request in
allcaps, boldface, 14 point type or larger: “IMMEDIATE RESPONSE REQUIRED,
CONSENT DEEMED GIVEN IF NO RESPONSE WITHIN 5 BUSINESS DAYS.” If no response has
been received within 5 Business Days of Lender’s receipt of such second request,
Lender’s consent shall be deemed to be given.

If at the time one or more Disclosure Documents (as hereinafter defined) are
being prepared for a securitization and if requested by Lender, Borrower shall
furnish, or shall cause the applicable tenant to furnish, to Lender financial
data and/or financial statements in accordance with Regulation AB (as defined in
Item 1101(k) of Regulation AB) for any tenant of any Property if, in connection
with a securitization, Lender reasonably expects there to be, with respect to
such tenant or group of affiliated tenants, a concentration within all of the
mortgage loans included or reasonably expected to be included, as applicable, in
such securitization such that such tenant or group of affiliated tenants would
constitute a Significant Obligor (as defined in Item 1101(k)); provided,
however, that in the event the related lease does not require the related tenant
to provide the foregoing information, Borrower shall use commercially reasonable
efforts to cause the applicable tenant to furnish such information, provided
however, that Borrower shall be in default hereunder only for failure to use
commercially reasonable efforts to cause such tenant to furnish such
information.

8. Inspection. Lender and its agents and designees may make or cause to be made
reasonable entries upon and inspections of the Property, including for
performing any environmental inspections and testing of the Property, and
inspections of Borrower’s books, records, and contracts at all reasonable times
upon reasonable advance notice, which notice may be given in writing or orally.
Borrower shall cooperate with Lender and its agents and designees with respect
to all such inspections, including any related to the sale or potential sale of
all or any portion of the Loan by Lender and any securitization or potential
securitization involving the Loan.

9. Books and Records. Borrower shall keep and maintain at all times at
Borrower’s address stated above, or such other place as Lender may approve in
writing, complete and accurate books of accounts and records adequate to reflect
correctly the results of the operation of the Property and copies of all written
contracts, Leases and other instruments affecting the Property.

10. Financial Statements. If required by Lender, Borrower shall furnish to
Lender, within 60 days after the end of each calendar month, until the later to
occur of either (i) the first 12 calendar months following the closing of the
loan (the “Loan”) evidenced by the Note, or (ii) the Loan is securitized as
described in Paragraph 43 below, a monthly unaudited (a) statement of income and
expenses, each in reasonable detail, prepared on a consistent, cash/tax basis in
accordance with sound accounting practices (relating to the real estate
industry) or in accordance with generally accepted accounting principles and
certified as true and complete by Borrower or its general partner,
manager/managing member or chief financial officer, and (b) a rent roll showing
the name of each tenant, and for each tenant, (i) the space occupied, (ii) the
lease expiration date, (iii) the rent payable, and (iv) the security deposit
being held for such tenant, each in reasonable detail and dated and certified as
true and complete by Borrower or its general partner or chief financial officer.
If required by Lender, Borrower shall furnish to Lender, within 60 days after
the end of each fiscal quarter of the operation of the business of Borrower and
at any other time upon Lender’s request, an unaudited (a) balance sheet, (b) a
statement of income and expenses of the Property, and (c) a list of aged
accounts receivables, each in reasonable detail, prepared on a consistent,
cash/tax basis in accordance with sound accounting practices (relating to the
real estate industry) or in accordance with generally accepted accounting
principles prepared on a consistent basis and certified as true and complete by
Borrower or its general partner, manager/managing member or chief financial
officer. If required by Lender, Borrower shall also furnish to Lender, and shall
cause each Guarantor (as defined in the Note) to furnish to Lender, within
60 days after the end of each fiscal year of Borrower, an unaudited (a) balance
sheet, (b) a statement of income and expenses and (c) a statement of cash flows,
each in reasonable detail, prepared on a consistent, cash/tax basis in
accordance with sound accounting practices (relating to the real estate
industry) or in accordance with generally accepted accounting principles
prepared on a consistent basis and certified as true and complete by Borrower or
its general partner, manager/managing member or chief financial officer and each
Guarantor, as the case may be. In the event that the Loan has an original
principal balance equal to or greater than $20,000,000.00 such annual financial
statements shall be audited by an independent certified public accountant. If
Lender requires audited GAAP-compliant financial statements of Guarantor,
Guarantor will provide such financial statements to Lender within 120 days of
Guarantor’s fiscal year-end or within 20 days of the filing of its returns with
the Internal Revenue Service. All of the information required by Lender in this
paragraph must be in a form acceptable to Lender in its absolute and sole
discretion. If Borrower fails to timely furnish Lender with any of the financial
information and reports set forth in this paragraph within the required time
periods, Lender shall have the right, acting in its sole discretion, to hire a
certified public accounting firm acceptable to Lender, to prepare such financial
information and reports, on an audited basis. The costs and expenses of such
accounting firm shall be paid by Borrower on demand and, to the extent advanced
by Lender become, with interest thereon from the date advanced by Lender at the
Default Rate, additional Indebtedness of Borrower secured by the Loan Documents.
Additionally, if Borrower fails to timely furnish Lender with any of the
financial information and reports set forth in this paragraph within the
required time periods, Lender shall be entitled to receive a late charge equal
to $500.00 for each financial information and/or report not so furnished to
Lender (the “Financial Late Charge”). The Financial Late Charge shall be due and
payable by Borrower immediately upon receipt by Borrower of an invoice for same
from Lender. Until paid, the Financial Late Charge shall bear interest at the
Default Rate, and shall be deemed additional Indebtedness of Borrower secured by
the Loan Documents.

If, at the time one or more Disclosure Documents are being prepared for a
securitization, Lender reasonably expects that Borrower alone or Borrower and
one or more affiliates of Borrower collectively, or the Property alone or the
Property and any other parcel(s) of real property, together with improvements
thereon and personal property related thereto, that is “related”, within the
meaning of the definition of Significant Obligor of Regulation AB), to the
Property (a “Related Property”) collectively, will be a Significant Obligor,
Borrower shall furnish to Lender upon request (i) the selected financial data as
required under Item 1112(b)(1) of Regulation AB, if Lender reasonably expects
that the principal amount of the Loan, together with any loans made to an
affiliate of Borrower or secured by a Related Property that is included in a
securitization with the Loan (a “Related Loan”), as of the cut-off date for such
securitization may, or if the principal amount of the Loan together with any
Related Loans as of the cut-off date for such securitization and at any time
during which the Loan and any Related Loans are included in a securitization
does, equal or exceed ten percent (10%) of the aggregate principal amount of all
mortgage loans included or reasonably expected to be included, as applicable, in
the securitization or (ii) the financial statements as required under
Item 1112(b)(2) of Regulation AB, if Lender reasonably expects that the
principal amount of the Loan together with any Related Loans as of the cut-off
date for such securitization may, or if the principal amount of the Loan
together with any Related Loans as of the cut-off date for such securitization
and at any time during which the Loan and any Related Loans are included in a
securitization does, equal or exceed twenty percent (20%) of the aggregate
principal amount of all mortgage loans included or reasonably expected to be
included, as applicable, in the securitization. Such financial data or financial
statements shall be furnished to Lender (A) within ten (10) Business Days after
notice from Lender in connection with the preparation of Disclosure Documents
for the securitization, (B) not later than thirty (30) days after the end of
each fiscal quarter of Borrower and (C) not later than seventy-five (75) days
after the end of each fiscal year of Borrower for any period for which a filing
pursuant to the Securities Exchange Act of 1934 in connection with or relating
to the securitization (an “Exchange Act Filing”) is not required. As used
herein, “Regulation AB” shall mean Regulation AB under the Securities Act of
1933 and the Securities Exchange Act of 1934 (as amended). As used herein,
“Disclosure Document” shall mean a prospectus, prospectus supplement, private
placement memorandum, or similar offering memorandum or offering circular, in
each case in preliminary or final form, used to offer securities in connection
with a securitization.

11. Hazardous Substances. Borrower covenants and agrees that it (a) shall not
use, generate, store, or allow to be generated, stored or used, any “Hazardous
Substances” (hereinafter defined) on the Property, except in the ordinary course
of Borrower’s business and in accordance with all “Environmental Laws”
(hereinafter defined), (b) shall at all times maintain the Property in full
compliance with all applicable Environmental Laws, including timely remediating
the Property if and when required, and (c) shall cause compliance by all tenants
and sub-tenants on the Property with Borrower’s covenants and agreements
contained in this Paragraph 11. Borrower shall promptly notify Lender in writing
of (i) any investigation, claim or other proceeding by any party caused or
threatened in connection with any Hazardous Substances on the Property, or the
failure or alleged failure of the Property to comply with any applicable
Environmental Laws, or (ii) Borrower’s discovery of any condition on or in the
vicinity of the Property to fail to comply with applicable Environmental Laws.

The term “Environmental Laws” shall include any present and future federal,
state and/or local law, statute, ordinance, code, rule, regulation, license,
authorization, decision, order, injunction or decree and/or other governmental
directive or requirement, as well as common law, which pertains or relates to
health, safety or the environment (including but not limited to, ground or air
or water or noise pollution or contamination, and underground or above ground
tanks) and shall include, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), the
Resource Conservation and Recovery Act of 1976, as amended (“RCRA”), and any
state or federal lien or superlien or environmental clean-up statutes, and
regulations, rules, guidelines, or standards promulgated pursuant thereto all as
amended from time to time. The term “Hazardous Substances” shall include any
substance, whether solid, liquid or gaseous: (i) which is listed, defined or
regulated as a “hazardous substance,” “hazardous waste” or “solid waste,” or
otherwise classified as hazardous or toxic, in or pursuant to any Environmental
Laws; or (ii) which is or contains asbestos, radon, any polychlorinated
biphenyl, urea formaldehyde foam insulation, explosive or radioactive material,
lead paint, or motor fuel or other petroleum hydrocarbons; or (iii) which causes
or poses a threat to cause a contamination or nuisance on the Property or any
adjacent property or a hazard to the environment or to the health or safety of
persons on or about the Property.

12. Representations and Covenants.

(a) If Borrower is a corporation, it represents that it is a corporation duly
organized, existing and in good standing under the laws of its state of
incorporation, that it is duly qualified and in good standing under the laws of
the state where the Land is located, and that the execution and delivery of the
Loan Documents and the performance of the obligations thereunder are within
Borrower’s corporate powers, have been duly authorized by all necessary action
of its board of directors, and do not contravene the terms of its articles of
incorporation or by-laws.

(b) If Borrower is a general or limited partnership or a limited liability
company, it represents that it is duly formed, organized and existing in the
state of its formation, that it is qualified to do business under the laws of
the state where the Land is located, and that the execution and delivery of the
Loan Documents and the performance of the obligations thereunder do not conflict
with any provision of Borrower’s partnership agreement or operating agreement,
as applicable, and all other certificates and agreements governing Borrower, and
have been duly authorized by all necessary action of its partners or members.

(c) Borrower represents that (i) the execution and delivery of the Loan
Documents, the payment of the Indebtedness, and the performance of the
Obligations do not violate any law or conflict with any agreement by which
Borrower is bound, or any court order by which Borrower is bound, (ii) no
consent or approval of any governmental authority or any third party is required
for the execution or delivery of the Loan Documents, the payment of
Indebtedness, and the performance of the Obligations, and (iii) the Loan
Documents are valid and binding agreements, enforceable in accordance with their
terms.

(d) Borrower represents that (i) it is lawfully seized with fee simple title in
the estate hereby conveyed; (ii) it has the right to mortgage, convey, assign
and grant a first security interest in the Property; (iii) the Property is
unencumbered, and Borrower will warrant and defend title to the Property against
all claims and demands, subject to easements and restrictions listed in a
schedule of exceptions to coverage in the title insurance policy accepted by
Lender insuring Lender’s interests in the Property; and (iv) it has no
operations, assets or activities other than the Property.

(e) Borrower represents and covenants that, to the best of Borrower’s knowledge,
(i) all material permits, licenses, authorizations, approvals, and certificates,
including certificates of completion and occupancy permits, required by law,
ordinance or regulation have been obtained and are and shall remain in full
force and effect; and (ii) Borrower and the use and occupancy of the Land and
all improvements thereon are and shall remain in compliance with all laws,
regulations and ordinances, including without limitation, all restrictive
covenants of record and zoning and building laws.

(f) Borrower represents that, to the best of its knowledge after inquiry, except
as disclosed on the survey furnished by Borrower to Lender in connection with
the Loan, all of the improvements on the Land lie wholly within the boundaries
of and building line restrictions relating to the Land and no improvements
located on adjoining lands encroach upon the Land so as to affect the value or
marketability of the Property, except those which are insured against by the
title insurance policy accepted by Lender insuring Lender’s interests in the
Property.

(g) Borrower represents that, to the best of Borrower’s knowledge, the Property
is served by public utilities, water and sewer (or septic facilities) and
services in the surrounding community, including police and fire protection,
public transportation, refuse removal, public education, and enforcement of
safety codes which are adequate in relation to the premises and location on
which the Property is located (taking into account the Permitted Use of the
Property).

(h) Borrower represents that, to the best of Borrower’s knowledge, the Property
is serviced by public water and sewer systems which are adequate in relation of
the improvements and location on which the Property is located. All liquid and
solid waste disposal, septic and sewer systems located on the Property are in
good and safe condition and repair and in compliance with all applicable laws.

(i) Borrower represents that the Property has parking and other amenities
necessary for the operation of the business currently conducted thereon which
are adequate in relation to the premises and location on which the Property is
located.

(j) Borrower represents that the Property is a contiguous parcel and a separate
tax parcel, and there are no delinquent taxes or other outstanding charges
adversely affecting the Property.

(k) Borrower represents that no action, omission, misrepresentation, negligence,
fraud or similar occurrence has taken place on the part of any person that would
reasonably be expected to result in the failure or impairment of full and timely
coverage under any insurance policies providing coverage for the Property.

(l) None of Borrower, any Guarantor, or any other holder of a direct or indirect
legal or beneficial interest in Borrower is or will be, held, directly or
indirectly, by a “foreign corporation,” “foreign partnership,” “foreign trust,”
“foreign estate,” “foreign person,” “affiliate” of a “foreign person” or a
“United States intermediary” of a “foreign person” within the meaning of IRC
Sections 897 and 1445, the Foreign Investments in Real Property Tax Act of 1980,
the International Investment and Trade in Services Survey Act, the Agricultural
Foreign Investment Disclosure Act of 1978, the regulations promulgated pursuant
to such acts or any amendments to such acts.

(m) None of Borrower or any Guarantor is insolvent, and there has been no
(i) assignment made for the benefit of the creditors of any of them,
(ii) appointment of a receiver for any of them or for the properties of any of
them, or (iii) bankruptcy, reorganization, or liquidation proceeding instituted
by or against any of them.

(n) All information in the application for the Loan submitted by Borrower to
Lender (the “Loan Application”) and in all financial statements, rent rolls,
reports, certificates and other documents submitted in connection with the Loan
Application or in satisfaction of the terms thereof, are accurate, complete and
correct in all material respects, provided, however, to the extent that such
information was prepared by someone other than Borrower or an affiliate of
Borrower, the foregoing representation is made to the best of Borrower’s
knowledge after inquiry. There has been no material adverse change in the
representations made or information heretofore supplied by or on behalf of
Borrower or any Guarantor in connection with the Loan or the Loan Application as
to Borrower, any Guarantor, or the Property. There has been no adverse change in
any condition, fact, circumstance or event that would make any such
representations or information inaccurate, incomplete or otherwise misleading.

(o) Except as listed on Exhibit C hereto, (i) there is no litigation,
arbitration, condemnation proceeding or other proceeding or governmental
investigation pending or, to Borrower’s knowledge, threatened against or
relating to Borrower, any Guarantor, or the Property and there are no
outstanding judgment(s) against or relating to Borrower or any Guarantor, in
each case that may have a material adverse effect on Borrower’s financial
condition, the value of the Property or the net operating income therefrom,
(ii) Borrower and Guarantor, each has not (A) had any property foreclosed upon,
(B) given a deed in lieu of foreclosure, or (C) been involved in any criminal
proceedings where Borrower or Guarantor was the defendant and (iii) Borrower and
Guarantor have not defaulted on any loan or other indebtedness.

(p) The proceeds evidenced by the Note will be used by Borrower solely and
exclusively for proper business purposes and will not be used for the purchase
or carrying of registered equity securities within the purview and operation of
any regulation issued by the Board of Governors of the Federal Reserve System or
for the purpose of releasing or retiring any indebtedness which was originally
incurred for any such purpose.

(q) Borrower represents and covenants that all Leases of space in the Property
existing as of the date hereof are in writing.

(r) Borrower covenants that Lender shall be allowed to advertise in the various
news or financial media that Lender has provided the Loan to Borrower, but
Borrower shall not do so without Lender’s prior written permission.

(s) Borrower represents that Borrower and all Guarantors have filed all federal,
state, county, municipal, and city income and other tax returns required to have
been filed by them and have paid all taxes and related liabilities which have
become due pursuant to such returns or pursuant to any assessments received by
them. Neither Borrower nor any Guarantor knows of any basis for any additional
assessment in respect to any such taxes and related liabilities for prior years.

(t) Borrower covenants that if at any time the United States of America, any
State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note or this Mortgage, or impose any other tax
or charge on the same, Borrower will pay for the same, with interest and
penalties thereon, if any.

(u) As of the date hereof, Borrower represents that Borrower and Guarantors have
no valid offset, defense, counterclaim, abatement or right to rescission with
respect to any of the Loan Documents.

(v) Borrower has dealt with no broker other than L.J. Melody (“Broker”) and
Borrower shall pay all fees and expenses owing to any mortgage broker and will
indemnify, defend and hold Lender harmless from any and all other brokerage
claims related to the Loan. Notwithstanding the foregoing, Lender may, at its
sole election, pay incentive fees or other compensation (collectively,
“Incentives”) to Broker. Those Incentives are intended to encourage Broker to
bring loans to Lender, and may be based on a variety of different factors,
including the amount of the Loan, the Contract Rate (as defined in the Note) the
spread, the number of loan applications or loans referred to Lender, the amount
of investigative, due diligence or other assistance provided by Broker, or other
factors. Any cash payments to Broker are not referenced in the Loan Documents.

(w) Notwithstanding anything to the contrary contained herein, so long as this
Mortgage remains in effect, Borrower shall not bring an action for partition
with respect to such Borrower’s ownership interest in the Property or to compel
any sale thereof, and each entity comprising Borrower hereby expressly waives
any and all rights to partition the Property.

(x) Borrower shall give prompt notice to Lender of any default under any Tenant
in Common Agreement (“TIC Agreement”).

(y) Borrower shall not modify, amend or terminate the TIC Agreement without the
prior written consent of Lender, which consent may be withheld in Lender’s sole
and absolute discretion.

(z) Without limiting the generality of Paragraph 15, there shall never be more
than thirty-five (35) tenants in common (including Borrower) owning the
Property.

(aa) Borrower covenants that it shall not terminate the property manager under
that certain Management Agreement (the “Management Agreement”) executed by and
between Borrower and Triple Net Properties Realty, Inc. (the “Property Manager”)
or modify and/or terminate the Management Agreement or enter into a new
management agreement, without the prior written consent of Lender. In the event
Borrower does terminate the Property Manager with the written consent of Lender,
Lender shall have the right to approve the new management agreement and approve
any new property manager named by Borrower which new property manager must be
acceptable to Lender in its sole discretion. The Management Agreement or any
subsequently approved management agreement shall provide that such property
manager may not be terminated without Lender’s prior written consent, and which
such new property management agreement may not be terminated or amended without
Lender’s prior written consent. In addition, the Management Agreement shall
provide that all notice from Lender to the Tenants in Common may go to the
Property Manager on behalf of all Tenants in Common.

(bb) At all times during the term of the Loan, Property Manager shall have all
operating authority for the Property pursuant to the terms of the Management
Agreement.

(cc) Borrower represents and warrants that it has not granted a security
interest in the Replacement Reserve or TI and Leasing Reserve to any other
person or entity.

Except as otherwise provided herein, each and all of the representations,
covenants and obligations of Borrower shall survive the execution and delivery
of the Loan Documents and shall continue in full force and effect until the
Indebtedness is paid in full.

13. Lease Assignment. Borrower acknowledges that, concurrently herewith Borrower
is delivering to Lender, as additional security for the repayment of the Loan,
an Assignment of Leases and Rents (the “Assignment”) pursuant to which Borrower
has assigned to Lender all of Borrower’s right, title and interest in the Leases
and the Rents and income from the Property. All of the provisions of the
Assignment are hereby incorporated herein as if fully set forth at length in the
text of this Mortgage. Borrower agrees to abide by all of the provisions of the
Assignment.

14. Subordination, Non-Disturbance and Attornment Agreements/Estoppel
Certificates.

(a) Borrower shall, within 15 days after Lender’s request, furnish Lender with a
written statement, duly acknowledged, setting forth the sums secured by the Loan
Documents and any right of set-off, counterclaim or other defense which exists
against such sums and the Obligations.

(b) If the Property includes commercial property, Borrower shall use best
efforts (including institution of litigation) to deliver to Lender upon request,
tenant subordination, non-disturbance and attornment agreements/estoppel
certificates from each commercial tenant at the Property in form and substance
reasonably satisfactory to Lender provided that Borrower shall not be required
to deliver such certificates more frequently than two (2) times in any calendar
year.

15. Transfers of the Property or Ownership Interests in Borrower; Assumption;
Due on Sale/Encumbrance.

(a) No Sale/Encumbrance. Borrower agrees that Borrower shall not, without the
prior written consent of Lender, sell, convey, mortgage, grant, bargain,
encumber, pledge, assign, or otherwise transfer the Property or any interest
therein or any part thereof or permit the Property or any part thereof to be
sold, conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred except for: (i) pursuant to Leases of space in the
Property to tenants in accordance with the provisions of Paragraph 7; (ii) in
connection with a condemnation action or other taking; or (iii) the disposal of
personalty that is obsolete or no longer used or useful, so long as such
personalty is replaced with similar items of comparable value and utility and in
which Lender has a first lien and mortgage. In addition, Borrower shall not
allow, without the prior written consent of Lender, any pledge of any ownership
interests in Borrower.

(b) Sale/Encumbrance Defined. A sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the Property within the meaning
of this Paragraph 15 shall be deemed to include, but not limited to the
following: (i) an installment sales agreement wherein Borrower agrees to sell
the Property or any part thereof for a price to be paid in installments; (ii) an
agreement by Borrower leasing all or a substantial part of the Property for
other than actual occupancy by a space tenant thereunder or a sale, assignment
or other transfer of, or the grant of a mortgage in, Borrower’s right, title and
interest in and to any Leases or any Rents; or (iii) a sale, encumbrance,
pledge, hypothecation, or transfer of any direct and/or indirect ownership
interests (including beneficial interests) in Borrower. Notwithstanding the
foregoing, provided that no Event of Default has occurred, the following
transfers shall not be deemed to be a sale or encumbrance for the purpose of
this Paragraph 15: (A) transfers of interests in Borrower for estate planning
purposes to immediate family members (which shall be limited to a spouse,
parent, child and grandchild (each an “Immediate Family Member”)) of such party
or to trusts or entities created for the benefit of Immediate Family Members
provided that (1) Borrower shall provide Lender with 30 days’ prior written
notice of any such permitted transfer, and (2) Borrower shall furnish Lender
with copies of any documentation executed in connection with such permitted
transfer promptly after execution thereof, (B) transfers of direct and/or
indirect interests in Borrower by operation of law or upon death by devise or
descent, provided that Borrower shall furnish Lender with copies of any
documentation executed in connection with such permitted transfer promptly after
execution thereof, (C) transfers of direct and/or indirect interests in Borrower
to Guarantor(s), (D) a sale, encumbrance, pledge, hypothecation, or transfer of
up to ninety-nine percent (99%) in the aggregate (which may be pursuant to one
or more transactions during the term of the Loan) of the direct and/or indirect
ownership interests (including beneficial interests) in Borrower provided that
(1) if such Transfer exceeds forty-nine percent (49.0%) of the direct or
indirect ownership interests in Borrower, such Transfer is to the REIT or to a
newly formed entity that is owned and controlled by the REIT, (2) Borrower shall
furnish Lender with copies of any documentation executed in connection with such
permitted transfer promptly after execution thereof, and (3) such transfer does
not result in change in the control or management of Borrower, (E) Sole Member
of Borrower may transfer 100% of its interest in Borrower or Property to the
REIT or to a newly formed entity that is owned and controlled by the REIT, and
(F) the issuance of new membership interests in Borrower by which an aggregate
of less than forty-nine percent (49%) of the ownership of Borrower’s membership
interests shall be vested in or pledged to a party or parties other than
Guarantor, provided that (1) Borrower shall furnish Lender with copies of any
documentation executed in connection with such permitted transfer promptly after
execution thereof, and (2) such transfer does not result in change in the
control or management of Borrower. To the extent that the forgoing are not
deemed to be a sale or encumbrance for purposes of this Paragraph 15, no
administrative fee shall be required in connection therewith.

(c) TIC Assumption. Notwithstanding the foregoing provisions of this
Paragraph 15, Lender shall not withhold its consent to a transfer of an
undivided tenant-in-common interest in the Property and partial assumption of
this Loan (hereinafter, a “TIC Assumption”), provided that each of the following
terms and conditions are satisfied:

(i) Borrower is in compliance with all terms and conditions of the Loan
Documents and no Event of Default has occurred and is then continuing hereunder
or under any of the other Loan Documents and the proposed transferee
(“Transferee”) agrees to continue to comply with and be bound by all provisions
of the Loan Documents;

(ii) Borrower gives Lender written notice of the terms of such prospective TIC
Assumption not less than thirty (30) days before the date on which such TIC
Assumption is scheduled to take place and, concurrently therewith, gives Lender
all such information concerning Transferee as Lender reasonably requests;

(iii) Borrower shall pay Lender (A) in connection with such proposed TIC
Assumption, all reasonable out-of-pocket costs and expenses, including, without
limitation, reasonable attorneys’ fees incurred by Lender and any rating agency
approval fees (whether such transfer is approved or rejected) plus
(B) concurrently with the closing of such TIC Assumption, a nonrefundable
assumption fee in an amount equal to the greater of (A) $5,000.00, or (B) 1% of
such Transferee’s proportionate share of the Principal Amount (based on such
Transferee’s tenancy in common interest in the Property);

(iv) Transferee executes and delivers such documents and agreements as Lender
shall reasonably require to evidence and effectuate said assumption and delivers
such legal opinions as Lender may reasonably require, including, without
limitation, hazard insurance endorsements or certificates and other similar
materials as Lender may deem necessary at the time of the TIC Assumption, all in
form and substance satisfactory to Lender, including, without limitation, an
endorsement or endorsements to Lender’s loan title insurance policy insuring the
lien of this Mortgage, extending the effective date of such policy to the date
of execution and delivery of the assumption agreement referenced in this
subparagraph 15(c)(iv), with no additional exceptions added to such policy,
except for items consented to by Lender or permitted under this Mortgage, and
insuring that Transferee’s proportionate interest in the fee simple title to the
Property is vested in the Transferee;

(v) the transferring Borrower executes and delivers to Lender, without any cost
or expense to Lender, a release of Lender, its officers, directors, employees
and agents, from all claims and liability relating to the transactions evidenced
by the other security documents through and including the date of the closing of
the TIC Assumption, which agreement shall be in form and substance satisfactory
to Lender and shall be binding upon the Transferee;

(vi) subject to the provisions of Paragraph 11 of the Note, such TIC Assumption
is not construed so as to relieve the transferring Borrower of any personal
liability under the Note or any of the Loan Documents for any act or events
occurring or obligations arising prior to or simultaneously with the closing of
such TIC Assumption (excluding payment of the principal amount of the Note and
interest accrued thereon) and the transferring Borrower executes, without any
cost or expense to Lender, such documents and agreements as Lender shall
reasonably require to evidence and effectuate the ratification of such personal
liability;

(vii) Transferee shall furnish, if Transferee is a corporation, partnership or
other entity, all appropriate papers evidencing Transferee’s capacity in good
standing and the qualification of the signers to execute the assumption of the
Obligations, which paper shall include certified copies of all documents
relating to the organization and formation of Transferee and of the entities, if
any, which are partners, members or shareholders of Transferee. Transferee and
such constituent partners, members or shareholders of Transferee (as the case
may be) as Lender shall require, shall be single purpose entities, whose
formation documents shall be approved by counsel to Lender. Transferee must
comply with the provisions of Paragraph 17 hereof;

(viii) Transferee shall furnish an opinion of counsel satisfactory to Lender and
its counsel stating that (A) Transferee’s formation documents provide proof for
the matters described in subparagraph (vii) above, (B) the assets of Transferee
will not be consolidated with the assets of any other entity having an interest
in, or affiliation with, the Transferee, in the event of a bankruptcy or
insolvency of any such entity if required by any rating agency after the
securitization of the Loan, (C) the assumption of the Obligations has been duly
authorized, executed and delivered and the Loan Documents are valid, binding and
enforceable against the Transferee in accordance with their terms,
(D) Transferee and any entity which is a controlling stockholder, general
partner or managing member of Transferee have been duly organized and are in
good standing and in existence, (E) the waiver of the right to partition the
Property is enforceable against Transferee, and (F) with respect to such other
matters as Lender or any applicable rating agency may request;

(ix) if the Loan has previously been securitized pursuant to Paragraph 43,
Lender shall have received evidence in writing from the rating agencies to the
effect the proposed transfer will not result in a downgrade, qualification,
reduction or withdrawal of any rating initially assigned or to be assigned to
any securities issued in connection with the Loan; and

(x) Notwithstanding the foregoing or any of the provisions of the Loan Documents
to the contrary, a Transferee must meet all of the following conditions:

(A) the owner(s) of all of the ownership interests in a Transferee must be an “
Accredited Investor” as defined in Rule 501 of Regulation D of the Securities
Act of 1933, and Transferee and/or its principals must have a Beacon/FICO score
of not less than 650;

(B) neither a Transferee nor the owner(s) of any of the ownership interests in a
Transferee shall have (1) been a party to any bankruptcy proceedings, voluntary
or involuntary, (2) made an assignment for the benefit of creditors or taken
advantage of any insolvency act, or any act for the benefit of debtors,
(3) defaulted on any indebtedness, (4) owned any property which was subject to
foreclosure or attachment proceedings, (5) been a target of, or party to, any
criminal investigation or proceeding, (6) been a party to any threatened or
pending litigation or (7) any outstanding judgments;

(C) intentionally deleted;

(D) there shall be no material convictions, judgments, litigation or regulatory
action pending or threatened against Transferee, Transferee’s principals or
related entities which is not reasonably acceptable to Lender, and none of
Transferee, Transferee’s principals or such related entities shall be on any
so-called prohibited persons lists;

(E) other than with respect to transfers by the initial Borrower hereunder, the
transfer (1) must be for the entire interest of a Tenant in Common in the
Property (or 100% of the ownership interests in a Tenant in Common), and (2) can
only be made to a single new Tenant in Common. In no event may any such transfer
result in “Borrower” being comprised of more than the number of co-owners set
forth in Revenue Procedure 2002-22, I.R.B. 2002-14, as such pronouncement may be
modified from time to time (which number is thirty five [35] as of the date
hereof);

(F) Transferee, Transferee’s principals and the related entities shall not have
defaulted under its or their obligations with respect to any other indebtedness
in a manner which is not acceptable to Lender; and

(G) Transferee, Transferee’s principals and the related entities must have
demonstrated expertise in owning and operating real estate investment property,
which expertise shall be reasonably determined by Lender.

Any such TIC Assumption shall not be construed as to relieve any current
Guarantors of their obligations under any guarantees or indemnity agreements
executed in connection with the Note, provided that if Transferee or a party
associated with Transferee approved by Lender in its sole discretion assumes the
obligations of the current Guarantors under their guarantees or indemnity
agreements and Transferee or such party associated with Transferee if
applicable, executes, without any cost or expense to Lender, a new guarantee
and/or indemnity agreement in form and substance satisfactory to Lender, then
Lender shall release the current Guarantors from all obligations first arising
under their guarantees or indemnity agreements after the closing of such TIC
Assumption;

(d) One-Time Assumption. Notwithstanding the foregoing provisions of this
Paragraph 15, Lender shall not withhold its consent to a sale of the entire
Property and assumption of this Loan (hereinafter, an “Assumption”), provided
that each of the following terms and conditions are satisfied:

(i) Borrower is in compliance with all terms and conditions of the Loan
Documents and no default has occurred and is then continuing hereunder or under
any of the other Loan Documents and the proposed Transferee agrees to continue
to comply with and be bound by all provisions of the Loan Documents;

(ii) Borrower gives Lender written notice of the terms of such prospective
Assumption not less than forty-five (45) days before the date on which such
Assumption is scheduled to take place and, concurrently therewith, gives Lender
all such information concerning Transferee as Lender reasonably requests. Lender
shall have the right to approve or disapprove the proposed Transferee. In
determining whether to give or withhold its approval of the proposed Transferee,
Lender shall consider Transferee’s experience in owning and operating a facility
similar to the Property, Transferee’s entity structure, Transferee’s financial
strength, the Transferee’s general business standing and Transferee’s
relationship and experience with contractors, vendors, tenants, lenders and
other business entities;

(iii) Borrower shall pay Lender (A) in connection with such proposed Assumption,
all reasonable out-of-pocket costs and expenses, including, without limitation,
reasonable attorneys’ fees incurred by Lender and any rating agency approval
fees (whether such transfer is approved or rejected), plus (B) concurrently with
the closing of such Assumption, a nonrefundable assumption fee in an amount
equal to 1% of the then outstanding principal balance of the Note (the
“Assumption Fee”). Notwithstanding the foregoing, Lender agrees to waive the
first Assumption Fee, so long as the Transferee is the REIT or a newly formed
entity that is owned and controlled by the REIT;

(iv) Transferee executes and delivers such documents and agreements as Lender
shall reasonably require to evidence and effectuate said assumption and delivers
such legal opinions as Lender may reasonably require, including, without
limitation, hazard insurance endorsements or certificates and other similar
materials as Lender may deem necessary at the time of the Assumption, all in
form and substance satisfactory to Lender, including, without limitation, an
endorsement or endorsements to Lender’s loan title insurance policy insuring the
lien of this Mortgage, extending the effective date of such policy to the date
of execution and delivery of the assumption agreement referenced in this
subparagraph 15(c)(iv), with no additional exceptions added to such policy,
except for items consented to by Lender or permitted under this Mortgage, and
insuring that fee simple title to the Property is vested in the Transferee;

(v) Borrower executes and delivers to Lender, without any cost or expense to
Lender, a release of Lender, its officers, directors, employees and agents, from
all claims and liability relating to the transactions evidenced by the other
security documents through and including the date of the closing of the
Assumption, which agreement shall be in form and substance satisfactory to
Lender and shall be binding upon the Transferee;

(vi) subject to the provisions of Paragraph 11 of the Note, such Assumption is
not construed so as to relieve Borrower of any personal liability under the Note
or any of the Loan Documents for any act or events occurring or obligations
arising prior to or simultaneously with the closing of such Assumption
(excluding payment of the principal amount of the Note and interest accrued
thereon) and Borrower executes, without any cost or expense to Lender, such
documents and agreements as Lender shall reasonably require to evidence and
effectuate the ratification of such personal liability;

(vii) Transferee shall furnish, if Transferee is a corporation, partnership or
other entity, all appropriate papers evidencing Transferee’s capacity in good
standing and the qualification of the signers to execute the assumption of the
Obligations, which paper shall include certified copies of all documents
relating to the organization and formation of Transferee and of the entities, if
any, which are partners, members or shareholders of Transferee. Transferee and
such constituent partners, members or shareholders of Transferee (as the case
may be) as Lender shall require, shall be single purpose entities, whose
formation documents shall be approved by counsel to Lender. Transferee must
comply with the provisions of Paragraph 17 hereof;

(viii) Transferee shall furnish an opinion of counsel satisfactory to Lender and
its counsel stating that (A) Transferee’s formation documents provide proof for
the matters described in subparagraph (vi) above, (B) the assets of Transferee
will not be consolidated with the assets of any other entity having an interest
in, or affiliation with, the Transferee, in the event of a bankruptcy or
insolvency of any such entity if required by any rating agency after the
securitization of the Loan, (C) the assumption of the Obligations has been duly
authorized, executed and delivered and the Loan Documents are valid, binding and
enforceable against the Transferee in accordance with their terms,
(D) Transferee and any entity which is a controlling stockholder, general
partner or managing member of Transferee have been duly organized and are in
good standing and in existence, and (E) with respect to such other matters as
Lender or any applicable rating agency may request; and

(ix) if the Loan has previously been securitized pursuant to Paragraph 44,
Lender shall have received evidence in writing from the rating agencies to the
effect the proposed transfer will not result in a downgrade, qualification,
reduction or withdrawal of any rating initially assigned or to be assigned to
any securities issued in connection with the Loan.

Any such Assumption shall not be construed as to relieve any current Guarantors
of their obligations under any guarantees or indemnity agreements executed in
connection with the Note, provided that if Transferee or a party associated with
Transferee approved by Lender in its sole discretion assumes the obligations of
the current Guarantors under their guarantees or indemnity agreements and
Transferee or such party associated with Transferee if applicable, executes,
without any cost or expense to Lender, a new guarantee and/or indemnity
agreement in form and substance satisfactory to Lender, then Lender shall
release the current Guarantors from all obligations first arising under their
guarantees or indemnity agreements after the closing of such Assumption. If the
Transferee under this Section 15(d) is the REIT, at such time as the REIT
achieves a minimum net worth not less than $10,000,000 as determined by Lender
in its sole discretion, then the REIT shall be deemed an acceptable substitute
guarantor for purposes of this section;

(e) Transfer of Membership Interests.

Notwithstanding anything herein to the contrary, the sole member of the initial
Borrower hereunder shall have the right, without Lender’s consent, to transfer
non-managing limited liability company interests in such initial Borrower to one
or more Persons (each, a “Member Transferee”), provided, the following criteria
are satisfied:

1) Each Member Transferee and/or its principals must be an “Accredited Investor”
as defined in Rule 501 of Regulation D of the Securities Act of 1933;

2) Each Member Transferee and/or its principals must not be listed on any
so-called prohibited persons lists, including, but not limited to any list
published by the Office of Foreign Assets Control or any successor agency;

3) No Member Transferee and/or its principals may, in the previous ten
(10) years, have been party to any bankruptcy proceedings, voluntary or
involuntary, made an assignment for the benefit of creditors or taken advantage
of any insolvency act, or any act for the benefit of debtors;

4) No Member Transferee may hold more than 7.5% of the interest in the Property
(determined by multiplying the initial Borrower’s interest in the Property by
the Member Transferee’s interest in such initial Borrower);

5) Triple Net Properties, LLC becomes the sole manager of Borrower; and

6) Not less than 10 days prior to such transfer, Borrower shall provide notice
of the pending transfer to Lender, together with a certificate certifying
compliance with the foregoing.

(f) Lender’s Rights. Except as provided in subparagraph 15(c), (d) and (e)
above, Lender reserves the right to condition the consent required hereunder
upon a modification of the terms hereof and on assumption of the Note, this
Mortgage and the Loan Documents as so modified by the proposed Transferee,
payment of an assumption fee of one percent (1%) of the Principal Amount, and
all of Lender’s out of pocket expenses incurred in connection with such
transfer, the approval by a rating agency of the proposed transferee, the
proposed transferee’s continued compliance with the covenants set forth in this
Mortgage, including, without limitation, the covenants contained in
Paragraph 17, or such other conditions as Lender shall determine in its sole
discretion to be in the interest of Lender. All of Lender’s out-of-pocket
expenses incurred shall be payable by Borrower whether or not Lender consents to
such assumption. Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Note immediately due and payable upon Borrower’s prohibited sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer of the Property without Lender’s consent. This provision shall apply to
every sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer of the Property regardless of whether voluntary or not,
or whether or not Lender has consented to any previous sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property.

(g) Lockout Periods.

(i) Lender may send written notice (the “Securitization Notice”) to Borrower
notifying Borrower that Lender has initiated contact with (A) any rating agency
concerning the securitization of the Loan or (B) any purchaser or investor
regarding the sale of the Loan. Once a Securitization Notice has been given,
Borrower can no longer transfer any interest in the Property; provided, however,
that notwithstanding the foregoing, in the event that Borrower has been provided
with all the information concerning any proposed Tenant in Common as a
Transferee as described above in subparagraph 15(c)(ii) prior to the receipt of
the Securitization Notice, Borrower shall have thirty (30) days from the date of
the receipt of the Securitization Notice to complete all the requirements set
forth in this Paragraph 15 necessary to transfer a Tenant in Common interest
hereunder. In the event such transfer is not completed within said thirty
(30) day period, Borrower shall be prohibited from trying to add the proposed
Tenant in Common or transferring any interest to any other Tenant in Common for
six (6) months from the date of the Securitization Notice. If the Loan is not
securitized or sold within six (6) months from the date of the Securitization
Notice, then Borrower may again try to admit a new Tenant in Common subject to
Lender providing a subsequent Securitization Notice in the event Lender later
initiates contact with any rating agency concerning the securitization of the
Loan or initializes contact with a potential whole loan purchaser or investor
and the thirty (30) day period and six (6) month period described above shall
commence again. Any subsequent approval and admittance of a new Tenant in Common
shall comply with the terms and conditions of this Paragraph 15.

(ii) Lender shall have no obligation to provide a Securitization Notice if an
Event of Default has occurred and is then continuing hereunder or under any of
the other Loan Documents and in such event Borrower shall have no right to add
an additional Tenant in Common or transfer any interest in the Property.

16. No Additional Liens. Borrower covenants not to execute any mortgage,
security agreement, assignment of leases and rents or other agreement granting a
lien (except the liens granted to Lender by the Loan Documents) or, except as
set forth in Paragraph 2 above, take or fail to take any other action which
would result in a lien against the interest of Borrower in the Property without
the prior written consent of Lender.

17. Single Asset Entity. Borrower and any other entity required by Lender to be
a Special Purpose Entity pursuant to the provisions of this Paragraph 17 or
otherwise (a “Required SPE”) shall not hold or acquire, directly or indirectly,
any ownership interest (legal or equitable) in any real or personal property
other than the Property, or become a shareholder of or a member or partner in
any entity which acquires any property other than the Property, until such time
as the Indebtedness has been fully repaid and all Obligations are satisfied.
Borrower’s and any Required SPE’s articles of incorporation, partnership
agreement or operating agreement, as applicable, (w) as to Borrower, limit its
purpose to the acquisition, ownership, operation and disposition of the
Property, and as to any Required SPE, limit its purpose to acting as the general
partner of the limited partnership that owns the Property, or a member of the
limited liability company that owns the Property, or the general partner of any
Required SPE which is a limited partnership, or a member of any Required SPE
which is a limited liability company, (x) prohibit other activities, mergers,
consolidations and asset sales while the Loan is outstanding until such time as
the Indebtedness has been fully repaid, (y) contain separateness covenants
satisfactory to Lender, and (z) provide that such provisions shall not be
amended without the prior written consent of Lender. Borrower covenants that:

(a) Borrower is organized solely for the purpose of acquiring, developing,
owning, holding, selling, leasing, transferring, exchanging, managing and
operating the Property, entering into the Loan Documents with the Lender,
refinancing the Property in connection with a permitted repayment of the Loan,
and transacting lawful business that is incident, necessary and appropriate to
accomplish the foregoing; and any Required SPE is organized solely for the
purpose of acting as a general partner of the limited partnership that owns the
Property, or a member of the limited liability company that owns the Property,
or the general partner of any Required SPE which is a limited partnership, or a
member of any Required SPE which is a limited liability company;

(b) Borrower is not engaged and will not engage in any business unrelated to the
acquisition, development, ownership, management or operation of the Property,
and any Required SPE is not engaged and will not engage in any business
unrelated to (1) acting as general partner of the limited partnership that owns
the Property, (2) acting as a member of the limited liability company that owns
the Property, (3) acting as general partner of any Required SPE which is a
limited partnership, or (4) acting as a member of any Required SPE which is a
limited liability company;

(c) Borrower does not have and will not have any assets other than those related
to the Property and any Required SPE does not have and will not have any assets
other than its partnership interest in the limited partnership that owns the
Property, or its membership interest in the limited liability company that owns
the Property or acts as the general partner of such limited partnership or
managing member of such limited liability company, as applicable;

(d) neither Borrower nor any Required SPE have engaged, sought or consented to
and will not, without the affirmative vote of all of its members, managers,
directors or general partners, as applicable, engage in, seek or consent to any
dissolution, winding up, liquidation, consolidation, merger, sale of all or
substantially all of its assets, transfer of partnership or membership
interests, or amendment of its limited partnership agreement, articles of
incorporation, bylaws, articles of organization, certificate of formation,
limited liability company agreement and/or operating agreement (as applicable)
with respect to the matters set forth in this definition (in each case, except
as permitted hereunder or otherwise with Lender’s prior written consent);

(e) Any Borrower or Required SPE that is a limited partnership has as its only
general partners, Special Purpose Entities that are corporations, limited
partnerships or limited liability companies;

(f) Any Borrower or Required SPE that is a limited liability company, if such
limited liability company has more than one member, has at least one manager
that is a Special Purpose Entity;

(g) Any Borrower or Required SPE that is a limited liability company, if such
limited liability company has only one member, (1) has been formed under
Delaware law and (2) has either a corporation or other person or entity that
shall become a member of the limited liability company upon the dissolution or
disassociation of the member, and (3) will not cause or allow such entity to
take any action related to a bankruptcy or insolvency proceeding or a voluntary
dissolution without the unanimous affirmative vote of 100% of the managers;

(h) Borrower and any Required SPE (1) have articles of organization, a
certificate of formation, limited liability company agreement and/or an
operating agreement, as applicable (if such entity is a limited liability
company), (2) have a limited partnership agreement (if such entity is a limited
partnership), or (3) have a certificate of incorporation, articles or bylaws (if
such entity is a corporation) that, in each case, provide that such entity will
not, without the affirmative vote of all of its members, managers, directors, or
general partners, as applicable: (i) dissolve, merge, liquidate or consolidate
and, as to any Required SPE, permit Borrower (as applicable) to dissolve, merge,
liquidate, or consolidate; (ii) except as permitted herein, sell all or
substantially all of its assets or, as to any Required SPE, the assets of the
Borrower (as applicable), (iii) engage in any other business activity, or amend
its organizational documents with respect to the matters set forth in this
definition without the consent of the Lender; or (iv) file a bankruptcy or
insolvency petition or otherwise institute insolvency proceedings with respect
to itself or, as to any Required SPE, with respect to Borrower (as applicable);

(i) Borrower and any Required SPE have not and shall not, without the
affirmative vote of all of its member, managers, directors or general partners,
as applicable: (i) dissolve, merge, liquidate, or consolidate, or, as to any
Required SPE, permit Borrower (as applicable) to dissolve, merge, liquidate, or
consolidate; (ii) except as permitted herein, sell all or substantially all of
its assets or, as to any Required SPE, the assets of the Borrower (as
applicable), (iii) engage in any other business activity, or amend its
organizational documents, or, with respect to any Required SPE, amend the
organizational documents of Borrower, with respect to the matters set forth in
this definition without the consent of the Lender; or (iv) file a bankruptcy or
insolvency petition or otherwise institute insolvency proceedings with respect
to itself or, as to any Required SPE, with respect to Borrower;

(j) each of Borrower and any Required SPE is solvent and pays its debts and
liabilities (including, as applicable, shared personnel and overhead expenses)
from its assets as the same become due, and endeavors to maintain adequate
capital for the normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business operations;

(k) each of Borrower and any Required SPE has not failed and will not fail to
correct any known misunderstanding regarding the separate identity of such
entity;

(l) each of Borrower and any Required SPE will file its own tax returns;
provided, however, that its assets and income may be included in a consolidated
tax return of its parent companies if inclusion on such consolidated tax return
is in compliance with applicable law or, in the event that such Borrower or
Required SPE is a disregarded entity for federal tax purposes, then its assets
and income may be included on the tax returns filed by its owner;

(m) each of Borrower and any Required SPE has maintained and will maintain its
own resolutions and agreements;

(n) each of Borrower and any Required SPE (1) has not commingled and will not
commingle its funds or assets with those of any other person, (2) will pay its
obligations solely with its own assets, and (3) has not participated and will
not participate in any cash management system with any other person other than
Lender;

(o) each of Borrower and any Required SPE has held and will hold its assets in
its own name;

(p) each of Borrower and any Required SPE has conducted and will conduct its
business in its name or in a name franchised or licensed to it by an entity
other than an Affiliate of Borrower;

(q) each of Borrower and any Required SPE has maintained and will maintain its
balance sheets, operating statements and other entity documents separate from
any other Person and has not permitted and will not permit its assets to be
listed as assets on the financial statement of any other entity except as
required or permitted by generally accepted accounting principles; provided,
however, that any such consolidated financial statement shall contain a note
indicating that it maintains separate balance sheets and operating statements
for such Borrower or Required SPE, respectively, and, if it is the Borrower, for
the Property.

(r) each of Borrower and any Required SPE has a sufficient number of employees
in light of its contemplated business operations, which may be none;

(s) each of Borrower and any Required SPE has observed and will observe all
partnership, corporate or limited liability company formalities, as applicable;

(t) each of Borrower and any Required SPE has no, and will have no, Indebtedness
(including loans (whether or not such loans are evidenced by a written
agreement) between such Borrower or Required SPE, respectively, and any
Affiliates of Borrower) other than (i) with respect to Borrower, the Loan; and
(ii) with respect to Borrower or any Required SPE, unsecured liabilities
incurred in the ordinary course of business relating to the routine
administration of Borrower or such Required SPE, respectively, and, with respect
to Borrower only, unsecured liabilities incurred in the ordinary course of
business relating to the ownership and operation of the Property, which
liabilities are owed to unrelated third parties, are not more than sixty
(60) days past the date incurred (unless disputed in accordance with applicable
law), are not evidenced by a note and are paid when due, and which amounts are
normal and reasonable under the circumstances, and shall not exceed two percent
(2%) of the outstanding principal balance of the Loan;

(u) each of Borrower and any Required SPE will not guarantee or become obligated
for the debts of any other entity or person or hold out its credits as being
available to satisfy the obligations of others, including not acquiring
obligations or securities of its partners, members or shareholders (except to
the extent that any Required SPE acting as the general partner of Borrower may
become liable for the debts of Borrower, where Borrower is a limited
partnership);

(v) each of Borrower and any Required SPE has not and will not acquire
obligations of its partners, members or shareholders or any other Affiliate;

(w) each of Borrower and any Required SPE has allocated and will allocate fairly
and reasonably any overhead expenses that are shared with any Affiliate,
including, but not limited to, paying for shared office space and services
performed by any employee of an Affiliate;

(x) each of Borrower and any Required SPE has not maintained or used, and will
not maintain or use, invoices and checks bearing the name of any other Person,
and will use its own stationery for written communications with all other
Persons;

(y) each of Borrower and any Required SPE has not pledged and will not pledge
its assets for the benefit of any other Person except as permitted or required
pursuant to this Mortgage;

(z) each of Borrower and any Required SPE has held itself out and identified
itself and will hold itself out and identify itself as a separate and distinct
entity under its own name or in a name franchised or licensed to it by an entity
other than an Affiliate of Borrower;

(aa) each of Borrower and any Required SPE has maintained and will maintain its
assets in such a manner that it will not be costly or difficult to segregate,
ascertain or identify its individual assets from those of any other Person;

(bb) each of Borrower and any Required SPE has not made and will not make loans
to any Person or hold evidence of indebtedness issued by any other person or
entity (other than cash and investment-grade securities issued by an entity that
is not an Affiliate of or subject to common ownership with such entity);

(cc) each of Borrower and any Required SPE has not identified and will not
identify its partners, members or shareholders, or any Affiliate of any of them,
as a division or part of it, and has not identified itself and shall not
identify itself as a division of any other Person (except to the extent such
treatment may be required under the federal income tax law and similar state law
for disregarded entities);

(dd) each of Borrower and any Required SPE has not entered into or been a party
to, and will not enter into or be a party to, any transaction with its partners,
members, shareholders or Affiliates except in the ordinary course of its
business and on terms which are intrinsically fair, commercially reasonable and
are no less favorable to it than would be obtained in a comparable arm’s-length
transaction with an unrelated third party;

(ee) each of Borrower and any Required SPE does not and will not have any of its
obligations guaranteed by any Affiliate except as otherwise required in the Loan
Documents; and

(ff) each of Borrower and any Required SPE has complied and will comply with all
of the terms and provisions contained in its organizational documents. The
statement of facts contained in its organizational documents are true and
correct and will remain true and correct.

For purposes of the foregoing:

“Affiliate” means any Person controlling, under common control with, or
controlled by the Person in question.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of management, policies or activities of a person or
entity, whether through ownership of voting securities, by contract or otherwise

“Person” or “Persons” shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

“Special Purpose Entity” shall mean a limited partnership, limited liability
company or corporation which, at all times until the Indebtedness is paid and
all Obligations are satisfied, meets all of the requirements of this
Paragraph 17.

18. Borrower and Lien Not Released. Without affecting the liability of Borrower
or any other person liable for the payment of the Indebtedness, and without
affecting the lien or charge of this Mortgage as security for the payment of the
Indebtedness, Lender may, from time to time and without notice to any junior
lien holder or holder of any right or other interest in and to the Property:
(a) release any person so liable, (b) waive or modify any provision of this
Mortgage or the other Loan Documents or grant other indulgences, (c) release all
or any part of the Property, (d) take additional security for any obligation
herein mentioned, (e) subordinate the lien or charge of this Mortgage,
(f) consent to the granting of any easement, or (g) consent to any map or plan
of the Property.

19. Uniform Commercial Code Security Agreement and Fixture Filing. This Mortgage
shall constitute a security agreement and fixture filing pursuant to the Uniform
Commercial Code in effect from time to time for any of the items specified
herein as part of the Property which, under applicable law, may be subject to a
security interest pursuant to the Uniform Commercial Code (collectively, the
“Collateral”), and Borrower hereby, pursuant to the terms of this Mortgage,
grants Lender a security interest in the Collateral. In addition, Borrower
authorizes Lender to file on its behalf any financing statements, as well as
extensions, renewals and amendments thereof, and reproductions of this Mortgage
in such form as Lender may require to perfect the security interest in respect
to said items. In addition, Borrower agrees to execute and deliver to Lender any
financing statements, as well as extensions, renewals and amendments thereof,
and reproductions of this Mortgage in such form as Lender may require to perfect
a security interest with respect to said items. Borrower shall pay all costs of
filing such financing statements and any extensions, renewals, amendments and
releases thereof, and shall pay all reasonable costs and expenses of any record
searches for financing statements Lender may reasonably require. Borrower shall,
at Lender’s request, at any time and from time to time, execute and deliver to
Lender such financing statements, amendments and other documents and do such
acts as Lender deems necessary in order to establish and maintain valid,
attached and perfected first security interests in the Collateral in favor of
Lender, free and clear of all liens, claims and rights of third parties
whatsoever. Borrower hereby irrevocably authorizes Lender at any time, and from
time to time, to execute and file in any jurisdiction any initial financing
statements and amendments thereto that (a) indicate the Collateral (i) as all
assets of the Borrower or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9
of the Uniform Commercial Code of the jurisdiction wherein such financing
statement or amendment is filed, or (ii) as being of an equal or lesser scope or
within greater detail, and (b) contain any other information required by
Section 5 of Article 9 of the Uniform Commercial Code of the jurisdiction
wherein such financing statement or amendment is filed regarding the sufficiency
or filing office acceptance of any financing statement or amendment, including
(i) whether the Borrower is an organization, the type of organization and any
organization identification number issued to the Borrower, and (ii) in the case
of a financing statement filed as a fixture filing or indicating Collateral as
as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. Borrower agrees to furnish any such
information to Lender promptly upon request. Borrower further ratifies and
affirms its authorization for any financing statements and/or amendments
thereto, executed and filed by Lender in any jurisdiction prior to the date of
this Mortgage. In addition, Borrower covenants to: (w) obtain acknowledgments
from any bailee holding Collateral; (x) obtain consents from any letter of
credit issuers; (y) notify and take steps to perfect Lender’s security interest
in any Commercial Tort Claims; and (z) take any action necessary to vest control
in Lender of any of Borrower’s Electronic Chattel Paper. If an Event of Default
shall occur, Lender, in addition to any other rights and remedies which it may
have, shall have and may exercise immediately and without demand, any and all
rights and remedies granted to a secured party upon default under the Uniform
Commercial Code, including without limitation, the right to take possession of
the Collateral or any part thereof, and to take such other measures as Lender
may deem necessary for the care, protection and preservation of the Collateral.
Upon request or demand of Lender, Borrower shall, at its expense, assemble the
Collateral and make it available to Lender at a convenient place acceptable to
Lender and Borrower. Borrower shall pay to Lender on demand any and all
expenses, including legal expenses and attorneys’ fees, incurred or paid by
Lender in protecting the interest in the Collateral and in enforcing the rights
hereunder with respect to the Collateral. Any notice of sale, disposition or
other intended action by Lender, with respect to the Collateral, sent to
Borrower in accordance with the provisions hereof at least ten (10) days prior
to such action, shall constitute commercially reasonable notice to Borrower.
Capitalized words and phrases used herein in this Paragraph 19 and not otherwise
defined herein shall have the respective meanings assigned to such terms in
either: (i) Article 9 of the Uniform Commercial Code as in force in Illinois at
the time the financing statement was filed by Lender, or (ii) Article 9 as in
force at any relevant time in Illinois, the meaning to be ascribed thereto with
respect to any particular item of property shall be that under the more
encompassing of the two definitions.

THIS MORTGAGE SHALL BE EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE
FILING IN THE REAL ESTATE RECORDS OF THE COUNTY WHERE THE PROPERTY IS LOCATED
WITH RESPECT TO ALL GOODS CONSTITUTING A PART OF THE PROPERTY WHICH ARE OR ARE
TO BECOME FIXTURES RELATED TO THE PROPERTY. FOR PURPOSES OF THE UNIFORM
COMMERCIAL CODE THE FOLLOWING INFORMATION IS FURNISHED:

  a.   Name and address of the record owner of the real estate described in this
Mortgage:

NNN Gallery Medical, LLC

1551 N. Tustin Avenue, Suite 300

Santa Ana, California 92705

  b.   Name and address of the debtor (Borrower):

NNN Gallery Medical, LLC
1551 N. Tustin Avenue, Suite 300
Santa Ana, California 92705

  c.   Name and address of the secured party (Lender):

LaSalle Bank National Association
135 South LaSalle Street
Suite 3410
Chicago, Cook County, Illinois 60603

  d.   Information concerning the security interest evidenced by this Mortgage
may be obtained from the secured party.

  e.   This Mortgage covers goods which are or are to become fixtures.

20. Events of Default; Acceleration of Indebtedness; Remedies. The occurrence of
any one or more of the following events shall constitute an “Event of Default”
under this Mortgage:

(a) failure of Borrower to pay (i) within 5 days of the due date, any of the
Indebtedness, including any payment due under the Note or (ii) the outstanding
Indebtedness, including all accrued and unpaid interest, in full on the Maturity
Date; or

(b) failure of Borrower to provide Lender with evidence of renewal of any
insurance required hereunder within 10 days of Lender’s request therefore, or

(c) failure of Borrower to pay when due any taxes, assessments and other similar
charges levied against the Property, or ground rents, if applicable, except to
the extent sums sufficient to pay such amounts have been escrowed with Lender as
required under Paragraph 3 and Borrower has given notice of such amounts due to
Lender; or

(d) failure of Borrower to strictly comply with Paragraphs 15, 16 and 17 of this
Mortgage; or

(e) failure of Borrower to comply with the financial reporting requirements of
Paragraph 10 within 10 days after notice from Lender; or

(f) a petition under any Chapter of Title 11 of the United States Code or any
similar law or regulation is filed by or against Borrower or any Guarantor (and
in the case of an involuntary petition in bankruptcy, which petition is not
discharged within sixty (60) days of its filing), or a custodian, receiver or
trustee for any of the Property is appointed, or Borrower or any Guarantor makes
an assignment for the benefit of creditors, or any of them are adjudged
insolvent by any state or federal court of competent jurisdiction, or an
attachment or execution is levied against any of the Property (individually or
collectively, a “Bankruptcy Default”), provided, however, in the event that
Borrower is comprised of more than one Tenants in Common and pursuant to a
buy/sell provision in the applicable TIC Agreement, the defaulting Tenant in
Common transfers its interest in the Property to a non-defaulting Tenant in
Common within sixty (60) days, no Bankruptcy Default shall be deemed to have
occurred; or

(g) the occurrence of an “Event of Default” under and as defined in any other
Loan Document; or

(h) Borrower is in default in the payment of any indebtedness (other than the
Indebtedness) and such default is declared and is not cured within the time, if
any, specified therefor in any agreement governing the same; or

(i) any statement, report or certificate made or delivered to Lender by Borrower
or any Guarantor is not materially true and complete, or any representation or
warranty made or delivered to Lender by Borrower or any Guarantor is not
materially true and correct; or

(j) seizure or forfeiture of the Property, or any portion thereof, or Borrower’s
interest therein, resulting from criminal wrongdoing or other unlawful action of
Borrower, its affiliates, or any tenant in the Property under any federal, state
or local law; or

(k) failure of Borrower, within 30 days after notice and demand, to satisfy each
and every Obligation, other than those set forth in the subparagraphs above;
provided, however, if such failure to satisfy such Obligation cannot by its
nature be cured within 30 days, and if Borrower commences to cure such failure
promptly after written notice thereof and thereafter diligently pursues the
curing thereof (and then in all events cures such failure within 60 days after
the original notice thereof), Borrower shall not be in default hereunder during
such period of diligent curing;

(l) the termination of the Property Manager or modification or termination of
the Management Agreement or TIC Agreement without the prior written consent of
the Lender; or

(m) in the event that Borrower is comprised of more than one Tenants in Common,
the filing by a Tenant in Common of an action to partition all or any portion of
the Property or any action to compel any sale thereof (individually or
collectively, a “Partition Default”), provided, however, if pursuant to a
buy/sell provision in the applicable TIC Agreement, the defaulting Tenant in
Common transfers its interest in the Property to a non-defaulting Tenant in
Common within sixty (60) days, no Partition Default shall be deemed to have
occurred.

Upon the occurrence of an Event of Default, the Indebtedness, at the option of
the Lender, shall become immediately due and payable without notice to Borrower;
and Lender shall be entitled to immediately exercise and pursue any or all of
the rights and remedies contained in this Mortgage and any other Loan Document
or otherwise available at law or in equity. Each remedy provided in the Loan
Documents is distinct and cumulative to all other rights or remedies under the
Loan Documents or afforded by law or equity, and may be exercised concurrently,
independently, or successively, in any order whatsoever.

21. Entry; Foreclosure; Remedies. Upon the occurrence of an Event of Default,
(a) Borrower, upon demand of Lender, shall forthwith surrender to Lender the
actual possession, or to the extent permitted by law, Lender itself, or by such
officers or agents as it may appoint, may enter and take possession of all or
any part of the Property, and may exclude Borrower and its agents and employees
wholly therefrom, and may have joint access with Borrower to the books, papers
and accounts of Borrower; and (b) if Borrower shall for any reason fail to
surrender or deliver the Property or any part thereof after such demand by
Lender, Lender may obtain a judgment or decree conferring on Lender the right to
immediate possession or requiring the delivery to Lender of the Property, and
Borrower specifically consents to the entry of such judgment or decree. Upon
every such entering upon or taking of possession, Lender may hold, store, use,
operate, manage and control the Property and conduct the business thereof.
Lender shall have no liability for any loss, damage, injury, cost or expense
resulting from any action or omission by it or its representatives which was
taken or omitted in good faith.

Upon any foreclosure sale, Lender may bid for and purchase the Property and
shall be entitled to apply all or part of the Indebtedness as a credit to the
purchase price.

Upon the occurrence of an Event of Default, then, without notice to or the
consent of Borrower, Lender shall be entitled to immediately exercise or pursue
or cause to be exercised or pursued any or all of the rights and remedies
contained in this Mortgage or in any other Loan Document or otherwise available
at law or in equity including the right to do any one or more of the following:

(a) declare the entire Indebtedness to be immediately due and payable;

(b) institute proceedings to foreclose this Mortgage, in which case the Property
or any interest therein may be sold for cash or upon credit in one or more
parcels or in several interests or portions and in any order or manner;

(c) with or without entry, to the extent permitted and pursuant to the
procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Mortgage for the portion of the Indebtedness then due and
payable, subject to the continuing lien of this Mortgage for the balance of the
Indebtedness not then due;

(d) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein, in the
Note or the Other Security Documents;

(e) recover judgment on the Note either before, during or after any proceedings
for the enforcement of this Mortgage;

(f) obtain appointment of a trustee, receiver, liquidator or conservator of the
Property, without notice and without regard for the adequacy of the security for
the Indebtedness or the solvency of Borrower, any Guarantor or of any person,
firm or other entity liable for the payment of the Indebtedness which
appointment is hereby agreed and consented to by the Borrower;

(g) enforce Lender’s interest in the Leases and Rents and enter into or upon the
Property, either personally or by its agents, nominees or attorneys and
dispossess Borrower and its agents and servants therefrom, and thereupon Lender
may: (A) use, operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Property and conduct the business
thereat; (B) complete any construction on the Property in such manner and form
as Lender deems advisable; (C) make alterations, additions, renewals,
replacements and improvements to or on the Property; (D) exercise all rights and
powers of Borrower with respect to the Property, whether in the name of Borrower
or otherwise, including, without limitation, the right to make, cancel, enforce
or modify Leases, obtain and evict tenants, and demand, sue for, collect and
receive all earnings, revenues, rents, issues, profits and other income of the
Property and every part thereof; and (E) apply the receipts from the Property to
the payment of the Indebtedness, after deducting therefrom all expenses
(including reasonable attorney fees) incurred in connection with the aforesaid
operations and all amounts necessary to pay the taxes, assessments, insurance
premiums and other charges in connection with the Property, as well as just and
reasonable compensation for the services of Lender, its counsel, agents and
employees; and/or

(h) pursue such other rights and remedies as may then be available at law and in
equity. To the extent permitted presently or in the future by laws of the state
in which the Property and Improvements are located, Lender may institute a
proceeding or proceedings, judicial, or nonjudicial, by advertisement or
otherwise, for the complete or partial foreclosure of this Mortgage or the
complete or partial sale of the Property under a power of sale which power is
hereby granted to Lender;

(i) Lender shall be entitled as a matter of right without notice and without
giving bond and without regard to the solvency or insolvency of Borrower, or
waste of the Property or adequacy of the security of the Property, to apply for
the appointment of a receiver in accordance with the statutes and laws made and
provided for who shall have all rights, powers and remedies as provided by such
statute, and who shall apply the rents, issues and profits as provided by
statute and thereafter to all expenses for maintenance of the Property and to
the costs and expenses of the receivership, including reasonable attorneys’ fees
and to the repayment of the Indebtedness and Obligations secured hereby and as
further provided in any Assignment of Leases and Rents, executed by Borrower as
further security for the Indebtedness, whether included in this Mortgage or
separate instrument. Borrower does hereby irrevocably consent to such
appointment. Nothing contained in this Mortgage and no actions taken pursuant to
this Mortgage shall be construed as constituting Lender a mortgagee in
possession. Lender shall have the right, at any time and without limitation, as
provided in Minn. §580.03, to advance money to the receiver to pay any part or
all of the items which the receiver would otherwise pay if cash were available
from the Property; and sums so advanced, with interest at the rate set forth in
the Note, shall be secured hereby, or if advanced during the period of
redemption shall be part of the sum required to be paid to redeem from sale; and

(j) To foreclose this Mortgage by judicial or non-judicial process as set forth
below:

Foreclosure/Power of Sale. Borrower hereby authorizes and fully empowers Lender

to foreclose this Mortgage by judicial proceedings or by non-judicial
proceeding, in accordance with the laws of the State of Minnesota, with full
power of sale and authority to sell the Property at public auction to the
highest bidder for cash, after giving notice or making publication, if required
by the laws of the State of Minnesota, and to convey the same to the purchaser
in fee simple all in accordance with and in the manner prescribed by the laws of
the State of Minnesota, and out of the proceeds arising from the sale and
foreclosure to retain the principal and interest due on the Note and the
Indebtedness, together with all such sums of money as Lender shall have expended
or advanced pursuant to this Mortgage or pursuant to statute, together with
interest thereon as herein provided, and all costs and expenses of such
foreclosure, which shall be immediately due and payable by Borrower, with
interest thereon at the rate of interest specified in the Loan Documents, with
the balance, if any, to be paid to the persons entitled thereto by law. Borrower
acknowledges that in such event, Borrower shall remain liable for any deficiency
to the extent permitted by the laws of the State of Minnesota and the Loan
Documents. By conferring this power of sale upon Lender, Borrower, for itself,
its successors and assigns, after an opportunity for consultation with its legal
counsel, hereby voluntarily, knowingly and intelligently waives all rights under
the Constitution and laws of the United States and under the Constitution and
laws of the State of Minnesota, both to a hearing on the right to exercise and
the exercise of the power of sale, and to notice, except as may be required by
any statute of the State of Minnesota.

The foregoing remedies shall be cumulative of any other nonjudicial remedies
available to Lender under this Mortgage or the other Loan Documents, at law or
in equity. Proceeding with a request or receiving a judgment for legal relief
shall not be or be deemed to be an election of remedies or bar any available
nonjudicial remedy of Lender.

22. Expenditures and Expenses. Borrower acknowledges and confirms that Lender
shall impose certain administrative processing and/or commitment fees in
connection with (a) the extension, renewal, modification, amendment and
termination of its loans, (b) the release or substitution of collateral
therefor, (c) obtaining certain consents, waivers and approvals with respect to
the Property, or (d) the review of any Lease or proposed Lease or the
preparation or review of any subordination, non-disturbance and attornment
agreement. In addition, in any civil action to foreclose the lien hereof or
otherwise enforce Lender’s rights, there shall be allowed and included as
additional Indebtedness in the order or judgment for foreclosure and sale or
other order all expenditures and expenses which may be paid or incurred by or on
behalf of Lender including attorneys’ fees, costs and expenses, receiver’s fees,
costs and expenses, appraiser’s fees, engineers’ fees, outlays for documentary
and expert evidence, stenographers’ charges, publication costs, and costs (which
may be estimates as to items to be expended after entry of said order or
judgment) of procuring all such abstracts of title, title searches and
examination, title insurance policies, Torrens’ Certificates and similar data
and assurances with respect to the title as Lender may deem reasonably necessary
either to prosecute such civil action or to evidence to bidders at any sale
which may be had pursuant to such order or judgment the true condition of the
title to, or the value of, the Property (all said expenditures and expenses are
hereinafter collectively referred to as the “Reimbursable Expenses”). All
Reimbursable Expenses, and such costs, expenses and fees as may be incurred by
Lender at any time or times hereafter in the protection of the Property, in
enforcing the Obligations, and/or the maintenance of the lien established by any
of the Loan Documents, including accountants’ and attorneys’ fees, costs and
expenses in any advice, litigation, or proceeding affecting the Loan Documents
or the Property, whether instituted by Lender, Borrower or any other party, or
in preparation for the commencement or defense of any action or proceeding or
threatened action or proceeding, shall be immediately due and payable to Lender
by Borrower, and, to the extent such services relate to the Hazardous Substances
Indemnification Agreement of even date herewith from Borrower and Guarantors in
favor of Lender, by Borrower and Guarantors, with interest thereon at the
Default Rate set forth in the Note, and shall be secured by the Loan Documents.
In addition, Borrower shall be liable for the payment of all commissions and
brokerage fees relating to the Loan.

23. Application of Proceeds of Foreclosure Sale. The proceeds of any foreclosure
sale of the Property shall be distributed and applied in the order of priority
set forth in the Note with the excess, if any, being applied to any parties
entitled thereto as their rights may appear.

24. Appointment of Receiver or Mortgagee in Possession. If an Event of Default
is continuing or if Lender shall have accelerated the Indebtedness, Lender, upon
application to a court of competent jurisdiction, shall be entitled as a matter
of strict right, without notice, and without regard to the occupancy or value of
any security for the Indebtedness, without any showing of fraud or mismanagement
on the part of Borrower or the insolvency of any party bound for its payment,
without regard to the existence of a declaration that the Indebtedness, or any
portion thereof, is immediately due and payable, and without regard to the
filing of a notice of default, to the appointment of a receiver or the immediate
appointment of Lender to take possession of and to operate the Property, and to
collect and apply the rents, issues, profits and revenues thereof, and Borrower
consents to such appointment.

25. Forbearance by Lender Not a Waiver. Any forbearance by Lender in exercising
any right or remedy under any of the Loan Documents, or otherwise afforded by
applicable law, shall not be a waiver of or preclude the exercise of any right
or remedy. Lender’s acceptance of payment of any sum secured by any of the Loan
Documents after the due date of such payment shall not be a waiver of Lender’s
right to either require prompt payment when due of all other sums so secured or
to declare a default for failure to make prompt payment. The procurement of
insurance or the payment of taxes or other liens or charges by Lender shall not
be a waiver of Lender’s right to accelerate the maturity of the Indebtedness,
nor shall Lender’s receipt of any awards, proceeds or damages under Paragraph 5
hereof operate to cure or waive Borrower’s default in payment or sums secured by
any of the Loan Documents. With respect to all Loan Documents, only waivers made
in writing by Lender shall be effective against Lender.

26. Waiver of Statute of Limitations. Borrower hereby waives the right to assert
any statute of limitations as a bar to the enforcement of the lien created by
any of the Loan Documents or to any action brought to enforce the Note or any
other obligation secured by any of the Loan Documents.

27. Waiver of Homestead and Redemption. Borrower hereby waives all rights of
homestead exemption in the Property. Borrower hereby waives all right of
redemption on behalf of Borrower and on behalf of all other persons acquiring
any interest or title in the Property subsequent to the date of this Mortgage,
except decree or judgment creditors of Borrower.

28. Jury Trial Waiver. BORROWER AND LENDER BY ITS ACCEPTANCE OF THIS MORTGAGE,
EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ITS RESPECTIVE RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE
SUBJECT MATTER OF THE LOAN DOCUMENTS AND THE BUSINESS RELATIONSHIP THAT IS BEING
ESTABLISHED. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY
BORROWER AND BY LENDER, AND BORROWER ACKNOWLEDGES ON BEHALF OF ITSELF AND ITS
PARTNERS, MEMBERS, SHAREHOLDERS, AS THE CASE MAY BE, THAT NEITHER LENDER NOR ANY
PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR
NULLIFY ITS EFFECT. BORROWER AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT BORROWER AND
LENDER HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THE LOAN DOCUMENTS
AND THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED
FUTURE DEALINGS. BORROWER AND LENDER FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN
REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF
THE LOAN DOCUMENTS AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF THEIR OWN FREE WILL AND THAT THEY HAVE HAD THE OPPORTUNITY
TO DISCUSS THIS WAIVER WITH COUNSEL.

29. Indemnification. In addition to any other indemnifications provided in any
of the other Loan Documents, Borrower shall, at its sole cost and expense,
protect, defend, indemnify, release and save harmless Lender, or any person or
entity who is or will have been involved in the servicing of this Loan, as well
as the respective affiliates, subsidiaries, persons controlling or under common
control, directors, officers, shareholders, members, partners, employees,
agents, servants, representatives, contractors, subcontractors, participants,
successors and assigns of any and all of the foregoing (collectively, the
“Indemnified Parties”), from and against all liabilities, obligations, claims,
demands, damages, penalties, causes of action, losses, fines, costs and expenses
(including without limitation reasonable attorneys’ fees and expenses), imposed
upon or incurred by or asserted against any of the Indemnified Parties and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (a) ownership of this Mortgage, the Property or any interest
therein or receipt of any Rents; (b) any amendment to, or restructuring of, the
Indebtedness, the Note, this Mortgage or any other Loan Documents; (c) any and
all lawful action that may be taken by Lender in connection with the enforcement
of the provisions of this Mortgage or the Note or any other Loan Documents,
whether or not suit is filed in connection with same, or in connection with
Borrower or any Guarantor becoming a party to a voluntary or involuntary federal
or state bankruptcy, insolvency or similar proceeding; (d) any accident, injury
to or death of persons or loss of or damage to property occurring in, on or
about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (e) any failure on
the part of Borrower to perform or comply with any of the terms of this
Mortgage; (f) performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof; (g)
any failure of the Property to comply with any laws or ordinances affecting or
which may be interpreted to affect the Property; or (h) any representation or
warranty made in the Note, this Mortgage or the other Loan Documents being false
or misleading in any respect as of the date such representation or warranty was
made. The obligations and liabilities of Borrower under this Paragraph 29
(A) shall survive for a period of two (2) years following any release of this
Mortgage executed by Lender and satisfaction of the Loan evidenced by the Loan
Documents, and (B) shall survive the transfer or assignment of this Mortgage,
the entry of a judgment of foreclosure, sale of the Property by nonjudicial
foreclosure sale, or delivery of a deed in lieu of foreclosure (including,
without limitation, any transfer by Borrower of any of its rights, title and
interest in and to the Property to any party, whether or not affiliated with
Borrower); provided, however, that any act or omission pursuant to subparagraphs
(a) through (h) above was taken or occurred prior to the payment in full of the
Indebtedness.

30. Duty to Defend. Upon written request by an Indemnified Party, Borrower shall
defend such Indemnified Party (if requested by an Indemnified Party, in the name
of the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may,
in their sole and absolute discretion, engage their own attorneys and other
professionals to defend or assist them, and, at the option of the Indemnified
Parties, their attorneys shall control the resolution of the claim or
proceeding. Upon demand, Borrower shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of reasonable fees and disbursements of attorneys, engineers, and
other professionals in connection therewith. Any amounts payable to any of the
Indemnified Parties by reason of the application of Paragraph 29 or this
paragraph shall be secured by this Mortgage and shall become immediately due and
payable and shall bear interest at the Default Rate specified in the Note from
the date loss or damage is sustained by any of the Indemnified Parties until
paid.

31. ERISA. Borrower covenants and agrees that during the term of the Loan, (a)
Borrower is not a and will not become a “party in interest” as defined in
Section 3(14) of the Employee Retirement Income Security Act of 1974, as
amended, with respect to any employee benefit plan, (b) Borrower will take no
action that would cause it to (i) become an “employee benefit plan” or
(ii) otherwise be considered “plan assets” as defined in 29 C.F.R.
Section 2510.3-101, or “assets of a governmental plan” subject to regulation
under the state statutes, and (c) Borrower will not sell, assign or transfer the
Property, or any portion thereof or interest therein, to any transferee that
does not execute and deliver to Lender its written assumption of the obligations
of this covenant. Borrower further covenants and agrees to protect, defend,
indemnify and hold Lender harmless from and against all loss, cost, damage and
expense (including without limitation, all attorneys’ fees and excise taxes,
costs of correcting any prohibited transaction or obtaining an appropriate
exemption) that Lender may incur as a result of Borrower’s breach of this
covenant. This covenant and indemnity shall survive the extinguishment of the
lien of this Mortgage by foreclosure or action in lieu thereof; furthermore, the
foregoing indemnity shall supersede any limitations on Borrower’s liability
under any of the Loan Documents.

32. No Oral Change. This Mortgage may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Borrower or Lender, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought.

33. Notice. Except for any notice required under applicable law to be given in
another manner, (a) any notice to Borrower provided for in the Loan Documents
shall be given by mailing such notice by Federal Express or any other nationally
recognized overnight carrier addressed to Borrower at Borrower’s address stated
above or at such other address as Borrower may designate by notice to Lender as
provided herein, and (b) any notice to Lender shall be given by Federal Express
or any other nationally recognized overnight carrier to Lender’s address stated
above or to such other address as Lender may designate by notice to Borrower as
provided herein. Any notice provided for in the Loan Documents shall be deemed
to have been given to Borrower or Lender on the first Business Day following
such mailing in the manner designated herein. In addition, notice may also be
given by first class certified mail, return receipt requested, postage prepaid,
addressed to the address set forth above for the party to whom such notice is to
be given and such notice given in this manner shall be deemed received the third
day after such notice was deposited with the United States Postal Service.

34. Successors and Assigns Bound; Joint and Several Liability; Agents; Captions.
The covenants and agreements contained in the Loan Documents shall bind, and the
rights thereunder shall inure to, the respective successors and assigns of
Lender and Borrower, subject to the provisions of Paragraph 15 hereof. All
representations, warranties, covenants and agreements of Borrower contained in
the Loan Documents shall be joint and several. In exercising any rights under
the Loan Documents or taking any actions provided for therein, Lender may act
through its employees, agents, or independent contractors as authorized by
Lender. The captions and headings of the paragraphs of this Mortgage are for
convenience only and are not to be used to interpret or define the provisions
hereof.

35. Governing Law; Jurisdiction; Severability. THE PROVISIONS OF THIS INSTRUMENT
REGARDING THE CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY
INTERESTS HEREIN GRANTED SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF
THE STATE OF MINNESOTA. ALL OTHER PROVISIONS OF THIS INSTRUMENT AND THE RIGHTS
AND OBLIGATIONS OF BORROWER AND LENDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.
THIS MORTGAGE SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES, AND BORROWER AGREES THAT THE PROPER VENUE FOR ANY
MATTERS IN CONNECTION HEREWITH SHALL BE IN THE STATE OR FEDERAL COURTS LOCATED
IN CHICAGO, ILLINOIS, AS LENDER MAY ELECT AND BORROWER HEREBY SUBMITS ITSELF TO
THE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ADJUDICATING ANY MATTERS
RELATED TO THE LOAN, PROVIDED, HOWEVER, THAT TO THE EXTENT THE MANDATORY
PROVISIONS OF THE LAWS OF ANOTHER JURISDICTION RELATING TO (i) THE PERFECTION OR
THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTERESTS IN ANY OF
THE PROPERTY, (ii) THE LIEN, ENCUMBRANCE OR OTHER INTEREST IN THE PROPERTY
GRANTED OR CONVEYED BY THIS MORTGAGE, OR (iii) THE AVAILABILITY OF AND
PROCEDURES RELATING TO ANY REMEDY HEREUNDER OR RELATED TO THIS MORTGAGE ARE
REQUIRED TO BE GOVERNED BY SUCH OTHER JURISDICTION’S LAWS, SUCH OTHER LAWS SHALL
BE DEEMED TO GOVERN AND CONTROL. THE INVALIDITY, ILLEGALITY OR UNENFORCEABILITY
OF ANY PROVISION OF THIS MORTGAGE OR THE LOAN DOCUMENTS SHALL NOT AFFECT OR
IMPAIR THE VALIDITY, LEGALITY OR ENFORCEABILITY OF THE REMAINDER OF THIS
MORTGAGE AND THE OTHER LOAN DOCUMENTS, AND TO THIS END, THE PROVISIONS OF THIS
MORTGAGE AND THE OTHER LOAN DOCUMENTS ARE DECLARED TO BE SEVERABLE.

36. Release. Upon payment of all sums secured by this Mortgage, Lender shall
release this Mortgage. Borrower shall pay Lender’s reasonable costs incurred in
releasing this Mortgage and any financing statements related hereto.

37. Covenants Running with the Land. All covenants, conditions, warranties,
representations and other obligations contained in this Mortgage and the other
Loan Documents are intended by Borrower and Lender to be, and shall be construed
as, covenants running with the Property until the lien of this Mortgage has been
fully released by Lender.

38. Terms. As used in the Loan Documents, (i) “Business Day” means a day when
banks are not required or authorized to be closed in Chicago, Illinois or New
York, New York; and (ii) the words “include” and “including” shall mean
“including but not limited to” unless specifically set forth to the contrary.

39. Loss of Note. Upon notice from Lender of the loss, theft, or destruction of
the Note and upon receipt of indemnity reasonably satisfactory to Borrower from
Lender, or in the case of mutilation of the Note, upon surrender of the
mutilated Note, Borrower shall make and deliver a new note of like tenor in lieu
of the then to be superseded Note.

40. Changes in the Laws Regarding Taxation. If any law is amended, enacted or
adopted after the date of this Mortgage which deducts the Indebtedness from the
value of the Property for the purpose of taxation or which imposes a tax, either
directly or indirectly, on the Indebtedness of Lender’s interest in the
Property, Borrower will pay such tax, with interest and penalties thereon, if
any. In the event Lender is advised by counsel chosen by it that the payment of
such tax or interest and penalties by Borrower would be unlawful or taxable to
Lender or unenforceable or provide the basis for a defense of usury, then in any
such event, Lender shall have the option, by written notice of not less than
forty-five (45) days, to declare the Indebtedness immediately due and payable.

41. Exculpation. This Mortgage and other Loan Documents and all of Borrower’s
obligations hereunder and thereunder are subject to the provisions of
Paragraph 11 of the Note entitled Exculpation. All of the provisions of the
Note, including Paragraph 11, are incorporated herein by this reference.

42. Disclosure of Information. Lender shall have the right (but shall be under
no obligation) to make available to any party for the purpose of granting
participation in or selling, transferring, assigning or conveying all or any
part of the Loan (including any governmental agency or authority and any
prospective bidder at any foreclosure sale of the Property) any and all
information which Lender may have with respect to the Property, Lease(s),
Borrower and any Guarantor, whether provided by Borrower, any Guarantor or any
third party or obtained as a result of any environmental assessments. Borrower
and each Guarantor agree that Lender shall have no liability whatsoever as a
result of delivering any such information to any third party, and Borrower and
each Guarantor, on behalf of themselves and their successors and assigns, hereby
release and discharge Lender from any and all liability, claims, damages, or
causes of action, arising out of, connected with or incidental to the delivery
of any such information to any third party.

43. Sale of Loan; Securitization. Lender may, at any time and without the
consent of Borrower or any Guarantor, grant participation in or sell, transfer,
securitize, assign and convey all or any portion of its right, title and
interest in and to the Loan, the servicing of the Loan, this Mortgage, the Note
and the other Loan Documents, any guaranties given in connection with the Loan
and any collateral given to secure the Loan. Borrower covenants to cooperate
with Lender’s efforts in the sale, transfer or securitization of the Loan; such
cooperation includes Borrower’s obligations to (a) make non-material
modifications of the Loan Documents (such modifications shall not have a
material adverse impact on Borrower and accordingly such modifications shall not
(i) increase the amount of the Indebtedness or (ii) change the Contract Rate [as
defined in the Note]), (b) provide additional information regarding Borrower’s
financial statements, (c) deliver updated information regarding Borrower and the
Property, (d) cooperate with all third parties, including, but not limited to,
rating agencies and potential investors to facilitate the rating and
securitization of the Loan, (e) review Lender’s securitization offering
materials to the extent such materials relate to Borrower, the Property or the
Loan, (f) respond to any inquiries of Lender or other party relating thereto and
(g) deliver an estoppel certificate. Borrower agrees to represent and warrant
the absence of misstatements and/or omissions in the information relating to
Borrower, the Property and the Loan that is contained in the offering materials
and which has been furnished to or approved by Borrower. Borrower shall not be
liable for Lender’s post-closing costs incurred pursuant to any securitization
of the Loan by Lender.

Any such sale, transfer, participation, securitization of all or any portion of
the Note, this Mortgage and/or other Loan Documentation including, without any
limitation, with respect to any whole loan sale or securitization of the Loan
shall be deemed a “Secondary Market Transaction”.

44. Actions and Proceedings. Lender has the right to appear in and defend any
action or proceeding brought with respect to the Property and to bring any
action or proceeding, in the name and on behalf of Borrower, which Lender, in
its discretion, decides should be brought to protect their respective interests
in the Property. Lender shall, at its option, be subrogated to the lien of any
Mortgage or other security instrument discharged in whole or in part by the
Indebtedness, and any such subrogation rights shall constitute additional
security for the payment of the Indebtedness.

45. No Third Party Beneficiaries. The provisions of this Mortgage and the other
Loan Documents are for the benefit of Borrower and Lender and shall not inure to
the benefit of any third party (other than any successor or assignee of Lender).
This Mortgage and the other Loan Documents shall not be construed as creating
any rights, claims or causes of action against Lender or any of its officers,
directors, agents or employees in favor of any party other than Borrower
including but not limited to any claims to any sums held in the Replacement
Reserve or the TI and Leasing Reserve.

46. Exhibits and Riders. The following Exhibits and Riders (which may contain
additional representations, warranties, and covenants) are attached to this
Mortgage and hereby made a part of this Mortgage: Exhibit A (legal description
for Land) Exhibit B (definition of Personal Property), and Exhibit C (pending
and threatened litigation).

47. Customer Identification – USA Patriot Act Notice; OFAC. Lender hereby
notifies Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56, signed into law October 26, 2001), as amended (the
“Act”), and Lender’s policies and practices, Lender is required to obtain,
verify and record certain information and documentation that identifies
Borrower, which information includes the name and address of Borrower and such
other information that will allow Lender to identify Borrower in accordance with
the Act. Borrower represents and covenants that it is not and will not become a
person (individually, a “Prohibited Person” and collectively “Prohibited
Persons”) listed on the Specially Designated Nationals and Blocked Persons List
maintained by the Office of Foreign Asset Control, U.S. Department of the
Treasury (the “OFAC List”) or otherwise subject to any other prohibitions or
restriction imposed by laws, rules, regulations or executive orders, including
Executive Order No. 13224, administered by OFAC (collectively the “OFAC Rules”).
Borrower represents and covenants that it also (a) is not and will not become
owned or controlled by a Prohibited Person, (b) is not acting and will not act
for or on behalf of a Prohibited Person, (c) is not otherwise associated with
and will not become associated with a Prohibited Person, (d) is not providing
and will not provide any material, financial or technological support for or
financial or other service to or in support of acts of terrorism or a Prohibited
Person. Borrower will not transfer any interest in Borrower to or enter into a
Lease with a Prohibited Person. Borrower shall immediately notify Lender if
Borrower has knowledge that any Guarantor or any member or beneficial owner of
Borrower or any Guarantor is or becomes a Prohibited Person or (i) is indicted
on or (ii) arraigned and held over on charges involving money laundering or
predicate crimes to money laundering. Borrower will not enter into any Lease or
any other transaction or undertake any activities related to the Loan in
violation of the federal Bank Secrecy Act, as amended (“BSA”), 31 U.S.C. §5311,
et seq. or any federal or state laws, rules, regulations or executive orders,
including, but not limited to, 18 U.S.C. §§1956, 1957 and 1960, prohibiting
money laundering and terrorist financing (collectively “Anti-Money Laundering
Laws”). Borrower shall (A) not use or permit the use of any proceeds of the Loan
in any way that will violate either the OFAC Rules or Anti-Money Laundering
Laws, (B) comply and cause all of its subsidiaries to comply with applicable
OFAC Rules and Anti-Money Laundering Laws, (C) provide information as Lender may
require from time to time to permit Lender to satisfy its obligations under the
OFAC Rules and/or the Anti-Money Laundering Laws and (D) not engage in or
conspire to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the foregoing. Borrower
shall immediately notify Lender if any Tenant becomes a Prohibited Person or
(1) is convicted of, (2) pleads nolo contendere to, (3) is indicted on, or
(4) is arraigned and held over on charges involving money laundering or
predicate crimes to money laundering.

48. Counterparts. This Mortgage may be executed in any number of counterparts
each of which shall be deemed to be an original but all of which when taken
together shall constitute one agreement.

49. Disclaimers. The relationship of Borrower and Lender under this Mortgage and
the other Loan Documents is, and shall at all times remain, solely that of
borrower and lender; and Lender neither undertakes nor assumes any
responsibility or duty to Borrower or to any third party with respect to the
Property. Notwithstanding any other provisions of this Mortgage and the other
Loan Documents: (i) Lender is not, and shall not be construed to be, a partner,
joint venturer, member, alter ego, manager, controlling person or other business
associate or participant of any kind of Borrower and Lender, and Lender does not
intend to ever assume such status; (ii) Lender does not intend to ever assume
any responsibility to any person for the quality, suitability, safety or
condition of the Property; and (iii) Lender shall not be deemed responsible for
or a participant in any acts, omissions or decisions of Borrower.

Lender shall not be directly or indirectly liable or responsible for any loss,
claim, cause of action, liability, indebtedness, damage or injury of any kind or
character to any person or property arising from any construction on, or
occupancy or use of, the Property, whether caused by or arising from: (i) any
defect in any building, structure, grading, fill, landscaping, or other
improvements thereon or in any on-site or off-site improvement or other facility
therein or thereon; (ii) any act or omission of Borrower or any of Borrower’s
agents, employees, independent contractors, licensees or invitees; (iii) any
accident in or on the Property or any fire, flood, or other casualty or hazard
thereon; (iv) the failure of Borrower or any of Borrower’s licensees, employees,
invitees, agents, independent contractors, or other representatives to maintain
the Property in a safe condition; or (v) any nuisance made or suffered on any
part of the Property.

STATE SPECIFIC PROVISIONS

1. Maximum Principal Amount.

Borrower represents and covenants that:

  (a)   The maximum principal amount of the obligations secured by this Mortgage
at any one time, excluding advances made by the Lender in protection of the
Property or the lien of this Mortgage shall be Six Million and No/100 Dollars
($6,000,000.00) excluding accrued interest, fees, expenses and sums advanced in
accordance herewith to protect the security of this Mortgage for which no
Mortgage Registry Tax has been paid; and

  (b)   The representations contained in this section are made solely for the
benefit of county recording authorities in determining the Mortgage Registry Tax
payable as a prerequisite to the recording of this Mortgage. The Borrower
acknowledges that such representations do not constitute or imply an agreement
by the Lender to make any future advances to Borrower.

2. Non-Agricultural Use. No part of the Property is, or shall be during the term
of this Mortgage, agricultural property, used for agricultural production or
used for any agricultural use.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK;
SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, Borrower has executed this Mortgage or has caused the same
to be executed by its representatives thereunto duly authorized.

 
 
BORROWER:

      NNN Gallery Medical, LLC, a Delaware limited liability company

 
   
By:
  NNN Gallery Medical Member, LLC, a Delaware limited
liability company, its sole member
 
   
By:
  Triple Net Properties, LLC, a Virginia limited liability
company, its sole member
 
   
 
  By: /s/ Jeff Hanson
 
   
 
  Name: Jeff Hanson
 
   
 
  Its: Managing Director of Real Estate
 
   

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STATE OF CALIFORNIA

COUNTY OF ORANGE

Before me, J. Hu, a Notary Public of the state and county mentioned, personally
appeared Jeff Hanson, with whom I am personally acquainted (or proved to me on
the basis of satisfactory evidence), and who, upon oath, acknowledged
himself/herself to be the Managing Director of Real Estate of Triple Net
Properties, LLC, a Virginia limited liability company, the sole member of NNN
Gallery Medical Member, LLC, a Delaware limited liability company, the sole
member of NNN Galler Medical, LLC, a Delaware limited liability company, the
within named bargainor, and that he/she as such Managing Director of Real
Estate, executed the foregoing instrument for the purposes therein contained, by
personally signing the name of the Triple Net Properties, LLC, the sole member
of NNN Gallery Medical Member, LLC, a Delaware limited liability company, the
sole member of NNN Gallery Medical, LLC, by himself/herself as Managing Director
of Real Estate.

WITNESS my hand and seal, at office in (county) Orange, California (state), this
2nd day of February, 2007.

/s/ J. Hu

Notary Public

My Commission Expires: September 30, 2009.

[AFFIX NOTARY SEAL]

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