Exhibit 10.7

GUARANTY

THIS GUARANTY (“Guaranty”) is executed as of August 27, 2010, by THE GC NET
LEASE REIT OPERATING PARTNERSHIP, a Delaware limited partnership (“Guarantor”),
for the benefit of BANK OF AMERICA, N.A. (SUCCESSOR BY MERGER TO LASALLE BANK
NATIONAL ASSOCIATION), AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN
CHASE COMMERCIAL MORTGAGE SECURITIES CORP., COMMERCIAL MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2003-CIBC7 (“Lender”).

A. EMPORIA PARTNERS, LLC, a Delaware limited liability company (“Borrower”), is
indebted to Lender with respect to a loan (“Loan”) pursuant to that certain
Fixed Rate Note dated August 8, 2003, payable to the order of JP Morgan Chase
Bank, a New York banking corporation (the “Original Lender”) in the original
principal amount of $6,930,000.00 (together with all renewals, modifications,
increases and extensions thereof, the “Note”), which is secured by the liens and
security interests created by that certain Mortgage and Security Agreement,
dated August 8, 2003 (the “Security Instrument”), and further evidenced, secured
or governed by the other Loan Documents (as defined in the Note); and

B. Borrower has requested that Lender consent to certain equity transfers, and
in connection therewith, make certain modifications to the Security Instrument
(the “Modifications”), as more particularly described in the Consent to Transfer
Agreement by and between Borrower, Lender, Guarantor and Kevin Shields dated the
date hereof (the “Consent Agreement”).

C. Lender is not willing to agree to the Modifications unless Guarantor
unconditionally guarantees payment and performance to Lender of the Guaranteed
Obligations (as hereinafter defined); and

D. Guarantor is the owner of a direct or indirect interest in Borrower, and
Guarantor will directly benefit from Lender’s agreement to the Modifications to
Borrower.

NOW, THEREFORE, as an inducement to Lender to agree to the Modifications, and
for other good and valuable consideration, the receipt and legal sufficiency of
which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE 1

NATURE AND SCOPE OF GUARANTY

Section 1.1 GUARANTY OF OBLIGATIONS. Guarantor hereby absolutely, irrevocably
and unconditionally guarantees to Lender (and its successors and assigns),
jointly and severally, the payment and performance of the Guaranteed Obligations
as and when the same shall be due and payable, whether by lapse of time, by
acceleration of maturity or otherwise. Guarantor hereby absolutely, irrevocably
and unconditionally covenants and agrees that it is liable, jointly and
severally, for the Guaranteed Obligations as a primary obligor, and that each
Guarantor shall fully perform, jointly and severally, each and every term and
provision hereof.

Section 1.2 DEFINITION OF GUARANTEED OBLIGATIONS. As used herein, the term
“Guaranteed Obligations” shall (i) mean each of the obligations of Borrower
under the Environmental Indemnity (as defined the Security Instrument),
including without limitation the indemnification provisions contained therein,
and (ii) be deemed to include, and Guarantor shall also be liable for, and shall
indemnify, defend and hold Lender harmless from and against, any and all Losses
(as hereinafter defined) incurred or suffered by Lender and arising out of or in
connection with the matters listed below:

(a) the misapplication or misappropriation of Rents (as defined in the Security
Instrument);

(b) the misapplication or misappropriation of insurance proceeds or condemnation
awards;

(c) Borrower’s failure to return or to reimburse Lender for all Personal
Property (as defined in the Security Instrument) taken from the Property (as
defined in the Security Instrument) by or on behalf of Borrower and not replaced
with Personal Property of the same utility and of the same or greater value,
excluding from the foregoing any personal property of the tenant of the
Property;

(d) any act of actual waste or arson by Borrower, any principal, affiliate,
general partner or member thereof or any Guarantor;

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(e) any fees or commissions paid by Borrower to any principal, affiliate,
general partner or member of Borrower or any Guarantor in violation of the terms
of this Guaranty, the Security Instrument or the other Loan Documents; or

(f) Borrower’s failure to comply with the provisions of Section 11.2 of the
Security Instrument.

In addition, in the event (i) of any fraud, willful misconduct or material
misrepresentation by Borrower, its general partners, if any, its members, if
any, its principals, its affiliates, its agents or its employees or by any
Guarantor in connection with the Loan, or (ii) the Property or any part thereof
becomes an asset in a voluntary bankruptcy or insolvency proceeding, then the
Guaranteed Obligations shall also include the unpaid balance of the Debt (as
defined in the Security Instrument). In the event of a breach or default under
Sections 4.3 or 8.2 of the Security Instrument, then the Guaranteed Obligations
shall also include the losses attributable to such breach or default.

For purposes of this Guaranty, the term “Losses” includes any and all claims,
suits, liabilities (including, without limitation, strict liabilities), actions,
proceedings, obligations, debts, damages, losses, costs, expenses, diminutions
in value, fines, penalties, charges, fees, expenses, judgments, awards, amounts
paid in settlement, punitive damages, foreseeable and unforeseeable
consequential damages, of whatever kind or nature (including but not limited to
attorneys’ fees and other costs of defense).

Section 1.3 NATURE OF GUARANTY. This Guaranty is an irrevocable, absolute,
continuing guaranty of payment and performance, is joint and several and is not
a guaranty of collection. This Guaranty shall continue to be effective with
respect to any Guaranteed Obligations arising or created after any attempted
revocation by Guarantor and after (if Guarantor is a natural person) Guarantor’s
death (in which event this Guaranty shall be binding upon Guarantor’s estate and
Guarantor’s legal representatives and heirs). The fact that at any time or from
time to time the Guaranteed Obligations may be increased or reduced shall not
release or discharge the obligation of Guarantor to Lender with respect to
Guaranteed Obligations. This Guaranty may be enforced by Lender and any
subsequent holder of the Note and shall not be discharged by the assignment or
negotiation of all or part of the Note.

Section 1.4 GUARANTEED OBLIGATIONS NOT REDUCED BY OFFSET. The Note, the
Guaranteed Obligations, and the liabilities and obligations of Guarantor to
Lender hereunder shall not be reduced, discharged or released because or by
reason of any existing or future offset, claim or defense of Borrower, or any
other party, against Lender or against payment of the Guaranteed Obligations,
whether such offset, claim or defense arises in connection with the Guaranteed
Obligations (or the transactions creating the Guaranteed Obligations) or
otherwise.

Section 1.5 PAYMENT BY GUARANTOR. If all or any part of the Guaranteed
Obligations shall not be punctually paid when due, whether at maturity or
earlier by acceleration or otherwise, Guarantor shall, immediately upon demand
by Lender, and without presentment, protest, notice of protest, notice of
non-payment, notice of intention to accelerate the maturity, notice of
acceleration of the maturity, or any other notice whatsoever, pay in lawful
money of the United States of America, the amount due on the Guaranteed
Obligations to Lender at Lender’s address as set forth herein. Such demand(s)
may be made at any time coincident with or after the time for payment of all or
part of the Guaranteed Obligations, and may be made from time to time with
respect to the same or different items of Guaranteed Obligations. Such demand
shall be deemed made, given and received in accordance with the notice
provisions hereof.

Section 1.6 NO DUTY TO PURSUE OTHERS. It shall not be necessary for Lender (and
Guarantor hereby waives any rights which Guarantor may have to require Lender),
in order to enforce this Guaranty against Guarantor, first to (i) institute suit
or exhaust its remedies against Borrower or others liable on the Loan or the
Guaranteed Obligations or any other person, (ii) enforce Lender’s rights against
any collateral which shall ever have been given to secure the Loan,
(iii) enforce Lender’s rights against any other guarantors of the Guaranteed
Obligations, (iv) join Borrower or any others liable on the Guaranteed
Obligations in any action seeking to enforce this Guaranty, (v) exhaust any
remedies available to Lender against any collateral which shall ever have been
given to secure the Loan, or (vi) resort to any other means of obtaining payment
of the Guaranteed Obligations. Lender shall not be required to mitigate damages
or take any other action to reduce, collect or enforce the Guaranteed
Obligations.

Section 1.7 WAIVERS. Guarantor agrees to the provisions of the Loan Documents,
and hereby waives notice of (i) any loans or advances made by Lender to
Borrower, (ii) acceptance of this Guaranty, (iii) any amendment or extension of
the Note or of any other Loan Documents, (iv) the execution and delivery by
Borrower

 

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and Lender of any other loan or credit agreement or of Borrower’s execution and
delivery of any promissory notes or other documents arising under the Loan
Documents or in connection with the Property, (v) the occurrence of any breach
by Borrower or Event of Default (as defined in the Security Instrument),
(vi) Lender’s transfer or disposition of the Guaranteed Obligations, or any part
thereof, (vii) sale or foreclosure (or posting or advertising for sale or
foreclosure) of any collateral for the Guaranteed Obligations, (viii) protest,
proof of non-payment or default by Borrower, or (ix) any other action at any
time taken or omitted by Lender, and, generally, all demands and notices of
every kind in connection with this Guaranty, the Loan Documents, any documents
or agreements evidencing, securing or relating to any of the Guaranteed
Obligations and the obligations hereby guaranteed.

Section 1.8 PAYMENT OF EXPENSES. In the event that Guarantor should breach or
fail to timely perform any provisions of this Guaranty, Guarantor shall,
immediately upon demand by Lender, pay Lender all costs and expenses (including
court costs and reasonable attorneys’ fees) incurred by Lender in the
enforcement hereof or the preservation of Lender’s rights hereunder. The
covenant contained in this section shall survive the payment and performance of
the Guaranteed Obligations.

Section 1.9 EFFECT OF BANKRUPTCY. In the event that, pursuant to any insolvency,
bankruptcy, reorganization, receivership or other debtor relief law, or any
judgment, order or decision thereunder, Lender must rescind or restore any
payment, or any part thereof, received by Lender in satisfaction of the
Guaranteed Obligations, as set forth herein, any prior release or discharge from
the terms of this Guaranty given to Guarantor by Lender shall be without effect,
and this Guaranty shall remain in full force and effect. It is the intention of
Borrower and Guarantor that Guarantor’s obligations hereunder shall not be
discharged except by Guarantor’s performance of such obligations and then only
to the extent of such performance.

Section 1.10 DEFERMENT OF RIGHTS OF SUBROGATION, REIMBURSEMENT AND CONTRIBUTION.

(a) Notwithstanding any payment or payments made by any Guarantor hereunder, no
Guarantor will assert or exercise any right of Lender or of such Guarantor
against Borrower to recover the amount of any payment made by such Guarantor to
Lender by way of subrogation, reimbursement, contribution, indemnity, or
otherwise arising by contract or operation of law, and such Guarantor shall not
have any right of recourse to or any claim against assets or property of
Borrower, whether or not the obligations of Borrower have been satisfied, all of
such rights being herein expressly waived by such Guarantor. Each Guarantor
agrees not to seek contribution or indemnity or other recourse from any other
guarantor. If any amount shall nevertheless be paid to a Guarantor by Borrower
or another Guarantor prior to payment in full of the Obligations (hereinafter
defined), such amount shall be held in trust for the benefit of Lender and shall
forthwith be paid to Lender to be credited and applied to the Obligations,
whether matured or unmatured. The provisions of this paragraph shall survive the
termination of this Guaranty, and any satisfaction and discharge of Borrower by
virtue of any payment, court order or any applicable law.

(b) Notwithstanding the provisions of Section 1.10(a), each Guarantor shall have
and be entitled to (1) all rights of subrogation otherwise provided by
applicable law in respect of any payment it may make or be obligated to make
under this Guaranty and (2) all claims it would have against any other Guarantor
in the absence of Section 1.10(a) and to assert and enforce same, in each case
on and after, but at no time prior to, the date (the “Subrogation Trigger Date”)
which is 91 days after the date on which all sums owed to Lender under the Loan
Documents (the “Obligations”) have been paid in full, if and only if (x) no
Event of Default of the type described in Section 9.1(d) or Section 9.1(e) of
the Security Instrument with respect to Borrower or any other Guarantor has
existed at any time on and after the date of this Guaranty to and including the
Subrogation Trigger Date and (y) the existence of each Guarantor’s rights under
this Section 1.10(b) would not make such Guarantor a creditor (as defined in the
Bankruptcy Code, as such term is hereinafter defined) of Borrower or any other
Guarantor in any insolvency, bankruptcy, reorganization or similar proceeding
commenced on or prior to the Subrogation Trigger Date.

Section 1.11 BANKRUPTCY CODE WAIVER. It is the intention of the parties that the
Guarantor shall not be deemed to be a “creditor” or “creditors” (as defined in
Section 101 of the United States Bankruptcy Code [the “Bankruptcy Code”]) of
Borrower, or any other guarantor, by reason of the existence of this Guaranty,
in the event that Borrower or any other guarantor, becomes a debtor in any
proceeding under the Bankruptcy Code, and in connection herewith, Guarantor
hereby waives any such right as a “creditor” under the Bankruptcy Code. This
waiver is given to induce Lender to make the Loan evidenced by the Note to
Borrower. After the Loan is paid in full

 

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and there shall be no obligations or liabilities under this Guaranty
outstanding, this waiver shall be deemed to be terminated.

Section 1.12 “BORROWER”. The term “Borrower” as used herein shall include any
new or successor corporation, association, partnership (general or limited),
joint venture, trust or other individual or organization formed as a result of
any merger, reorganization, sale, transfer, devise, gift or bequest of Borrower
or any interest in Borrower.

ARTICLE 2

EVENTS AND CIRCUMSTANCES NOT REDUCING

OR DISCHARGING GUARANTOR’S OBLIGATIONS

Guarantor hereby consents and agrees to each of the following, and agrees that
Guarantor’s obligations under this Guaranty shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any
common law, equitable, statutory or other rights (including without limitation
rights to notice) which Guarantor might otherwise have as a result of or in
connection with any of the following:

Section 2.1 MODIFICATIONS. Any renewal, extension, increase, modification,
alteration or rearrangement of all or any part of the Guaranteed Obligations,
Note, Loan Documents, or other document, instrument, contract or understanding
between Borrower and Lender, or any other parties, pertaining to the Guaranteed
Obligations or any failure of Lender to notify Guarantor of any such action.

Section 2.2 ADJUSTMENT. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by Lender to Borrower or any Guarantor.

Section 2.3 CONDITION OF BORROWER OR GUARANTOR. The insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation, disability, dissolution or
lack of power of Borrower, Guarantor or any other party at any time liable for
the payment of all or part of the Guaranteed Obligations; or any dissolution of
Borrower or Guarantor, or any sale, lease or transfer of any or all of the
assets of Borrower or Guarantor, or any changes in the shareholders, partners or
members of Borrower or Guarantor; or any reorganization of Borrower or
Guarantor.

Section 2.4 INVALIDITY OF GUARANTEED OBLIGATIONS. The invalidity, illegality or
unenforceability of all or any part of the Guaranteed Obligations, or any
document or agreement executed in connection with the Guaranteed Obligations,
for any reason whatsoever, including without limitation the fact that (i) the
Guaranteed Obligations, or any part thereof, exceed the amount permitted by law,
(ii) the act of creating the Guaranteed Obligations or any part thereof, is
ultra vires, (iii) the officers or representatives executing the Note or the
other Loan Documents or otherwise creating the Guaranteed Obligations acted in
excess of their authority, (iv) the Guaranteed Obligations violate applicable
usury laws, (v) Borrower has valid defenses, claims or offsets (whether at law,
in equity or by agreement) which render the Guaranteed Obligations wholly or
partially uncollectible from Borrower, (vi) the creation, performance or
repayment of the Guaranteed Obligations (or the execution, delivery and
performance of any document or instrument representing part of the Guaranteed
Obligations or executed in connection with the Guaranteed Obligations, or given
to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible
or unenforceable, or (vii) the Note or any of the other Loan Documents have been
forged or otherwise are irregular or not genuine or authentic, it being agreed
that Guarantor shall remain liable hereon regardless of whether Borrower or any
other person be found not liable on the Guaranteed Obligations or any part
thereof for any reason.

Section 2.5 RELEASE OF OBLIGORS. Any full or partial release of the liability of
Borrower on the Guaranteed Obligations, or any part thereof, or of any
co-guarantors, or any other person or entity now or hereafter liable, whether
directly or indirectly, jointly, severally, or jointly and severally, to pay,
perform, guarantee or assure the payment of the Guaranteed Obligations, or any
part thereof, it being recognized, acknowledged and agreed by Guarantor that
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other party, and Guarantor has not been induced to
enter into this Guaranty on the basis of a contemplation, belief, understanding
or agreement that other parties will be liable to pay or perform the Guaranteed
Obligations, or that Lender will look to other parties to pay or perform the
Guaranteed Obligations.

Section 2.6 OTHER COLLATERAL. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Guaranteed Obligations.

 

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Section 2.7 RELEASE OF COLLATERAL. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guaranteed Obligations.

Section 2.8 CARE AND DILIGENCE. The failure of Lender or any other party to
exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
collateral, property or security, including but not limited to any neglect,
delay, omission, failure or refusal of Lender (i) to take or prosecute any
action for the collection of any of the Guaranteed Obligations, or (ii) to
foreclose, or initiate any action to foreclose, or, once commenced, prosecute to
completion any action to foreclose upon any security therefor, or (iii) to take
or prosecute any action in connection with any instrument or agreement
evidencing or securing all or any part of the Guaranteed Obligations.

Section 2.9 UNENFORCEABILITY. The fact that any collateral, security, security
interest or lien contemplated or intended to be given, created or granted as
security for the repayment of the Guaranteed Obligations, or any part thereof,
shall not be properly perfected or created, or shall prove to be unenforceable
or subordinate to any other security interest or lien, it being recognized and
agreed by Guarantor that Guarantor is not entering into this Guaranty in
reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectability or value of any of the collateral for the
Guaranteed Obligations.

Section 2.10 MERGER. The reorganization, merger or consolidation of Borrower
into or with any other corporation or entity.

Section 2.11 PREFERENCE. Any payment by Borrower to Lender is held to constitute
a preference under bankruptcy laws, or for any reason Lender is required to
refund such payment or pay such amount to Borrower or someone else.

Section 2.12 OTHER ACTIONS TAKEN OR OMITTED. Any other action taken or omitted
to be taken with respect to the Loan Documents, the Guaranteed Obligations, or
the security and collateral therefor, whether or not such action or omission
prejudices Guarantor or increases the likelihood that Guarantor will be required
to pay the Guaranteed Obligations pursuant to the terms hereof, it is the
unambiguous and unequivocal intention of Guarantor that Guarantor shall be
obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether or not
contemplated, and whether or not otherwise or particularly described herein,
which obligation shall be deemed satisfied only upon the full and final payment
and satisfaction of the Guaranteed Obligations.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

To induce Lender to enter into the Loan Documents and extend credit to Borrower,
Guarantor represents and warrants to Lender as follows:

Section 3.1 BENEFIT. Guarantor is an affiliate of Borrower, is the owner of a
direct or indirect interest in Borrower, and has received, or will receive,
direct or indirect benefit from the making of this Guaranty with respect to the
Guaranteed Obligations.

Section 3.2 FAMILIARITY AND RELIANCE. Guarantor is familiar with, and has
independently reviewed books and records regarding, the financial condition of
Borrower and is familiar with the value of any and all collateral intended to be
created as security for the payment of the Note or Guaranteed Obligations;
provided, however, Guarantor is not relying on such financial condition or the
collateral as an inducement to enter into this Guaranty.

Section 3.3 NO REPRESENTATION BY LENDER. Neither Lender nor any other party has
made any representation, warranty or statement to Guarantor in order to induce
Guarantor to execute this Guaranty.

Section 3.4 GUARANTOR’S FINANCIAL CONDITION. As of the date hereof, and after
giving effect to this Guaranty and the contingent obligation evidenced hereby,
Guarantor is, and will be, solvent, and has and will have assets which, fairly
valued, exceed its obligations, liabilities (including contingent liabilities)
and debts, and has and will have property and assets sufficient to satisfy and
repay its obligations and liabilities.

 

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Section 3.5 LEGALITY. The execution, delivery and performance by Guarantor of
this Guaranty and the consummation of the transactions contemplated hereunder do
not, and will not, contravene or conflict with any law, statute or regulation
whatsoever to which Guarantor is subject or constitute a default (or an event
which with notice or lapse of time or both would constitute a default) under, or
result in the breach of, any indenture, mortgage, deed of trust, charge, lien,
or any contract, agreement or other instrument to which Guarantor is a party or
which may be applicable to Guarantor. This Guaranty is a legal and binding
obligation of Guarantor and is enforceable in accordance with its terms, except
as limited by bankruptcy, insolvency or other laws of general application
relating to the enforcement of creditors’ rights.

Section 3.6 SURVIVAL. All representations and warranties made by Guarantor
herein shall survive the execution hereof.

Section 3.7 REVIEW OF DOCUMENTS. Guarantor has examined the Note and all of the
Loan Documents.

Section 3.8 LITIGATION. Except as otherwise disclosed to Lender, there are no
proceedings pending or, so far as Guarantor knows, threatened before any court
or administrative agency which, if decided adversely to Guarantor, would
materially adversely affect the financial condition of Guarantor or the
authority of Guarantor to enter into, or the validity or enforceability of this
Guaranty.

Section 3.9 TAX RETURNS. Guarantor has filed all required federal, state and
local tax returns and has paid all taxes as shown on such returns as they have
become due. No claims have been assessed and are unpaid with respect to such
taxes.

ARTICLE 4

SUBORDINATION OF CERTAIN INDEBTEDNESS

Section 4.1 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the term
“Guarantor Claims” shall mean all debts and liabilities of Borrower to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligations of Borrower thereon are direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the person or persons
in whose favor such debts or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by Guarantor. The Guarantor Claims shall include, without
limitation, all rights and claims of Guarantor against Borrower (arising as a
result of subrogation or otherwise) as a result of Guarantor’s payment of all or
a portion of the Guaranteed Obligations to the extent the provisions of
Section 1.10 hereof are unenforceable. Any indebtedness of Borrower to Guarantor
now or hereafter existing (including, but not limited to, any rights to
subrogation Guarantor may have as a result of any payment by Guarantor under
this Guaranty), together with any interest thereon, shall be, and such
indebtedness is, hereby deferred, postponed and subordinated to the prior
payment in full of the Debt. Until payment in full of the Debt (and including
interest accruing on the Note after the commencement of a proceeding by or
against Borrower under the Bankruptcy Reform Act of 1978, as amended, 11 U.S.C.
Sections 101 et seq., and the regulations adopted and promulgated pursuant
thereto (collectively, the “Bankruptcy Code”) which interest the parties agree
shall remain a claim that is prior and superior to any claim of Guarantor
notwithstanding any contrary practice, custom or ruling in cases under the
Bankruptcy Code generally), Guarantor agrees not to accept any payment or
satisfaction of any kind of indebtedness of Borrower to Guarantor and hereby
assigns such indebtedness to Lender, including the right to file proof of claim
and to vote thereon in connection with any such proceeding under the Bankruptcy
Code, including the right to vote on any plan of reorganization.

Section 4.2 CLAIMS IN BANKRUPTCY. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
involving Guarantor as debtor, Lender shall have the right to prove its claim in
any such proceeding so as to establish its rights hereunder and receive directly
from the receiver, trustee or other court custodian dividends and payments which
would otherwise be payable upon Guarantor Claims. Guarantor hereby assigns such
dividends and payments to Lender. Should Lender receive, for application upon
the Guaranteed Obligations, any such dividend or payment which is otherwise
payable to Guarantor, and which, as between Borrower and Guarantor, shall
constitute a credit upon the Guarantor Claims, then upon payment to Lender in
full of the Guaranteed Obligations, Guarantor shall become subrogated to the
rights of Lender to the extent that such payments to Lender on the Guarantor
Claims have contributed toward the liquidation of the

 

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Guaranteed Obligations, and such subrogation shall be with respect to that
portion of the Guaranteed Obligations which would have been unpaid if Lender had
not received dividends or payments upon the Guarantor Claims.

Section 4.3 PAYMENTS HELD IN TRUST. In the event that, notwithstanding anything
to the contrary in this Guaranty, Guarantor should receive any funds, payment,
claim or distribution which is prohibited by this Guaranty, Guarantor agrees to
hold in trust for Lender an amount equal to the amount of all funds, payments,
claims or distributions so received, and agrees that it shall have absolutely no
dominion over the amount of such funds, payments, claims or distributions so
received except to pay them promptly to Lender, and Guarantor covenants promptly
to pay the same to Lender.

Section 4.4 LIENS SUBORDINATE. Guarantor agrees that any liens, security
interests, judgment liens, charges or other encumbrances upon Borrower’s assets
securing payment of the Guarantor Claims shall be and remain inferior and
subordinate to any liens, security interests, judgment liens, charges or other
encumbrances upon Borrower’s assets securing payment of the Guaranteed
Obligations, regardless of whether such encumbrances in favor of Guarantor or
Lender presently exist or are hereafter created or attach. Without the prior
written consent of Lender, Guarantor shall not (i) exercise or enforce any
creditor’s right it may have against Borrower, or (ii) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceedings
(judicial or otherwise, including without limitation the commencement of, or
joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or
insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security
interest, collateral rights, judgments or other encumbrances on assets of
Borrower held by Guarantor.

ARTICLE 5

FINANCIAL REPORTS

(a) Guarantor shall keep adequate books and records of account in accordance
with methods acceptable to Lender, consistently applied and furnish to Lender:

(i) an annual balance sheet and income statement of Guarantor in the form
required by Lender, prepared and certified by Guarantor, within ninety (90) days
after the close of each fiscal year of Guarantor;

(ii) copies of all federal tax returns filed by Guarantor, within ninety
(90) days after the filing thereof; and

(iii) such other financial statements as may, from time to time, be required by
Lender.

(b) Lender and its accountants shall have the right to examine the records,
books, management and other papers of any Guarantor which reflect upon its
financial condition, at the Property or at any office regularly maintained by
any Guarantor where the books and records are located. Lender and its
accountants shall have the right to make copies and extracts from the foregoing
records and other papers. In addition, Lender and its accountants shall have the
right to examine and audit the books and records of any Guarantor pertaining to
the income, expenses and operation of the Property during reasonable business
hours at any office of Guarantor where the books and records are located.

ARTICLE 6

MISCELLANEOUS

Section 6.1 WAIVER. No failure to exercise, and no delay in exercising, on the
part of Lender, any right hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right. The rights of Lender hereunder shall
be in addition to all other rights provided by law. No modification or waiver of
any provision of this Guaranty, nor consent to departure therefrom, shall be
effective unless in writing and no such consent or waiver shall extend beyond
the particular case and purpose involved. No notice or demand given in any case
shall constitute a waiver of the right to take other action in the same, similar
or other instances without such notice or demand.

Section 6.2 NOTICES. All notices or other written communications hereunder shall
be deemed to have been properly given (i) upon delivery, if delivered in person,
(ii) one (1) Business Day (hereinafter defined) after having been deposited for
overnight delivery with any reputable overnight courier service, or (iii) three
(3) Business Days after having been deposited in any post office or mail
depository regularly maintained by the U.S. Postal Service and sent by
registered or certified mail, postage prepaid, addressed as follows:

 

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Guarantor:    The GC Net Lease REIT Operating Partnership    c/o Griffin Capital
Corporation    101 North Wacker Drive    Chicago, Illinois 60606 Lender:    Bank
of America, N.A., as Trustee for the Registered Holders    Of J.P. Morgan Chase
Commercial Mortgage Pass-Through    Certificates Series 2003-CIBC7    c/o
Midland Loan Services, Inc.    10851 Mastin, Suite 300    Overland Park, Kansas
66210

or addressed as such party may from time to time designate by written notice to
the other parties. For purposes of this Section 6.2, the term “Business Day”
shall mean a day on which commercial banks are not authorized or required by law
to close in New York, New York.

Any party by notice to the other parties may designate additional or different
addresses for subsequent notices or communications.

Section 6.3 GOVERNING LAW; JURISDICTION. This Guaranty shall be governed by and
construed in accordance with the laws of the State in which the real property
encumbered by the Security Instrument is located and the applicable laws of the
United States of America. Guarantor hereby irrevocably submits to the
jurisdiction of any court of competent jurisdiction located in the state in
which the Property is located in connection with any proceeding out of or
relating to this Guaranty.

Section 6.4 INVALID PROVISIONS. If any provision of this Guaranty is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Guaranty, such provision shall be fully severable and this
Guaranty shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Guaranty, and the
remaining provisions of this Guaranty shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Guaranty, unless such continued effectiveness of this
Guaranty, as modified, would be contrary to the basic understandings and
intentions of the parties as expressed herein.

Section 6.5 AMENDMENTS. This Guaranty may be amended only by an instrument in
writing executed by the party or an authorized representative of the party
against whom such amendment is sought to be enforced.

Section 6.6 PARTIES BOUND; ASSIGNMENT. This Guaranty shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
assigns and legal representatives; provided, however, that Guarantor may not,
without the prior written consent of Lender, assign any of its rights, powers,
duties or obligations hereunder.

Section 6.7 HEADINGS. Section headings are for convenience of reference only and
shall in no way affect the interpretation of this Guaranty.

Section 6.8 RECITALS. The recital and introductory paragraphs hereof are a part
hereof, form in a basis for this Guaranty and shall be considered prima facie
evidence of the facts and documents referred to therein.

Section 6.9 COUNTERPARTS. To facilitate execution, this Guaranty may be executed
in as many counterparts as may be convenient or required. It shall not be
necessary that the signature or acknowledgment of, or on behalf of, each party,
or that the signature of all persons required to bind any party, or the
acknowledgment of such party, appear on each counterpart. All counterparts shall
collectively constitute a single instrument. It shall not be necessary in making
proof of this Guaranty to produce or account for more than a single counterpart
containing the respective signatures of, or on behalf of, and the respective
acknowledgments of, each of the parties hereto. Any signature or acknowledgment
page to any counterpart may be detached from such counterpart without impairing
the legal effect of the signatures or acknowledgments thereon and thereafter
attached to another counterpart identical thereto except having attached to it
additional signature or acknowledgment pages.

Section 6.10 RIGHTS AND REMEDIES. If Guarantor becomes liable for any
indebtedness owing by Borrower to Lender, by endorsement or otherwise, other
than under this Guaranty, such liability shall not be in any

 

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manner impaired or affected hereby and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may ever have against
Guarantor. The exercise by Lender of any right or remedy hereunder or under any
other instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.

Section 6.11 ENTIRETY. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF
GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR’S GUARANTY OF THE GUARANTEED
OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTOR AND LENDER AS A
FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF
DEALING BETWEEN GUARANTOR AND LENDER, NO COURSE OF PERFORMANCE, NO TRADE
PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY
AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER.

Section 6.12 WAIVER OF RIGHT TO TRIAL BY JURY. GUARANTOR HEREBY AGREES NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE MORTGAGE, OR THE OTHER LOAN
DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY GUARANTOR, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE
ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.

EXECUTED as of the day and year first above written.

 

GUARANTOR: THE GC NET LEASE REIT OPERATING PARTNERSHIP, a Delaware limited
partnership By:   The GC Net Lease REIT, Inc., a Maryland corporation, its
general partner   By:  

/s/ Kevin A. Shields

    Kevin A. Shields, President

 

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