Exhibit 10.65
LOAN AGREEMENT
Dated as of December 15, 2010
By and among
THE ENTITIES SET FORTH ON SCHEDULE I
ATTACHED HERETO,
collectively, as Borrower
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Lender

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TABLE OF CONTENTS

              Page  
ARTICLE 1 — DEFINITIONS; PRINCIPLES OF CONSTRUCTION
    1  
 
       
Section 1.1 Definitions
    1  
Section 1.2 Principles of Construction
    29  
 
       
ARTICLE 2 — GENERAL TERMS
    29  
 
       
Section 2.1 Loan Commitment; Disbursement to Borrower
    29  
2.1.1 Agreement to Lend and Borrow
    29  
2.1.2 Single Disbursement to Borrower
    29  
2.1.3 The Note, Mortgage and Loan Documents
    29  
2.1.4 Use of Proceeds
    29  
Section 2.2 Interest Rate
    29  
2.2.1 Interest Rate
    29  
2.2.2 Interest Calculation
    29  
2.2.3 Default Rate
    30  
2.2.4 Usury Savings
    30  
Section 2.3 Loan Payment
    32  
2.3.1 Monthly Debt Service Payments
    32  
2.3.2 Payments Generally
    32  
2.3.3 Payment on Maturity Date
    32  
2.3.4 Late Payment Charge
    32  
2.3.5 Method and Place of Payment
    33  
Section 2.4 Prepayments
    33  
2.4.1 Voluntary Prepayments
    33  
2.4.2 Mandatory Prepayments
    33  
2.4.3 Prepayments After Default
    34  
Section 2.5 Intentionally omitted
    34  
Section 2.6 Release of Property
    34  
2.6.1 Release of Property
    34  
2.6.2 Release of Individual Property
    34  
Section 2.7 Lockbox Account/Cash Management
    36  

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              Page  
2.7.1 Lockbox Account
    36  
2.7.2 Cash Management Account
    37  
2.7.3 Payments Received under the Cash Management Agreement
    38  
 
       
ARTICLE 3 — CONDITIONS PRECEDENT
    38  
 
       
Section 3.1 Conditions Precedent to Closing
    38  
 
       
ARTICLE 4 — REPRESENTATIONS AND WARRANTIES
    38  
 
       
Section 4.1 Borrower Representations
    38  
4.1.1 Organization
    38  
4.1.2 Proceedings
    38  
4.1.3 No Conflicts
    39  
4.1.4 Litigation
    39  
4.1.5 Agreements
    39  
4.1.6 Title
    40  
4.1.7 Solvency
    40  
4.1.8 Full and Accurate Disclosure
    40  
4.1.9 No Plan Assets
    41  
4.1.10 Compliance
    41  
4.1.11 Financial Information
    41  
4.1.12 Condemnation
    41  
4.1.13 Federal Reserve Regulations
    41  
4.1.14 Utilities and Public Access
    42  
4.1.15 Not a Foreign Person
    42  
4.1.16 Separate Lots
    42  
4.1.17 Assessments
    42  
4.1.18 Enforceability
    42  
4.1.19 No Prior Assignment
    42  
4.1.20 Insurance
    42  
4.1.21 Use of Property
    43  
4.1.22 Certificate of Occupancy; Licenses
    43  
4.1.23 Flood Zone
    43  
4.1.24 Physical Condition
    43  
4.1.25 Boundaries
    43  

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              Page  
4.1.26 Leases
    43  
4.1.27 Survey
    44  
4.1.28 Inventory
    44  
4.1.29 Filing and Recording Taxes
    44  
4.1.30 Special Purpose Entity/Separateness
    44  
4.1.31 Management Agreement
    45  
4.1.32 Illegal Activity
    45  
4.1.33 No Change in Facts or Circumstances; Disclosure
    45  
4.1.34 Investment Company Act
    45  
4.1.35 Embargoed Person
    46  
4.1.36 Principal Place of Business; State of Organization
    46  
4.1.37 Environmental Representations and Warranties
    46  
4.1.38 Cash Management Account
    47  
4.1.39 True Lease. Borrower hereby represents and warrants to Lender that each
Lease reflects the intent of Borrower and Tenant that it is a true lease and not
a financing arrangement
    47  
Section 4.2 Survival of Representations
    47  
 
       
ARTICLE 5 — BORROWER COVENANTS
    48  
 
       
Section 5.1 Affirmative Covenants
    48  
5.1.1 Existence; Compliance with Legal Requirements
    48  
5.1.2 Taxes and Other Charges
    49  
5.1.3 Litigation
    50  
5.1.4 Access to Property
    50  
5.1.5 Notice of Default
    50  
5.1.6 Cooperate in Legal Proceedings
    50  
5.1.7 Perform Loan Documents
    50  
5.1.8 Award and Insurance Benefits
    50  
5.1.9 Further Assurances
    50  
5.1.10 Principal Place of Business, State of Organization
    51  
5.1.11 Financial Reporting
    51  
5.1.12 Business and Operations
    53  
5.1.13 Title to the Property
    53  
5.1.14 Costs of Enforcement
    53  

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              Page  
5.1.15 Estoppel Statement
    54  
5.1.16 Loan Proceeds
    54  
5.1.17 Performance by Borrower
    54  
5.1.18 Confirmation of Representations
    54  
5.1.19 Environmental Covenants
    54  
5.1.20 Leasing Matters
    56  
5.1.21 Alterations
    57  
5.1.22 Operation of Property
    58  
5.1.23 Embargoed Person
    58  
5.1.24 Supplemental Mortgage Affidavits
    59  
5.1.25 True Lease. Each Borrower shall reflect its applicable Lease in all
applicable books, records and reports (including, without limitation, income tax
filings) in a manner consistent with “true lease” treatment rather than
“financing” treatment
    59  
5.1.26 Denver Shortfall Payment. Each other Individual Borrower and Guarantor
agree to pay any shortfall between (i) the Denver Purchase Option Price and
(ii) all amounts due under Section 2.6.2 hereof in connection with the exercise
of the Denver Purchase Option, including the Adjusted Release Amount for the
Denver Individual Property and any applicable Yield Maintenance Premium (if such
payment is made prior to the Permitted Par Prepayment Date) (the “Denver
Shortfall Payment”)
    59  
5.1.27 Tenant Reports
    59  
Section 5.2 Negative Covenants
    60  
5.2.1 Operation of Property
    60  
5.2.2 Liens
    61  
5.2.3 Dissolution
    61  
5.2.4 Change In Business
    61  
5.2.5 Debt Cancellation
    61  
5.2.6 Zoning
    61  
5.2.7 No Joint Assessment
    61  
5.2.8 Intentionally Omitted
    62  
5.2.9 ERISA
    62  
5.2.10 Transfers
    62  
 
       
ARTICLE 6 — INSURANCE; CASUALTY; CONDEMNATION;
    67  
 
       
Section 6.1 Insurance
    67  
Section 6.2 Casualty
    71  

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              Page  
Section 6.3 Condemnation
    72  
Section 6.4 Restoration
    72  
 
       
ARTICLE 7 — RESERVE FUNDS
    77  
 
       
Section 7.1 Required Repairs
    77  
7.1.1 Deposits
    77  
7.1.2 Release of Required Repair Funds
    78  
Section 7.2 Tax and Insurance Escrow Fund
    78  
Section 7.3 Intentionally Omitted
    79  
Section 7.4 Intentionally Omitted
    79  
Section 7.5 Excess Cash Flow Reserve Fund
    79  
7.5.1 Deposits to Excess Cash Flow Reserve Fund
    79  
7.5.2 Release of Excess Cash Flow Reserve Funds
    79  
Section 7.6 Reserve Funds, Generally
    80  
 
       
ARTICLE 8 — DEFAULTS
    81  
 
       
Section 8.1 Event of Default
    81  
Section 8.2 Remedies
    84  
Section 8.3 Remedies Cumulative; Waivers
    85  
 
       
ARTICLE 9 — SPECIAL PROVISIONS
    85  
 
       
Section 9.1 Securitization
    85  
9.1.1 Sale of Notes and Securitization
    85  
9.1.2 Securitization Costs
    86  
Section 9.2 Uncross of Properties
    87  
Section 9.3 Exculpation
    88  
Section 9.4 Matters Concerning Manager
    91  
Section 9.5 Servicer
    91  
Section 9.6 Aggregate Cap on Costs
    92  
 
       
ARTICLE 10 — MISCELLANEOUS
    92  
 
       
Section 10.1 Survival
    92  
Section 10.2 Lender’s Discretion
    92  
Section 10.3 Governing Law
    92  
Section 10.4 Modification, Waiver in Writing
    94  

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              Page  
Section 10.5 Delay Not a Waiver
    94  
Section 10.6 Notices
    94  
Section 10.7 Trial by Jury
    95  
Section 10.8 Headings
    96  
Section 10.9 Severability
    96  
Section 10.10 Preferences
    96  
Section 10.11 Waiver of Notice
    96  
Section 10.12 Remedies of Borrower
    96  
Section 10.13 Expenses; Indemnity
    97  
Section 10.14 Schedules Incorporated
    98  
Section 10.15 Offsets, Counterclaims and Defenses
    98  
Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries
    98  
Section 10.17 Publicity
    99  
Section 10.18 Cross-Default; Cross-Collateralization; Waiver of Marshalling of
Assets
    99  
Section 10.19 Waiver of Counterclaim
    100  
Section 10.20 Conflict; Construction of Documents; Reliance
    100  
Section 10.21 Brokers and Financial Advisors
    100  
Section 10.22 Prior Agreements
    100  
Section 10.23 Joint and Several Liability
    100  
Section 10.24 Certain Additional Rights of Lender (VCOC)
    101  
1. Albertsons — Abilene
       
4450 Buffalo Gap Road
       
Abilene, Texas
       
2. Albertson — Albuquerque
       
11825 Lomas Blvd. Northeast
       
Albuquerque, New Mexico
       
3. Albertsons — Baton Rouge
       
9650 Airline Highway
       
Baton Rouge, Louisiana
       
4. Albertsons — Bossier City
       
3121 East Texas Street
       
Bossier City, Louisiana
       
5. Albertsons — Clovis
       

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              Page  
1905 North Prince Street
       
Clovis, New Mexico
       
6. Albertsons — El Paso
       
9111 Dyer Street
       
El Paso, Texas
       
7. Albertsons — Midland
       
4706 North Midkiff Road
       
Midland, Texas
       
8. Albertsons — Odessa
       
2751 North County Road West
       
Odessa, Texas
       
9. Albertsons — Silver City
       
1956 US Highway 180 East
       
Silver City, New Mexico
       

SCHEDULES

         
Schedule I
  —   List of Borrowers and Organizational Identification Nos.
 
       
Schedule II
  —   Rent Roll
 
       
Schedule III
  —   Required Repairs — Deadlines for Completion
 
       
Schedule IV
  —   Organizational Chart of Borrower
 
       
Schedule V
  —   Release Amounts
 
       
Schedule VI
  —   O&M Programs
 
       
Schedule VII
  —   Minor Required Repairs

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LOAN AGREEMENT
     THIS LOAN AGREEMENT, dated as of December 15, 2010 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
“Agreement”), between JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking
association chartered under the laws of the United States of America, having an
address at 383 Madison Avenue, New York, New York 10179 (“Lender”) and THE
ENTITIES SET FORTH ON SCHEDULE I ATTACHED HERETO, each having an address at 2555
East Camelback Road, Ste. 400, Phoenix, Arizona 85016 (each, an “Individual
Borrower” and, collectively, “Borrower”).
W I T N E S S E T H:
     WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from
Lender; and
     WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms of this Agreement and the other Loan Documents (as
hereinafter defined).
     NOW THEREFORE, in consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
ARTICLE 1 — DEFINITIONS; PRINCIPLES OF CONSTRUCTION.
Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:
     “Accrual Period” shall mean the period commencing on and including the
first (1st) day of each calendar month during the term of the Loan and ending on
and including the final calendar date of such calendar month; however, the
initial Accrual Period shall commence on and include the Closing Date and shall
end on and include the final calendar date of the calendar month in which the
Closing Date occurs.
     “Accrued Interest” shall have the meaning set forth in Section 2.3.1(b).
     “actual knowledge” shall mean, with respect to Borrower, the conscious
awareness of facts or other information by Borrower after inquiry reasonable for
an institutional owner of properties similar to the Properties.
     “Additional Insolvency Opinion” shall mean any subsequent Insolvency
Opinion.
     “Adjusted Interest Rate” shall mean a fixed rate per annum equal to three
percentage points (3.00%) plus the greater of (i) the Initial Interest Rate or
(ii) the Seven Year Swap Yield on the date that is one month before the
Anticipated Repayment Date plus two and eighty-five hundredths percentage points
(2.85%); provided, however, in no event shall the Adjusted Interest Rate exceed
the Initial Interest Rate plus five percentage points (5.00%)

 

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     “Adjusted Release Amount” shall mean, for each Individual Property, the sum
of (a) the Release Amount for such Individual Property and (b) (i) zero percent
(0%) with respect to the first Thirteen Million Three Hundred Two Thousand Five
Hundred and No/100 Dollars ($13,302,500.00) of Release Amounts for Individual
Properties released in accordance with the terms hereof, and (ii) fifteen
percent (15%) of all Release Amounts over Thirteen Million Three Hundred Two
Thousand Five Hundred and No/100 Dollars ($13,302,500.00) for Individual
Properties released in accordance with the terms hereof.
     “Affected Property” shall have the meaning set forth in Section 9.2(a)
hereof.
     “Affiliate” shall mean, as to any Person, any other Person that, directly
or indirectly, is in Control of, is Controlled by or is under common Control
with such Person or is a director or officer of such Person or of an Affiliate
of such Person.
     “Affiliated Manager” shall mean any Manager that is an Affiliate of
Borrower or Guarantor.
     “Agent” shall mean Wells Fargo Bank, N.A., or any successor Eligible
Institution acting as Agent under the Cash Management Agreement.
     “Albertson’s” shall mean Albertson’s LLC, a Delaware limited liability
company.
     “Albertson’s Lease” shall mean, individually or collectively, as the
context requires, each Lease between an Individual Borrower and Albertson’s.
     “Allocated Loan Amount” shall have the meaning set forth in Section 9.2
hereof.
     “Amortizing Period” shall mean any Accrual Period for which Borrower is
obligated to pay the Monthly Debt Service Payment Amount pursuant to
Section 2.3.1 hereof.
     “Anticipated Repayment Date” shall mean January 1, 2018.
     “Applicable Interest Rate” shall mean (i) prior to the Anticipated
Repayment Date, the Initial Interest Rate and (ii) on and after the Anticipated
Repayment Date, the Adjusted Interest Rate.
     “Assignment of Management Agreement” shall mean that certain Assignment of
Management Agreement and Subordination of Management Fees, dated as of the date
hereof, among Lender, Borrower and Manager, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
     “Award” shall mean any compensation paid or payable to Borrower by any
Governmental Authority in connection with a Condemnation in respect of all or
any part of any Individual Property.
     “Bankruptcy Action” shall mean with respect to any Person (a) such Person
filing a voluntary petition under the Bankruptcy Code or any other Federal or
state bankruptcy or insolvency law; (b) the filing of an involuntary petition
against such Person under the

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Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(c) such Person filing an answer consenting to or otherwise acquiescing in or
joining in any involuntary petition filed against it, by any other Person under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(d) such Person consenting to or acquiescing in or joining in an application for
the appointment of a custodian, receiver, trustee, or examiner for such Person
or any portion of any Individual Property; (e) such Person making an assignment
for the benefit of creditors, or admitting, in writing or in any legal
proceeding, its insolvency or inability to pay its debts as they become due.
     “Bankruptcy Code” shall mean Title 11 of the United States Code, 11 U.S.C.
§101, et seq., as the same may be amended from time to time, and any successor
statute or statutes and all rules and regulations from time to time promulgated
thereunder, and any comparable foreign laws relating to bankruptcy, insolvency
or creditors’ rights or any other Federal or state bankruptcy or insolvency law.
     “Basic Carrying Costs” shall mean, with respect to an Individual Property,
the sum of the following costs associated with such Individual Property for the
relevant Fiscal Year or payment period: (a) Taxes, (b) Other Charges and
(c) Insurance Premiums.
     “Borrower” shall have the meaning set forth in the introductory paragraph
hereto, together with its successors and permitted assigns.
     “Business Day” shall mean any day other than a Saturday, Sunday or any
other day on which national banks in New York, New York, or the place of
business of the trustee under a Securitization (or, if no Securitization has
occurred, Lender), or any Servicer or the financial institution that maintains
any collection account for or on behalf of any Servicer or any Reserve Funds or
the New York Stock Exchange or the Federal Reserve Bank of New York is not open
for business.
     “Capital Expenditures” shall mean, for any period, the amount expended for
items capitalized under GAAP (or another basis of accounting acceptable to
Lender and consistently applied) (including expenditures for building
improvements or major repairs, leasing commissions and tenant improvements).
     “Cash Management Account” shall have the meaning set forth in Section 2.7.2
hereof.
     “Cash Management Agreement” shall mean that certain Cash Management
Agreement, dated as of the date hereof, by and among Borrower, Lender, Manager
and Agent, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
     “Cash Sweep Event” shall mean the occurrence of: (a) an Event of Default (a
“Default Trigger”); (b) any Bankruptcy Action of Borrower (a “Borrower
Trigger”); (c) any Bankruptcy Action of Manager (a “Property Manager Trigger”);
(d) a DSCR Trigger; (e) any Bankruptcy Action of Albertson’s (an “Albertson’s
Trigger”); or (f) the Payment Date that is one month prior to the Anticipated
Repayment Date if the Loan has not been repaid if full (an “ARD Trigger”).

3

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     “Cash Sweep Event Cure” shall mean (a) if the Cash Sweep Event is caused
solely by the occurrence of a DSCR Trigger, the achievement of a DSCR Trigger
Cure, (b) if the Cash Sweep Event is caused by a Default Trigger, the acceptance
by Lender of a cure of such Event of Default (which cure Lender is not obligated
to accept and may reject or accept in its sole and absolute discretion, unless
required by law) provided Lender has not accelerated the Loan, moved for the
appointment of a receiver or commenced foreclosure proceedings, (c) if the Cash
Sweep Event is caused by a Property Manager Trigger, if Borrower replaces the
Manager with a Qualified Manager under a Replacement Management Agreement or the
applicable Bankruptcy Action of Manager has been dismissed without adverse
consequence to the Loan or the Properties as determined by Lender in its
reasonable discretion; or (d) if the Cash Sweep Event is caused solely by the
occurrence of an Albertson’s Trigger, either (i) the irrevocable assumption of
all of the Leases by Albertson’s and Albertson’s or a subtenant acceptable to
Lender being in occupancy and paying full, unabated post-petition rent without
offset or credit as evidenced by an estoppel letter acceptable to Lender, or
(ii) the assignment and assumption by an assignee acceptable to Lender of all of
the Leases pursuant to the bankruptcy court proceedings, with such assignee
being in occupancy and paying full, unabated post-petition rent without offset
or credit as evidenced by an estoppel letter acceptable to Lender; provided,
however, that, such Cash Sweep Event Cure set forth in this definition shall be
subject to the following conditions, (i) no Event of Default (other than the
Event of Default that has been cured pursuant to clause (b) above) shall have
occurred and be continuing under this Agreement or any of the other Loan
Documents, (ii) a Cash Sweep Event Cure may occur no more than a total of five
(5) times in the aggregate during the term of the Loan, and (iii) Borrower shall
have paid all of Lender’s reasonable expenses incurred in connection with such
Cash Sweep Event Cure including, reasonable attorney’s fees and expenses. In no
event shall Borrower have a right to cure a Cash Sweep Event that is caused by
the occurrence of a Borrower Trigger or an ARD Trigger.
     “Cash Sweep Period” shall mean each period commencing on the occurrence of
a Cash Sweep Event and continuing until the earlier of (a) the Payment Date next
occurring following the related Cash Sweep Event Cure (or, if such day is not a
Business Day, the immediately preceding Business Day), or (b) payment in full of
all principal and interest on the Loan and all other amounts payable under the
Loan Documents in accordance with the terms and provisions of the Loan
Documents.
     “Casualty” shall have the meaning set forth in Section 6.2 hereof.
     “Casualty Consultant” shall have the meaning set forth in
Section 6.4(b)(iii) hereof.
     “Casualty Retainage” shall have the meaning set forth in Section 6.4(b)(iv)
hereof.
     “Closing Date” shall mean the date of the funding of the Loan.
     “Code” shall mean the Internal Revenue Code of 1986, as amended, as it may
be further amended from time to time, and any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
     “Collective Group” shall have the meaning set forth in Section 10.23
hereof.

4

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     “Condemnation” shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
any Individual Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting such
Individual Property or any part thereof.
     “Condemnation Proceeds” shall have the meaning set forth in Section 6.4(b).
     “Contribution Agreement” shall mean that certain Contribution Agreement,
dated as of the date hereof, by and among each Individual Borrower, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.
     “Control” shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management, policies or activities of a
Person, whether through ownership of voting securities, by contract or
otherwise. “Controlled” and “Controlling” shall have correlative meanings.
     “Debt” shall mean the outstanding principal amount set forth in, and
evidenced by, this Agreement and the Note together with all interest accrued and
unpaid thereon and all other sums (including any Yield Maintenance Premium and
any Yield Maintenance Default Premium) due to Lender in respect of the Loan
under the Note, this Agreement, the Mortgage or any other Loan Document.
     “Debt Service” shall mean, with respect to any particular period of time,
the scheduled principal and interest payments due under this Agreement and the
Note.
     “Debt Service Coverage Ratio” shall mean a ratio for the applicable period
in which:
     (a) the numerator is the Net Operating Income (excluding interest on credit
accounts and using annualized operating expenses for any recurring expenses not
paid monthly (e.g., Taxes and Insurance Premiums)) for such period as set forth
in the statements required hereunder, without deduction for (i) actual property
management fees incurred in connection with the operation of the applicable
Individual Property, or (ii) amounts paid to the Reserve Funds, less
(A) property management fees equal to the greater of (1) assumed property
management fees of 3% of Gross Income from Operations and (2) the actual
property management fees incurred, and (B) underwritten annual replacement
reserve fund contributions equal to $0.20 per square foot of gross leasable area
at the Property, and (C) underwritten annual rollover reserve fund contributions
equal to $0.42 per square foot of gross leasable area at the Property; and
     (b) the denominator is the aggregate amount of Debt Service for such
period, assuming for purposes of this calculation that the Debt Service for each
Accrual Period is equal to the Monthly Debt Service Payment Amount.
     “Default” shall mean the occurrence of any event hereunder or under any
other Loan Document which, but for the giving of notice or passage of time, or
both, would be an Event of Default.

5

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     “Default Rate” shall mean, with respect to the Loan, a rate per annum equal
to the lesser of (a) the Maximum Legal Rate or (b) four percent (4%) above the
Applicable Interest Rate.
     “Denver Individual Borrower” shall mean Cole AB Denver CO, LLC, a Delaware
limited liability company.
     “Denver Individual Property” shall mean the Individual Property owned by
the Denver Individual Borrower.
     “Denver Purchase Option” shall mean the right of Weingarten/Miller/Lowry
Joint Venture, a Texas joint venture, and any permitted successor in interest
(collectively, “Weingarten”), to purchase fee simple title to the Denver
Individual Property upon the happening of certain occurrences and pursuant to
the terms of that certain Agreement for Right to Purchase dated as of July 3,
2001, between Weingarten and Denver Individual Borrower, successor in interest
to Albertson’s, Inc., a Delaware corporation.
     “Denver Purchase Option Price” shall mean the actual purchase price paid by
Weingarten to the Denver Individual Borrower in connection with Weingarten’s
exercise of the Denver Purchase Option.
     “Denver Shortfall Payment” shall have the meaning set forth in
Section 5.1.26 hereof.
     “Disclosure Documents” shall have the meaning set forth in Section 9.1.1(b)
hereof.
     “DSCR Trigger” shall mean, that as of the date of determination, the Debt
Service Coverage Ratio based on the trailing three (3) calendar month period
immediately preceding the date of such determination is less than 1.20 to 1.00.
     “DSCR Trigger Cure” shall mean, that for two consecutive calendar quarters,
with the applicable determination date being the first day of a calendar quarter
(i.e., January 1, April 1, July 1, or October 1), Borrower shall have satisfied
the following: as of each date of determination, the Debt Service Coverage Ratio
based on the trailing three (3) month period immediately preceding the date of
such determination is not less than 1.45 to 1.00.
     “Eligible Account” shall mean a separate and identifiable account from all
other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the definition of Eligible Institution or
(b) a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b),
having in either case a combined capital and surplus of at least $50,000,000.00
and subject to supervision or examination by federal and state authority. An
Eligible Account will not be evidenced by a certificate of deposit, passbook or
other instrument.
     “Eligible Institution” shall mean JPMorgan Chase Bank, National
Association, or a depository institution or trust company insured by the Federal
Deposit Insurance Corporation, the short term unsecured debt obligations or
commercial paper of which are rated at least “A-1+”

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by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of accounts in which
funds are held for thirty (30) days or less (or, in the case of accounts in
which funds are held for more than thirty (30) days, the long-term unsecured
debt obligations of which are rated at least “AA-” by Fitch and S&P and “Aa3” by
Moody’s).
     “Embargoed Person” shall mean any person, entity or government subject to
trade restrictions under U.S. law, including, but not limited to, The USA
PATRIOT Act (including the anti-terrorism provisions thereof), the International
Emergency Economic Powers Act, 50 U.S.C. §§ 1701, et seq., The Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder including those related to Specially Designated Nationals
and Specially Designated Global Terrorists, with the result that the investment
in Borrower, Principal or Guarantor, as applicable (whether directly or
indirectly) by such person, entity or government, is prohibited by law or the
Loan made by the Lender is in violation of law.
     “Environmental Indemnity” shall mean that certain Environmental Indemnity
Agreement, dated as of the date hereof, executed by Borrower and Guarantor in
connection with the Loan for the benefit of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
     “Environmental Law” means any present and future federal, state and local
laws, statutes, ordinances, rules, regulations and the like, as well as common
law, relating to protection of human health or the environment, relating to
Hazardous Substances, relating to liability for or costs of Remediation or
prevention of Releases of Hazardous Substances or relating to liability for or
costs of other actual or threatened danger to human health or the environment.
Environmental Law includes, but is not limited to, the following statutes, as
amended, any successor thereto, and any regulations promulgated pursuant
thereto, and any state or local statutes, ordinances, rules, regulations and the
like addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource
Conservation and Recovery Act (including but not limited to Subtitle I relating
to underground storage tanks); the Solid Waste Disposal Act; the Clean Water
Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking
Water Act; the Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the
Endangered Species Act; the National Environmental Policy Act; and the River and
Harbors Appropriation Act. Environmental Law also includes, but is not limited
to, any present and future federal, state and local laws, statutes, ordinances,
rules, regulations and the like, as well as common law: conditioning transfer of
property upon a negative declaration or other approval of a governmental
authority of the environmental condition of the Properties; requiring
notification or disclosure of Releases of Hazardous Substances or other
environmental condition of the Properties to any governmental authority or other
Person, whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements in connection with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action related to the Properties; or relating to wrongful death,
personal injury, or property or other damage in connection with any physical
condition or use of the Properties.
     “Environmental Liens” shall have the meaning set forth in Section 5.1.19
hereof.

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     “Environmental Report” shall have the meaning set forth in Section 4.1.37
hereof.
     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.
     “Event of Default” shall have the meaning set forth in Section 8.1(a)
hereof.
     “Excess Cash Flow” shall have the meaning set forth in the Cash Management
Agreement.
     “Excess Cash Flow Reserve Account” shall have the meaning set forth in
Section 7.5.1 hereof.
     “Excess Cash Flow Reserve Fund” shall have the meaning set forth in
Section 7.5.1 hereof.
     “Fiscal Year” shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during each year of the term of the Loan.
     “Fitch” shall mean Fitch, Inc.
     “GAAP” shall mean generally accepted accounting principles in the United
States of America as of the date of the applicable financial report.
     “Governmental Authority” shall mean any court, board, agency, commission,
office or other authority of any nature whatsoever for any governmental unit
(foreign, federal, state, county, district, municipal, city or otherwise)
whether now or hereafter in existence.
     “Gross Income from Operations” shall mean, during any period, all recurring
income as reported on the financial statements delivered by Borrower in
accordance with this Agreement, computed in accordance with GAAP (or another
basis of accounting acceptable to Lender and consistently applied), derived from
the ownership and operation of any Individual Property from whatever source
during such period, including, but not limited to, (i) Rents from Tenants that
are in occupancy, open for business and paying full contractual rent without
right of offset or credit, (ii) utility charges, (iii) escalations,
(iv) forfeited security deposits, (v) interest on credit accounts, (vi) service
fees or charges, (vii) license fees, (viii) parking fees, (ix) rent concessions
or credits, (x) income from vending machines, (xi) business interruption or
other loss of income or rental insurance proceeds, (xii) other required
pass-throughs or reimbursements, (xiii) easement proceeds, (xiv) interest on
Reserve Accounts, if any, and (xv) Rents and reimbursements from “dark”
locations provided that such Rents and reimbursements shall not exceed ten
percent (10%) of the total Rent and reimbursements for all of the Properties,
but excluding (i) Rents from month-to-month Tenants, Tenants during a free-rent
period, or Tenants that are included in any Bankruptcy Action, (ii) sales, use
and occupancy or other taxes on receipts required to be accounted for by
Borrower to any Governmental Authority, (iii) refunds and uncollectible
accounts, (iv) sales of furniture, fixtures and equipment, (v) Insurance
Proceeds (other than business interruption or other loss of income or rental
insurance), (vi) Awards, (vii) unforfeited security deposits, (viii) utility and
other similar deposits, (ix) any disbursements to Borrower from the Reserve
Funds, if any, and (x) Rents and reimbursements

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from “dark” locations in excess of ten percent (10%) of the total Rent and
reimbursements for all of the Properties. Gross income shall not be diminished
as a result of the Mortgage or the creation of any intervening estate or
interest in such Individual Property or any part thereof.
     “Guarantor” shall mean Cole REIT III Operating Partnership, LP.
     “Guaranty” shall mean that certain Guaranty Agreement, dated as of the date
hereof, executed and delivered by Guarantor in connection with the Loan to and
for the benefit of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
     “Hazardous Substances” include but are not limited to any and all
substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Laws or that may have a
negative impact on human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables,
explosives, mold, mycotoxins, microbial matter and airborne pathogens (naturally
occurring or otherwise), but excluding substances of kinds and in amounts
ordinarily and customarily used or stored in similar properties for the purpose
of cleaning or other maintenance or operations and otherwise in compliance with
all Environmental Laws.
     “Identified Affiliate” shall mean each of the following:
Cole Capital Partners, LLC, an Arizona limited liability company;
Cole Capital Advisors, Inc., an Arizona Corporation;
Series C, LLC, an Arizona limited liability company;
Series D, LLC, an Arizona limited liability company;
Cole Credit Property Trust, Inc., a Maryland corporation;
Cole Credit Property Trust II, Inc., a Maryland corporation;
Cole Holdings Corporation, an Arizona corporation; and
Any entity wholly-owned, either directly or indirectly, by one or more of the
foregoing.
     “Improvements” shall have the meaning set forth in the granting clause of
the Mortgage with respect to the applicable Individual Property.
     “Indebtedness” of a Person, at a particular date, shall mean the sum
(without duplication) at such date of (a) all indebtedness or liability of such
Person (including, without limitation, amounts for borrowed money and
indebtedness in the form of mezzanine debt or preferred equity); (b) obligations
evidenced by bonds, debentures, notes, or other similar instruments;
(c) obligations for the deferred purchase price of property or services
(including trade obligations); (d) obligations under letters of credit;
(e) obligations under acceptance facilities; (f) all guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds, to invest in any Person or entity, or otherwise to assure a
creditor against loss;

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and (g) obligations secured by any Liens, whether or not the obligations have
been assumed (other than the Permitted Encumbrances).
     “Indemnified Liabilities” shall have the meaning set forth in
Section 10.13(b) hereof.
     “Indemnified Parties” shall mean Lender and any Affiliate of Lender that
has filed any registration statement relating to the Securitization or has acted
as the sponsor or depositor in connection with the Securitization, any Affiliate
of Lender that acts as an underwriter, placement agent or initial purchaser of
Securities issued in the Securitization, any other co underwriters, co placement
agents or co initial purchasers of Securities issued in the Securitization, and
each of their respective officers, directors, partners, employees,
representatives, agents and Affiliates and each Person or entity who Controls
any such Person within the meaning of Section 15 of the Securities Act of 1933
as amended or Section 20 of the Security Exchange Act of 1934 as amended, any
Person who is or will have been involved in the origination of the Loan, any
Person who is or will have been involved in the servicing of the Loan secured
hereby, any Person in whose name the encumbrance created by the Mortgage is or
will have been recorded, any Person who may hold or acquire or will have held a
full or partial interest in the Loan secured hereby (including, but not limited
to, investors or prospective investors in the Securities, as well as custodians,
trustees and other fiduciaries who hold or have held a full or partial interest
in the Loan secured hereby for the benefit of third parties) as well as the
respective directors, officers, shareholders, partners, employees, agents,
servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the
foregoing (including, but not limited to, any other Person who holds or acquires
or will have held a participation or other full or partial interest in the Loan,
whether during the term of the Loan or as a part of or following a foreclosure
of the Loan and including, but not limited to any successors by merger,
consolidation or acquisition of all or a substantial portion of Lender’s assets
and business).
     “Independent Director” shall mean a natural Person who (a) is not at the
time of initial appointment, or at any time while serving in such capacity, and
is not, and has never been, and will not while serving as Independent Director
be: (i) a stockholder, director (with the exception of serving as the
Independent Director of an Individual Borrower), officer, employee, partner,
member (other than a “special member” or “springing member”), manager, attorney
or counsel of an Individual Borrower, equity owners of an Individual Borrower or
Guarantor or any Affiliate of an Individual Borrower or Guarantor; (ii) a
customer, supplier or other person who derives any of its purchases or revenues
from its activities with an Individual Borrower or Guarantor, equity owners of
an Individual Borrower or Guarantor or any Affiliate of an Individual Borrower
or Guarantor; (iii) a Person Controlling or under common Control with any such
stockholder, director, officer, employee, partner, member, manager, attorney,
counsel, equity owner, customer, supplier or other Person; or (iv) a member of
the immediate family of any such stockholder, director, officer, employee,
partner, member, manager, attorney, counsel, equity owner, customer, supplier or
other Person and (b) has (i) prior experience as an independent director or
independent manager for a corporation, a trust or limited liability company
whose charter documents required the unanimous consent of all independent
directors or independent managers thereof before such corporation, trust or
limited liability company could consent to the institution of bankruptcy or
insolvency proceedings against it or could file a petition seeking relief under
any applicable federal or state law relating to bankruptcy and (ii) at

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least three years of employment experience with one or more
nationally-recognized companies that provides, inter alia, professional
independent directors or independent managers in the ordinary course of their
respective business to issuers of securitization or structured finance
instruments, agreements or securities or lenders originating commercial real
estate loans for inclusion in securitization or structured finance instruments,
agreements or securities (a “Professional Independent Director”) and is at all
times during his or her service as an Independent Director of an Individual
Borrower an employee of such a company or companies. A natural Person who
satisfies the foregoing definition except for being (or having been) the
independent director or independent manager of a “special purpose entity”
affiliated with an Individual Borrower (provided such affiliate does not or did
not own a direct or indirect equity interest in an Individual Borrower) shall
not be disqualified from serving as an Independent Director, provided that such
natural Person satisfies all other criteria set forth above and that the fees
such individual earns from serving as independent director or independent
manager of affiliates of an Individual Borrower or in any given year constitute
in the aggregate less than five percent (5%) of such individual’s annual income
for that year. A natural Person who satisfies the foregoing definition other
than subparagraph (a)(ii) shall not be disqualified from serving as an
Independent Director of an Individual Borrower if such individual is a
Professional Independent Director and such individual complies with the
requirements of the previous sentence. A person serving as a manager (and not as
a director) of a limited liability company, but otherwise satisfying this
definition shall be deemed an Independent Director for purposes of this
Agreement.
     “Individual Borrower” shall have the meaning set forth in the introductory
paragraph hereto, together with its successors and permitted assigns.
     “Individual Property” shall mean shall mean each parcel of real property,
the Improvements thereon and all personal property owned by an Individual
Borrower and encumbered by a Mortgage, together with all of such Individual
Borrower’s rights pertaining to such property and Improvements, as more
particularly described in the granting clauses of the related Mortgage and
referred to therein as the “Property”.
     “Initial Interest Rate” shall mean a rate of five and six hundred nine
thousandths percent (5.609%) per annum.
     “Insolvency Opinion” shall mean that certain non-consolidation opinion
letter dated the date hereof delivered by Kutak Rock LLP in connection with the
Loan.
     “Insurance Premiums” shall have the meaning set forth in Section 6.1(b)
hereof.
     “Insurance Proceeds” shall have the meaning set forth in Section 6.4(b)
hereof.
     “Interest Only Period” shall mean any Accrual Period for which Borrower is
obligated to make a payment of interest only pursuant to Section 2.3.1 hereof.
     “Lease” shall mean any lease, sublease or subsublease, letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) entered into by any Individual Borrower (or a
predecessor-in-interest to any Individual Borrower) pursuant to which any Person
is granted a possessory interest in, or right to use or occupy all or any
portion

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of any space in any Individual Property, and every modification, amendment or
other agreement relating to such lease, sublease, subsublease, or other
agreement entered into in connection with such lease, sublease, subsublease, or
other agreement and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto.
     “Legal Requirements” shall mean, all federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting any
Individual Property or any part thereof, or the construction, use, alteration or
operation thereof, or any part thereof, whether now or hereafter enacted and in
force, and all permits, licenses and authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments, either of record or known to Borrower, at any time in force
affecting any Individual Property or any part thereof, including, without
limitation, any which may (a) require repairs, modifications or alterations in
or to any Individual Property or any part thereof, or (b) in any way limit the
use and enjoyment thereof.
     “Lender” shall have the meaning set forth in the introductory paragraph
hereto, together with its successors and assigns.
     “Lien” shall mean, any mortgage, deed of trust, deed to secure debt,
indemnity deed of trust, lien, pledge, hypothecation, assignment for security,
security interest, or any other encumbrance, charge or transfer of, on or
affecting Borrower, any Individual Property, any portion thereof or any interest
therein, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, the filing of any financing statement, and
mechanic’s, materialmen’s and other similar liens and encumbrances.
     “Loan” shall mean the loan made by Lender to Borrower pursuant to this
Agreement.
     “Loan Documents” shall mean, collectively, this Agreement, the Note, the
Mortgage, the Environmental Indemnity, the Assignment of Management Agreement,
the Guaranty, the Lockbox Agreement, the Cash Management Agreement, the
Contribution Agreement and all other documents executed and/or delivered by any
Individual Borrower or Guarantor in connection with the Loan.
     “Loan Group” shall have the meaning set forth in Section 9.2(b) hereof.
     “Lockbox Account” shall have the meaning set forth in Section 2.7.1 hereof.
     “Lockbox Agreement” shall mean that certain Blocked Account Control
Agreement dated the date hereof among Cole AB Abilene TX, LLC, Lender and
Lockbox Bank (and joined by each Borrower and Manager), as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time, relating to funds deposited in the Lockbox Account.
     “Lockbox Bank” shall mean JPMorgan Chase Bank, National Association, or the
clearing bank which establishes, maintains and holds the Lockbox Account, which
shall be an Eligible Institution.

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     “Management Agreement” shall mean the management agreement entered into
among Manager, Cole REIT III Operating Partnership, LP, and Cole Credit Property
Trust III, Inc. pursuant to which Manager is to provide management and other
services with respect to each Individual Property and certain other properties,
or, if the context requires, the Replacement Management Agreement.
     “Manager” shall mean Cole Realty Advisors, Inc. (f/k/a Fund Realty
Advisors, Inc.) an Arizona corporation, or, if the context requires, a Qualified
Manager who is managing the Properties in accordance with the terms and
provisions of this Agreement pursuant to a Replacement Management Agreement.
     “Material Action” means to file any insolvency, or reorganization case or
proceeding, to institute proceedings to have any Individual Borrower be
adjudicated bankrupt or insolvent, to institute proceedings under any applicable
insolvency law, to seek any relief under any law relating to relief from debts
or the protection of debtors, to consent to the filing or institution of
bankruptcy or insolvency proceedings against any Individual Borrower, to file a
petition seeking, or consent to, reorganization or relief with respect to any
Individual Borrower under any applicable federal or state law relating to
bankruptcy or insolvency, to seek or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator, custodian, or any similar official
of or for any Individual Borrower or a substantial part of its property, to make
any assignment for the benefit of creditors of any Individual Borrower, to admit
in writing such Individual Borrower’s inability to pay its debts generally as
they become due, or to take action in furtherance of any of the foregoing.
     “Maturity Date” shall mean January 1, 2028, or such other date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.
     “Maximum Legal Rate” shall mean the maximum nonusurious interest rate, if
any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the indebtedness evidenced by the Note and as
provided for herein or the other Loan Documents, under the laws of such state or
states whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.
     “Minor Required Repairs” shall mean those certain Required Repairs
identified on Schedule VII hereto.
     “Monthly Debt Service Payment Amount” shall mean a constant monthly payment
of $764,423.68.
     “Moody’s” shall mean Moody’s Investors Service, Inc.
     “Mortgage” shall mean, with respect to each Individual Property, that
certain first priority Mortgage and Security Agreement, Deed of Trust, Fixture
Filing and Security Agreement, Deed of Trust and Security Agreement or Deed to
Secure Debt and Security Agreement, dated the date hereof, executed and
delivered by Borrower to Lender as security for the Loan and encumbering the
applicable Individual Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

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     “Net Cash Flow” shall mean, with respect to the Properties for any period,
the amount obtained by subtracting Operating Expenses and Capital Expenditures
for such period from Gross Income from Operations for such period.
     “Net Operating Income” shall mean, for any period, the amount obtained by
subtracting Operating Expenses for such period from Gross Income from Operations
for such period.
     “Net Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.
     “Net Proceeds Deficiency” shall have the meaning set forth in
Section 6.4(b)(vi) hereof.
     “New Note” shall have the meaning set forth in Section 9.2(a) hereof.
     “Note” shall mean that certain Promissory Note, dated the date hereof, in
the principal amount of One Hundred Thirty Three Million Twenty Five Thousand
and No/100 Dollars ($133,025,000.00), made by Borrower in favor of Lender, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
     “O&M Program” shall have the meaning set forth in Section 5.1.19(c) hereof.
     “Officer’s Certificate” shall mean a certificate delivered to Lender by
Borrower which is signed by an authorized officer of Borrower or the general
partner, managing member, sole member or manager of Borrower, as applicable.
     “Operating Expenses” shall mean, with respect to each Individual Property,
the total of all expenditures incurred by or on behalf of Borrower (other than
expenditures by a Tenant pursuant to its Lease), computed in accordance with
GAAP (or another basis of accounting acceptable to Lender and consistently
applied), of whatever kind relating to the operation, maintenance and management
of such Individual Property that are incurred on a regular monthly or other
periodic basis, including without limitation, bad debt, utilities, ordinary
repairs and maintenance, insurance, license fees, property taxes and
assessments, advertising expenses, property management fees, payroll and related
taxes, computer processing charges, operational equipment or other lease
payments as approved by Lender, and other similar costs, but excluding
depreciation and amortization, acquisition costs, impairment charges, Debt
Service pre-payments of principal (to the extent permitted by this Agreement),
Capital Expenditures and contributions to the Reserve Funds.
     “Other Charges” shall mean, with respect to each Individual Property, all
ground rents, maintenance charges, impositions other than Taxes, and any other
charges, including, without limitation, vault charges and license fees for the
use of vaults, chutes and similar areas adjoining such Individual Property, now
or hereafter levied or assessed or imposed against such Individual Property or
any part thereof.
     “Other Obligations” shall have the meaning as set forth in the Mortgage.
     “Payment Date” shall mean the first (1st) day of each calendar month during
the term of the Loan.

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     “Permitted Encumbrances” shall mean, with respect to an Individual
Property, collectively, (a) the Liens and security interests created by the Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the Title
Insurance Policy, (c) Liens, if any, for Taxes and Other Charges imposed by any
Governmental Authority not yet due or delinquent, (d) the Leases existing as of
the date hereof and any Leases entered into after the date hereof in accordance
with Section 5.1.20, and (e) such other title and survey exceptions as Lender
has approved or may approve in writing in Lender’s sole discretion, which
Permitted Encumbrances in the aggregate do not materially adversely affect the
value or use of such Individual Property (as currently used) or Borrower ‘s
ability to repay the Loan.
     “Permitted Investments” shall mean any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
including those issued by Servicer, the trustee under any Securitization or any
of their respective Affiliates, payable on demand or having a maturity date not
later than the Business Day immediately prior to the first Payment Date
following the date of acquiring such investment and meeting one of the
appropriate standards set forth below:
     (i) obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States or any agency or instrumentality
thereof provided such obligations are backed by the full faith and credit of the
United States of America including, without limitation, obligations of: the U.S.
Treasury (all direct or fully guaranteed obligations), the Farmers Home
Administration (certificates of beneficial ownership), the General Services
Administration (participation certificates), the U.S. Maritime Administration
(guaranteed Title XI financing), the Small Business Administration (guaranteed
participation certificates and guaranteed pool certificates), the U.S.
Department of Housing and Urban Development (local authority bonds) and the
Washington Metropolitan Area Transit Authority (guaranteed transit bonds);
provided, however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity;
     (ii) Federal Housing Administration debentures;
     (iii) obligations of the following United States government sponsored
agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit
System (consolidated systemwide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), the Financing Corp. (debt obligations), and the Resolution Funding
Corp. (debt obligations); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

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     (iv) federal funds, unsecured certificates of deposit, time deposits,
bankers’ acceptances and repurchase agreements with maturities of not more than
365 days of any bank, the short term obligations of which at all times are rated
in the highest short term rating category by each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency in the highest
short term rating category and otherwise acceptable to each other Rating Agency,
as confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an “r” highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;
     (v) fully Federal Deposit Insurance Corporation-insured demand and time
deposits in, or certificates of deposit of, or bankers’ acceptances issued by,
any bank or trust company, savings and loan association or savings bank, the
short term obligations of which at all times are rated in the highest short term
rating category by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency in the highest short term rating category
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities); provided, however, that the investments described
in this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;
     (vi) debt obligations with maturities of not more than 365 days and at all
times rated by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities) in its highest
long-term unsecured rating category; provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have
an “r” highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;
     (vii) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) with maturities
of not more than

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365 days and that at all times is rated by each Rating Agency (or, if not rated
by all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities) in its highest short-term unsecured debt rating; provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;
     (viii) units of taxable money market funds, which funds are regulated
investment companies, seek to maintain a constant net asset value per share and
invest solely in obligations backed by the full faith and credit of the United
States, which funds have the highest rating available from each Rating Agency
(or, if not rated by all Rating Agencies, rated by at least one Rating Agency
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) for money market funds; and
     (ix) any other security, obligation or investment which has been approved
as a Permitted Investment in writing by (a) Lender and (b) each Rating Agency,
as evidenced by a written confirmation that the designation of such security,
obligation or investment as a Permitted Investment will not, in and of itself,
result in a downgrade, qualification or withdrawal of the initial, or, if
higher, then current ratings assigned to the Securities by such Rating Agency;
provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment.
     “Permitted Par Prepayment Date” shall mean the Payment Date which is three
(3) months prior to the Anticipated Repayment Date (or, if such Payment Date is
not a Business Day, the immediately preceding Business Day).
     “Permitted Prepayment Date” shall mean the second (2nd) anniversary of the
first Payment Date (or, if such day is not a Business Day, the immediately
succeeding Business Day).
     “Permitted Transfer” shall mean any of the following: (a) any transfer,
directly as a result of the death of a natural person, of stock, membership
interests, partnership interests or other ownership interests previously held by
the decedent in question to the Person or Persons lawfully entitled thereto, or
(b) any transfer, directly as a result of the legal incapacity of a

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natural person, of stock, membership interests, partnership interests or other
ownership interests previously held by such natural person to the Person or
Persons lawfully entitled thereto.
     “Person” 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.
     “Personal Property” shall have the meaning set forth in the granting clause
of the Mortgage with respect to the applicable Individual Property.
     “Physical Conditions Report” shall mean, with respect to each Individual
Property, a structural engineering report prepared by a company satisfactory to
Lender regarding the physical condition of such Individual Property,
satisfactory in form and substance to Lender in its sole discretion, which
report shall, among other things, (a) confirm that such Individual Property and
its use complies, in all material respects, with all applicable Legal
Requirements (including, without limitation, zoning, subdivision and building
laws) and (b) include a copy of a final certificate of occupancy with respect to
all Improvements on such Individual Property.
     “Policies” shall have the meaning specified in Section 6.1(b) hereof.
     “Policy” shall have the meaning specified in Section 6.1(b) hereof.
     “Prepayment Rate” shall mean the bond equivalent yield (in the secondary
market) on the United States Treasury Security that as of the Prepayment Rate
Determination Date has a remaining term to maturity closest to, but not
exceeding, the remaining term to the Permitted Par Prepayment Date as most
recently published in “Statistical Release H.15 (519), Selected Interest Rates,”
or any successor publication, published by the Board of Governors of the Federal
Reserve System, or on the basis of such other publication or statistical guide
as Lender may reasonably select.
     “Prepayment Rate Determination Date” shall mean the date which is five
(5) Business Days prior to the date that such prepayment shall be applied in
accordance with the terms and provisions of Section 2.4.1 hereof.
     “Principal” shall mean the Special Purpose Entity that is (i) the general
partner of an Individual Borrower, if such Individual Borrower is a limited
partnership, (ii) the managing member of an Individual Borrower, if such
Individual Borrower is a multi-member limited liability company, or (iii) the
beneficiary of an Individual Borrower, if such Individual Borrower is a Delaware
statutory trust.
     “Property” or “Properties” shall mean, collectively, each Individual
Property.
     “Provided Information” shall mean any and all financial and other
information provided at any time prepared by, or on behalf of, Borrower,
Principal, Guarantor and/or Manager.
     “Qualified Manager” shall mean either (a) Manager; or (b) in the reasonable
judgment of Lender, a reputable and experienced management organization (which
may be an Affiliate of

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Borrower) possessing experience in managing properties similar in size, scope,
use and value as the Properties, provided, that in the case of this clause (b),
if required by Lender, Borrower shall have obtained (i) prior written
confirmation from the applicable Rating Agencies that management of the
Properties by such entity will not cause a downgrade, withdrawal or
qualification of the then current ratings of the Securities or any class thereof
and (ii) if such entity is an Affiliate of Borrower, an Additional Insolvency
Opinion.
     “Rating Agencies” shall mean each of S&P, Moody’s, Fitch, and Realpoint or
any other nationally recognized statistical rating agency which has been
approved by Lender and designated by Lender to assign a rating to the
Securities.
     “Realpoint” shall mean Realpoint, LLC, a Pennsylvania limited liability
company.
     “Related Entities” shall have the meaning set forth in Section 5.2.10(e)
hereof.
     “Release” of any Hazardous Substance includes but is not limited to any
release, deposit, discharge, emission, leaking, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or other
movement of Hazardous Substances.
     “Release Amount” shall mean for an Individual Property the amount set forth
on Schedule V hereto, as the same may be reduced pursuant to Section 2.4.2
hereof.
     “Release Debt Service Coverage Ratio” shall mean the product of 1.89
multiplied by a fraction of which (a) the numerator is the sum of the Release
Amounts of all Properties subject to the Liens of the Mortgages (including the
Individual Property to be released), and (b) the denominator is the sum of the
then-current outstanding principal amount of the Loan.
     “Release Premium” shall mean, with respect to the related Individual
Property released in accordance with Section 2.6.2 hereof, the difference
between the Adjusted Release Amount and the Release Amount for such Individual
Property.
     “Remediation” includes but is not limited to any response, remedial,
removal, or corrective action, any activity to cleanup, detoxify, decontaminate,
contain or otherwise remediate any Hazardous Substance, any actions to prevent,
cure or mitigate any Release of any Hazardous Substance, any action to comply
with any Environmental Laws or with any permits issued pursuant thereto, any
inspection, investigation, study, monitoring, assessment, audit, sampling and
testing, laboratory or other analysis, or evaluation relating to any Hazardous
Substances.
     “REMIC Trust” shall mean a “real estate mortgage investment conduit” within
the meaning of Section 860D of the Code that holds the Note.
     “Rents” shall mean, with respect to an Individual Property, all rents
(including percentage rents), rent equivalents, moneys payable as damages or in
lieu of rent or rent equivalents, royalties (including, without limitation, all
oil and gas or other mineral royalties and bonuses), income, receivables,
receipts, revenues, deposits (including, without limitation, security, utility
and other deposits), accounts, cash, issues, profits, charges for services
rendered, all other amounts payable as rent under any Lease or other agreement
relating to the Individual

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Property, including, without limitation, charges for electricity, oil, gas,
water, steam, heat, ventilation, air-conditioning and any other energy,
telecommunication, telephone, utility or similar items or time use charges, HVAC
equipment charges, sprinkler charges, escalation charges, license fees,
maintenance fees, charges for Taxes, operating expenses or other reimbursables
payable to Borrower (or to the Manager for the account of Borrower) under any
Lease, and other consideration of whatever form or nature received by or paid to
or for the account of or benefit of Borrower or its agents or employees from any
and all sources arising from or attributable to such Individual Property.
     “Replacement Management Agreement” shall mean, collectively, (a) either
(i) a management agreement for the Properties with a Qualified Manager
substantially in the same form and substance as the Management Agreement, or
(ii) a management agreement for the Properties with a Qualified Manager, which
management agreement shall be reasonably acceptable to Lender in form and
substance, provided, that in either case, Lender, at its option, may require
that Borrower shall have obtained prior written confirmation from the applicable
Rating Agencies that such management agreement will not cause a downgrade,
withdrawal or qualification of the then current rating of the Securities or any
class thereof and (b) an assignment of management agreement and subordination of
management fees substantially in the form then used by Lender (or of such other
form and substance reasonably acceptable to Lender), executed and delivered to
Lender by Borrower and such Qualified Manager at Borrower’s expense.
     “Required Repair Account” shall have the meaning set forth in Section 7.1.1
hereof.
     “Required Repair Fund” shall have the meaning set forth in Section 7.1.1
hereof.
     “Required Repairs” shall have the meaning set forth in Section 7.1.1
hereof.
     “Reserve Funds” shall mean, collectively, the Tax and Insurance Escrow
Fund, the Excess Cash Flow Reserve Fund, the Required Repair Fund and any other
escrow fund established by the Loan Documents.
     “Restoration” shall mean the repair and restoration of an Individual
Property after a Casualty or Condemnation as nearly as possible to the condition
such Individual Property was in immediately prior to such Casualty or
Condemnation, with such alterations as may be reasonably approved by Lender.
     “Restricted Party” shall mean collectively, (a) Borrower, Principal and any
Guarantor, and (b) any general partner, managing member, or non-member manager
of, Borrower, Principal, or any Guarantor.
     “S&P” shall mean Standard & Poor’s Ratings Group, a division of the
McGraw-Hill Companies.
     “Sale or Pledge” shall mean a voluntary or involuntary sale, conveyance,
assignment, transfer, encumbrance, pledge, grant of option or other transfer or
disposal of a legal or beneficial interest, whether direct or indirect.

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     “Securities” shall have the meaning set forth in Section 9.1 hereof.
     “Securitization” shall have the meaning set forth in Section 9.1 hereof.
     “Servicer” shall have the meaning set forth in Section 9.5 hereof.
     “Seven Year Swap Yield” shall mean the seven year swap yield determined by
Lender as currently published on an SMKR100 live feed from Bloomberg, or, if
such source is not available, as determined by Lender in its sole but reasonable
discretion from another source.
     “Severed Loan Documents” shall have the meaning set forth in Section 8.2(c)
hereof.
     “Special Purpose Entity” shall mean a corporation, limited partnership or
limited liability company that, since the date of its formation and at all times
on and after the date thereof, has complied with and shall at all times comply
with the following requirements unless it has received either prior consent to
do otherwise from Lender or a permitted administrative agent thereof, or, while
the Loan is securitized, confirmation from each of the applicable Rating
Agencies that such noncompliance would not result in the qualification,
withdrawal, or downgrade of the ratings of any Securities or any class thereof:
     (i) is and shall be organized solely for the purpose of (A) in the case of
an Individual Borrower, acquiring, developing, owning, holding, selling,
leasing, transferring, exchanging, managing and operating the applicable
Individual Property, entering into and performing its obligations under the Loan
Documents with Lender, refinancing the applicable Individual Property in
connection with a permitted repayment of the Loan, and transacting lawful
business that is incident, necessary and appropriate to accomplish the
foregoing; or (B) in the case of a Principal, acting as a general partner of the
limited partnership that owns the applicable Individual Property or as member of
the limited liability company that owns the applicable Individual Property and
transacting lawful business that is incident, necessary and appropriate to
accomplish the foregoing;
     (ii) has not engaged and shall not engage in any business unrelated to
(A) the acquisition, development, ownership, management or operation of the
applicable Individual Property, or (B) in the case of a Principal, acting as
general partner of the limited partnership that owns the applicable Individual
Property or acting as a member of the limited liability company that owns the
applicable Individual Property, as applicable;
     (iii) has not owned and shall not own any real property other than, in the
case of an Individual Borrower, the applicable Individual Property;
     (iv) does not have, shall not have and at no time had any assets other than
(A) in the case of an Individual Borrower, the applicable Individual Property,
personal property necessary or incidental to its ownership and operation of the
applicable Individual Property and cash or (B) in the case of a Principal, its
partnership interest in the limited partnership or its membership interest in
the limited liability company that owns the applicable Individual Property and
personal property necessary or incidental to its ownership of such interests;

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     (v) has not engaged in, sought, consented or permitted to and shall not
engage in, seek, consent to or permit (A) any dissolution, winding up,
liquidation, consolidation or merger unless required by applicable law (and in
such case, after fifteen (15) days prior written notice to Lender), (B) any sale
or other transfer of all or substantially all of its assets or any sale of
assets outside the ordinary course of its business, except as permitted by the
Loan Documents, or (C) in the case of a Principal, any transfer of its
partnership or membership interests unless required by applicable law (and in
such case, after fifteen (15) days prior written notice to Lender);
     (vi) except as permitted under the Loan Documents or unless required by
law, shall not cause, consent to or permit any amendment of its limited
partnership agreement, articles of incorporation, articles of organization,
certificate of formation, operating agreement or other formation document or
organizational document (as applicable) with respect to the matters set forth in
this definition;
     (vii) if such entity is a limited partnership, has and shall have at least
one general partner and has and shall have, as its only general partners,
Special Purpose Entities each of which (A) is a corporation or single-member
Delaware limited liability company, (B) has two (2) Independent Directors, and
(C) holds a direct interest as general partner in the limited partnership of not
less than 0.5% (or 0.1%, if the limited partnership is a Delaware entity);
     (viii) if such entity is a corporation, has and shall have at least two (2)
Independent Directors, and shall not cause or permit the board of directors of
such entity to take any Material Action either with respect to itself or, if the
corporation is a Principal, with respect to the applicable Individual Borrower
or any action requiring the unanimous affirmative vote of one hundred percent
(100%) of the members of its board of directors unless two (2) Independent
Directors shall have participated in such vote and shall have voted in favor of
such action;
     (ix) if such entity is a limited liability company (other than a limited
liability company meeting all of the requirements applicable to a single-member
limited liability company set forth in this definition of “Special Purpose
Entity”), has and shall have at least one (1) member that is a Special Purpose
Entity, that is a corporation, that has at least two (2) Independent Directors
and that directly owns at least one-half-of-one percent (0.5%) of the equity of
the limited liability company (or 0.1% if the limited liability company is a
Delaware entity);
     (x) if such entity is a single-member limited liability company, (A) is and
shall be a Delaware limited liability company, (B) has and shall have at least
two (2) Independent Directors serving as managers of such company, (C) shall not
take any Material Action and shall not cause or permit the members or managers
of such entity to take any Material Action, either with respect to itself or, if
the company is a Principal, with respect to the applicable Individual Borrower,
in each case unless two (2) Independent Directors then serving as managers of
the company shall have consented in writing to such action, and (D) has and
shall have either (1) a member which owns no economic interest in the company,
has signed the company’s limited liability company

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agreement and has no obligation to make capital contributions to the company, or
(2) two natural persons or one entity that is not a member of the company, that
has signed its limited liability company agreement and that, under the terms of
such limited liability company agreement becomes a member of the company
immediately prior to the withdrawal or dissolution of the last remaining member
of the company;
     (xi) has not and shall not (and, if such entity is (a) a limited liability
company, has and shall have a limited liability company agreement or an
operating agreement, as applicable, (b) a limited partnership, has a limited
partnership agreement, or (c) a corporation, has a certificate of incorporation
or articles that, in each case, provide that such entity shall not)
(1) dissolve, merge, liquidate, consolidate; (2) except as permitted under the
Loan Documents, sell all or substantially all of its assets; (3) unless required
by applicable law, amend its organizational documents with respect to the
matters set forth in this definition without the consent of Lender; or
(4) without the affirmative vote of two (2) Independent Directors of itself or
the consent of a Principal that is a member or general partner in it: (A) file
or consent to the filing of any bankruptcy, insolvency or reorganization case or
proceeding, institute any proceedings under any applicable insolvency law or
otherwise seek relief under any laws relating to the relief from debts or the
protection of debtors generally, file a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings; (B) seek or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or any similar official for the entity or a substantial portion of its
property; (C) make an assignment for the benefit of the creditors of the entity;
or (D) take any action in furtherance of any of the foregoing;
     (xii) has at all times been and shall at all times remain solvent and has
paid and shall pay its debts and liabilities (including, a fairly-allocated
portion of any personnel and overhead expenses that it shares with any
Affiliate) from its assets as the same shall become due, and has maintained and
shall 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, provided, however, that the foregoing shall
not require any member, partner or beneficiary to make additional capital
contributions;
     (xiii) has not failed and shall not fail to correct any known
misunderstanding regarding the separate identity of such entity and has not
identified and shall not identify itself as a division of any other Person;
     (xiv) except with respect to the other Individual Borrowers as contemplated
by this Agreement or the other Loan Documents, has maintained and shall maintain
its bank accounts, books of account, books, records, resolutions and agreements
separate from those of any other Person and, to the extent that it is required
to file tax returns under applicable law, has filed and shall file its own tax
returns, except to the extent that it is required by law to file consolidated
tax returns and, if it is a corporation, has not filed and shall not file a
consolidated federal income tax return with any other corporation, except to the
extent that it is required by law to file consolidated tax returns, or to the
extent that an Individual Borrower or its Principal is treated as a “disregarded
entity” for tax purposes and is not required to file tax returns under
applicable law;

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     (xv) Intentionally omitted.
     (xvi) except with respect to the other Individual Borrowers as contemplated
by this Agreement, the Lockbox Agreement, the Cash Management Agreement or the
other Loan Documents, has not commingled and shall not commingle its funds or
assets with those of any other Person and has not participated and shall not
participate in any cash management system with any other Person;
     (xvii) has held and shall hold its assets in its own name;
     (xviii) has held itself out and identified itself and shall hold itself out
and identify itself, and has conducted and shall conduct its business in its
name or in a name franchised or licensed to it by an entity other than an
Affiliate of itself or of an Individual Borrower not as a division or part of
any other Person, except (A) with respect to the other Individual Borrowers, as
contemplated by this Agreement, the Lockbox Agreement, the Cash Management
Agreement or the other Loan Documents, and (B) for business conducted on behalf
of itself by another Person under a business management services agreement that
is on commercially-reasonable terms, so long as the manager, or equivalent
thereof, under such business management services agreement holds itself out as
an agent of an Individual Borrower;
     (xix) except with respect to the other Individual Borrowers as contemplated
by this Agreement or the other Loan Documents, (A) has maintained and shall
maintain its financial statements, accounting records and other entity documents
separate from those of any other Person; (B) has shown and shall show, in its
financial statements, its assets and liabilities separate and apart from those
of any other Person; and (C) has not permitted and shall not permit its assets
to be listed as assets on the financial statement of any of its Affiliates
except as required by GAAP (or another basis of accounting acceptable to Lender
and consistently applied); provided, however, that any such consolidated
financial statement contains a note indicating that the Special Purpose Entity’s
separate assets and credit are not available to pay the debts of such Affiliate
and that the Special Purpose Entity’s liabilities do not constitute obligations
of the consolidated entity;
     (xx) except with respect to the other Individual Borrowers as contemplated
by this Agreement, the Lockbox Agreement, the Cash Management Agreement or the
other Loan Documents, has paid and shall pay its own liabilities and expenses,
including the salaries of its own employees, out of its own funds and assets,
and has maintained and shall maintain a sufficient number of employees in light
of its contemplated business operations;
     (xxi) has observed and shall observe all partnership, corporate or limited
liability company formalities, as applicable;
     (xxii) has not incurred any Indebtedness other than (i) acquisition
financing with respect to the applicable Individual Property; construction
financing with respect to the Improvements and certain off-site improvements
required by municipal and other

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authorities as conditions to the construction of the Improvements; and first
mortgage financings secured by the applicable Individual Property; and
Indebtedness pursuant to letters of credit, guaranties, interest rate protection
agreements and other similar instruments executed and delivered in connection
with such financings, (ii) unsecured trade payables and operational debt not
evidenced by a note, and (iii) Indebtedness incurred in the financing of
equipment and other personal property used on the applicable Individual
Property;
     (xxiii) shall have no Indebtedness other than (i) the Loan,
(ii) liabilities incurred in the ordinary course of business relating to the
ownership and operation of the Property and the routine administration of
Borrower, in amounts not to exceed 2% of the outstanding principal balance of
the Loan which liabilities are not more than sixty (60) days past the date
incurred, are not evidenced by a note and are paid when due, and which amounts
are normal and reasonable under the circumstances, and (iii) such other
liabilities that are permitted pursuant to this Agreement;
     (xxiv) has not assumed, guaranteed or become obligated and shall not assume
or guarantee or become obligated for the debts of any other Person, has not held
out and shall not hold out its credit as being available to satisfy the
obligations of any other Person or has not pledged and shall not pledge its
assets for the benefit of any other Person, in each case, except (i) as
permitted pursuant to this Agreement, (ii) in the case of an Individual
Borrower, in connection with the Loan, or (iii) with respect to the general
partner of any Individual Borrower that is a limited partnership, as such
general partner may be liable under applicable law for the obligations of such
Individual Borrower as the general partner thereof;
     (xxv) has not acquired and shall not acquire obligations or securities of
its partners, members or shareholders or any other owner or Affiliate except for
a Principal with respect to the obligations of, or interests in, a Borrower;
     (xxvi) has allocated and shall allocate fairly and reasonably any overhead
expenses that are shared with any of its Affiliates, constituents, or owners, or
any guarantors of any of their respective obligations, or any Affiliate of any
of the foregoing, including, but not limited to, paying for shared office space
and for services performed by any employee of an Affiliate;
     (xxvii) has maintained and used and shall maintain and use separate
stationery, invoices and checks bearing its name and not bearing the name of any
other entity unless such entity is clearly designated as being the Special
Purpose Entity’s agent;
     (xxviii) Intentionally omitted.
     (xxix) has held itself out and identified itself and shall 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 an
Individual Borrower and not as a division or part of any other Person,

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     (xxx) except with respect to the other Individual Borrowers as contemplated
by this Agreement, the Lockbox Agreement, the Cash Management Agreement or the
other Loan Documents, has maintained and shall maintain its assets in such a
manner that it shall not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any other Person;
     (xxxi) has not made and shall not make loans to any Person and has not held
and shall not 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);
     (xxxii) has not identified and shall 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;
     (xxxiii) other than (A) the Loan, and (B) capital contributions and
distributions permitted under the terms of its organizational documents, has not
entered into or been a party to, and shall not enter into or be a party to, any
transaction with any of its partners, members, shareholders or Affiliates except
in the ordinary course of its business and on terms which are commercially
reasonable terms comparable to those of an arm’s-length transaction with an
unrelated third party;
     (xxxiv) has not had and shall not have any obligation to, and has not
indemnified and shall not indemnify its partners, officers, directors or
members, as the case may be, in each case unless such an obligation or
indemnification is fully subordinated to the Debt and shall not constitute a
claim against it in the event that its cash flow is insufficient to pay the
Debt;
     (xxxv) if such entity is a corporation, has considered and shall consider
the interests of its creditors in connection with all corporate actions;
     (xxxvi) has not had and shall not have any of its obligations guaranteed by
any Affiliate except as provided by the Loan Documents;
     (xxxvii) has not formed, acquired or held and shall not form, acquire or
hold any subsidiary, except that a Principal may acquire and hold its interest
in an Individual Borrower;
     (xxxviii) has complied and shall comply with all of the terms and
provisions contained in its organizational documents;
     (xxxix) has conducted and shall conduct its business so that each of the
assumptions made about it and each of the facts stated about it in the
Insolvency Opinion are true;
     (xl) has not permitted and shall not permit any Affiliate or constituent
party independent access to its bank accounts, other than the Manager;

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     (xli) is, has always been and shall continue to be duly formed, validly
existing, and in good standing in the state of its incorporation or formation
and in all other jurisdictions where it is qualified to do business;
     (xlii) has paid all taxes which it owes and is not currently involved in
any dispute with any taxing authority;
     (xliii) is not now, nor has ever been, party to any lawsuit, arbitration,
summons, or legal proceeding that resulted in a judgment against it that has not
been paid in full;
     (xliv) has no judgments or Liens of any nature against it except for tax
liens not yet due and the Permitted Encumbrances;
     (xlv) has provided Lender with complete financial statements that reflect a
fair and accurate view of the entity’s financial condition; and
     (xlvi) has no material contingent or actual obligations not related to the
applicable Individual Property.
     “Split Note” shall have the meaning set forth in Section 9.2(b) hereof.
     “State” shall mean, the State or Commonwealth in which the applicable
Individual Property or any part thereof is located.
     “Survey” shall mean a survey of an Individual Property prepared by a
surveyor licensed in the State and satisfactory to Lender and the company or
companies issuing the Title Insurance Policy, and containing a certification of
such surveyor satisfactory to Lender.
     “Tax and Insurance Escrow Fund” shall have the meaning set forth in
Section 7.2 hereof.
     “Taxes” shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against any Individual Property or part thereof.
     “Tenant” shall mean Albertson’s, or any other person or entity with a
possessory right to all or any part of an Individual Property pursuant to a
Lease or other written agreement.
     “Tenant Direction Letter” shall have the meaning set forth in the Cash
Management Agreement.
     “Terrorism Insurance Premium Cap” shall mean an amount equal to 250% of the
annual Insurance Premiums payable by Borrower for the year of determination for
the insurance coverages required under Section 6.1(a)(i) and (ii) hereof, but
excluding any portion of such Insurance Premiums relating to terrorism or
earthquake coverage.
     “Threshold Amount” shall have the meaning set forth in Section 5.1.21
hereof.

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     “Title Insurance Policy” shall mean, with respect to an Individual
Property, an ALTA mortgagee title insurance policy in the form acceptable to
Lender (or, if an Individual Property is in a State which does not permit the
issuance of such ALTA policy, such form as shall be permitted in such State and
acceptable to Lender) issued with respect to the Individual Property and
insuring the lien of the Mortgage encumbering the Individual Property.
     “Transfer” shall have the meaning set forth in Section 5.2.10(b) hereof.
     “Transferee” shall have the meaning set forth in Section 5.2.10(e)(iii)
hereof.
     “Transferee’s Principals” shall mean collectively, (A) Transferee’s
managing members, general partners or principal shareholders and (B) such other
members, partners or shareholders which directly or indirectly shall own a
fifty-one percent (51%) or greater economic and voting interest in Transferee.
     “UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code
as in effect in the State in which the applicable Individual Property is
located.
     “U.S. Obligations” shall mean non-redeemable securities evidencing an
obligation to timely pay principal and/or interest in a full and timely manner
that are (a) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged, or (b) to the extent acceptable
to the Rating Agencies, other “government securities” within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, as amended.
     “Yield Maintenance Default Premium” shall mean an amount equal to the
greater of (a) three percent (3%) of the outstanding principal balance of the
Loan to be prepaid or satisfied and (b) the excess, if any, of (i) the sum of
the present values of all then-scheduled payments of principal and interest
under the Note assuming that all scheduled payments are made timely and that the
remaining outstanding principal and interest on the Loan is paid on the
Permitted Par Prepayment Date (with each such payment and assumed payment
discounted to its present value at the date of prepayment at the rate which,
when compounded monthly, is equivalent to the Prepayment Rate when compounded
semi-annually and deducting from the sum of such present values any short-term
interest paid from the date of prepayment to the next succeeding Payment Date in
the event such payment is not made on a Payment Date), over (ii) the principal
amount being prepaid.
     “Yield Maintenance Premium” shall mean an amount equal to the greater of
(a) one percent (1%) of the outstanding principal of the Loan to be prepaid or
satisfied and (b) the excess, if any, of (i) the sum of the present values of
all then-scheduled payments of principal and interest under the Note assuming
that all scheduled payments are made timely and that the remaining outstanding
principal and interest on the Loan is paid on the Permitted Par Prepayment Date
(with each such payment and assumed payment discounted to its present value at
the date of prepayment at the rate which, when compounded monthly, is equivalent
to the Prepayment Rate when compounded semi-annually and deducting from the sum
of such present values any short-term interest paid from the date of prepayment
to the next succeeding Payment Date in the event such payment is not made on a
Payment Date), over (ii) the principal amount being prepaid.

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      Section 1.2 Principles of Construction. All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. All uses of the word “including” shall mean “including, without
limitation” unless the context shall indicate otherwise. Unless otherwise
specified, the words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise specified,
all meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.
ARTICLE 2 — GENERAL TERMS
     Section 2.1 Loan Commitment; Disbursement to Borrower.
     2.1.1 Agreement to Lend and Borrow. Subject to and upon the terms and
conditions set forth herein, Lender hereby agrees to make and Borrower hereby
agrees to accept the Loan on the Closing Date.
     2.1.2 Single Disbursement to Borrower. Borrower may request and receive
only one (1) borrowing hereunder in respect of the Loan and any amount borrowed
and repaid hereunder in respect of the Loan may not be reborrowed. Borrower
acknowledges and agrees that the Loan has been fully funded as of the Closing
Date.
     2.1.3 The Note, Mortgage and Loan Documents. The Loan shall be evidenced by
the Note and secured by the Mortgage and the other Loan Documents.
     2.1.4 Use of Proceeds. Borrower shall use the proceeds of the Loan to
(a) acquire the Properties or repay and discharge any existing loans relating to
the Properties, (b) pay all past due Basic Carrying Costs, if any, with respect
to the Properties, (c) make deposits into the Reserve Funds on the Closing Date
in the amounts provided herein, (d) pay costs and expenses incurred in
connection with the closing of the Loan and the acquisition of the Properties,
as approved by Lender, (e) fund any working capital requirements of the
Properties and (f) distribute the balance, if any, to Borrower.
     Section 2.2 Interest Rate.
     2.2.1 Interest Rate. Interest on the outstanding principal balance of the
Loan shall accrue at the Initial Interest Rate or as otherwise set forth in this
Agreement from (and including) the Closing Date to but excluding the Anticipated
Repayment Date. Interest on the outstanding principal balance of the Loan shall
accrue at the Adjusted Interest Rate or as otherwise set forth in this Agreement
from (and including) the Anticipated Repayment Date to but excluding the
Maturity Date.
     2.2.2 Interest Calculation. Interest on the outstanding principal balance
of the Loan shall be calculated by multiplying (a) the actual number of days
elapsed in the relevant Accrual Period by (b) a daily rate based on the
Applicable Interest Rate or Default Rate, as applicable, and a three hundred
sixty (360) day year by (c) the outstanding principal balance of the Loan.

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     2.2.3 Default Rate. In the event that, and for so long as, any Event of
Default shall have occurred and be continuing, the outstanding principal balance
of the Loan and, to the extent permitted by law, all accrued and unpaid interest
in respect of the Loan and any other amounts due pursuant to the Loan Documents,
shall accrue interest at the Default Rate, calculated from the date such payment
was due without regard to any grace or cure periods contained herein.
     2.2.4 Usury Savings. This Agreement, the Note and the other Loan Documents
are subject to the express condition that at no time shall Borrower be obligated
or required to pay interest on the principal balance of the Loan at a rate which
could subject Lender to either civil or criminal liability as a result of being
in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the
other Loan Documents, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the Applicable Interest Rate or the Default Rate, as the
case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate
and all previous payments in excess of the Maximum Legal Rate shall be deemed to
have been payments in reduction of principal (without any Yield Maintenance
Premium or other prepayment consideration) and not on account of the interest
due hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.
     With respect to the foregoing provisions, the following shall apply with
respect to the State of Texas:
     (a) It is expressly stipulated and agreed to be the intent of Borrower and
Lender at all times to comply strictly with the applicable Texas law governing
the maximum rate or amount of interest payable on the Note, this Agreement or
the Debt (or applicable United States federal law to the extent that it permits
Lender to contract for, charge, take, reserve or receive a greater amount of
interest than under Texas law). If the applicable law is ever judicially
interpreted so as to render usurious any amount (i) contracted for, charged,
taken, reserved or received pursuant to the Note, this Agreement or any of the
other Loan Documents or any other communication or writing by or between
Borrower and Lender related to the transaction or transactions that are the
subject matter of the Loan Documents, (ii) contracted for, charged or received
by reason of Lender’s exercise of the option to accelerate the maturity of the
Note, this Agreement and/or the Debt, or (iii) Borrower will have paid or Lender
will have received by reason of any voluntary prepayment by Borrower of the Note
and/or the Debt, then it is Borrower’s and Lender’s express intent that all
amounts charged in excess of the Maximum Lawful Rate (hereinafter defined) shall
be automatically cancelled, ab initio, and all amounts in excess of the Maximum
Lawful Rate theretofore collected by Lender shall be credited on the principal
balance of the Note and/or the Debt (or, if the Note and all Debt have been or
would thereby be paid in full, refunded to Borrower), and the provisions of the
Note, this Agreement and the other Loan Documents immediately be deemed reformed
and the amounts thereafter collectible hereunder and thereunder reduced, without
the necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder and thereunder; provided, however, if the Note has been
paid in full before the end

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of the stated term of the Note, then Borrower and Lender agree that Lender
shall, with reasonable promptness after Lender discovers or is advised by
Borrower that interest was received in an amount in excess of the Maximum Lawful
Rate, either refund such excess interest to Borrower and/or credit such excess
interest against the Note and/or any Debt then owing by Borrower to Lender.
Borrower hereby agrees that as a condition precedent to any claim seeking usury
penalties against Lender, Borrower will provide written notice to Lender,
advising Lender in reasonable detail of the nature and amount of the violation,
and Lender shall have sixty (60) days after receipt of such notice in which to
correct such usury violation, if any, by either refunding such excess interest
to Borrower or crediting such excess interest against the Note and/or the Debt
then owing by Borrower to Lender. All sums contracted for, charged or received
by Lender for the use, forbearance or detention of any debt evidenced by the
Note, this Agreement and/or the Debt shall, to the extent permitted by
applicable law, be amortized or spread, using the actuarial method, throughout
the stated term of the Note, this Agreement and/or the Debt (including any and
all renewal and extension periods) until payment in full so that the rate or
amount of interest on account of the Note, this Agreement and/or the Debt does
not exceed the Maximum Lawful Rate from time to time in effect and applicable to
the Note and/or the Debt for so long as debt is outstanding. In no event shall
the provisions of Chapter 346 of the Texas Finance Code (which regulates certain
revolving credit loan accounts and revolving triparty accounts) apply to the
Note, this Agreement and/or the Debt. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, it is not the intention
of Lender to accelerate the maturity of any interest that has not accrued at the
time of such acceleration or to collect unearned interest at the time of such
acceleration.
     (b) As used herein, the term “Maximum Lawful Rate” shall mean the maximum
lawful rate of interest which may be contracted for, charged, taken, received or
reserved by Lender in accordance with the applicable laws of the State of Texas
(or applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, receive or reserve a greater amount of interest than
under Texas law), taking into account all Charges (as herein defined) made in
connection with the transaction evidenced by the Note, this Agreement and the
other Loan Documents. As used herein, the term “Charges” shall mean all fees,
charges and/or any other things of value, if any, contracted for, charged,
received, taken or reserved by Lender in connection with the transactions
relating to the Note, this Agreement and the other Loan Documents, which are
treated as interest under applicable law. As used in this Section 2.2.4, the
term “Debt” shall mean any and all debt paid or payable by Borrower to Lender
pursuant to the Loan Documents or any other communication or writing by or
between Borrower and Lender related to the transaction or transactions that are
the subject matter of this Agreement and the Loan Documents, except such debt
which has been paid or is payable by Borrower to Lender under the Note.
     (c) To the extent that Lender is relying on Chapter 303 of the Texas
Finance Code to determine the Maximum Lawful Rate payable on the Note and/or the
Debt, Lender will utilize the weekly ceiling from time to time in effect as
provided in such Chapter 303, as amended. To the extent United States federal
law permits Lender to contract for, charge, take, receive or reserve a greater
amount of interest than under Texas law, Lender will rely on United States
federal law instead of such Chapter 303 for the purpose of determining the
Maximum Lawful Rate. Additionally, to the extent permitted by applicable law now
or hereafter in effect, Lender may, at its option and from time to time, utilize
any other method of establishing the Maximum

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Lawful Rate under such Chapter 303 or under other applicable law by giving
notice, if required, to Borrower as provided by applicable law now or hereafter
in effect.
     Section 2.3 Loan Payment.
     2.3.1 Monthly Debt Service Payments.
     (a) Borrower shall pay to Lender (i) on the Closing Date, an amount equal
to interest only on the outstanding principal balance of the Loan for the
initial Accrual Period, (ii) on February 1, 2011, and on each Payment Date
thereafter up to and including the Payment Date on January 1, 2016, an amount
equal to interest only on the outstanding principal balance of the Loan for the
related Accrual Period, and (iii) on February 1, 2016, and on each Payment Date
thereafter up to and including the Anticipated Repayment Date, the Monthly Debt
Service Payment Amount, which payments shall be applied first to accrued and
unpaid interest and the balance to principal.
     (b) On each Payment Date occurring after the Anticipated Repayment Date
Borrower shall (i) make a payment to Lender of principal and interest in the
amount of the Monthly Debt Service Payment Amount, such payment to be applied to
interest in an amount equal to interest that would have accrued on the
outstanding principal balance of the Loan (without adjustment for Accrued
Interest) at the Initial Interest Rate and the remainder to the principal
balance of the Loan, and (ii) pay the other amounts required to be paid in
accordance with the Cash Management Agreement. In addition, to the extent there
is Excess Cash Flow for the preceding month, Borrower shall pay to Lender such
Excess Cash Flow, such payment to be applied as follows: (A) first, to the
reduction of the principal balance of the Note until the entire outstanding
principal balance of the Note is paid in full; and (B) then, to the payment of
Accrued Interest. “Accrued Interest” shall mean interest calculated at the
Adjusted Interest Rate, and deferred and not paid pursuant to subsection
(i) above.
     2.3.2 Payments Generally. For purposes of making payments hereunder, but
not for purposes of calculating Accrual Periods, if the day on which such
payment is due is not a Business Day, then amounts due on such date shall be due
on the immediately preceding Business Day and with respect to payments of
principal due on the Maturity Date, interest shall be payable at the Applicable
Interest Rate or the Default Rate, as the case may be, through and including the
day immediately preceding such Maturity Date. All amounts due under this
Agreement and the other Loan Documents shall be payable without setoff,
counterclaim, defense or any other deduction whatsoever.
     2.3.3 Payment on Maturity Date. Borrower shall pay to Lender on the
Maturity Date the outstanding principal balance of the Loan (including without
limitation the Accrued Interest), all accrued and unpaid interest and all other
amounts due hereunder and under the Note, the Mortgage and the other Loan
Documents.
     2.3.4 Late Payment Charge. If any principal, interest or any other sums due
under the Loan Documents (including the amounts due on the Maturity Date) are
not paid by Borrower on or prior to the date on which it is due, Borrower shall
pay to Lender upon demand an amount equal to the lesser of five percent (5%) of
such unpaid sum and the Maximum Legal Rate in

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order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Mortgage and the
other Loan Documents to the extent permitted by applicable law.
     2.3.5 Method and Place of Payment. Except as otherwise specifically
provided herein and subject to the provisions of Section 2.7.3, all payments and
prepayments under this Agreement and the Note shall be made to Lender not later
than 2:00 P.M., New York City time, on the date when due and shall be made in
lawful money of the United States of America in immediately available funds at
Lender’s office or as otherwise directed by Lender, and any funds received by
Lender after such time shall, for all purposes hereof, be deemed to have been
paid on the next succeeding Business Day.
     Section 2.4 Prepayments.
     2.4.1 Voluntary Prepayments.
     (a) Except as otherwise expressly provided in this Section 2.4, Borrower
shall not have the right to prepay the Loan in whole or in part prior to the
Anticipated Repayment Date.
     (b) On any Business Day after the Permitted Prepayment Date through the
Maturity Date, Borrower may, at its option, prepay the Debt in full (but not in
part), provided that (i) Borrower submits a notice to Lender setting forth the
projected date of prepayment, which date shall be no less than thirty (30) days
from the date of such notice, and (ii) Borrower pays to Lender (A) the unpaid
principal amount of the Note, (B) all interest accrued and unpaid on the
principal balance of the Note to and including the date of prepayment, (C) all
other sums due under the Note, this Agreement and the other Loan Documents,
(D) if such prepayment occurs prior to the Permitted Par Prepayment Date, the
Yield Maintenance Premium, and (E) if such prepayment is not paid on a regularly
scheduled Payment Date (or, if such day is not a Business Day, the immediately
preceding Business Day), interest for the full Accrual Period during which the
prepayment occurs.
     (c) Notwithstanding anything contained in Section 2.4.1(a) above to the
contrary, Borrower may prepay a portion of the Loan in accordance with
Section 2.6.2 hereof.
     2.4.2 Mandatory Prepayments. On the next occurring Payment Date following
the date on which Lender actually receives any Net Proceeds, if Lender is not
obligated to make such Net Proceeds available to Borrower for the Restoration of
the applicable Individual Property or otherwise remit such Net Proceeds to
Borrower pursuant to Section 6.4 hereof, Borrower authorizes Lender, at Lender’s
option, to apply Net Proceeds as a prepayment of all or a portion of the
outstanding principal balance of the Loan together with accrued interest and any
other sums due hereunder in an amount equal to one hundred percent (100%) of
such Net Proceeds; provided, however, if an Event of Default has occurred and is
continuing, Lender may apply such Net Proceeds to the Debt (until paid in full)
in any order or priority in its sole discretion. No Yield Maintenance Premium or
other prepayment consideration or premium shall be due in connection with any
prepayment made pursuant to this Section 2.4.2. Any Net Proceeds applied as a
prepayment of a portion of the outstanding principal balance of the Loan

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shall reduce the Release Amount for the applicable Individual Property by an
equivalent amount.
     2.4.3 Prepayments After Default. If during the continuance of an Event of
Default, payment of all or any part of the Debt is tendered by Borrower or
otherwise recovered by Lender, such tender or recovery shall be (a) deemed made
on the next occurring Payment Date together with the Monthly Debt Service
Payment and (b) deemed a voluntary prepayment by Borrower in violation of the
prohibition against prepayment set forth in Section 2.4.1 hereof, and Borrower
shall pay, in addition to the Debt, an amount equal to the Yield Maintenance
Default Premium which can be applied by Lender in such order and priority as
Lender shall determine in is sole and absolute discretion.
     Section 2.5 Intentionally omitted.
     Section 2.6 Release of Property. Except as set forth in this Section 2.6,
no repayment or prepayment of all or any portion of the Loan shall cause, give
rise to a right to require, or otherwise result in, the release of the Lien of
the Mortgage on any Individual Property.
     2.6.1 Release of Property.
     (a) If Borrower has elected to prepay the entire Loan and the requirements
of Section 2.4.1 and this Section 2.6.1 have been satisfied, all of the
Properties shall be released from the Liens of their respective Mortgages.
     (b) In connection with the release of the Mortgages, Borrower shall submit
to Lender, not less than fifteen (15) days prior to the date of prepayment, a
release of Lien (and related Loan Documents) for each Individual Property for
execution by Lender. Each such release shall be in a form appropriate in the
jurisdiction in which the applicable Individual Property is located and that
would be satisfactory to a prudent lender and contains standard provisions, if
any, protecting the rights of the releasing lender. In addition, Borrower shall
provide all other documentation Lender reasonably requires to be delivered by
Borrower in connection with such release. Borrower shall reimburse Lender and
Servicer for any costs and expenses Lender and Servicer incur arising from such
release (including reasonable attorneys’ fees and expenses) and Borrower shall
pay, in connection with such release, (i) all recording charges, filing fees,
taxes or other expenses payable in connection therewith, and (ii) to any
Servicer, the current fee being assessed by such Servicer to effect such
release, which fee shall not exceed $500 per Individual Property being released
(exclusive of costs incurred).
     2.6.2 Release of Individual Property. On any Business Day after the
Permitted Prepayment Date through the Anticipated Repayment Date, an Individual
Borrower may, at its option, prepay a portion of the Loan, provided the
applicable requirements of Section 2.4.1 and this Section 2.6.2 have been
satisfied, and such Individual Borrower may obtain the release of its Individual
Property from the Lien of the related Mortgage thereon (and related Loan
Documents) and the release of the related Individual Borrower’s obligations
under the Loan Documents (other than those expressly stated to survive). In
connection with such partial prepayment and release, the following conditions
must be satisfied:

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     (a) The amount of the outstanding principal balance of the Loan to be
prepaid shall equal or exceed the Adjusted Release Amount for the applicable
Individual Property, and such prepayment shall be deemed a voluntary prepayment
for all purposes hereunder and shall include the applicable Yield Maintenance
Premium (if such prepayment is made prior to the Permitted Par Prepayment Date)
and any other sums then due to Lender;
     (b) No Event of Default has occurred and is continuing (and no event which,
with notice, the passage or time, or both would constitute an Event of Default
shall have occurred);
     (c) Subsequent to such release, each remaining Individual Borrower shall
continue to be a Special Purpose Entity pursuant to, and in accordance with,
Section 4.1.30 hereof;
     (d) If required by the Rating Agencies (as determined by Lender), Borrower
shall deliver to Lender and the Rating Agencies an Additional Insolvency Opinion
or an update of the Insolvency Opinion indicating that the release does not
affect the opinions set forth therein;
     (e) Borrower shall deliver an opinion of tax counsel that would be
acceptable to a prudent lender acting reasonably, prepared and delivered at
Borrower’s expense, stating that as a result of such release of the applicable
Individual Property any REMIC Trust that has acquired the Loan (i) will not fail
to maintain its status as a REMIC Trust, and (ii) will not be subject to tax on
any “prohibited transactions” or “prohibited contributions”;
     (f) After giving effect to the release of the applicable Individual
Property, the Debt Service Coverage Ratio for the Properties then remaining
subject to the Liens of the Mortgages based on the trailing (twelve) (12) month
period immediately preceding the release of the applicable Individual Property
shall be equal to or greater than the greater of (i) the Release Debt Service
Coverage Ratio, and (ii) the Debt Service Coverage Ratio for all of the
Properties then subject to the Liens of the Mortgages (including the Individual
Property requested to be released) immediately preceding the release of the
applicable Individual Property based on the trailing twelve (12) month period;
     (g) Immediately after giving effect to the release of the applicable
Individual Property, the loan-to-value ratio of the remaining Properties, as
determined by Lender in its sole discretion, shall not exceed 125%. Unless
Lender determines that applicable REMIC regulations or other applicable
authority require a different valuation method, Lender shall determine the
aggregate loan-to-value ratio of the remaining Properties by capitalizing net
operating income for such Properties for such period using a capitalization rate
or range of capitalization rates that the Lender has no reason to believe is
incorrect.
     (h) In connection with the release of a Mortgage, Borrower shall submit to
Lender, not less than fifteen (15) days prior to the date of prepayment, a
release of Lien (and related Loan Documents) for the applicable Individual
Property for execution by Lender. Such release shall be in a form appropriate in
the jurisdiction in which the applicable Individual Property is located and that
would be satisfactory to a prudent lender and contains standard provisions, if
any, protecting the rights of the releasing lender. In addition, Borrower shall
provide all other documentation Lender reasonably requires to be delivered by
Borrower in connection with such release. Borrower shall reimburse Lender and
Servicer for any costs and expenses Lender and

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Servicer incur arising from such release (including reasonable attorneys’ fees
and expenses) and Borrower shall have paid, in connection with such release,
(i) all recording charges, filing fees, taxes or other expenses payable in
connection therewith, (ii) all costs and expenses (if any) of the Rating
Agencies incurred with respect to such release, and (iii) to any Servicer, the
current fee being assessed by such Servicer to effect such release, provided,
however, such fee shall not exceed $15,000 per release (exclusive of costs
incurred); and
     (i) Borrower shall comply with Lender’s or Servicer’s reasonable
requirements in connection with such release (subject to the fee cap in clause
(h) above).
     Notwithstanding the first sentence of this Section 2.6.2, in connection
with an exercise of the purchaser’s rights under the Denver Purchase Option, on
any Business Day after the date hereof, the Denver Individual Borrower may
prepay a portion of the Loan and obtain the release of the Denver Individual
Property from the Lien of the related Mortgage thereon (and related Loan
Documents) and the release of the Denver Individual Borrower’s obligations under
the Loan Documents (other than those expressly stated to survive), provided the
applicable requirements of Section 2.4.1 and this Section 2.6.2 (other than
clause (b) of this Section 2.6.2) have been satisfied.
     Upon the release of any Individual Property and Individual Borrower
pursuant to this Section 2.6.2, all references herein or in any of the other
Loan Documents to the term “Properties” shall be deemed to exclude such
Individual Property and all references in the Note, this Agreement or any other
Loan Document to the term “Borrower” or “Borrowers” shall be deemed to exclude
such Individual Borrower.
     Section 2.7 Lockbox Account/Cash Management.
      2.7.1 Lockbox Account.
     (a) During the term of the Loan, Borrower shall establish and maintain an
account (the “Lockbox Account”) with Lockbox Bank in trust for the benefit of
Lender, which Lockbox Account shall be under the sole dominion and control of
Lender. The Lockbox Account shall be entitled “Cole AB Abilene TX, LLC as
Borrower and JPMorgan Chase Bank, National Association, as Lender, pursuant to
Loan Agreement dated as of December 15, 2010 — Lockbox Account”. Borrower hereby
grants to Lender a first-priority security interest in the Lockbox Account and
all deposits at any time contained therein and the proceeds thereof and will
take all actions necessary to maintain in favor of Lender a perfected first
priority security interest in the Lockbox Account, including, without
limitation, filing UCC-1 Financing Statements and continuations thereof. Lender
and Servicer shall have the sole right to make withdrawals from the Lockbox
Account and all costs and expenses for establishing and maintaining the Lockbox
Account shall be paid by Borrower. All monies now or hereafter deposited into
the Lockbox Account shall be deemed additional security for the Debt. The
Lockbox Agreement and Lockbox Account shall remain in effect until the Loan has
been repaid in full.
     (b) Borrower shall, or shall cause Manager to, on or prior to the Closing
Date, deliver Tenant Direction Letters to all Tenants under Leases to deliver
all Rents payable thereunder directly to the Lockbox Account. Borrower shall,
and shall cause Manager to, deposit all

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amounts received by Borrower or Manager constituting Rents into the Lockbox
Account within one (1) Business Day after receipt thereof.
     (c) Pursuant to the Lockbox Agreement, the Lockbox Bank will agree to
transfer to the Cash Management Account in immediately available funds by
federal wire transfer all amounts on deposit in the Lockbox Account (except for
any required minimum balances and/or fees of the Lockbox Bank, as specified in
the Lockbox Agreement) once every Business Day throughout the term of the Loan.
     (d) Upon the occurrence and during the continuance of an Event of Default,
Lender may, in addition to any and all other rights and remedies available to
Lender, apply any sums then present in the Lockbox Account to the payment of the
Debt in any order in its sole discretion.
     (e) The Lockbox Account shall not be commingled with other monies held by
Borrower, Manager or Lockbox Bank.
     (f) Borrower shall not further pledge, assign or grant any security
interest in the Lockbox Account or the monies deposited therein or permit any
lien or encumbrance to attach thereto, or any levy to be made thereon, or any
UCC-1 Financing Statements, except those naming Lender as the secured party, to
be filed with respect thereto.
     (g) Borrower shall indemnify Lender and hold Lender harmless from and
against any and all actions, suits, claims, demands, liabilities, losses,
damages, obligations and costs and expenses (including litigation costs and
reasonable attorneys’ fees and expenses) arising from or in any way connected
with the Lockbox Account and/or the Lockbox Agreement (unless arising from the
gross negligence or willful misconduct of Lender) or the performance of the
obligations for which the Lockbox Account was established.
     2.7.2 Cash Management Account.
     (a) During the term of the Loan, Borrower shall establish and maintain a
segregated Eligible Account (the “Cash Management Account”) to be held by Agent
in trust and for the benefit of Lender, which Cash Management Account shall be
under the sole dominion and control of Lender. The Cash Management Account shall
be entitled “Cole AB Abilene TX, LLC as Borrower and JPMorgan Chase Bank,
National Association, as Lender, pursuant to Loan Agreement dated as of
December 15, 2010 — Cash Management Account.” Borrower hereby grants to Lender a
first priority security interest in the Cash Management Account and all deposits
at any time contained therein and the proceeds thereof and will take all actions
necessary to maintain in favor of Lender a perfected first priority security
interest in the Cash Management Account, including, without limitation, filing
UCC-1 Financing Statements and continuations thereof. Borrower will not in any
way alter or modify the Cash Management Account and will notify Lender of the
account number thereof. Lender and Servicer shall have the sole right to make
withdrawals from the Cash Management Account and all costs and expenses for
establishing and maintaining the Cash Management Account shall be paid by
Borrower pursuant to the Fee Agreement (as defined in the Cash Management
Agreement).

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     (b) The insufficiency of funds on deposit in the Cash Management Account
shall not relieve Borrower from the obligation to make any payments, as and when
due pursuant to this Agreement and the other Loan Documents, and such
obligations shall be separate and independent, and not conditioned on any event
or circumstance whatsoever.
     (c) All funds on deposit in the Cash Management Account following the
occurrence and during the continuance of an Event of Default may be applied by
Lender in such order and priority as Lender shall determine.
     (d) Borrower hereby agrees that Lender may modify the Cash Management
Agreement for the purpose of establishing additional sub-accounts in connection
with any payments otherwise required under this Agreement and the other Loan
Documents and Lender shall provide notice thereof to Borrower.
     2.7.3 Payments Received under the Cash Management Agreement.
Notwithstanding anything to the contrary contained in this Agreement or the
other Loan Documents, and provided no Event of Default has occurred and is
continuing, Borrower’s obligations with respect to the payment of the Monthly
Debt Service Payment Amount and amounts required to be deposited into the
Reserve Funds, if any, shall be deemed satisfied to the extent sufficient
amounts are deposited in the Cash Management Account to satisfy such obligations
pursuant to this Agreement on the dates each such payment is required,
regardless of whether any of such amounts are so applied by Lender.
ARTICLE 3 — CONDITIONS PRECEDENT
     Section 3.1 Conditions Precedent to Closing. The obligation of Lender to
make the Loan hereunder is subject to the fulfillment by Borrower or waiver by
Lender of all of the conditions precedent to closing set forth in the
application or term sheet for the Loan between Borrower and Lender and the
commitment or commitment rider, if any, to the application or term sheet for the
Loan issued by Lender.
ARTICLE 4 — REPRESENTATIONS AND WARRANTIES
     Section 4.1 Borrower Representations. Borrower represents and warrants as
of the date hereof that:
     4.1.1 Organization. Borrower has been duly organized and is validly
existing and in good standing with requisite power and authority to own the
Properties and to transact the businesses in which it is now engaged. Borrower
is duly qualified to do business and is in good standing in each jurisdiction
where it is required to be so qualified in connection with its businesses and
operations. Borrower possesses all rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own the Properties and to
transact the businesses in which it is now engaged, and the sole business of
Borrower is the ownership, management and operation of the Properties. The
ownership interests in Borrower are as set forth on the organizational chart
attached hereto as Schedule IV.
     4.1.2 Proceedings. Borrower has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents. This Agreement

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and such other Loan Documents have been duly executed and delivered by or on
behalf of Borrower and constitute legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their respective terms,
subject only to applicable bankruptcy, insolvency and similar laws affecting
rights of creditors generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
     4.1.3 No Conflicts. The execution, delivery and performance of this
Agreement and the other Loan Documents by Borrower will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, partnership agreement, management agreement or other
agreement or instrument to which Borrower is a party or by which any of the
Properties or Borrower’s assets is subject, nor will such action result in any
violation of the provisions of any statute or any order, rule or regulation of
any Governmental Authority having jurisdiction over Borrower or any of
Borrower’s properties or assets, and any consent, approval, authorization,
order, registration or qualification of or with any court or any such
Governmental Authority required for the execution, delivery and performance by
Borrower of this Agreement or any other Loan Documents has been obtained and is
in full force and effect.
     4.1.4 Litigation. There are no actions, suits or proceedings at law or in
equity by or before any Governmental Authority or other agency now pending or,
to Borrower’s actual knowledge, threatened against or affecting any Individual
Borrower, Guarantor, Principal or, to the extent an Individual Borrower,
Guarantor or Principal is a party, any Individual Property, which actions, suits
or proceedings, if determined against such Individual Borrower, Guarantor,
Principal or any Individual Property, might materially adversely affect the
condition (financial or otherwise) or business of such Individual Borrower,
Guarantor, Principal or the condition or ownership of any Individual Property.
In addition, no Individual Borrower has any knowledge of any actions, suits or
proceedings at law or in equity by or before any Governmental Authority or other
agency now pending or threatened against or affecting any Individual Property to
which an Individual Borrower, Guarantor or Principal is not a party, which
actions, suits or proceedings, if determined against such Individual Property
might materially adversely affect the condition or ownership of such Individual
Property.
     4.1.5 Agreements. Borrower is not a party to any agreement or instrument or
subject to any restriction which might materially and adversely affect Borrower
or any Individual Property, or Borrower’s business, properties or assets,
operations or condition, financial or otherwise. Borrower is not in default in
any material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument to
which it is a party or by which Borrower or any Individual Property is bound.
Borrower has no material financial obligation under any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which Borrower
is a party or by which Borrower or any Individual Property is otherwise bound,
other than (a) obligations incurred in the ordinary course of the operation of
any Individual Property as permitted pursuant to clause (xxiii) of the
definition of “Special Purpose Entity” set forth in Section 1.1 hereof and
(b) obligations under the Loan Documents.

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     4.1.6 Title. Each Individual Borrower has good and marketable fee simple
title to the real property comprising part of its Individual Property and good
title to the balance of the Individual Property, free and clear of all Liens
whatsoever except the Permitted Encumbrances, such other Liens as are permitted
pursuant to the Loan Documents and the Liens created by the Loan Documents. To
Borrower’s actual knowledge, the Permitted Encumbrances in the aggregate do not
materially and adversely affect the value, operation or use of the Properties
(as currently used) or Borrower’s ability to repay the Loan. To Borrower’s
actual knowledge, each Mortgage, when properly recorded in the appropriate
records, together with any Uniform Commercial Code financing statements required
to be filed in connection therewith, will create (a) a valid, perfected first
priority lien on the corresponding Individual Property, subject only to
Permitted Encumbrances and the Liens created by the Loan Documents and
(b) perfected security interests in and to, and perfected collateral assignments
of, all personalty owned by Borrower (including the Leases), all in accordance
with the terms thereof, in each case subject only to any applicable Permitted
Encumbrances, such other Liens as are permitted pursuant to the Loan Documents
and the Liens created by the Loan Documents. To Borrower’s actual knowledge and
except as set forth in the Title Insurance Policy, there are no claims for
payment for work, labor or materials affecting the Properties which are or may
become a Lien prior to, or of equal priority with, the Liens created by the Loan
Documents.
     4.1.7 Solvency. Borrower has (a) not entered into this transaction or
executed the Note, this Agreement or any other Loan Documents with the actual
intent to hinder, delay or defraud any creditor and (b) received reasonably
equivalent value in exchange for its obligations under such Loan Documents.
Giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds
and will, immediately following the making of the Loan, exceed Borrower’s total
liabilities, including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities. The fair saleable value of Borrower’s assets is and
will, immediately following the making of the Loan, be greater than Borrower’s
probable liabilities, including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured. Borrower’s assets do not
and, immediately following the making of the Loan will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. Borrower does not intend to, and does not believe that it will,
incur debt and liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such debt and liabilities as they mature
(taking into account the timing and amounts of cash to be received by Borrower
and the amounts to be payable on or in respect of obligations of Borrower). No
petition in bankruptcy has been filed against Borrower or any constituent Person
in the last seven (7) years, and neither Borrower nor any constituent Person in
the last seven (7) years has ever made an assignment for the benefit of
creditors or taken advantage of any insolvency act for the benefit of debtors.
Neither Borrower nor any of its constituent Persons are contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
laws or the liquidation of all or a major portion of Borrower’s assets or
property, and Borrower has no actual knowledge of any Person contemplating the
filing of any such petition against it or such constituent Persons.
     4.1.8 Full and Accurate Disclosure. No statement of fact made by Borrower
in this Agreement or in any of the other Loan Documents contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained herein or therein not misleading. There is no material
fact presently known to Borrower which has not been disclosed to Lender which
adversely affects, nor as far as Borrower can foresee, might adversely

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affect, any Individual Property or the business, operations or condition
(financial or otherwise) of Borrower.
     4.1.9 No Plan Assets. Borrower does not sponsor, is not obligated to
contribute to, and is not itself an “employee benefit plan,” as defined in
Section 3(3) of ERISA, subject to Title I of ERISA or Section 4975 of the Code,
and none of the assets of Borrower constitutes or will constitute “plan assets”
of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In
addition, (a) Borrower is not a “governmental plan” within the meaning of
Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject
to any state or other statute , regulation or other restriction regulating
investments of, or fiduciary obligations with respect to, governmental plans
within the meaning of Section 3(32) of ERISA which is similar to the provisions
of Section 406 of ERISA or Section 4975 of the Code and which prohibit or
otherwise restrict the transactions contemplated by this Agreement, including
but not limited to the exercise by Lender of any of its rights under the Loan
Documents.
     4.1.10 Compliance. To Borrower’s actual knowledge, Borrower and the
Properties and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes. Borrower is not in default or violation of any
order, writ, injunction, decree or demand of any Governmental Authority. There
has not been committed by Borrower or, to Borrower’s actual knowledge, any other
Person in occupancy of or involved with the operation or use of the Properties,
any act or omission affording the federal government or any other Governmental
Authority the right of forfeiture as against any Individual Property or any part
thereof or any monies paid in performance of Borrower’s obligations under any of
the Loan Documents.
     4.1.11 Financial Information. All financial data, including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered to Lender in connection with the Loan (i) are true, complete
and correct in all material respects, (ii) accurately represent the financial
condition of Borrower and such Individual Property, as applicable, as of the
date of such reports, and (iii) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance
with GAAP (or another basis of accounting acceptable to Lender and consistently
applied), throughout the periods covered, except as disclosed therein. Except
for Permitted Encumbrances, Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on any Individual
Property or the current operation thereof, except as referred to or reflected in
said financial statements. Since the date of such financial statements, there
has been no materially adverse change in the financial condition, operations or
business of Borrower from that set forth in said financial statements.
     4.1.12 Condemnation. No Condemnation or other proceeding has been commenced
or, to Borrower’s actual knowledge, is threatened or contemplated with respect
to all or any portion of any Individual Property or for the relocation of
roadways providing access to any Individual Property.
     4.1.13 Federal Reserve Regulations. No part of the proceeds of the Loan
will be used for the purpose of purchasing or acquiring any “margin stock”
within the meaning of Regulation

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U of the Board of Governors of the Federal Reserve System or for any other
purpose which would be inconsistent with such Regulation U or any other
Regulations of such Board of Governors, or for any purposes prohibited by Legal
Requirements or by the terms and conditions of this Agreement or the other Loan
Documents.
     4.1.14 Utilities and Public Access. The applicable Individual Property has
rights of access to public ways and is served by water, sewer, sanitary sewer
and storm drain facilities adequate to service such Individual Property for its
intended uses. All public utilities necessary or convenient to the full use and
enjoyment of such Individual Property are located either in the public right of
way abutting the Individual Property (which are connected so as to serve the
Individual Property without passing over other property) or in recorded
easements serving such Individual Property and such easements are set forth in
the Title Insurance Policy. All roads necessary for the use of the Individual
Property for its current purposes have been completed and dedicated to public
use and accepted by all Governmental Authorities.
     4.1.15 Not a Foreign Person. Borrower is not a “foreign person” within the
meaning of §1445(f)(3) of the Code.
     4.1.16 Separate Lots. To Borrower’s actual knowledge, each Individual
Property is comprised of one (1) or more parcels which constitute a separate tax
lot or lots and does not constitute a portion of any other tax lot not a part of
such Individual Property.
     4.1.17 Assessments. To Borrower’s actual knowledge and except as set forth
in the Title Insurance Policy, there are no pending or proposed special or other
assessments for public improvements or otherwise affecting any Individual
Property nor are there any contemplated improvements to any Individual Property
that may result in such special or other assessments.
     4.1.18 Enforceability. To Borrower’s actual knowledge, the Loan Documents
are not subject to any right of rescission, set-off, counterclaim or defense by
Borrower or Guarantor, including the defense of usury, nor would the operation
of any of the terms of the Loan Documents, or the exercise of any right
thereunder, render the Loan Documents unenforceable (subject to principles of
equity and bankruptcy, insolvency and other laws generally affecting creditors’
rights and the enforcement of debtors’ obligations), and neither Borrower nor
Guarantor has asserted any right of rescission, set-off, counterclaim or defense
with respect thereto.
     4.1.19 No Prior Assignment. There are no prior collateral assignments of
the Leases or any portion of the Rents due and payable or to become due and
payable which are presently outstanding.
     4.1.20 Insurance. Borrower has obtained and has delivered to Lender
certified copies of the Policies, or insurance certificates in form reasonably
acceptable to Lender, reflecting the insurance coverages, amounts and other
requirements set forth in this Agreement. To Borrower’s actual knowledge, no
claims have been made or are currently pending, outstanding or otherwise remain
unsatisfied under any of the Policies and neither Borrower nor any other Person,
has done, by act or omission, anything which would impair the coverage of any
such Policy.

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     4.1.21 Use of Property. Each Individual Property is used exclusively for
retail or commercial purposes and other appurtenant and related uses.
     4.1.22 Certificate of Occupancy; Licenses. To Borrower’s actual knowledge,
all certifications, permits, licenses and approvals, including without
limitation, certificates of completion and occupancy permits, required for the
legal use, occupancy and operation of each Individual Property have been
obtained and are in full force and effect. The use being made of each Individual
Property is in conformity with the certificate of occupancy issued for such
Individual Property.
     4.1.23 Flood Zone. Except as may be set forth in any flood certificate
delivered to Lender in connection with the Loan, none of the Improvements on any
Individual Property are located in an area as identified by the Federal
Emergency Management Agency as an area having special flood hazards or, if so
located, the flood insurance required pursuant to Section 6.1(a)(i) is in full
force and effect with respect to such Individual Property.
     4.1.24 Physical Condition. To Borrower’s actual knowledge and except as set
forth in the Physical Conditions Report, each Individual Property, including,
without limitation, all buildings, improvements, parking facilities, sidewalks,
storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, are in good
condition, order and repair in all material respects; To Borrower’s actual
knowledge, there exists no structural or other material defects or damages in
any Individual Property, whether latent or otherwise, and Borrower has not
received notice from any insurance company or bonding company of any defects or
inadequacies in any Individual Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.
     4.1.25 Boundaries. To Borrower’s actual knowledge and except as set forth
on the Survey, all of the improvements which were included in determining the
appraised value of each Individual Property lie wholly within the boundaries and
building restriction lines of such Individual Property, and no improvements on
adjoining properties encroach upon the Individual Property, and no easements or
other encumbrances upon the Individual Property encroach upon any of the
Improvements, so as to affect the value or marketability of the Individual
Property except those which are insured against by the Title Insurance Policy.
     4.1.26 Leases. The Properties are not subject to any leases other than the
Leases described in the rent roll attached hereto as Schedule II and made a part
hereof, which rent roll is true, complete and accurate in all respects as of the
date hereof. Borrower is the owner and lessor of landlord’s interest in the
Leases. No Person has any possessory interest in any Individual Property or
right to occupy the same except under and pursuant to the provisions of the
Leases. The current Leases are in full force and effect and, to Borrower’s
actual knowledge there are no defaults thereunder by either party and there are
no conditions that, with the passage of time or the giving of notice, or both,
would constitute defaults thereunder. No Rent (including security deposits) has
been paid more than one (1) month in advance of its due date. All security
deposits are held by Borrower in accordance with applicable law. To Borrower’s
actual

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knowledge all work to be performed by Borrower under each Lease has been
performed as required and has been accepted by the applicable Tenant , and any
payments, free rent, partial rent, rebate of rent or other payments, credits,
allowances or abatements required to be given by Borrower to any Tenant has
already been received by such Tenant. There has been no prior sale, transfer or
assignment (other than to Borrower), hypothecation or pledge of any Lease or of
the Rents received therein (other than sales, transfers, assignments,
hypothecations or pledges which may have been made by the Tenants under the
Leases). To Borrower’s actual knowledge and except as indicated on Schedule II,
no Tenant listed on Schedule II has assigned its Lease or sublet all or any
portion of the premises demised thereby, no such Tenant holds its leased
premises under assignment or sublease, nor does anyone except such Tenant and
its employees occupy such leased premises. Except as set forth in the Leases
with Albertson’s, no Tenant under any Lease has a right or option pursuant to
such Lease or otherwise to purchase all or any part of the leased premises or
the building of which the leased premises are a part. No Tenant under any Lease
has any right or option for additional space in the Improvements.
     4.1.27 Survey. To Borrower’s actual knowledge, the Survey for each
Individual Property delivered to Lender in connection with this Agreement does
not fail to reflect any material matter affecting such Individual Property or
the title thereto.
     4.1.28 Inventory. Borrower is the owner of all of the Equipment, Fixtures
and Personal Property (as such terms are defined in the Mortgage) located on or
at each Individual Property, other than Equipment, Fixtures and Personal
Property owned by the Tenants under the Leases and shall not lease any
Equipment, Fixtures or Personal Property other than pursuant to the Leases. All
of the Equipment, Fixtures and Personal Property are sufficient to operate the
Properties in the manner required hereunder and in the manner in which it is
currently operated.
     4.1.29 Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements applicable to the
transfer of each Individual Property to Borrower have been paid. All mortgage,
mortgage recording, stamp, intangible or other similar tax required to be paid
by any Person under applicable Legal Requirements currently in effect in
connection with the execution, delivery, recordation, filing, registration,
perfection or enforcement of any of the Loan Documents, including, without
limitation, the Mortgage, have been paid, and, under current Legal Requirements,
such Mortgage is enforceable in accordance with its terms by Lender (or any
subsequent holder thereof), subject to principles of equity and bankruptcy,
insolvency and other laws generally applicable to creditors’ rights and the
enforcement of debtors’ obligations.
     4.1.30 Special Purpose Entity/Separateness.
     (a) Until the Debt has been paid in full, Borrower hereby represents,
warrants and covenants that (i) each Borrower is, shall be and shall continue to
be a Special Purpose Entity and (ii) Principal is, shall be and shall continue
to be a Special Purpose Entity.
     (b) The representations, warranties and covenants set forth in
Section 4.1.30(a) shall survive for so long as any amount remains payable to
Lender under this Agreement or any other Loan Document.

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     (c) Any and all of the stated facts and factual assumptions relating to the
conduct of Borrower or Guarantor or any Affiliate of either such party made in
any Insolvency Opinion, including, but not limited to, any exhibits attached
thereto, will have been and shall be true and correct in all respects, and
Borrower and Principal will have complied and will comply with all of such
stated facts and assumptions made with respect to it in any Insolvency Opinion.
Each entity other than Borrower, Principal and Lender with respect to which a
factual assumption is made relating to its conduct or a fact stated in any
Insolvency Opinion will have complied and will comply with all of such
assumptions made and facts stated with respect to it in any such Insolvency
Opinion. Borrower covenants that in connection with any Additional Insolvency
Opinion delivered in connection with this Agreement it shall provide an updated
certification regarding compliance with the facts and the factual assumptions
relating to the conduct of Borrower or Guarantor or any Affiliate of either such
party made therein.
     (d) Borrower covenants and agrees that Borrower shall provide Lender with
not less than thirty (30) days’ prior written notice prior to the removal of an
Independent Director of any of Borrower and/or Principal.
     4.1.31 Management Agreement. The Management Agreement is in full force and
effect and there is no default thereunder by any party thereto and no event has
occurred that, with the passage of time and/or the giving of notice would
constitute a default thereunder. The Management Agreement was entered into on
commercially reasonable terms.
     4.1.32 Illegal Activity. No portion of any Individual Property has been or
will be purchased by Borrower with proceeds of any illegal activity.
     4.1.33 No Change in Facts or Circumstances; Disclosure. All information
submitted by and on behalf of Borrower to Lender and in all financial
statements, rent rolls (including the rent roll attached hereto as Schedule II),
reports, certificates and other documents submitted in connection with the Loan
or in satisfaction of the terms thereof and all statements of fact made by
Borrower in this Agreement or in any other Loan Document, are accurate, complete
and correct in all material respects. There has been no material adverse change
in any condition, fact, circumstance or event that would make any such
information inaccurate, incomplete or otherwise misleading in any material
respect or that otherwise materially and adversely affects or might materially
and adversely affect the use, operation or value of the Properties or the
business operations or the financial condition of Borrower. Borrower has
disclosed to Lender all material facts and has not failed to disclose any
material fact that could cause any Provided Information or representation or
warranty made herein to be materially misleading.
     4.1.34 Investment Company Act. Borrower is not (a) an “investment company”
or a company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended; (b) a “holding company” or a
“subsidiary company” of a “holding company” or an “affiliate” of either a
“holding company” or a “subsidiary company” within the meaning of the Public
Utility Holding Company Act of 1935, as amended; or (c) subject to any other
federal or state law or regulation which purports to restrict or regulate its
ability to borrow money.

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     4.1.35 Embargoed Person. As of the date hereof and at all times throughout
the term of the Loan, including after giving effect to any Transfers permitted
pursuant to the Loan Documents, (a) none of the funds or other assets of
Borrower and Cole Credit Property Trust III, Inc. constitute property of, or are
beneficially owned, directly or indirectly, by any Embargoed Person; (b) no
Embargoed Person has any interest of any nature whatsoever in Borrower or Cole
Credit Property Trust III, Inc., as applicable, with the result that the
investment in Borrower or Cole Credit Property Trust III, Inc., as applicable
(whether directly or indirectly), is prohibited by law or the Loan is in
violation of law; and (c) none of the funds of Borrower or Cole Credit Property
Trust III, Inc., as applicable, have been derived from any unlawful activity
with the result that the investment in Borrower or Cole Credit Property Trust
III, Inc., as applicable (whether directly or indirectly), is prohibited by law
or the Loan is in violation of law. Notwithstanding the foregoing, to the extent
that an Embargoed Person acquires a non-controlling interest in Cole Credit
Property Trust III, Inc., without the knowledge of Borrower or Cole Credit
Property Trust III, Inc., through a transaction brokered by a FINRA licensed
broker dealer not affiliated with Cole Credit Property Trust III, Inc., provided
such broker dealer has executed a dealer agreement or selling agreement with
Cole Credit Property Trust III, Inc. or an affiliate of Cole Credit Property
Trust III, Inc. in which it covenants to, among other things, comply with The
USA PATRIOT Act (or any successor legislation), the resulting breach of the
foregoing representations shall be deemed to be unintentional and not grossly
negligent for purposes of Section 9.3 hereof.
     4.1.36 Principal Place of Business; State of Organization. Borrower’s
principal place of business as of the date hereof is the address set forth in
the introductory paragraph of this Agreement. Each Individual Borrower is
organized under the laws of the State of Delaware. Each Individual Borrower’s
organizational identification number assigned by the state of incorporation or
organization is correctly set forth in Schedule I to this Agreement.
     4.1.37 Environmental Representations and Warranties. To Borrower’s
knowledge and except as otherwise disclosed by those certain Phase I
environmental reports (or Phase II environmental reports, if required) delivered
to Lender by Borrower in connection with the origination of the Loan (such
reports are collectively referred to below as the “Environmental Report”),
(a) there are no Hazardous Substances or underground storage tanks in, on, or
under the Properties, except those that are (i) in compliance with Environmental
Laws and with permits issued pursuant thereto (to the extent such permits are
required under Environmental Law), (ii) de-minimis amounts necessary to operate
the Properties for the purposes set forth in the Loan Agreement which will not
result in an environmental condition in, on or under the Properties and which
are otherwise permitted under and used in compliance with Environmental Law and
(iii) fully disclosed to Lender in writing pursuant the Environmental Report;
(b) there are no past, present or threatened Releases of Hazardous Substances
in, on, under or from the Properties which has not been fully remediated in
accordance with Environmental Law; (c) there is no threat of any Release of
Hazardous Substances migrating to the Properties in violation of any
Environmental Law; (d) there is no past or present non-compliance with
Environmental Laws, or with permits issued pursuant thereto, in connection with
the Properties which has not been fully remediated in accordance with
Environmental Law; (e) Borrower does not know of, and has not received, any
written or oral notice or other communication from any Person (including but not
limited to a Governmental Authority) relating to Hazardous Substances or
Remediation thereof, of possible liability of any Person pursuant to any
Environmental Law, other environmental

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conditions in connection with the Properties, or any actual or potential
administrative or judicial proceedings in connection with any of the foregoing;
and (f) Borrower has truthfully and fully disclosed provided to Lender, in
writing, any and all information relating to environmental conditions in, on,
under or from the Properties that is known to Borrower and has provided to
Lender all information that is contained in Borrower’s files and records,
including, but not limited to, any reports relating to Hazardous Substances in,
on, under or from the Properties and/or to the environmental condition of the
Properties.
     4.1.38 Cash Management Account. Borrower hereby represents and warrants to
Lender that:
     (a) This Agreement, together with the other Loan Documents, create a valid
and continuing security interest (as defined in the Uniform Commercial Code of
the State of New York) in the Lockbox Account and Cash Management Account in
favor of Lender or Agent, which security interest is prior to all other Liens,
other than Permitted Encumbrances, and is enforceable as such against creditors
of and purchasers from Borrower. Other than in connection with the Loan
Documents and except for Permitted Encumbrances, Borrower has not sold, pledged,
transferred or otherwise conveyed the Lockbox Account and Cash Management
Account ;
     (b) Each of the Lockbox Account and Cash Management Account constitutes
“deposit accounts” and/or “securities accounts” within the meaning of the
Uniform Commercial Code of the State of New York;
     (c) Pursuant and subject to the terms hereof and the other applicable Loan
Documents, the Lockbox Bank and Agent have agreed to comply with all
instructions originated by Lender, without further consent by Borrower,
directing disposition of the Lockbox Account and Cash Management Account and all
sums at any time held, deposited or invested therein, together with any interest
or other earnings thereon and all proceeds thereof;
     (d) The Lockbox Account and Cash Management Account are not in the name of
any Person other than Borrower, as pledgor, or Lender, as pledgee. Borrower has
not consented to the Lockbox Bank and Agent complying with instructions with
respect to the Lockbox Account and Cash Management Account from any Person other
than Lender; and
     (e) The Properties are not subject to any cash management system (other
than pursuant to the Loan Documents), and any and all existing tenant
instruction letters issued in connection with any previous financing have been
duly terminated prior to the date hereof.
     4.1.39 True Lease. Borrower hereby represents and warrants to Lender that
each Lease reflects the intent of Borrower and Tenant that it is a true lease
and not a financing arrangement.
     Section 4.2 Survival of Representations. Borrower agrees that all of the
representations and warranties of Borrower set forth in Section 4.1 hereof and
elsewhere in this Agreement and in the other Loan Documents shall survive for so
long as any amount remains owing to Lender under this Agreement or any of the
other Loan Documents by Borrower. All representations, warranties, covenants and
agreements made in this Agreement or in the other

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Loan Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.
ARTICLE 5 — BORROWER COVENANTS
     Section 5.1 Affirmative Covenants. From the date hereof until payment and
performance in full of all obligations of Borrower under the Loan Documents or,
solely with respect to any Individual Borrower that obtains the earlier release
of the Lien of the Mortgage affecting such Individual Borrower’s Individual
Property (and all related obligations) in accordance with the terms of this
Agreement and the other Loan Documents, then exclusive of any such Individual
Borrower and such Individual Property so released, Borrower hereby covenants and
agrees with Lender that:
     5.1.1 Existence; Compliance with Legal Requirements. Borrower shall do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its existence, rights, licenses, permits and franchises and comply
with all Legal Requirements applicable to it and the Properties. There shall
never be committed by Borrower, and Borrower shall never permit any other Person
in occupancy of or involved with the operation or use of an Individual Property
to commit any act or omission affording the federal government or any state or
local government the right of forfeiture against any Individual Property or any
part thereof or any monies paid in performance of Borrower’s obligations under
any of the Loan Documents. Borrower hereby covenants and agrees not to commit,
permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower shall at all times maintain, preserve and protect all
franchises and trade names and preserve all the remainder of the Properties used
or useful in the conduct of its business and shall keep the Properties in good
working order and repair, and from time to time make, or cause to be made, all
reasonably necessary repairs, renewals, replacements, betterments and
improvements thereto, all as more fully provided in the applicable Mortgage.
Borrower shall cause the Properties to be insured at all times by financially
sound and reputable insurers, to such extent and against such risks, and cause
to be maintained liability and such other insurance, as is more fully provided
in this Agreement. After prior written notice to Lender, Borrower, at Borrower’s
expense, may contest by appropriate legal proceeding promptly initiated and
conducted in good faith and with due diligence, the validity of any Legal
Requirement, the applicability of any Legal Requirement to Borrower or an
Individual Property or any alleged violation of any Legal Requirement, provided
that (i) no Event of Default has occurred and remains uncured; (ii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any instrument to which Borrower is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable statutes, laws and ordinances; (iii) no
Individual Property nor any part thereof or interest therein will be in danger
of being sold, forfeited, terminated, cancelled or lost; (iv) Borrower shall
promptly upon final determination thereof comply with any such Legal Requirement
determined to be valid or applicable or cure any violation of any Legal
Requirement; (v) such proceeding shall suspend the enforcement of the contested
Legal Requirement against Borrower or any Individual Property; and (vi) Borrower
shall furnish such security as may be required in the proceeding, or as may be
requested by Lender, to insure compliance with such Legal Requirement, together
with all interest and penalties payable in connection therewith. Lender may
apply any such security, as necessary to cause compliance with such Legal
Requirement at any time when, in the reasonable judgment of Lender, the

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validity, applicability or violation of such Legal Requirement is finally
established or any Individual Property (or any part thereof or interest therein)
shall be in danger of being sold, forfeited, terminated, cancelled or lost.
     5.1.2 Taxes and Other Charges. Borrower shall pay or cause to be paid all
Taxes and Other Charges now or hereafter levied or assessed or imposed against
the Properties or any part thereof as the same become due and payable; provided,
however, Borrower’s obligation to directly pay (or cause to be paid) Taxes shall
be suspended for so long as Borrower complies with the terms and provisions of
Section 7.2 hereof. Borrower will deliver to Lender receipts for payment or
other evidence satisfactory to Lender that the Taxes and Other Charges have been
so paid or are not then delinquent no later than ten (10) days prior to the date
on which the Taxes and/or Other Charges would otherwise be delinquent if not
paid, provided, however, (i) Borrower is not required to furnish such receipts
for payment of Taxes and Other Charges in the event Taxes and Other Charges have
been paid by Lender pursuant to Section 7.2 hereof, and (ii) if the Tenant under
a Lease pays such Taxes or Other Charges directly to the applicable authority
and Borrower timely requests and diligently pursues evidence of payment, and
further provided that no enforcement action has been commenced by the applicable
authority resulting from such Tenant’s failure to pay Taxes or Other Charges,
Borrower shall have an additional thirty (30) day period to provide such
evidence to Lender. Borrower shall not suffer and shall promptly cause to be
paid and discharged any Lien or charge whatsoever which may be or become a Lien
or charge against the Properties (other than Permitted Encumbrances), and shall
promptly pay for or cause to be paid all utility services provided to the
Properties. After prior written notice to Lender, Borrower, at Borrower’s
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any Taxes or Other Charges, provided that
(i) no Event of Default has occurred and remains uncured; (ii) such proceeding
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower is subject and shall not constitute a
default thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (iii) no Individual Property nor any
part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (iv) Borrower shall promptly upon final
determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (v) such proceeding shall suspend the collection of such
contested Taxes or Other Charges from any Individual Property; and (vi) Borrower
shall furnish such security as may be required in the proceeding, or as may be
requested by Lender, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon. Notwithstanding the foregoing,
a Tenant, at its own expense, may contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any Taxes or Other
Charges, provided that (i) such contest is permitted under such Tenant’s Lease,
(ii) such proceeding shall be conducted in accordance with all applicable
statutes, laws and ordinances; (iii) either no Individual Property nor any part
thereof or interest therein will be in danger of being sold, forfeited or lost,
or Borrower or Tenant shall furnish such security as may be required in the
proceeding, or as may be requested by Lender, to insure the payment of any such
Taxes or Other Charges, together with all interest and penalties thereon; and
(iv) Tenant shall be required to promptly upon final determination thereof pay
the amount of any such Taxes or Other Charges, together with all costs, interest
and penalties which may be payable in connection therewith. Lender may pay

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over any such cash deposit or part thereof held by Lender to the claimant
entitled thereto at any time when, in the judgment of Lender, the entitlement of
such claimant is established or any Individual Property (or part thereof or
interest therein) shall be in danger of being sold, forfeited, terminated,
cancelled or lost or there shall be any danger of the Lien of the Mortgage being
primed by any related Lien (other than Permitted Encumbrances).
     5.1.3 Litigation. Borrower shall give prompt written notice to Lender of
any litigation or governmental proceedings pending or threatened against
Borrower and/or Guarantor which might materially adversely affect Borrower’s or
Guarantor’s condition (financial or otherwise) or business or any Individual
Property.
     5.1.4 Access to Property. Subject to the rights of Tenants under the
Leases, Borrower shall permit agents, representatives and employees of Lender to
inspect the Properties or any part thereof at reasonable hours upon reasonable
advance notice.
     5.1.5 Notice of Default. Borrower shall promptly advise Lender of any
material adverse change in Borrower’s or Guarantor’s condition, financial or
otherwise, or of the occurrence of any Default or Event of Default of which
Borrower has knowledge.
     5.1.6 Cooperate in Legal Proceedings. Borrower shall cooperate fully with
Lender with respect to any proceedings before any court, board or other
Governmental Authority which may in any way affect the rights of Lender
hereunder or any rights obtained by Lender under any of the other Loan Documents
and, in connection therewith, permit Lender, at its election, to participate in
any such proceedings.
     5.1.7 Perform Loan Documents. Borrower shall observe, perform and satisfy
all the terms, provisions, covenants and conditions of, and shall pay when due
all costs, fees and expenses to the extent required under the Loan Documents
executed and delivered by, or applicable to, Borrower.
     5.1.8 Award and Insurance Benefits. Borrower shall cooperate with Lender in
obtaining for Lender the benefits of any Awards or Insurance Proceeds lawfully
or equitably payable in connection with any Individual Property, and Lender
shall be reimbursed for any reasonable expenses incurred in connection therewith
(including reasonable attorneys’ fees and disbursements, and the payment by
Borrower of the actual expense of an appraisal on behalf of Lender in case of
Casualty or Condemnation affecting any Individual Property or any part thereof)
out of such Insurance Proceeds.
     5.1.9 Further Assurances. Borrower shall, at Borrower’s sole cost and
expense:
     (a) furnish to Lender all instruments, documents, boundary surveys, footing
or foundation surveys, certificates, plans and specifications, appraisals, title
and other insurance reports and agreements, and each and every other document,
certificate, agreement and instrument required to be furnished by Borrower
pursuant to the terms of the Loan Documents or which are reasonably requested by
Lender in connection therewith;
     (b) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence,

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preserve and/or protect the collateral at any time securing or intended to
secure the obligations of Borrower under the Loan Documents, as Lender may
reasonably require; and
     (c) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender
shall reasonably require from time to time.
     5.1.10 Principal Place of Business, State of Organization. Borrower will
not cause or permit any change to be made in its name, identity (including its
trade name or names), place of organization or formation (as set forth in
Section 4.1.36 hereof) or, except for Transfers permitted under the Loan
Documents, Borrower’s corporate or partnership structure unless Borrower shall
have first notified Lender in writing of such change at least thirty (30) days
prior to the effective date of such change, and shall have first taken all
action required by Lender for the purpose of perfecting or protecting the lien
and security interests of Lender pursuant to this Agreement, and the other Loan
Documents and, in the case of a change in Borrower’s structure, which is not
permitted under the Loan Documents, without first obtaining the prior written
consent of Lender, which consent may given or denied in Lender’s sole
discretion. Upon Lender’s request, Borrower shall, at Borrower’s sole cost and
expense, execute and deliver additional financing statements, security
agreements and other instruments which may be necessary to effectively evidence
or perfect Lender’s security interest in the Properties as a result of such
change of principal place of business or place of organization. Borrower’s
principal place of business and chief executive office, and the place where
Borrower keeps its books and records, including recorded data of any kind or
nature, regardless of the medium or recording, including software, writings,
plans, specifications and schematics, has been for the preceding four months
(or, if less, the entire period of the existence of Borrower) and will continue
to be the address of Borrower set forth at the introductory paragraph of this
Agreement (unless Borrower notifies Lender in writing at least thirty (30) days
prior to the date of such change). Borrower shall promptly notify Lender of any
change in its organizational identification number. If Borrower does not now
have an organizational identification number and later obtains one, Borrower
promptly shall notify Lender of such organizational identification number.
     5.1.11 Financial Reporting.
     (a) Borrower will keep and maintain or will cause to be kept and maintained
on a Fiscal Year basis, in accordance with the requirements for a Special
Purpose Entity set forth herein and GAAP (or another basis of accounting
acceptable to Lender and consistently applied), proper and accurate books,
records and accounts reflecting all of the financial affairs of Borrower and all
items of income and expense in connection with the operation of the Properties.
Lender shall have the right from time to time at all times during normal
business hours upon reasonable notice to examine such books, records and
accounts at the office of Borrower or any other Person maintaining such books,
records and accounts and to make such copies or extracts thereof as Lender shall
desire. After the occurrence of an Event of Default, Borrower shall pay any
costs and expenses incurred by Lender to examine Borrower’s accounting records
with respect to the Property, as Lender shall determine to be necessary or
appropriate in the protection of Lender’s interest.

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     (b) Borrower will furnish to Lender annually, within one hundred twenty
(120) days following the end of each Fiscal Year of Borrower, a complete copy of
Borrower’s (and no other Persons) combined annual financial statements audited
by an independent certified public accountant acceptable to Lender in accordance
with GAAP (or another basis of accounting acceptable to Lender and consistently
applied), together with related combined statements of operations, income,
members’ capital and cash flows. Such statements shall set forth the financial
condition and the results of operations for the Properties for such Fiscal Year,
and shall include, but not be limited to, amounts representing annual net
operating income, net cash flow, gross income, and operating expenses.
     (c) Borrower will furnish, or cause to be furnished, to Lender on or before
forty-five (45) days after the end of each calendar quarter the following items,
accompanied by an Officer’s Certificate stating that such items are true,
correct, accurate, and complete and fairly present the financial condition and
results of the operations of Borrower and the Properties: (i) a rent roll for
the subject quarter; and (ii) quarterly and year-to-date operating statements
(including Capital Expenditures, if any) prepared for each calendar quarter,
noting net operating income, gross income, and operating expenses and other
information necessary and sufficient to fairly represent the financial position
and results of operation of the Properties during such calendar quarter, and
containing a comparison of budgeted income and expenses and the actual income
and expenses. In addition, such certificate shall also be accompanied by an
Officer’s Certificate stating that the representations and warranties of
Borrower set forth in Section 4.1.30 are true and correct as of the date of such
certificate.
     (d) Prior to the occurrence of a Securitization, or after (i) an Event of
Default, or (ii) a Cash Sweep Event other than a Cash Sweep Event caused by an
Event of Default (but in the case of (ii), only until a Cash Sweep Event Cure),
Borrower will furnish, or cause to be furnished, to Lender on or before thirty
(30) days after the end of each calendar month (other than January and the last
month of each calendar quarter) the following items, accompanied by an Officer’s
Certificate stating that such items are true, correct, accurate, and complete
and fairly present the financial condition and results of the operations of
Borrower and the Properties: (i) a rent roll for the subject month; and
(ii) monthly and year-to-date operating statements (including Capital
Expenditures, if any) prepared for each calendar month, noting net operating
income, gross income, and operating expenses, and other information necessary
and sufficient to fairly represent the financial position and results of
operation of the Properties during such calendar month, and containing a
comparison of budgeted income and expenses and the actual income and expenses.
     (e) Borrower shall furnish to Lender prompt notice (containing reasonable
detail) of any material changes in the financial or physical condition of any
Individual Property, as reasonably determined by Borrower, including, but not
limited to, any termination or cancellation of terrorism or other insurance
required by this Agreement.
     (f) Borrower shall furnish to Lender, within ten (10) Business Days after
request (or as soon thereafter as may be reasonably possible), such further
detailed information with respect to the operation of the Properties and the
financial affairs of Borrower as may be reasonably requested by Lender, and
financial and sales information from any Tenant designated by Lender (to the
extent such financial and sales information is required to be provided under the
applicable

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Lease and same is received by Borrower after request therefor). Borrower has
advised Lender that as more particularly set forth in Article 27 of the
Albertson’s Lease, Tenant’s financial statements are confidential.
     (g) Borrower will cause Cole Credit Property Trust III, Inc. (the general
partner of Guarantor) to furnish to Lender annually, within one hundred twenty
(120) days following the end of its Fiscal Year, financial statements audited by
an independent certified public accountant, which shall include an annual
balance sheet and profit and loss statement, in the form previously provided to
Lender or in another form reasonably approved by Lender.
     (h) Any reports, statements or other information required to be delivered
under this Agreement shall be delivered electronically in a manner acceptable to
Lender and prepared using a spreadsheet program, or, if requested by Lender,
(i) delivered in paper form and/or on a diskette and/or (ii) prepared using
Microsoft Word for Windows files (which files may be prepared using a
spreadsheet program and saved as word processing files). Subject to the last
sentence of subsection (f) above, Borrower agrees that Lender may disclose
information regarding the Properties and Borrower that is provided to Lender
pursuant to this Section 5.1.11 in connection with the Securitization to such
parties requesting such information in connection with such Securitization.
     5.1.12 Business and Operations. Borrower will continue to engage in the
businesses presently conducted by it as and to the extent the same are necessary
for the ownership, maintenance, management and operation of the Properties.
Borrower will qualify to do business and will remain in good standing under the
laws of the jurisdiction of its formation as and to the extent the same are
required for the ownership, maintenance, management and operation of the
Properties. Borrower shall at all times during the term of the Loan, continue to
own all of Equipment, Fixtures and Personal Property which are necessary to
operate the Properties in the manner required hereunder and in the manner in
which it is currently operated, other than Equipment, Fixtures and Personal
Property owned by the Tenants under the Leases.
     5.1.13 Title to the Property. Borrower will warrant and defend (a) the
title to each Individual Property and every part thereof, subject only to Liens
permitted hereunder (including Permitted Encumbrances) and (b) the validity and
priority of the Lien of each Mortgage on the applicable Individual Property,
subject only to Liens permitted hereunder (including Permitted Encumbrances), in
each case against the claims of all Persons whomsoever. Borrower shall reimburse
Lender for any losses, costs, damages or expenses (including reasonable
attorneys’ fees and expenses) incurred by Lender if an interest in any
Individual Property, other than as permitted hereunder, is claimed by another
Person.
     5.1.14 Costs of Enforcement. In the event (a) that the Mortgage encumbering
any Individual Property is foreclosed in whole or in part or that the Mortgage
is put into the hands of an attorney for collection, suit, action or
foreclosure, (b) of the foreclosure of any mortgage encumbering an Individual
Property prior to or subsequent to the Mortgage in which proceeding Lender is
made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other
similar proceeding in respect of Borrower or any of its constituent Persons or
an assignment by Borrower or any of its constituent Persons for the benefit of
its creditors, Borrower, its successors or assigns, shall be chargeable with and
agrees to pay all costs of collection and

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defense, including reasonable attorneys’ fees and expenses, incurred by Lender
or Borrower in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, together with all required
service or use taxes.
     5.1.15 Estoppel Statement.
     (a) After request by Lender, Borrower shall within ten (10) days furnish
Lender with a statement, duly acknowledged and certified, setting forth (i) the
original principal amount of the Note, (ii) the unpaid principal amount of the
Note, (iii) the Applicable Interest Rate of the Note, (iv) the date installments
of interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Debt, if any, claimed by Borrower, and (vi) that the Note, this
Agreement, the Mortgage and the other Loan Documents are valid, legal and
binding obligations and have not been modified or if modified, giving
particulars of such modification.
     (b) Borrower shall use commercially reasonable efforts to deliver to Lender
upon request, tenant estoppel certificates from each commercial Tenant leasing
space at the Properties 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.
     5.1.16 Loan Proceeds. Borrower shall use the proceeds of the Loan received
by it on the Closing Date only for the purposes set forth in Section 2.1.4
hereof.
     5.1.17 Performance by Borrower. Borrower shall in a timely manner observe,
perform and fulfill each and every covenant, term and provision of each Loan
Document executed and delivered by, or applicable to, Borrower, and shall not
enter into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Loan Document executed and delivered
by, or applicable to, Borrower without the prior written consent of Lender.
     5.1.18 Confirmation of Representations. Borrower shall deliver, in
connection with any Securitization, (a) one (1) or more Officer’s Certificates
certifying as to the accuracy of all representations made by Borrower in the
Loan Documents as of the date of the closing of such Securitization in all
relevant jurisdictions, and (b) certificates of the relevant Governmental
Authorities in all relevant jurisdictions indicating the good standing and
qualification of Borrower, Principal and Guarantor as of the date of the
Securitization.
     5.1.19 Environmental Covenants.
     (a) Borrower covenants and agrees that: (i) all uses and operations on or
of the Property, whether by Borrower or any other Person, shall be in compliance
with all Environmental Laws and permits issued pursuant thereto; (ii) there
shall be no Releases of Hazardous Substances in, on, under or from the Property
except those that are in compliance with all Environmental Laws and with permits
issued pursuant thereto (to the extent such permits are required by
Environmental Law); (iii) there shall be no Hazardous Substances in, on, or
under the Property, except those that are (A) in compliance with all
Environmental Laws and with permits issued pursuant thereto (to the extent such
permits are required by Environmental Law), or (B) de-minimis amounts necessary
to operate the Property for the purposes set forth in the Loan Agreement which
will not result in an environmental condition in, on or under the

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Property and which are otherwise permitted under and used in compliance with
Environmental Law; (iv) Borrower shall keep the Properties free and clear of all
liens and other encumbrances imposed pursuant to any Environmental Law, whether
due to any act or omission of Borrower or any other Person (the “Environmental
Liens”), subject to a right to contest such liens under applicable environmental
law, provided (A) any such contest stays any enforcement proceeding by the
applicable authority, (B) neither the applicable Individual Property nor any
part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost, and (C) Borrower shall furnish such security as
may be required in the proceeding, or as may be requested by Lender; (v)
Borrower shall, at its sole cost and expense, fully and expeditiously cooperate
in all activities pursuant to subsection (b) below, including but not limited to
providing all relevant information and making knowledgeable persons available
for interviews; (vi) Borrower shall, at its sole cost and expense, perform any
environmental site assessment or other investigation of environmental conditions
in connection with the Properties, pursuant to any reasonable written request of
Lender made in the event that Lender has a good faith reason to believe based on
credible evidence or information that an environmental hazard exists on the
Properties (including but not limited to sampling, testing and analysis of soil,
water, air, building materials and other materials and substances whether solid,
liquid or gas), and share with Lender the reports and other results thereof, and
Lender and other Indemnified Parties shall be entitled to rely on such reports
and other results thereof; (vii) Borrower shall, at its sole cost and expense,
comply with all reasonable written requests of Lender made in the event that
Lender has a good faith reason to believe based on credible evidence or
information that an environmental hazard exists on the Properties to
(A) reasonably effectuate Remediation of any condition (including but not
limited to a Release of a Hazardous Substance) in, on, under or from the
Properties; (B) comply with any Environmental Law; (C) comply with any directive
from any Governmental Authority; and (D) take any other reasonable action
necessary or appropriate for protection of human health or the environment;
(viii) Borrower shall not do or allow any Tenant or other user of the Properties
to do any act that materially increases the dangers to human health or the
environment, involves Hazardous Substances or an environmental condition and
poses an unreasonable risk of harm to any Person (whether on or off the
Property), involves Hazardous Substances or an environmental condition and
impairs or may impair the value of the Properties, is contrary to any
requirement of any insurer, involves Hazardous Substances or an environmental
condition and constitutes a public or private nuisance, involves Hazardous
Substances or an environmental condition and constitutes waste, or involves
Hazardous Substances or an environmental condition and violates any covenant,
condition, agreement or easement applicable to the Properties; and (ix) Borrower
shall immediately notify Lender in writing upon learning of (A) any presence or
Releases or threatened Releases of Hazardous Substances in, on, under, from or
migrating towards the Properties; (B) any non-compliance with any Environmental
Laws related in any way to the Properties; (C) any actual or potential
Environmental Lien; (D) any required or proposed Remediation of environmental
conditions relating to the Properties; and (E) any written or oral notice or
other communication of which Borrower becomes aware from any source whatsoever
(including but not limited to a governmental entity) relating in any way to the
release or potential release of Hazardous Substances or Remediation thereof,
likely to result in liability of any Person pursuant to any Environmental Law,
other environmental conditions in connection with the Property, or any actual or
potential administrative or judicial proceedings in connection with anything
referred to in this Section.

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     (b) In the event that Lender has a good faith reason to believe based on
credible evidence or information that an environmental hazard exists on the
Properties that may, in Lender’s sole discretion, endanger any Tenants or other
occupants of the Properties or their guests or the general public or may
materially and adversely affect the value of the Properties, upon reasonable
notice from Lender, Borrower shall, at Borrower’s expense, promptly cause an
engineer or consultant satisfactory to Lender to conduct an environmental
assessment or audit (the scope of which shall be determined in Lender’s sole and
absolute discretion) and take any samples of soil, groundwater or other water,
air, or building materials or any other invasive testing requested by Lender and
promptly deliver the results of any such assessment, audit, sampling or other
testing; provided, however, if such results are not delivered to Lender within a
reasonable period or if Lender has a good faith reason to believe based on
credible evidence or information that an environmental hazard exists on the
Property that, in Lender’s sole judgment, endangers any Tenant or other occupant
of the Property or their guests or the general public or may materially and
adversely affect the value of the Property, upon reasonable notice to Borrower,
Lender and any other Person designated by Lender, including but not limited to
any receiver, any representative of a governmental entity, and any environmental
consultant, shall have the right, but not the obligation, and subject to the
rights of Tenants, to enter upon the Properties at all reasonable times to
assess any and all aspects of the environmental condition of the Properties and
its use, including but not limited to conducting any environmental assessment or
audit (the scope of which shall be determined in Lender’s sole and absolute
discretion) and taking samples of soil, groundwater or other water, air, or
building materials, and reasonably conducting other invasive testing. Borrower
shall cooperate with and provide Lender and any such Person designated by Lender
with access to the Properties subject to the rights of Tenants.
     (c) Borrower hereby represents and warrants that Borrower has delivered to
Lender true and complete copies of each of the O&M Programs listed on the
attached Schedule VI (collectively, the “O&M Program”), and has, as of the date
hereof, complied in all respects with the O&M Program. Borrower hereby covenants
and agrees that, during the term of the Loan, including any extension or renewal
thereof, Borrower shall comply in all respects with the terms and conditions of
the O&M Program.
     5.1.20 Leasing Matters. Any Leases written after the date hereof shall be
subject to the prior written approval of Lender, which approval shall not be
unreasonably withheld, conditioned or delayed. Upon request, Borrower shall
furnish Lender with executed copies of all Leases. All renewals of Leases and
all proposed Leases shall provide for rental rates comparable to existing local
market rates. All proposed Leases shall be on commercially reasonable terms and
shall not contain any terms which would materially affect Lender’s rights under
the Loan Documents. All Leases executed after the date hereof shall provide that
they are subordinate to the applicable Mortgage and that the lessee agrees to
attorn to Lender or any purchaser at a sale by foreclosure or power of sale.
Borrower (i) shall observe and perform the obligations imposed upon the lessor
under the Leases in a commercially reasonable manner; (ii) shall enforce and may
amend or terminate the terms, covenants and conditions contained in the Leases
upon the part of the lessee thereunder to be observed or performed in a
commercially reasonable manner and in a manner not to impair the value of the
Individual Property involved except that no termination by Borrower or
acceptance of surrender by a Tenant of any Leases shall be permitted unless by
reason of a tenant default and then only in a commercially reasonable manner to
preserve and protect the Individual Property; provided, however, that no such
termination or

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surrender of any Lease covering more than 6,000 square feet will be permitted
without the prior written consent of Lender; (iii) shall not collect any of the
rents more than one (1) month in advance (other than security deposits);
(iv) shall not execute any other assignment of lessor’s interest in the Leases
or the Rents (except as contemplated by the Loan Documents); (v) shall not
alter, modify or change the terms of the Leases in a manner inconsistent with
the provisions of the Loan Documents; and (vi) shall execute and deliver at the
request of Lender all such further assurances, confirmations and assignments in
connection with the Leases as Lender shall from time to time reasonably require.
Notwithstanding anything to the contrary contained herein, all new Leases and
all amendments, modifications, extensions, and renewals of existing Leases with
Tenants that are Affiliates of Borrower shall be subject to the prior written
consent of Lender.
To the extent Lender’s approval is required pursuant to this Section 5.1.20 to
any Lease or modification, Borrower’s written request therefor shall be
delivered together with such materials reasonably requested by Lender in order
to evaluate such request (it being acknowledged and agreed that no request for
consent shall be effective unless and until such materials have been delivered
to Lender). Each such request shall conspicuously state, in large bold type on
the top of the first page of such request, that “PURSUANT TO SECTION 5.1.20 OF
THE LOAN AGREEMENT, THIS IS A REQUEST FOR LENDER’S CONSENT. LENDER’S RESPONSE IS
REQUESTED WITHIN FIFTEEN (15) BUSINESS DAYS. LENDER’S FAILURE TO RESPOND WITHIN
SUCH TIME PERIOD WILL ENABLE BORROWER TO DELIVER A SECOND NOTICE REQUESTING
LENDER’S CONSENT”. In the event Lender fails to approve or disapprove to such
initial request within fifteen (15) Business Days’ of the effective date of such
initial request, Borrower may deliver to Lender a second written request for
approval, which second written request for approval shall conspicuously state,
in large bold type on the top of the first page of such request, that “THIS IS A
REQUEST FOR LENDER’S CONSENT. LENDER’S CONSENT IS REQUESTED WITHIN FIVE
(5) BUSINESS DAYS. THE LEASE SHALL BE DEEMED APPROVED IF LENDER DOES NOT RESPOND
TO THE CONTRARY WITHIN FIVE (5) BUSINESS DAYS’ OF LENDER’S RECEIPT OF THIS
WRITTEN NOTICE”. In the event that Lender fails to approve or disapprove the
second written request within such five (5) Business Day period, then Lender’s
consent shall be deemed to have been granted. Notwithstanding the foregoing, if
four (4) or more Leases have been deemed approved pursuant to this
Section 5.1.20, then Borrower shall not be entitled to receive deemed approval
with respect to any additional Leases.
     5.1.21 Alterations. Borrower shall obtain Lender’s prior written consent to
any alterations to any Improvements, which consent shall not be unreasonably
withheld, conditioned or delayed. Notwithstanding the foregoing, Lender’s
consent shall not be required in connection with any non-structural alterations,
that will not have a material adverse effect on Borrower’s financial condition,
the value of the Individual Property or the Individual Property’s Net Operating
Income, and (a) that are performed pursuant to the terms and provisions of any
Lease executed on or before the date hereof, (b) that are performed pursuant to
the terms and provisions of any Lease executed after the date hereof, provided
that such Lease shall satisfy the requirements of Section 5.1.20, or (c) that
are performed in connection with the Restoration of any Individual Property
after the occurrence of a Casualty or Condemnation in accordance with the terms
and provisions of this Agreement. If the total unpaid amounts due and payable
with respect to alterations to the Improvements at an Individual Property (other
than such amounts to

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be paid or reimbursed by Tenants under the Leases) shall at any time exceed
$100,000.00 (the “Threshold Amount”), Borrower shall promptly deliver to Lender
as security for the payment of such amounts and as additional security for
Borrower’s obligations under the Loan Documents any of the following: (A) cash,
(B) U.S. Obligations, (C) other securities having a rating acceptable to Lender
and that, at Lender’s option, the applicable Rating Agencies have confirmed in
writing will not, in and of itself, result in a downgrade, withdrawal or
qualification of the initial, or, if higher, then current ratings assigned to
any Securities or any class thereof in connection with any Securitization or
(D) a completion and performance bond or an irrevocable letter of credit
(payable on sight draft only) issued by a financial institution having a rating
by S&P of not less than “A-1+” if the term of such bond or letter of credit is
no longer than three (3) months or, if such term is in excess of three
(3) months, issued by a financial institution having a rating that is acceptable
to Lender and that, at Lender’s option, the applicable Rating Agencies have
confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned to any Securities or class thereof in connection with any
Securitization. Such security shall be in an amount equal to the excess of the
total unpaid amounts with respect to alterations to the Improvements on the
Individual Property (other than such amounts to be paid or reimbursed by Tenants
under the Leases) over the Threshold Amount and Lender may apply such security
from time to time at the option of Lender to pay for such alterations.
     5.1.22 Operation of Property.
     (a) Borrower shall cause the Properties to be operated, in all material
respects, in accordance with the Leases and Management Agreement (or Replacement
Management Agreement) as applicable. In the event that the Management Agreement
expires or an Individual Property is removed from the application of the
Management Agreement (without limiting any obligation of Borrower to obtain
Lender’s consent to any removal of an Individual Property from the application
of the Management Agreement or modification of the Management Agreement as it
relates to the Individual Property if required in accordance with the terms and
provisions of this Agreement), Borrower shall promptly enter into a Replacement
Management Agreement with Manager or another Qualified Manager, as applicable.
Borrower shall comply, and shall cause its Affiliates to comply, with any
exclusive use provisions and radius restrictions granted in favor of Tenants in
the Leases.
     (b) Borrower shall: (i) promptly perform and/or observe, in all material
respects, all of the covenants and agreements required to be performed and
observed by it under the Management Agreement and do all things necessary to
preserve and to keep unimpaired its material rights thereunder; (ii) promptly
notify Lender of any material default under the Management Agreement of which it
is aware; (iii) promptly deliver to Lender a copy of each financial statement,
business plan, capital expenditures plan, notice, report and estimate received
by it with respect to the Individual Property under the Management Agreement;
and (iv) enforce the performance and observance of all of the covenants and
agreements required to be performed and/or observed by Manager under the
Management Agreement, in a commercially reasonable manner.
     5.1.23 Embargoed Person. Borrower has performed (or caused to be performed)
and shall perform (or cause to be performed) reasonable due diligence to insure
that at all times

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throughout the term of the Loan, including after giving effect to any Transfers
permitted pursuant to the Loan Documents, (a) none of the funds or other assets
of Borrower, Principal and Cole Credit Property Trust III, Inc. constitute
property of, or are beneficially owned, directly or indirectly, by any Embargoed
Person; (b) no Embargoed Person has any interest of any nature whatsoever in
Borrower, Principal or Cole Credit Property Trust III, Inc., as applicable, with
the result that the investment in Borrower, Principal or Cole Credit Property
Trust III, Inc., as applicable (whether directly or indirectly), is prohibited
by law or the Loan is in violation of law; and (c) none of the funds of
Borrower, Principal or Cole Credit Property Trust III, Inc., as applicable, have
been derived from, or are the proceeds of, any unlawful activity, including
money laundering, terrorism or terrorism activities, with the result that the
investment in Borrower, Principal or Cole Credit Property Trust III, Inc., as
applicable (whether directly or indirectly), is prohibited by law or the Loan is
in violation of law, or may cause any Individual Property to be subject to
forfeiture or seizure. Notwithstanding the foregoing, to the extent that an
Embargoed Person acquires a non-controlling interest in Cole Credit Property
Trust III, Inc., without the knowledge of Borrower or Cole Credit Property Trust
III, Inc., through a transaction brokered by a FINRA licensed broker dealer not
affiliated with Cole Credit Property Trust III, Inc., provided such broker
dealer has executed a dealer agreement or selling agreement with Cole Credit
Property Trust III, Inc. or an affiliate of Cole Credit Property Trust III, Inc.
in which it covenants to, among other things, comply with The USA PATRIOT Act
(or any successor legislation), the resulting breach of the foregoing
representations shall be deemed to be unintentional and not grossly negligent
for purposes of Section 9.3 hereof.
      5.1.24 Supplemental Mortgage Affidavits. As of the date hereof, each
Individual Borrower represents that it has paid all state, county and municipal
recording and all other taxes imposed upon the execution and recordation of the
Mortgages. If at any time Lender determines (i) based on applicable law, that
Lender is not being afforded the maximum amount of security available from any
one or more of the Properties as a direct or indirect result of applicable taxes
not having been paid with respect to any Individual Property or (ii) Lender
and/or the Rating Agencies, in connection with a Securitization, require the
amount secured by any Mortgage be increased, Borrower agrees that it will
execute, acknowledge and deliver to Lender, immediately upon Lender’s request,
supplemental affidavits and/or Mortgages increasing the amount of the Debt
attributable to any such Individual Property (as set forth as the Release Amount
on Schedule V annexed hereto) for which all applicable taxes have been paid to
an amount determined by Lender, and Borrower shall, on demand, pay any
additional taxes.
     5.1.25 True Lease. Each Borrower shall reflect its applicable Lease in all
applicable books, records and reports (including, without limitation, income tax
filings) in a manner consistent with “true lease” treatment rather than
“financing” treatment.
     5.1.26 Denver Shortfall Payment. Each other Individual Borrower and
Guarantor agree to pay any shortfall between (i) the Denver Purchase Option
Price and (ii) all amounts due under Section 2.6.2 hereof in connection with the
exercise of the Denver Purchase Option, including the Adjusted Release Amount
for the Denver Individual Property and any applicable Yield Maintenance Premium
(if such payment is made prior to the Permitted Par Prepayment Date) (the
“Denver Shortfall Payment”).
     5.1.27 Tenant Reports.

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     For so long as the Lease to Albertson’s remains in effect, Borrower shall
deliver, or cause to be delivered to Lender, the following:
     (i) within 10 days after Borrower receives such information from Tenant,
complete financial statements of Tenant including a balance sheet, profit and
loss statement, statement of cash flows and all other related schedules for the
fiscal period then ended. All such financial statements shall be prepared in
accordance with GAAP (or such other accounting practices consistently applied)
from period to period, and shall be certified to be accurate and complete by
Tenant in all material respects (or the treasurer or other appropriate officer
of Tenant). The annual financial statements of Tenant delivered pursuant to this
Section shall be audited by independent accountants in accordance with GAAP (or
such other accounting practices consistently applied);
     Borrower has advised Lender that as more particularly set forth in
Article 27 of the Albertson’s Lease, Tenant’s financial statements are
confidential. Notwithstanding the foregoing, Lender may disclose the following
corporate level financial information in connection with a Securitization: net
sales or operating revenues; income (loss) from continuing operations; income
(loss) from continuing operations per common share; total assets; long-term
obligations and redeemable preferred stock (including long-term debt, capital
leases, and redeemable preferred stock); and, cash dividends declared per common
share.
     If Tenant does not provide the information required hereunder as required
pursuant to the Albertson’s Lease, then Borrower shall take commercially
reasonable efforts to require such Tenant to comply with the applicable
provisions of its Lease and thereafter diligently pursue the same, provided,
however, Borrower shall not be required pursuant to the foregoing covenant to
declare an event of default under the applicable Lease.
     Section 5.2 Negative Covenants. From the date hereof until payment and
performance in full of all obligations of Borrower under the Loan Documents or,
solely with respect to any Individual Borrower that obtains the earlier release
of the Lien of the Mortgage affecting such Individual Borrower’s Individual
Property (and all related obligations) in accordance with the terms of this
Agreement and the other Loan Documents, then exclusive of such Individual
Borrower and such Individual Property so released, Borrower covenants and agrees
with Lender that it will not do, directly or indirectly, any of the following:
     5.2.1 Operation of Property.
     (a) Borrower shall not, without Lender’s prior written consent (which
consent shall not be unreasonably withheld): (i) surrender, terminate, cancel,
amend or modify the Management Agreement as it relates to the Properties;
provided, that Borrower may, without Lender’s consent, replace the Manager so
long as the replacement manager is a Qualified Manager pursuant to a Replacement
Management Agreement and remove an Individual Property from the application of
the Management Agreement in connection with such replacement; (ii) reduce or
consent to the reduction of the term of the Management Agreement as it relates
to an Individual Property; (iii) increase or consent to the increase of the
amount of any charges under the Management Agreement as it relates to the
Individual Property; or (iv) otherwise modify,

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change, supplement, alter or amend, or waive or release any of its rights and
remedies under, the Management Agreement as it relates to the Individual
Property in any material respect.
     (b) Following the occurrence and during the continuance of an Event of
Default, Borrower shall not exercise any rights, make any decisions, grant any
approvals or otherwise take any action under the Management Agreement as it
relates to the Properties without the prior written consent of Lender, which
consent may be granted, conditioned or withheld in Lender’s sole discretion.
     5.2.2 Liens. Borrower shall not create, incur, assume or suffer to exist
any Lien on any portion of any Individual Property or permit any such action to
be taken, except for Permitted Encumbrances.
     5.2.3 Dissolution. Borrower shall not, without obtaining the prior written
consent of Lender (a) engage in any dissolution, liquidation or consolidation or
merger with or into any other business entity, (b) engage in any business
activity not related to the ownership and operation of the Properties,
(c) transfer, lease or sell, in one transaction or any combination of
transactions, the assets or all or substantially all of the properties or assets
of Borrower except to the extent permitted by the Loan Documents, (d) unless
required by applicable law (and in such case, following fifteen (15) days prior
written notice to Lender), modify, amend, waive or terminate its organizational
documents or its qualification and good standing in any jurisdiction or
(e) cause the Principal to (i) dissolve, wind up or liquidate or take any
action, or omit to take an action, as a result of which the Principal would be
dissolved, wound up or liquidated in whole or in part, or (ii) unless required
by applicable law (and in such case, following fifteen (15) days prior written
notice to Lender) amend, modify, waive or terminate the organizational documents
of the Principal.
     5.2.4 Change In Business. Borrower shall not enter into any line of
business other than the ownership and operation of the Properties, or make any
material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance
of its present business. Nothing contained in this Section 5.2.4 is intended to
expand the rights of Borrower contained in Section 5.2.10(d) hereof.
     5.2.5 Debt Cancellation. Borrower shall not cancel or otherwise forgive or
release any claim or debt (other than termination of Leases in accordance
herewith) owed to Borrower by any Person, except for adequate consideration and
in the ordinary course of Borrower’s business.
     5.2.6 Zoning. Borrower shall not initiate or consent to any zoning
reclassification of any portion of any Individual Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
such Individual Property in any manner that could result in such use becoming a
non conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior consent of Lender.
     5.2.7 No Joint Assessment. Borrower shall not suffer, permit or initiate
the joint assessment of any Individual Property (a) with any other real property
constituting a tax lot separate from any Individual Property, and (b) which
constitutes real property with any portion of any Individual Property which may
be deemed to constitute personal property, or any other

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procedure whereby the lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to such real property
portion of any Individual Property.
     5.2.8 Intentionally Omitted.
     5.2.9 ERISA.
     (a) Borrower shall not engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by Lender
of any of its rights under the Note, this Agreement or the other Loan Documents)
to be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA.
     (b) Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (A) Borrower is not
and does not maintain an “employee benefit plan” as defined in Section 3(3) of
ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the
meaning of Section 3(32) of ERISA; (B) Borrower is not subject to any state
statute regulating investment of, or fiduciary obligations with respect to
governmental plans and (C) one or more of the following circumstances is true:
     (i) Equity interests in Borrower are publicly offered securities, within
the meaning of 29 C.F.R. §2510.3-101(b)(2);
     (ii) Less than twenty-five percent (25%) of each outstanding class of
equity interests in Borrower are held by “benefit plan investors” within the
meaning of 29 C.F.R. §2510.3-101(f)(2); or
     (iii) Borrower qualifies as an “operating company” or a “real estate
operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).
     5.2.10 Transfers.
     (a) Borrower acknowledges that Lender has examined and relied on the
experience of Borrower and its stockholders, general partners, members,
principals and (if Borrower is a trust) beneficial owners in owning and
operating properties such as the Properties in agreeing to make the Loan, and
will continue to rely on Borrower’s ownership of the Properties as a means of
maintaining the value of the Properties as security for repayment of the Debt
and the performance of the Other Obligations. Borrower acknowledges that Lender
has a valid interest in maintaining the value of the Properties so as to ensure
that, should Borrower default in the repayment of the Debt or the performance of
the Other Obligations, Lender can recover the Debt by a sale of the Properties.
     (b) Without the prior written consent of Lender, and except to the extent
otherwise set forth in this Section 5.2.10 , Borrower shall not, and shall not
permit any Restricted Party do any of the following (collectively, a
“Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge,
assign, grant options with respect to, or otherwise transfer or dispose of
(directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) the Properties or
any part thereof or any legal or beneficial

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interest therein or (ii) permit a Sale or Pledge of an interest in any
Restricted Party, other than (A) pursuant to Leases of space in the Improvements
to Tenants in accordance with the provisions of Section 5.1.20, (B) Permitted
Transfers, and (C) subject to Section 5.1.23 above, any issuance, sale, pledge
or transfer of non-controlling interests in Cole Credit Property Trust III, Inc.
     (c) Subject to the exclusions in Section 5.2.10(b), a Transfer shall
include, but not be limited to, (i) an installment sales agreement wherein
Borrower agrees to sell the Properties or any part thereof for a price to be
paid in installments; (ii) an agreement by Borrower leasing all or a substantial
part of an Individual Property for other than actual occupancy by a space Tenant
thereunder or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower’s right, title and interest in and to any Leases
or any Rents; (iii) if a Restricted Party is a corporation, any merger,
consolidation or Sale or Pledge of such corporation’s stock or the creation or
issuance of new stock; (iv) if a Restricted Party is a limited or general
partnership or joint venture, any merger or consolidation or the change,
removal, resignation or addition of a general partner or the Sale or Pledge of
the partnership interest of any general partner or any profits or proceeds
relating to such partnership interest, or the Sale or Pledge of limited
partnership interests or any profits or proceeds relating to such limited
partnership interest or the creation or issuance of new limited partnership
interests; (v) if a Restricted Party is a limited liability company, any merger
or consolidation or the change, removal, resignation or addition of a managing
member or non-member manager (or if no managing member, any member) or the Sale
or Pledge of the membership interest of a managing member (or if no managing
member, any member) or any profits or proceeds relating to such membership
interest, or the Sale or Pledge of non-managing membership interests or the
creation or issuance of new non-managing membership interests; or (vi) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests.
     (d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent
shall not be required in connection with one or a series of Transfers, of not
more than forty-nine percent (49%) of the stock, the limited partnership
interests or non-managing membership interests (as the case may be) in a
Restricted Party; provided, however, no such Transfer shall result in the change
of Control in a Restricted Party, and as a condition to each such Transfer,
Lender shall receive not less than thirty (30) days prior written notice of such
proposed Transfer, and provided, further, all outstanding partnership interests
in Guarantor shall at all times be owned, directly or indirectly, by Cole Credit
Property Trust III, Inc. If after giving effect to any such Transfer, more than
forty-nine percent (49%) in the aggregate of direct or indirect interests in a
Restricted Party are owned by any Person and its Affiliates that owned less than
forty-nine percent (49%) direct or indirect interest in such Restricted Party as
of the Closing Date, Borrower shall, no less than thirty (30) days prior to the
effective date of any such Transfer, deliver to Lender an Additional Insolvency
Opinion acceptable to Lender and the Rating Agencies. In addition, at all times,
Cole Credit Property Trust III, Inc. must continue to Control Borrower,
Guarantor and Manager and own, directly or indirectly, at least a 51% legal and
beneficial interest in Borrower, Guarantor and Manager.
     (e) No Transfer of the Properties and assumption of the Loan, or Transfer
of any direct interest in any Individual Borrower shall occur during the period
that is sixty (60) days

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prior to and sixty (60) days after a Securitization. Otherwise, Lender’s consent
to a Transfer of the Properties and assumption of the Loan or Transfer of one
hundred percent (100%) of the outstanding membership or partnership interests in
Borrower shall not be unreasonably withheld provided that Lender receives not
less than sixty (60) days prior written notice of such Transfer and no Event of
Default has occurred and is continuing, and further provided that the following
additional requirements are satisfied:
     (i) Borrower shall pay or cause to be paid to Lender a transfer fee equal
to one percent (1%) of the outstanding principal balance of the Loan at the time
of such Transfer, unless the applicable Transfer is a Transfer to an Identified
Affiliate that is a Cole sponsored entity, in which case no transfer fee shall
be required;
     (ii) Borrower shall pay or cause to be paid any and all reasonable
out-of-pocket costs incurred in connection with such Transfer (including,
without limitation, Lender’s reasonable counsel fees and disbursements and all
recording fees, title insurance premiums and mortgage and intangible taxes and
the fees and expenses of the Rating Agencies pursuant to clause (x) below);
     (iii) The proposed transferee (the “Transferee”) or Transferee’s Principals
must have demonstrated expertise in owning and operating properties similar in
location, size, class and operation to the Properties, which expertise shall be
reasonably determined by Lender;
     (iv) Transferee and Transferee’s Principals shall, as of the date of such
transfer, have an aggregate net worth and liquidity reasonably acceptable to
Lender;
     (v) Transferee, Transferee’s Principals and all other entities which may be
owned or Controlled directly or indirectly by Transferee’s Principals (“Related
Entities”) must not 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 within seven
(7) years prior to the date of the proposed Transfer;
     (vi) Transferee shall ratify or assume (subject to Section 9.3 hereof) all
of the obligations of Borrower under the Loan Documents in a manner satisfactory
to Lender in all respects, including, without limitation, by entering into an
assumption agreement in form and substance satisfactory to Lender;
     (vii) There shall be no material litigation or regulatory action pending or
threatened against Transferee, Transferee’s Principals or Related Entities which
is not reasonably acceptable to Lender;
     (viii) Transferee, Transferee’s Principals and Related Entities shall not
have defaulted under its or their obligations with respect to any other
Indebtedness in a manner which is not reasonably acceptable to Lender;
     (ix) Transferee and Transferee’s Principals must be able to satisfy all the
representations and covenants set forth in Sections 4.1.30, 4.1.35, 5.1.23 and
5.2.9 of this

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Agreement, no Default or Event of Default shall otherwise occur as a result of
such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all
organizational documentation reasonably requested by Lender, which shall be
reasonably satisfactory to Lender and (B) all certificates, agreements,
covenants and legal opinions reasonably required by Lender, provided that such
certificates, agreements and covenants shall not materially increase the
obligations of Borrower under the Loan Documents or materially decrease the
rights of Borrower under the Loan Documents;
     (x) If required by Lender, Transferee shall be approved by the Rating
Agencies selected by Lender, which approval, if required by Lender, shall take
the form of a confirmation in writing from such Rating Agencies to the effect
that such Transfer will not result in a qualification, reduction, downgrade or
withdrawal of the ratings in effect immediately prior to such assumption or
transfer for the Securities or any class thereof issued in connection with a
Securitization which are then outstanding;
     (xi) Prior to any release of Guarantor, one (1) or more substitute
guarantors reasonably acceptable to Lender shall have assumed all of the
liabilities and obligations of Guarantor under the Guaranty and Environmental
Indemnity executed by Guarantor or execute a replacement guaranty and
environmental indemnity reasonably satisfactory to Lender;
     (xii) Borrower shall deliver, at its sole cost and expense, an endorsement
to the Title Insurance Policies, as modified by the assumption agreement, as
valid first liens on the Properties and naming the Transferee as owner of the
Properties, which endorsement shall insure that, as of the date of the recording
of the assumption agreement, the Properties shall not be subject to any
additional exceptions or liens other than those contained in the Title Insurance
Policies issued on the date hereof and the Permitted Encumbrances;
     (xiii) The Properties shall be managed by a Qualified Manager pursuant to a
Replacement Management Agreement; and
     (xiv) Borrower or Transferee, at its sole cost and expense, shall deliver
to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory
in form and substance to Lender.
     Immediately upon a Transfer to such Transferee and the satisfaction of all
of the above requirements, the named Borrower and Guarantor herein shall be
released from all liability under this Agreement, the Note, the Mortgages and
the other Loan Documents accruing after such Transfer. The foregoing release
shall be effective upon the date of such Transfer, but Lender agrees to provide
written evidence thereof reasonably requested by Borrower.
     (f) No Transfer of any direct interest in a Principal or a manager of an
Individual Borrower or of a Principal shall occur during the period that is
sixty (60) days prior to and sixty (60) days after a Securitization. Otherwise,
Lender’s consent to a Transfer of one hundred percent (100%) of the outstanding
membership interests in a Principal or a manager of an Individual Borrower or of
a Principal shall not be unreasonably withheld provided that Lender

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receives not less than sixty (60) days prior written notice of such Transfer and
no Event of Default has occurred and is continuing, and further provided that
the following additional requirements are satisfied:
     (i) The Transferee shall be, or shall be owned and controlled by, an
Identified Affiliate;
     (ii) Borrower shall pay or cause to be paid any and all reasonable
out-of-pocket costs incurred in connection with such Transfer (including,
without limitation, Lender’s reasonable counsel fees and disbursements and all
recording fees, title insurance premiums and mortgage and intangible taxes and
the fees and expenses of the Rating Agencies pursuant to clause (x) below),
provided that no transfer fee shall be required;
     (iii) The Transferee or Transferee’s Principals must have demonstrated
expertise in owning and operating properties similar in location, size, class
and operation to the Properties, which expertise shall be reasonably determined
by Lender;
     (iv) Transferee and Transferee’s Principals shall, as of the date of such
transfer, have an aggregate net worth and liquidity reasonably acceptable to
Lender;
     (v) Transferee, Transferee’s Principals and all other entities which may be
owned or Controlled directly or indirectly by Transferee’s Principals (“Related
Entities”) must not 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 within seven
(7) years prior to the date of the proposed Transfer;
     (vi) Transferee shall ratify all of the obligations of Borrower under the
Loan Documents in a manner satisfactory to Lender in all respects, including,
without limitation, by entering into an assumption agreement in form and
substance satisfactory to Lender;
     (vii) There shall be no material litigation or regulatory action pending or
threatened against Transferee, Transferee’s Principals or Related Entities which
is not reasonably acceptable to Lender;
     (viii) Transferee, Transferee’s Principals and Related Entities shall not
have defaulted under its or their obligations with respect to any other
Indebtedness in a manner which is not reasonably acceptable to Lender;
     (ix) Transferee and Transferee’s Principals must be able to satisfy all the
representations and covenants set forth in Sections 4.1.30, 4.1.35, 5.1.23 and
5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as
a result of such Transfer, and Transferee and Transferee’s Principals shall
deliver (A) all organizational documentation reasonably requested by Lender,
which shall be reasonably satisfactory to Lender and (B) all certificates,
agreements, covenants and legal opinions reasonably required by Lender, provided
that such certificates, agreements and covenants shall not

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materially increase the obligations of Borrower under the Loan Documents or
materially decrease the rights of Borrower under the Loan Documents;
     (x) If required by Lender, Transferee shall be approved by the Rating
Agencies selected by Lender, which approval, if required by Lender, shall take
the form of a confirmation in writing from such Rating Agencies to the effect
that such Transfer will not result in a qualification, reduction, downgrade or
withdrawal of the ratings in effect immediately prior to such assumption or
transfer for the Securities or any class thereof issued in connection with a
Securitization which are then outstanding;
     (xi) Intentionally omitted;
     (xii) Intentionally omitted;
     (xiii) The Properties shall be continue to be managed by a Qualified
Manager pursuant to the Management Agreement or a Replacement Management
Agreement; and
     (xiv) Borrower or Transferee, at its sole cost and expense, shall deliver
to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory
in form and substance to Lender.
     (g) 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
Debt immediately due and payable upon Borrower’s Transfer without Lender’s
consent. This provision shall apply to every Transfer regardless of whether
voluntary or not, or whether or not Lender has consented to any previous
Transfer.
ARTICLE 6 — INSURANCE; CASUALTY; CONDEMNATION;
     Section 6.1 Insurance.
     (a) From the date hereof until payment and performance in full of all
obligations of Borrower under the Loan Documents or, solely with respect to any
Individual Borrower that obtains the earlier release of the Lien of the Mortgage
affecting such Individual Borrower’s Individual Property (and all related
obligations) in accordance with the terms of this Agreement and the other Loan
Documents, then exclusive of any such Individual Borrower and such Individual
Property so released, Borrower shall obtain and maintain, or cause to be
maintained, insurance for Borrower and the Properties providing at least the
following coverages:
     (i) comprehensive all risk “special form” insurance including, but not
limited to, loss caused by any type of windstorm or hail on the Improvements and
the Personal Property, (A) in an amount equal to one hundred percent (100%) of
the “Full Replacement Cost,” which for purposes of this Agreement shall mean
actual replacement value (exclusive of costs of excavations, foundations,
underground utilities and footings) with a waiver of depreciation;
(B) 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; and (C) providing for no deductible in excess of $10,000.00
for all such insurance coverage; provided however with respect to windstorm

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and earthquake coverage, providing for a deductible satisfactory to Lender in
its reasonable discretion. In addition, Borrower shall obtain: (y) 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 reasonably require, and (z) earthquake insurance in
amounts and in form and substance reasonably satisfactory to Lender in the event
the Individual Property is located in an area with a high degree of seismic
activity; provided that the insurance pursuant to clauses (y) and (z) hereof
shall be on terms consistent with the comprehensive all risk insurance policy
required under this subsection (i);
     (ii) business income or rental loss insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance provided
for in subsection (i) above; (C) in an amount equal to one hundred percent
(100%) of the projected gross revenues from the operation of the Properties (as
reduced to reflect expenses not incurred during a period of Restoration) for a
period of at least eighteen (18) months after the date of the Casualty; and
(D) 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 Individual 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 or rental loss 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 Individual Property for the succeeding twelve
(12) month period. All proceeds payable to Lender pursuant to this subsection
(ii) shall be deemed Rents and, as long as no Event of Default has occurred and
is continuing, shall be applied by Lender in accordance with the Cash Management
Agreement, except if Lender has elected, in accordance with its rights under
Section 6.3 hereof, to apply Net Proceeds in respect of any Casualty or
Condemnation to the payment of the Debt or Other Obligation, in which case
Lender shall apply such proceeds in accordance with Section 2.4.2 hereof.
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 Agreement and the other Loan Documents except to
the extent such amounts are actually paid out of the proceeds of such business
income insurance;
     (iii) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
Individual Property coverage form does not otherwise apply, (A) 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 below mentioned commercial general liability
insurance policy and (B) the insurance provided for in subsections (i), (ii) and
(x) above written in a so-called builder’s risk completed value form (1) on a
non-

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reporting basis, (2) against all risks insured against pursuant to subsections
(i), (ii) and (x) above, (3) including permission to occupy the Individual
Property and (4) with an agreed amount endorsement waiving co-insurance
provisions;
     (iv) 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 subsection (i) above;
     (v) commercial general liability insurance against claims for personal
injury, bodily injury, death or property damage occurring upon, in or about the
Individual Property, such insurance (A) 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; (B) 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 (C) to cover at least
the following hazards: (1) premises and operations; (2) products and completed
operations on an “if any” basis; (3) independent contractors; (4) blanket
contractual liability for all written contracts and (5) contractual liability
covering the indemnities contained in Article 9 of the Mortgage to the extent
the same is available;
     (vi) 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);
     (vii) worker’s compensation and employer’s liability subject to the
worker’s compensation laws of the applicable state;
     (viii) ordinance & law coverage with minimum limits as follows: Coverage A
(value of undamaged portion) to be ‘included’ in the insured replacement cost
limit; Coverage B (demolition/debris removal) to be 25% of the building’s
replacement cost limit, and Coverage C (increased cost of construction) to be
25% of the building’s replacement cost value;
     (ix) umbrella and excess liability insurance in an amount not less than
$50,000,000.00 per occurrence on terms consistent with the commercial general
liability insurance policy required under subsection (v) 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 clause (vi) above;
     (x) the insurance required under this Section 6.1(a) above shall cover
perils of terrorism (both certified and non-certified, foreign and domestic) and
acts of terrorism (both certified and non-certified, foreign and domestic) and
Borrower shall maintain insurance for loss resulting from perils and acts of
terrorism (both foreign and domestic) on terms (including amounts) consistent
with those required under Sections 6.1(a) above at all times during the term of
the Loan; provided, that, if the Terrorism Risk Insurance

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Program Reauthorization Act of 2007, as amended and as may be further amended
from time to time (including any extensions thereof), is no longer in effect,
Borrower shall only be required to obtain such insurance under this
Section 6.1(a)(x) to the extent obtainable for an annual premium not to exceed
the applicable Terrorism Insurance Premium Cap; and
     (xi) upon sixty (60) days written notice, such other reasonable insurance,
including, but not limited to, sinkhole or land subsidence insurance, 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 Individual Property located in or around the
region in which the Individual Property is located.
     (b) All insurance provided for in Section 6.1(a) hereof, 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, and deductibles, and shall designate Lender as
loss payee, mortgagee or additional insured, as applicable. The Policies shall
be issued by financially sound and responsible insurance companies authorized to
do business in the State and having a rating of “A-:X” or better in the current
Best’s Insurance Reports and a claims paying ability rating of “A-” or better by
at least two (2) of the Rating Agencies including, (i) S&P, (ii) Fitch, and
(iii) Moody’s, if Moody’s is rating the Securities. The Policies described in
Section 6.1 hereof (other than those strictly limited to liability protection)
shall designate Lender as loss payee. Not later than five (5) Business Days
prior to the expiration dates of each Policy theretofore furnished to Lender,
Borrower shall deliver to Lender evidence satisfactory to Lender that such
Policy has been renewed or replaced by another policy conforming to the
provisions of Section 6.1. Borrower shall provide confirmation that all renewed
or replaced premiums (the “Insurance Premiums”) have been paid in full, no later
than (A) in the case of Borrower provided Policies, the date the premiums on
each such Policy shall be delinquent, or (B) in the case of Tenant provided
Policies, two (2) Business Days after the date such Tenant is required to
provide such proof to Borrower under the applicable Lease.
     (c) Any blanket insurance Policy shall specifically allocate to the
Individual 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 Individual Property in compliance with the provisions of
Section 6.1(a) hereof.
     (d) All Policies provided for or contemplated by Section 6.1(a) hereof,
except for the Policy referenced in Section 6.1(a)(vii) of this Agreement, shall
name Borrower as the insured and shall designate Lender as loss payee, mortgagee
or additional insured, as applicable, 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.
     (e) All Policies shall contain clauses or endorsements to the effect that:
     (i) 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

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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;
     (ii) the Policy shall not be materially changed (other than to increase the
coverage provided thereby) or canceled without at least thirty (30) days written
notice to Lender and any other party named therein as an additional insured;
     (iii) the issuers thereof shall give written notice to Lender if the Policy
has not been renewed thirty (30) days prior to its expiration, unless the
applicable insurers will not agree to provide such notice; and
     (iv) Lender shall not be liable for any Insurance Premiums thereon or
subject to any assessments thereunder.
     (f) If at any time Lender is not in receipt of written evidence that all
insurance required hereunder is in full force and effect, Lender shall have the
right, without notice to Borrower (except as provided below), to take such
action as Lender deems necessary to protect its interest in the Properties,
including, without limitation, the obtaining of such insurance coverage as
Lender in its sole discretion deems appropriate after three (3) Business Days
notice to Borrower if prior to the date upon which any such coverage will lapse
or at any time Lender deems necessary (regardless of prior notice to Borrower)
to avoid the lapse of any such coverage. All premiums incurred by Lender in
connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by Borrower to Lender upon demand and, until paid, shall be
secured by the Mortgage and shall bear interest at the Default Rate.
     (g) Notwithstanding the foregoing, if Albertson’s obtains insurance from a
third-party insurer satisfying the requirements hereof with respect to its
Individual Property (including, without limitation, naming Lender as an
additional insured or loss payee, as applicable), such insurance shall satisfy
Borrower’s obligations hereunder. In addition, if Albertson’s obtains insurance
from a third-party insurer satisfying the requirements hereof in all respects
other than the carrier’s rating in the current Best’s Insurance Reports, such
insurance will be deemed to satisfy Borrower’s obligations hereunder provided
(A) the applicable carrier’s rating in the current Best’s Insurance Reports
satisfies the requirements of the Albertson’s Lease, and (B) Borrower provides
(or causes to be provided) secondary coverage either through a separate
insurance Policy or a blanket insurance Policy covering substantially all real
property owned directly or indirectly by Guarantor, including, without
limitation, the Property, which such coverage shall (i) be provided by a carrier
that satisfies the ratings requirements set forth herein, and (ii) include
coverage for perils which are required pursuant to Section 6.1 and not covered
or collectible from insurance provided by Albertson’s.
     (h) Lender acknowledges that the insurance in place as of the date hereof,
as evidenced by the certificates of insurance provided by Borrower and/or Tenant
in connection with the closing of the Loan, shall be deemed to satisfy the
foregoing requirements as in effect on the date hereof.
     Section 6.2 Casualty. If any Individual Property shall be damaged or
destroyed, in whole or in part (other than damage costing less than $25,000 to
repair), by fire or other casualty

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(a “Casualty”), Borrower shall give prompt notice of such damage to Lender.
Subject to the last sentence of this Section 6.2, the applicable Individual
Borrower shall promptly commence and diligently prosecute, or cause to be
promptly commenced and diligently prosecuted, the completion of the Restoration
of the Individual Property pursuant to Section 6.4 hereof as nearly as possible
to the condition the Individual Property was in immediately prior to such
Casualty, with such alterations as may be reasonably approved by Lender and
otherwise in accordance with Section 6.4 hereof. Borrower shall pay (or cause to
be paid) all costs of such Restoration whether or not such costs are covered by
insurance. Lender may, but shall not be obligated to make proof of loss if not
made promptly by Borrower. In addition, Lender may participate in any settlement
discussions with any insurance companies (and shall approve the final
settlement, which approval shall not be unreasonably withheld or delayed) with
respect to any Casualty in which the Net Proceeds or the costs of completing the
Restoration are equal to or greater than five percent (5%) of the Release Amount
for the applicable Individual Property, and Borrower shall deliver to Lender all
instruments required by Lender to permit such participation.
     Section 6.3 Condemnation. Borrower shall promptly give Lender notice of the
actual or threatened commencement of any proceeding for the Condemnation of any
Individual Property and shall deliver to Lender copies of any and all papers
served in connection with such proceedings. Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Borrower, at its
expense, shall diligently prosecute any such proceedings, and shall consult with
Lender, its attorneys and experts, and cooperate with them in the carrying on or
defense of any such proceedings. Notwithstanding any taking by any public or
quasi-public authority through Condemnation or otherwise (including, but not
limited to, any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note and in this Agreement and the Debt
shall not be reduced until any Award shall have been actually received and
applied by Lender, after the deduction of expenses of collection, to the
reduction or discharge of the Debt. Lender shall not be limited to the interest
paid on the Award by the condemning authority but shall be entitled to receive
out of the Award interest at the rate or rates provided herein or in the Note.
If any portion of the Individual Property is taken by a condemning authority,
subject to the last sentence of this Section 6.3, the applicable Individual
Borrower shall promptly commence and diligently prosecute, or cause to be
promptly commenced and diligently prosecuted, the completion of the Restoration
of the Individual Property pursuant to Section 6.4 hereof and otherwise comply
with the provisions of Section 6.4 hereof. If the Individual Property is sold,
through foreclosure or otherwise, prior to the receipt by Lender of the Award,
Lender shall have the right, whether or not a deficiency judgment on the Note
shall have been sought, recovered or denied, to receive the Award, or a portion
thereof sufficient to pay the Debt.
     Section 6.4 Restoration. The following provisions shall apply in connection
with the Restoration of an Individual Property:
     (a) If the Net Proceeds shall be less than five percent (5%) of the Release
Amount for the applicable Individual Property and the costs of completing the
Restoration shall be less than five percent (5%) of the Release Amount for the
applicable Individual Property, the Net Proceeds will be disbursed by Lender to
Borrower upon receipt, provided that all of the conditions set forth in
Section 6.4(b)(i) hereof are met and Borrower delivers to Lender a written
undertaking to

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expeditiously commence and to satisfactorily complete with due diligence the
Restoration in accordance with the terms of this Agreement.
     (b) If the Net Proceeds are equal to or greater than five percent (5%) of
the Release Amount for the applicable Individual Property or the costs of
completing the Restoration are equal to or greater than five percent (5%) of the
Release Amount for the applicable Individual Property, Lender shall make the Net
Proceeds available for the Restoration in accordance with the provisions of this
Section 6.4. The term “Net Proceeds” for purposes of this Section 6.4 shall
mean: (i) the net amount of all insurance proceeds received by Lender pursuant
to Section 6.1 (a)(i), (iv), (ix) and (x) as a result of such damage or
destruction, after deduction of its reasonable costs and expenses (including,
but not limited to, reasonable counsel fees), if any, in collecting same
(“Insurance Proceeds”), or (ii) the net amount of the Award, after deduction of
its reasonable costs and expenses (including, but not limited to, reasonable
counsel fees), if any, in collecting same (“Condemnation Proceeds”), whichever
the case may be.
     (i) The Net Proceeds shall be made available to Borrower for Restoration
provided that each of the following conditions are met:
     (A) no Event of Default shall have occurred and be continuing;
     (B) (1) in the event the Net Proceeds are Insurance Proceeds, less than
forty percent (40%) of the total floor area of the Improvements on the
Individual Property has been damaged, destroyed or rendered unusable as a result
of such Casualty or (2) in the event the Net Proceeds are Condemnation Proceeds,
less than twenty five percent (25%) of the land constituting the Individual
Property is taken, and such land is located along the perimeter or periphery of
the Individual Property, and no material portion of the Improvements is located
on such land;
     (C) Leases demising in the aggregate a percentage amount equal to or
greater than the Rentable Space Percentage of the total rentable space in the
Individual Property which has been demised under executed and delivered Leases
in effect as of the date of the occurrence of such Casualty or Condemnation,
whichever the case may be, shall remain in full force and effect during and
after the completion of the Restoration, notwithstanding the occurrence of any
such Casualty or Condemnation, whichever the case may be, and Borrower and/or
Tenant, as applicable under the respective Lease, will make all necessary
repairs and restorations thereto at their sole cost and expense. The term
“Rentable Space Percentage” shall mean (1) in the event the Net Proceeds are
Insurance Proceeds, a percentage amount equal to ninety percent (90%) and (2) in
the event the Net Proceeds are Condemnation Proceeds, a percentage amount equal
to ninety percent (90%);
     (D) Borrower shall commence or cause to be commenced the Restoration as
soon as reasonably practicable (but in no event later than sixty (60) days after
such Casualty or Condemnation, whichever the case may be, occurs) and shall
diligently pursue the same to satisfactory completion;

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     (E) Lender shall be satisfied that any operating deficits, including all
scheduled payments of principal and interest under the Note, which will be
incurred with respect to the Individual Property as a result of the occurrence
of any such Casualty or Condemnation, whichever the case may be, will be covered
out of (1) the Net Proceeds, (2) the insurance coverage referred to in
Section 6.1(a)(ii) hereof, if applicable, or (3) by other funds of Borrower;
     (F) Lender shall be satisfied that the Restoration will be completed on or
before the earliest to occur of (1) six (6) months prior to the Anticipated
Repayment Date, (2) the earliest date required for such completion under the
terms of any Leases, (3) such time as may be required under all applicable Legal
Requirements in order to repair and restore the Individual Property to the
condition it was in immediately prior to such Casualty or to as nearly as
possible the condition it was in immediately prior to such Condemnation, as
applicable, or (4) the expiration of the insurance coverage referred to in
Section 6.1(a)(ii) hereof;
     (G) the Individual Property and the use thereof after the Restoration will
be in compliance with and permitted under all applicable Legal Requirements;
     (H) the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable Legal
Requirements;
     (I) such Casualty or Condemnation, as applicable, does not result in the
loss of access to the Individual Property or the Improvements;
     (J) the projected Debt Service Coverage Ratio for the Properties, in the
aggregate, for the twelve months after the Restoration, after giving effect to
the Restoration at the applicable Individual Property, shall be equal to or
greater than 1.30 to 1.0;
     (K) Borrower shall deliver, or cause to be delivered, to Lender a signed
detailed budget approved in writing by Borrower’s architect or engineer stating
the entire cost of completing the Restoration, which budget shall be subject to
Lender’s approval; and
     (L) the Net Proceeds together with any cash or cash equivalent deposited by
Borrower with Lender are sufficient in Lender’s discretion to cover the cost of
the Restoration (provided that Borrower shall not be required to deposit any
cash or cash equivalent with Lender if the Net Proceeds and the costs of
completing the Restoration are each less than One Hundred Thousand and 00/100
Dollars ($100,000.00) and the conditions in the preceding subsections
(A) through (K) shall be satisfied).
     (ii) The Net Proceeds shall be held by Lender in an interest-bearing
Eligible Account and, until disbursed in accordance with the provisions of this
Section 6.4(b),

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shall constitute additional security for the Debt and Other Obligations under
the Loan Documents. The Net Proceeds shall be disbursed by Lender to, or as
directed by, Borrower from time to time during the course of the Restoration,
upon receipt of evidence satisfactory to Lender that (A) all materials installed
and work and labor performed (except to the extent that they are to be paid for
out of the requested disbursement) in connection with the Restoration have been
paid for in full, and (B) there exist no notices of pendency, stop orders,
mechanic’s or materialman’s liens or notices of intention to file same, or any
other liens or encumbrances of any nature whatsoever on the Property which have
not either been fully bonded to the satisfaction of Lender and discharged of
record or in the alternative fully insured to the satisfaction of Lender by the
title company issuing the Title Insurance Policy.
     (iii) All plans and specifications required in connection with the
Restoration shall be subject to prior review and acceptance in all respects by
Lender and by an independent consulting engineer selected by Lender (the
“Casualty Consultant”), such acceptance not to be unreasonably withheld,
conditioned or delayed. Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained in
connection with the Restoration. The identity of the contractors, subcontractors
and materialmen engaged in the Restoration, as well as the contracts under which
they have been engaged, shall be subject to prior review and approval by Lender
and the Casualty Consultant, such acceptance not to be unreasonably withheld,
conditioned or delayed. All reasonable costs and expenses incurred by Lender in
connection with making the Net Proceeds available for the Restoration including,
without limitation, reasonable counsel fees and disbursements and the Casualty
Consultant’s reasonable fees, shall be paid by Borrower.
     (iv) In no event shall Lender be obligated to make disbursements of the Net
Proceeds in excess of an amount equal to the costs actually incurred from time
to time for work in place as part of the Restoration, as certified by the
Casualty Consultant, minus the Casualty Retainage. The term “Casualty Retainage”
shall mean an amount equal to ten percent (10%) of the costs actually incurred
for work in place as part of the Restoration, as certified by the Casualty
Consultant, until the Restoration has been completed. The Casualty Retainage
shall in no event, and notwithstanding anything to the contrary set forth above
in this Section 6.4(b), be less than the amount actually held back by Borrower
from contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to Lender that the Restoration has been completed in accordance with the
provisions of this Section 6.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate
governmental and quasi-governmental authorities, and Lender receives evidence
satisfactory to Lender that the costs of the Restoration have been paid in full
or will be paid in full out of the Casualty Retainage; provided, however, that
Lender will release the portion of the Casualty Retainage being held with
respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Casualty Consultant certifies to
Lender that the contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with the
provisions of the contractor’s, subcontractor’s or materialman’s contract, the
contractor, subcontractor or materialman

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delivers the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company issuing the Title Insurance Policy, and Lender
receives an endorsement to the Title Insurance Policy insuring the continued
priority of the lien of the Mortgage and evidence of payment of any premium
payable for such endorsement. If required by Lender, the release of any such
portion of the Casualty Retainage shall be approved by the surety company, if
any, which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.
     (v) Lender shall not be obligated to make disbursements of the Net Proceeds
more frequently than once every calendar month.
     (vi) If at any time the Net Proceeds or the undisbursed balance thereof
shall not, in the opinion of Lender in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 6.4(b) shall constitute additional security for the Debt and Other
Obligations under the Loan Documents.
     (vii) The excess, if any, of the Net Proceeds (and the remaining balance,
if any, of the Net Proceeds Deficiency) deposited with Lender after the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 6.4(b), and the receipt by Lender
of evidence satisfactory to Lender that all costs incurred in connection with
the Restoration have been paid in full, shall be deposited in the Cash
Management Account to be disbursed in accordance with the Cash Management
Agreement, provided no Event of Default shall have occurred and shall be
continuing under the Note, this Agreement or any of the other Loan Documents.
     (c) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Section 6.4(b)(vii) hereof may be retained and applied by Lender toward the
payment of the Debt in accordance with Section 2.4.2 hereof, or, at the
discretion of Lender, the same may be paid, either in whole or in part, to
Borrower for such purposes as Lender shall approve, in its discretion.
     (d) Notwithstanding anything in Section 6.4(a), (b) or (c) above, if
immediately after giving effect to the release of the portion of the Property
taken through Condemnation, the loan-to-value ratio of the remaining Property,
as determined by Lender in its sole discretion exceeds 125%, all Condemnation
Proceeds shall be retained and applied by Lender toward the payment of the Debt
in accordance with Section 2.4.2 hereof. Unless Lender determines that
applicable REMIC regulations or other applicable authority require a different
valuation method, Lender shall determine the loan-to-value ratio of the
remaining Property by capitalizing net operating income for such Property for
such period using a capitalization rate or range of capitalization rates that
the Lender has no reason to believe is incorrect.

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     (e) In the event of foreclosure of the Mortgage with respect to an
Individual Property, or other transfer of title to an Individual Property in
extinguishment in whole or in part of the Debt all right, title and interest of
Borrower in and to the Policies that are not blanket Policies then in force
concerning such Individual Property (other than to the extent those Policies
provide liability coverage to Borrower) and all proceeds payable thereunder
shall thereupon vest in the purchaser at such foreclosure or Lender or other
transferee in the event of such other transfer of title.
     (f) If Albertson’s is leasing all or substantially all of a building
located on an Individual Property, and the Improvements thereon suffer a
Casualty or Condemnation, then provided (i) Albertson’s is not in monetary or
material non-monetary default under its Lease for such Individual Property,
(ii) such Lease remains in full force and effect notwithstanding such Casualty
or Condemnation, (iii) Albertson’s remains liable for the obligations under such
Lease (without reduction or abatement unless covered by business
interruption/rent loss insurance), and (iv) such Lease requires Restoration of
the Improvements, such Lease shall govern and control in the event of a conflict
between the foregoing provisions of this Section 6.4 and such Lease.
ARTICLE 7 — RESERVE FUNDS
     Section 7.1 Required Repairs.
     7.1.1 Deposits. On the Closing Date, Borrower shall deposit with Lender the
aggregate amount for the Properties set forth on Schedule III-A and
Schedule III-B (together, Schedule III) as security for the performance of the
Required Repairs (hereinafter defined) for the Properties. Amounts so deposited
with Lender shall be held by Lender in accordance with Section 7.6 hereof.
Amounts so deposited shall hereinafter be referred to as Borrower’s “Required
Repair Fund” and the account in which such amounts are held shall hereinafter be
referred to as Borrower’s “Required Repair Account”. Lender acknowledges that
Albertson’s, under the Albertson’s Lease, is responsible for the Required
Repairs with respect to the Properties. Borrower shall use commercially
reasonable efforts to cause Albertson’s to perform the repairs at the
Properties, as more particularly set forth on Schedule III hereto (such repairs
hereinafter referred to as “Required Repairs”) on or before the required
deadline for each repair as set forth on Schedule III-A and Schedule III-B,
respectively. It shall be an Event of Default under this Agreement if
(i) Borrower does not use commercially reasonable efforts to cause Albertson’s
to perform the Required Repairs listed on Schedule III-B by the required
deadline for each repair, or (ii) if Borrower or Albertson’s does not complete
the Required Repairs listed on Schedule III-A by the required deadline for each
repair. Borrower and Lender acknowledge that with respect to Minor Required
Repairs only, for purposes of the foregoing clause (i), “commercially reasonable
efforts” (x) shall include sending a written demand letter regarding the
Required Repairs to Albertson’s, which demand letter shall be resent not less
than once every six months until the applicable Required Repair has been
completed, and (y) shall not require that Borrower declare a default under the
applicable Albertson’s Lease if Albertson’s fails to complete any of the
Required Repairs. In addition to its other remedies hereunder or under the other
Loan Documents, upon the occurrence of an Event of Default under this
Section 7.1.1, Lender, at its option, may withdraw all Required Repair Funds
from the Required Repair Account and Lender may apply such funds either to
completion of the Required Repairs at the Property or toward

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payment of the Debt in such order, proportion and priority as Lender may
determine in its sole discretion.
     7.1.2 Release of Required Repair Funds. Lender shall disburse to Borrower
the Required Repair Funds from the Required Repair Account from time to time
upon satisfaction by Borrower of each of the following conditions: (a) Borrower
shall submit a written request for payment to Lender at least thirty (30) days
prior to the date on which Borrower requests such payment be made and specifies
the Required Repairs to which the request relates, (b) on the date such request
is received by Lender and on the date such payment is to be made, no Event of
Default shall exist, (c) Lender shall have received an Officers’ Certificate
stating that all Required Repairs related to the requested disbursement have
been completed in good and workmanlike manner and in accordance with all
applicable federal, state and local laws, rules and regulations, together with
such other evidence of completion reasonably required by Lender; in addition, if
such Required Repairs were performed by Borrower, Borrower shall (i) provide to
Lender a copy of any license, permit or other approval by any Governmental
Authority required to commence and/or complete the Required Repairs, (ii) shall
identify in the Officer’s Certificate each Person that supplied materials or
labor in connection with the Required Repairs to be funded by the requested
disbursement, and (iii) shall certify in such Officer’s Certificate that each
such Person has been paid in full or will be paid in full upon such
disbursement, such Officers’ Certificate to be accompanied by lien waivers or
other evidence of payment satisfactory to Lender, and (d) Lender shall have
received such other evidence as Lender shall reasonably request that the
Required Repairs to be funded by the requested disbursement have been completed
and are paid for or will be paid upon such disbursement to Borrower. Lender
shall not be required to make disbursements from the Required Repair Account
with respect to an Individual Property (i) more than once a month, and
(ii) unless such requested disbursement is in an amount greater than $25,000.00
(or a lesser amount if the total amount in the Required Repair Account is less
than $25,000.00), in which case only one disbursement of the amount remaining in
the account shall be made) and such disbursement shall be made only upon
satisfaction of each condition contained in this Section 7.1.2.
     Section 7.2 Tax and Insurance Escrow Fund. Borrower shall pay to Lender
(a) on the Closing Date an initial deposit and (b) on each Payment Date
thereafter (i) one-twelfth (1/12) of the Taxes and Other Charges that Lender
estimates will be payable during the next ensuing twelve (12) months in order to
accumulate with Lender sufficient funds to pay all such Taxes and Other Charges
at least thirty (30) days prior to their respective due dates, and
(ii) one-twelfth (1/12) of the Insurance Premiums that Lender estimates will be
payable for the renewal of the coverage afforded by the Policies upon the
expiration thereof in order to accumulate with Lender sufficient funds to pay
all such Insurance Premiums at least thirty (30) days prior to the expiration of
the Policies (said amounts in (a) and (b) above hereinafter called the “Tax and
Insurance Escrow Fund”). Lender will apply the Tax and Insurance Escrow Fund to
payments of Taxes and Insurance Premiums required to be made by Borrower
pursuant to Sections 5.1.2 and 6.1 hereof and under the Mortgage. In making any
payment relating to the Tax and Insurance Escrow Fund, Lender may do so
according to any bill, statement or estimate procured from the appropriate
public office (with respect to Taxes) or insurer or agent (with respect to
Insurance Premiums), without inquiry into the accuracy of such bill, statement
or estimate or into the validity of any tax, assessment, sale, forfeiture, tax
lien or title or claim thereof. If the amount of the Tax and Insurance Escrow
Fund shall exceed the amounts due for Taxes, Other

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Charges and Insurance Premiums pursuant to Sections 5.1.2 and 6.1 hereof, Lender
shall, in its sole discretion, return any excess to Borrower or credit such
excess against future payments to be made to the Tax and Insurance Escrow Fund.
If at any time Lender reasonably determines that the Tax and Insurance Escrow
Fund is not or will not be sufficient to pay Taxes, Other Charges and Insurance
Premiums by the dates set forth in (a) and (b) above, Lender shall notify
Borrower of such determination and Borrower shall increase its monthly payments
to Lender by the amount that Lender estimates is sufficient to make up the
deficiency at least thirty (30) days prior to the due date of the Taxes and
Other Charges and/or thirty (30) days prior to expiration of the Policies, as
the case may be.
     Notwithstanding anything to the contrary hereinbefore contained, Lender
shall waive the requirement set forth herein for Borrower to make deposits for
the payment of Insurance Premiums into the Tax and Insurance Escrow Fund so long
as (a) no Event of Default has occurred and is continuing, and (b) Borrower
shall have provided Lender with satisfactory evidence (as determined by Lender)
that each Individual Property is insured in accordance with Section 6.1 of this
Agreement.
     Further notwithstanding anything to the contrary hereinbefore contained,
Lender shall waive the requirement set forth herein for Borrower to make
deposits for the payment of Taxes into the Tax and Insurance Escrow Fund so long
as (a) no Event of Default has occurred and is continuing, (b) Taxes are
actually paid prior to assessment of any penalty for late payment and prior to
delinquency and (c) Borrower provides to Lender evidence satisfactory to Lender
that such Taxes have been paid prior to assessment of any penalty for late
payment and prior to delinquency which evidence shall be provided to Lender no
later than thirty (30) days after the date that such Taxes would be delinquent
if not paid.
     Section 7.3 Intentionally Omitted.
     Section 7.4 Intentionally Omitted.
     Section 7.5 Excess Cash Flow Reserve Fund.
     7.5.1 Deposits to Excess Cash Flow Reserve Fund. During a Cash Sweep Period
prior to the Anticipated Repayment Date, all Excess Cash Flow in the Cash
Management Account shall be deposited with Lender and held by Lender as
additional security for the Loan, and amounts so held shall be hereinafter
referred to as the “Excess Cash Flow Reserve Fund” and the account to which such
amounts are held shall hereinafter be referred to as the “Excess Cash Flow
Reserve Account”. If on or prior to the Anticipated Repayment Date Borrower does
not pay to Lender the outstanding principal balance of the Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Note, the
Mortgage and the other Loan Documents, then, on the Anticipated Repayment Date,
all funds in the Excess Cash Flow Reserve Account shall be applied pursuant to
the second sentence of Section 2.3.1(b) hereof. Following the Anticipated
Repayment Date, all Excess Cash Flow in the Cash Management Account shall be
applied by Lender pursuant to Section 2.3.1(b) hereof.
     7.5.2 Release of Excess Cash Flow Reserve Funds. Upon the occurrence of a
Cash Sweep Event Cure, all Excess Cash Flow Reserve Funds shall be deposited
into the Cash

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Management Account as revenue from the Property to be disbursed in accordance
with the Cash Management Agreement. Any Excess Cash Flow Reserve Funds remaining
after the Debt has been paid in full shall be paid to Borrower.
     Section 7.6 Reserve Funds, Generally.
     (a) Borrower grants to Lender a first-priority perfected security interest
in each of the Reserve Funds and any and all monies now or hereafter deposited
in each Reserve Fund as additional security for payment of the Debt. Until
expended or applied in accordance herewith, the Reserve Funds shall constitute
additional security for the Debt.
     (b) Upon the occurrence and during the continuance of an Event of Default,
Lender may, in addition to any and all other rights and remedies available to
Lender, apply any sums then present in any or all of the Reserve Funds to the
payment of the Debt in any order in its sole discretion.
     (c) The Reserve Funds shall not constitute trust funds and may be
commingled with other monies held by Lender. The Reserve Funds shall be held in
an Eligible Account in Permitted Investments as directed by Lender or Lender’s
Servicer. All interest on a Reserve Fund shall be added to and become a part
thereof. Borrower shall be responsible for payment of any federal, state or
local income or other tax applicable to the interest earned on the Reserve Funds
credited or paid to Borrower.
     (d) Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in any Reserve
Fund or the monies deposited therein or permit any lien or encumbrance to attach
thereto, or any levy to be made thereon, or any UCC-1 Financing Statements,
except those naming Lender as the secured party, to be filed with respect
thereto.
     (e) As long as Reserve Funds are invested in investments that constitute
Permitted Investments at the time such investments are made, Lender and Servicer
shall not be liable for any loss sustained on the investment of any funds
constituting the Reserve Funds. Borrower shall indemnify Lender and Servicer and
hold Lender and Servicer harmless from and against any and all actions, suits,
claims, demands, liabilities, losses, damages, obligations and costs and
expenses (including litigation costs and reasonable attorneys’ fees and
expenses) arising from or in any way connected with the Reserve Funds or the
performance of the obligations for which the Reserve Funds were established,
unless arising from the gross negligence, willful misconduct or bad faith of the
party seeking indemnification. Borrower shall assign to Lender all rights and
claims Borrower may have against all persons or entities supplying labor,
materials or other services which are to be paid from or secured by the Reserve
Funds; provided, however, that Lender may not pursue any such right or claim
unless an Event of Default has occurred and remains uncured.
     (f) The required monthly deposits into the Reserve Funds and the Monthly
Debt Service Payment Amount, shall be added together and shall be paid as an
aggregate sum by Borrower to Lender.

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     (g) Any amount remaining in the Reserve Funds after the Debt has been paid
in full shall be returned to Borrower.
ARTICLE 8 — DEFAULTS
     Section 8.1 Event of Default.
     (a) Each of the following events shall constitute an event of default
hereunder (an “Event of Default”):
     (i) (x) if the Monthly Debt Service Payment Amount is not paid when due,
except to the extent there are sufficient funds in the Cash Management Agreement
to pay such Monthly Debt Service Payment Amount when due, (y) the outstanding
principal balance of the Loan, all accrued and unpaid interest and all other
amounts due hereunder and under the Note, the Mortgage and the other Loan
Documents is not paid on the Maturity Date, or (z) any other payment required
hereunder or under the other Loan Documents is not paid within five (5) days of
the applicable due date;
     (ii) if any of the Taxes or Other Charges are not paid prior to the date
when the same become delinquent, except to the extent that Borrower or Tenant is
contesting the same in accordance with the terms of Section 5.1.2 hereof, or
there are sufficient funds in the Cash Management Account to pay such Taxes or
Other Charges and Lender fails to or refuses to release the same from to the
extent required under this Agreement;
     (iii) if the Policies are not kept in full force and effect, or if
certified copies of the Policies (or, if any such Policy is an umbrella Policy
covering more than the Property or Tenant is providing any such Policy,
certificates or other evidence of such Policy reasonably acceptable to Lender)
are not delivered to Lender within fifteen (15) days after request;
     (iv) if Borrower Transfers or otherwise encumbers any portion of the
Properties without Lender’s prior written consent in violation of the provisions
of this Agreement and Article 6 of the Mortgage;
     (v) if any representation or warranty made by Borrower herein or in any
other Loan Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or warranty
was made;
     (vi) if Borrower or Principal shall make an assignment for the benefit of
creditors;
     (vii) if a receiver, liquidator or trustee shall be appointed for Borrower
or Principal or any other guarantor under any guarantee issued in connection
with the Loan or if Borrower or Principal shall be adjudicated a bankrupt or
insolvent, or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state law, shall
be filed by or against, consented to, or acquiesced in by, Borrower or
Principal, or if any proceeding for the dissolution or liquidation of Borrower

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or Principal shall be instituted; provided, however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Borrower or Principal upon the same not being discharged, stayed or dismissed
within ninety (90) days;
     (viii) if Borrower attempts to assign its rights under this Agreement or
any of the other Loan Documents or any interest herein or therein in
contravention of the Loan Documents;
     (ix) if Guarantor or any guarantor or indemnitor under any guaranty or
indemnity issued in connection with the Loan shall make an assignment for the
benefit of creditors or if a receiver, liquidator or trustee shall be appointed
for Guarantor or any guarantor or indemnitor under any guarantee or indemnity
issued in connection with the Loan or if Guarantor or such other guarantor or
indemnitor shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Guarantor or such other guarantor or indemnitor, or if any
proceeding for the dissolution or liquidation of Guarantor or such other
guarantor or indemnitor shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Guarantor or such other guarantor or indemnitor, upon the same
not being discharged, stayed or dismissed within ninety (90) days; provided,
further, however, it shall be at Lender’s option to determine whether any of the
foregoing shall be an Event of Default;
     (x) if Borrower breaches any covenant contained in Section 4.1.30 hereof or
any negative covenant contained in Section 5.2 hereof;
     (xi) if Borrower breaches any covenant contained in Section 5.1.22 hereof
related to any exclusive use provision or radius restriction set forth in any
Lease, or any Affiliate of Borrower breaches any exclusive use provision or
radius restriction set forth in any Lease;
     (xii) intentionally omitted;
     (xiii) with respect to any term, covenant or provision set forth herein
which specifically contains a notice requirement and/or grace period, if
Borrower shall be in default under such term, covenant or condition after the
giving of such notice and/or the expiration of such grace period;
     (xiv) if any of the factual assumptions relating to the conduct of Borrower
or Guarantor or any Affiliate of either such party, prior to the date hereof
contained in the Insolvency Opinion delivered to Lender in connection with the
Loan, or in any Additional Insolvency Opinion delivered subsequent to the
closing of the Loan, is or shall become untrue in any material respect;
     (xv) if a material default has occurred and continues beyond any applicable
cure period under the Management Agreement as it relates to an Individual
Property (or any Replacement Management Agreement) and if such default permits
the Manager thereunder to remove the Individual Property from the application of
the Management

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Agreement or terminate or cancel the Management Agreement (or any Replacement
Management Agreement);
     (xvi) if Borrower shall continue to be in Default under any of the terms,
covenants or conditions of Section 9.1 hereof, or fails to cooperate with Lender
in connection with a Securitization pursuant to the provisions of Section 9.1
hereof, for five (5) Business Days after notice to Borrower from Lender,
provided, however, if such Default is susceptible of cure but cannot reasonably
be cured within such period and provided further that Borrower shall have
commenced to cure such Default within such period and thereafter diligently and
expeditiously proceeds to cure the same, such five (5) Business Day period shall
be extended for such time as is reasonably necessary for Borrower in the
exercise of due diligence to cure such Default, such additional period not to
exceed thirty (30) days;
     (xvii) if Borrower shall continue to be in Default under any of the other
terms, covenants or conditions of this Agreement not specified in subsections
(i) to (xii) above, for ten (10) days after notice to Borrower from Lender, in
the case of any Default which can be cured by the payment of a sum of money, or
for thirty (30) days after notice from Lender in the case of any other Default;
provided, however, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such thirty (30) day period and provided
further that Borrower shall have commenced to cure such Default within such
thirty (30) day period and thereafter diligently and expeditiously proceeds to
cure the same, such thirty (30) day period shall be extended for such time as is
reasonably necessary for Borrower in the exercise of due diligence to cure such
Default, such additional period not to exceed one hundred twenty (120) days; or
     (xviii) if there shall be default under any of the other Loan Documents
beyond any applicable cure periods contained in such documents, whether as to
Borrower or the Individual Property, or if any other such event shall occur or
condition shall exist, if the effect of such default, event or condition is to
accelerate the maturity of any portion of the Debt or to permit Lender to
accelerate the maturity of all or any portion of the Debt.
     (b) Upon the occurrence of an Event of Default (other than an Event of
Default described in clauses (vi), (vii) or (viii) above) and at any time
thereafter while such Event of Default is continuing, in addition to any other
rights or remedies available to it pursuant to this Agreement and the other Loan
Documents or at law or in equity but subject to Section 9.3, Lender may take
such action, without notice or demand, that Lender deems advisable to protect
and enforce its rights against Borrower and the Properties, including, without
limitation, declaring the Debt to be immediately due and payable, and Lender may
enforce or avail itself of any or all rights or remedies provided in the Loan
Documents against Borrower and in and to all or any Individual Property,
including, without limitation, all rights or remedies available at law or in
equity; and upon any Event of Default described in clauses (vi), (vii) or
(viii) above, the Debt and Other Obligations of Borrower hereunder and under the
other Loan Documents shall immediately and automatically become due and payable,
without notice or demand, and Borrower hereby expressly waives any such notice
or demand, anything contained herein or in any other Loan Document to the
contrary notwithstanding.

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     Section 8.2 Remedies.
     (a) Upon the occurrence and during the continuance of an Event of Default,
subject to Section 9.3, all or any one or more of the rights, powers, privileges
and other remedies available to Lender against Borrower under this Agreement or
any of the other Loan Documents executed and delivered by, or applicable to,
Borrower or at law or in equity may be exercised by Lender at any time and from
time to time, whether or not all or any of the Debt shall be declared due and
payable, and whether or not Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to all or any part of any Individual
Property. Subject to Section 9.3, any such actions taken by Lender shall be
cumulative and concurrent and may be pursued independently, singularly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, Borrower agrees
that if an Event of Default is continuing and to the fullest extent permitted by
law (i) Lender is not subject to any “one action” or “election of remedies” law
or rule, and (ii) all liens and other rights, remedies or privileges provided to
Lender shall remain in full force and effect until Lender has exhausted all of
its remedies against each Individual Property and each Mortgage has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or
the Debt has been paid in full. With respect to Borrower and the Properties,
nothing contained herein or in any other Loan Document shall be construed as
requiring Lender to resort to any Individual Property for the satisfaction of
any of the Debt in any preference or priority, and Lender may seek satisfaction
out of all of the Properties, or any part thereof, in its absolute discretion in
respect of the Debt. In addition, to the fullest extent permitted by law, Lender
shall have the right from time to time to partially foreclose a Mortgage in any
manner and for any amounts secured by such Mortgage then due and payable as
determined by Lender in its sole discretion including, without limitation, the
following circumstances: (i) in the event Borrower defaults beyond any
applicable grace period in the payment of one or more scheduled payments of
principal and interest, Lender may foreclose one or more of the Mortgages to
recover such delinquent payments or (ii) in the event Lender elects to
accelerate less than the entire outstanding principal balance of the Loan,
Lender may foreclose one or more of the Mortgages to recover so much of the
principal balance of the Loan as Lender may accelerate and such other sums
secured by one or more of the Mortgages as Lender may elect. Notwithstanding one
or more partial foreclosures, the remaining Properties shall remain subject to
the Mortgages to secure payment of sums secured by the Mortgages and not
previously recovered, to the fullest extent permitted by law.
     (b) Lender shall have the right from time to time to sever the Note and the
other Loan Documents into one or more separate notes, mortgages and other
security documents (the “Severed Loan Documents”) in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender and provided that such severance
agreement and other documents incorporate the provisions of Section 9.3.
Borrower hereby absolutely and irrevocably appoints

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Lender as its true and lawful attorney, coupled with an interest, in its name
and stead to make and execute all documents necessary or desirable to effect the
aforesaid severance, Borrower ratifying all that its said attorney shall do by
virtue thereof; provided, however, Lender shall not make or execute any such
documents under such power until ten (10) days after notice has been given to
Borrower by Lender of Lender’s intent to exercise its rights under such power.
Borrower shall be obligated to pay any costs or expenses incurred in connection
with the preparation, execution, recording or filing of the Severed Loan
Documents and the Severed Loan Documents shall not contain any representations,
warranties or covenants not contained in the Loan Documents and any such
representations and warranties contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date. Notwithstanding the foregoing,
provided no Event of Default shall then exist, Borrower’s liability for costs or
expenses shall be subject to Section 9.6 below.
     (c) As used in this Section 8.2, a “foreclosure” shall include, without
limitation, any sale by power of sale.
     Section 8.3 Remedies Cumulative; Waivers. The rights, powers and remedies
of Lender under this Agreement shall be cumulative and, subject to Section 9.3,
not exclusive of any other right, power or remedy which Lender may have against
Borrower pursuant to this Agreement or the other Loan Documents, or existing at
law or in equity or otherwise. Lender’s rights, powers and remedies may be
pursued singularly, concurrently or otherwise, at such time and in such order as
Lender may determine in Lender’s sole discretion. No delay or omission to
exercise any remedy, right or power accruing upon an Event of Default shall
impair any such remedy, right or power or shall be construed as a waiver
thereof, but any such remedy, right or power may be exercised from time to time
and as often as may be deemed expedient. A waiver of one Default or Event of
Default with respect to Borrower shall not be construed to be a waiver of any
subsequent Default or Event of Default by Borrower or to impair any remedy,
right or power consequent thereon.
ARTICLE 9 — SPECIAL PROVISIONS
     Section 9.1 Securitization.
     9.1.1 Sale of Notes and Securitization.
     (a) Borrower acknowledges and agrees that Lender may sell all or any
portion of the Loan and the Loan Documents, or issue one or more participations
therein, or consummate one or more private or public securitizations of rated
single- or multi-class securities (the “Securities”) secured by or evidencing
ownership interests in all or any portion of the Loan and the Loan Documents or
a pool of assets that include the Loan and the Loan Documents (such sales,
participations and/or securitizations, collectively, a “Securitization”).
     (b) At the request of Lender, and to the extent not already required to be
provided by or on behalf of Borrower under this Agreement, Borrower shall use
reasonable efforts to provide information not in the possession of Lender or
which may be reasonably required by Lender or take other actions reasonably
required by Lender, in each case in order to satisfy the market standards to
which Lender customarily adheres or which may be reasonably required by

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prospective investors and/or the Rating Agencies in connection with any such
Securitization. Lender shall have the right to provide to prospective investors
and the Rating Agencies any information in its possession, including, without
limitation, financial statements relating to Borrower, Guarantors, if any, the
Property and any Tenant of the Improvements. Borrower acknowledges that certain
information regarding the Loan and the parties thereto and the Property may be
included in a private placement memorandum, prospectus or other disclosure
documents (the “Disclosure Documents”). Borrower agrees that each of Borrower,
Principal, Guarantor and their respective officers and representatives, shall,
at Lender’s request, and subject to Section 9.6 below, at Borrower’s sole cost
and expense, cooperate with Lender’s efforts to arrange for a Securitization in
accordance with the market standards to which Lender customarily adheres and/or
which may be required by prospective investors and/or the Rating Agencies in
connection with any such Securitization. Borrower, Principal and Guarantor agree
to review, at Lender’s request in connection with the Securitization, the
Disclosure Documents as such Disclosure Documents relate to Borrower, Principal,
Guarantor, the Properties and the Loan, including without limitation, the
sections entitled “Risk Factors,” “Special Considerations,” “Description of the
Mortgage,” “Description of the Mortgage Loan and Mortgaged Property,” “The
Manager,” “The Borrower,” and “Certain Legal Aspects of the Mortgage Loan,” and
shall confirm that the factual statements and representations contained in such
sections and such other information in the Disclosure Documents (to the extent
such information relates to, or is based on, or includes any information
regarding the Properties, Borrower, Guarantor, Manager and/or the Loan) do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading.
     (c) In connection with a Securitization, Borrower agrees to make, upon
Lender’s written request, without limitation, all structural or other changes to
the Loan (including delivery of one or more new component notes to replace the
original note or modify the original note to reflect multiple components of the
Loan and such new notes or modified note may have different interest rates and
amortization schedules), modifications to any documents evidencing or securing
the Loan, creation of one or more mezzanine loans (including amending Borrower’s
organizational structure to provide for one or more mezzanine borrowers),
modification of Borrower’s organizational documents (including, without
limitation, in the case of a limited partnership, to increase the general
partner’s percentage ownership in the partnership to not less than 0.5%),
delivery of opinions of counsel acceptable to the Rating Agencies or potential
investors and addressing such matters as the Rating Agencies or potential
investors may require; provided, however, that in creating such new notes or
modified notes or mezzanine notes Borrower shall not be required to (i) modify
the weighted average interest rate payable under the Note (and further provided
that any subsequent prepayment of the Loan shall be applied on a pro-rata basis
to all promissory notes so that the weighted average interest rate does not
change), (ii) modify the stated maturity of the Note, (iii) modify the aggregate
amortization of principal of the Note, (iv) modify any other material economic
term of the Loan, or (v) decrease the time periods during which Borrower is
permitted to perform its obligations under the Loan Documents. In connection
with the foregoing, Borrower covenants and agrees to modify the Cash Management
Agreement to reflect the newly created components and/or mezzanine loans.
     9.1.2 Securitization Costs. Subject to Section 9.6 below, all out-of-pocket
third party costs and expenses incurred by Borrower and Guarantor in connection
with Borrower’s

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complying with requests made under this Section 9.1 (including, without
limitation, the fees and expenses of the Rating Agencies and expenses incurred
pursuant to Section 9.1.1(c)) shall be paid by Borrower.
     Section 9.2 Uncross of Properties.
     (a) Each Individual Borrower agrees that Lender shall have the right, at
any time and from time to time, to release any Individual Property (the
“Affected Property”) or Individual Borrower from the cross-defaulting and/or the
cross-collateralization effected pursuant to the grant of the Mortgage from such
Individual Borrower and secured by the lien of the applicable Mortgage. In
furtherance thereof, Lender shall have the right to (i) sever and divide the
Note and the other Loan Documents in order to allocate to such Affected Property
the portion of the Loan allocable to such Individual Property (the “Allocated
Loan Amount”) which portion shall be evidenced by a new note and secured by such
other loan documents (collectively, the “New Note”) having a principal amount
equal to the Allocated Loan Amount applicable to such Affected Property,
(ii) segregate the applicable portion of each of the Reserve Funds relating to
the Affected Property, (iii) release any cross-default and/or
cross-collateralization provisions applicable to such Affected Property and
(iv) take such additional action consistent therewith; provided, that such New
Note secured by such Affected Property, together with the Loan Documents secured
by the remaining Properties, shall not increase in the aggregate (A) any
monetary obligation of Borrower under the Loan Documents (provided, however, it
being acknowledged and agreed that such New Note shall immediately after the
dividing of the Note have the same initial weighted average coupon as the
original Note prior to such dividing, notwithstanding that such New Note may, in
connection with the application of principal to such New Note, subsequently
cause the weighted average coupon of such New Note to change (but not increase,
except that the weighted average coupon may subsequently increase due to
prepayments or if an Event of Default shall occur)), or (B) any other obligation
of Borrower under the Loan Documents in any material respect or decrease the
rights of Borrower under the Loan Documents. In connection with the transfer of
any such Affected Property as provided for in this Section 9.2, the Loan shall
be reduced by an amount equal to the amount of the New Note applicable to such
Affected Property and the new loan secured by such Affected Property and the New
Note shall be in an amount equal to such Allocated Loan Amount. Subsequent to
the release of the Affected Property from the lien of the Loan pursuant to this
Section 9.2, the balances of the components of the Loan shall be the same as
they would have been had a prepayment occurred in an amount equal to the
Allocated Loan Amount of the Affected Property. At the request of Lender, each
Individual Borrower shall otherwise cooperate with Lender in its attempt to
satisfy all requirements necessary in order for Lender to obtain written
confirmation from the Rating Agencies that such transfer of the Affected
Property from the Securitization and splitting of the Loan shall not cause a
downgrade, withdrawal or qualification of the then current ratings of the
Securities or any class thereof, which requirements shall include, without
limitation: (A) delivery of evidence that the single purpose nature and
bankruptcy remoteness of each Individual Borrower owning an Individual Property
other than the Affected Property following such release have not been adversely
affected and are in accordance with the terms and provisions of this Agreement
(which evidence may include a “bring-down” of the Insolvency Opinion); and
(B) the execution of such documents and instruments and delivery by Lender of
such opinions of counsel as are typical for similar transactions, including, an
opinion of counsel that the release of the Affected Property will not be a
“significant modification” of this Loan

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within the meaning of Section 1.860G-2(b) of the regulations of the United
States Department of the Treasury and that all other requirements applicable, if
any, to the REMIC Trust that holds the Note (if applicable), have been satisfied
or have not otherwise been violated. Subject to Section 9.6 below, Borrower
shall be responsible for its own actual out-of-pocket costs and expenses
incurred in connection with the provisions of this Section 9.2(a), including
without limitation, payment of any mortgage recording tax or title insurance
premiums.
     (b) In addition to the foregoing, each Individual Borrower agrees that
Lender shall have the unilateral right, at any time and from time to time prior
to a Securitization, to divide the Loan into two or more Loans which are not
cross-defaulted and/or cross-collateralized. Lender may designate two or more
groups of Individual Properties and Individual Borrowers (each, a “Loan Group”)
for such new Loans. Such new Loans shall be internally cross-defaulted and/or
cross-collateralized. Lender reserves the right to structure each Loan Group as
one or more senior and/or junior mortgage components, and/or mezzanine loans. In
furtherance thereof, Lender shall have the right to (i) sever or divide the Note
and the other Loan Documents in order to allocate to each such Loan Group the
applicable Allocated Loan Amount, which shall be evidenced by two or more
promissory notes and related security documents (each, collectively, a “Split
Note”), (ii) segregate the applicable portion of each of the Reserve Funds
relating to each Loan Group, (iii) release any cross-default and/or
cross-collateralization provisions applicable to such Loan Groups, and (iv) take
such additional action consistent therewith; provided, that all such Split
Notes, together, shall not increase in the aggregate (A) any monetary obligation
of Borrower under the Loan Documents (provided, however, it being acknowledged
and agreed that such Split Notes shall immediately after the dividing of the
Note have the same initial weighted average coupon as the original Note prior to
such dividing, notwithstanding that such Split Notes may, in connection with the
application of principal to such Split Notes, subsequently cause the weighted
average coupon of such Split Notes to change (but not increase, except that the
weighted average coupon may subsequently increase due to prepayments or if an
Event of Default shall occur)), or (B) any other obligation of Borrower under
the Loan Documents in any material respect or decrease the rights of Borrower
under the Loan Documents. At the request of Lender, each Individual Borrower
shall otherwise cooperate with Lender in connection with the foregoing, which
cooperation shall include, without limitation: (a) additional Loan Documents or
amendments to existing Loan Documents as reasonably required by Lender, (b) new
opinions or updates to the legal opinions delivered to Lender in connection with
the closing of the Loan, (c) endorsements and/or updates to the Title Insurance
Policies delivered to Lender in connection with the closing of the Loan, (d) a
new cash management structure for each Loan Group, and (e) any other
certificates, instruments and documents reasonably determined by Lender as
necessary or appropriate to such severance, which documentation shall be in form
and substance acceptable to Lender in its reasonable discretion. Lender’s rights
pursuant to this Section 9.2(b) shall be in addition to Lender’s rights under
Section 9.1.1(c), above, and shall not in any way shall limit or otherwise
effect such rights. Subject to Section 9.6 below, Borrower shall be responsible
for its own actual out-of-pocket costs and expenses incurred in connection with
the provisions of this Section 9.2(b), including without limitation, payment of
any mortgage recording tax, title insurance premiums and fees related to outside
counsel legal opinions.
     Section 9.3 Exculpation. Notwithstanding anything to the contrary contained
in this Agreement, the Note, the Mortgages or the other Loan Documents but
subject to the qualifications below, Lender shall not enforce the liability and
obligation of Borrower to perform

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and observe the obligations contained in the Note, this Agreement, the Mortgages
or the other Loan Documents by any action or proceeding wherein a money judgment
shall be sought against Borrower, except that Lender may bring a foreclosure
action, an action for specific performance or any other appropriate action or
proceeding to enable Lender to enforce and realize upon its interest under the
Note, this Agreement, the Mortgages and the other Loan Documents, or in one or
more Properties, the Rents, or any other collateral given to Lender pursuant to
the Loan Documents; provided, however, that, except as specifically provided
herein, any judgment in any such action or proceeding shall be enforceable
against Borrower only to the extent of Borrower’s interest in the Properties, in
the Rents and in any other collateral given to Lender, and Lender, by accepting
the Note, this Agreement, the Mortgages and the other Loan Documents, agrees
that it shall not sue for, seek or demand any deficiency judgment against
Borrower in any such action or proceeding under or by reason of or under or in
connection with the Note, this Agreement, the Mortgages or the other Loan
Documents. The provisions of this Section shall not, however, (a) constitute a
waiver, release or impairment of any obligation evidenced or secured by any of
the Loan Documents; (b) impair the right of Lender to name Borrower as a party
defendant in any action or suit for foreclosure and sale under the Mortgages (as
long as Lender shall not sue for, seek or demand any deficiency judgment against
Borrower); (c) affect the validity or enforceability of or any guaranty made in
connection with the Loan or any of the rights and remedies of Lender thereunder;
(d) impair the right of Lender to obtain the appointment of a receiver;
(e) impair the enforcement of any assignment of leases contained in the
Mortgage; (f) constitute a prohibition against Lender seeking a deficiency
judgment against Borrower (but not Guarantor) if necessary in order to fully
realize the security granted by the Mortgages or to commence any other
appropriate action or proceeding in order for Lender to exercise its remedies
against any Individual Property; or (g) constitute a waiver of the right of
Lender to enforce the liability and obligation of Borrower, by money judgment or
otherwise, to the extent of any loss, damage, cost, expense, liability, claim or
other obligation incurred by Lender (including attorneys’ fees and expenses
reasonably incurred) arising out of or in connection with the following:
     (i) fraud or intentional misrepresentation by any Individual Borrower,
Principal or Guarantor in connection with the Loan;
     (ii) the gross negligence or willful misconduct of any Individual Borrower,
Principal or Guarantor;
     (iii) material physical waste of any Individual Property by or knowingly
permitted by any Individual Borrower, Principal or Guarantor, or to which an
Individual Borrower, Principal or Guarantor has knowledge of and has acquiesced
to;
     (iv) the removal or disposal by or knowingly permitted by any Individual
Borrower, Principal or Guarantor or any Affiliate of the foregoing of any
portion of any Individual Property after an Event of Default (unless otherwise
permitted under the Loan Documents);
     (v) the misapplication or conversion by any Individual Borrower, Principal
or Guarantor of (A) any Insurance Proceeds paid by reason of any loss, damage or
destruction to any Individual Property, (B) any Awards received in connection
with a

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Condemnation of all or a portion of any Individual Property, (C) any Rents
following an Event of Default, or (D) any Rents paid more than one month in
advance;
     (vi) failure of any Individual Borrower, Principal or Guarantor or any
Affiliate of the foregoing to pay charges for labor or materials incurred, Taxes
or other charges or judgments that can create Liens on any Individual Borrower’s
interest in any portion of any Individual Property to the extent such Liens are
not bonded over or discharged in accordance with this Agreement or the other
Loan Documents;
     (vii) failure to appoint a new property manager upon the request of Lender
as permitted under this Agreement;
     (viii) failure of any Individual Borrower or Principal to maintain its
status as a Special Purpose Entity or a breach by any such party of any
representation, warranty or covenant set forth in Section 4.1.30 hereof;
     (ix) failure of any Individual Borrower to permit on-site inspections of
its Individual Property subject to the rights of Tenants and any applicable cure
period set forth in the Loan Documents;
     (x) failure of any Individual Borrower to provide financial information as
required under the Loan Documents subject to any applicable cure period (except
for financial information required to be delivered by a Tenant pursuant to the
applicable Lease that has not been delivered to Borrower, provided Borrower has
requested such financial information from such Tenant);
     (xi) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity, in this Agreement or
in any Mortgage concerning environmental laws, hazardous substances or asbestos
or any indemnification of Lender with respect thereto in either document;
     (xii) any security deposits, advance deposits or any other deposits
collected with respect to any Individual Property which are not delivered to
Lender upon a foreclosure of such Individual Property or action in lieu thereof,
except to the extent any such security deposits were applied in accordance with
the terms and conditions of any of the Leases prior to the occurrence of the
Event of Default that gave rise to such foreclosure or action in lieu thereof;
     (xiii) any failure to pay the Denver Shortfall Payment;
     (xiv) any acts of terrorism that occur while Borrower does not have the
insurance coverages required pursuant to Section 6.1(a)(x) hereof;
     (xv) any unsatisfied deductible in the event of a claim under the insurance
coverages described in Section 6.1(a)(x) hereof; and
     (xvi) failure of any Individual Borrower to timely deliver evidence of
payment of Taxes.

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     Notwithstanding anything to the contrary in this Agreement, the Note or any
of the Loan Documents, (A) Lender shall not be deemed to have waived any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Debt secured by the Mortgages or to require that all collateral shall continue
to secure all of the Debt owing to Lender in accordance with the Loan Documents,
and (B) the Debt shall be fully recourse to Borrower (i) in the event of:
(a) any Individual Borrower or Principal filing a voluntary petition under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(b) the filing of an involuntary petition against any Individual Borrower or
Principal under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law in which such Individual Borrower, Principal or Guarantor
colludes with, or otherwise assists such Person, or solicits or causes to be
solicited petitioning creditors for any involuntary petition against such
Individual Borrower or Principal from any Person; (c) any Individual Borrower or
Principal filing an answer consenting to or otherwise acquiescing in or joining
in any involuntary petition filed against it, by any other Person under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(d) any Individual Borrower or Principal consenting to or acquiescing in or
joining in an application for the appointment of a custodian, receiver, trustee,
or examiner for such Individual Borrower or Principal or any portion of any
Individual Property (other than a receiver requested by Lender in connection
with enforcement of its rights under the Loan Documents); (e) any Individual
Borrower or Principal making an assignment for the benefit of creditors, or
admitting, in writing or in any legal proceeding, its insolvency or inability to
pay its debts as they become due; (ii) if the first full monthly payment of
interest on the Note is not paid within five (5) days of notice that such
payment is late (provided, however, that such grace period relates only to the
recourse trigger described in this paragraph); (iii) if any Individual Borrower
fails to obtain Lender’s prior written consent to any Indebtedness or voluntary
Lien encumbering the Property as required by the Loan Documents; or (iv) if any
Individual Borrower fails to obtain Lender’s prior written consent to any
Transfer as required by this Agreement or the Mortgage.
     Section 9.4 Matters Concerning Manager. At the option of Lender exercised
by written notice to Borrower and Manager, Borrower shall cause any Individual
Property to be removed from the application of the Management Agreement (i) upon
the occurrence and during the continuance of an Event of Default, (ii) if
Manager shall become subject to a Bankruptcy Action, or (iii) if Manager is in
default under the terms of the Management Agreement with respect to any
Individual Property beyond any applicable grace or cure period; and upon such a
removal of such Individual Property from the application of the Management
Agreement, Borrower shall replace the Manager with a Qualified Manager pursuant
to a Replacement Management Agreement, it being understood and agreed that the
property management fee for such Qualified Manager shall not exceed then
prevailing market rates.
     Section 9.5 Servicer. At the option of Lender, the Loan may be serviced by
a master servicer, primary servicer, special servicer and/or trustee (any such
master servicer, primary servicer, special servicer, and trustee, together with
its agents, nominees or designees, are collectively referred to as “Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to Servicer
pursuant to a pooling and servicing agreement, servicing agreement, special
servicing agreement or other agreement providing for the servicing of one or
more mortgage loans (collectively, the “Servicing Agreement”) between Lender and
Servicer. Borrower shall not be responsible for (i)

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any set up fees or other initial costs relating to or arising under the
Servicing Agreement, (ii) the payment of the regular monthly master servicing
fee or trustee fee due to Servicer under the Servicing Agreement, or (iii) any
fees or expenses required to be borne by, and not reimbursable to, Servicer.
Notwithstanding the foregoing, Borrower shall promptly reimburse Lender on
demand for the following costs and expenses payable by Lender to Servicer as a
result of the Loan becoming specially serviced: (i) any liquidation fees that
are due and payable to Servicer under the Servicing Agreement in connection with
the exercise of any or all remedies permitted under this Agreement, (ii) any
workout fees and special servicing fees that are due and payable with respect to
the Loan to Servicer under the Servicing Agreement, which fees may be due and
payable under the Servicing Agreement on a periodic or continuing basis, and
(iii) the costs of all property inspections and/or appraisals of the Properties
(or any updates to any existing inspection or appraisal) that Servicer may be
required to obtain (other than the cost of regular annual inspections required
to be borne by Servicer under the Servicing Agreement).
     Section 9.6 Aggregate Cap on Costs. In no event shall Borrower’s actual
out-of-pocket costs and expenses pursuant to either of Section 8.2(b) or
Section 9.1.1(c) hereof exceed $20,000, and in no event shall Borrower’s actual
out-of-pocket costs and expenses pursuant to either of Section 9.2(a) or
Section 9.2(b) hereof exceed $50,000. In addition, in no event shall Borrower’s
actual out-of-pocket costs and expenses pursuant to Section 8.2(b),
Sections 9.1.1(b) and (c) and Sections 9.2(a) and (b) hereof, in the aggregate,
exceed $50,000. If such actual out-of-pocket costs and expenses, in the
aggregate, exceed the foregoing limitations, Lender shall reimburse Borrower for
such excess costs and expenses.
ARTICLE 10 — MISCELLANEOUS
     Section 10.1 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Note, and shall continue in full force and effect
so long as all or any of the Debt is outstanding and unpaid unless a longer
period is expressly set forth herein or in the other Loan Documents. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the legal representatives, successors and assigns of such
party. All covenants, promises and agreements in this Agreement, by or on behalf
of each party, shall inure to the benefit of the legal representatives,
successors and assigns of the other party.
     Section 10.2 Lender’s Discretion. Whenever pursuant to this Agreement,
Lender exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Lender, the decision of Lender to
approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Lender and shall be final and
conclusive.
     Section 10.3 Governing Law.
     (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS
MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE
PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK,

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WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND
TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS
AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA,
EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND
ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS (OTHER THAN LIENS AND SECURITY INTERESTS IN
THE LOCKBOX ACCOUNT, THE CASH MANAGEMENT ACCOUNT AND THE RESERVE FUNDS) SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE
FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW
YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE
AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW.
     (b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY AT LENDER’S
OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK,
COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER
HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND
APPOINT:
CT Corporation System
111 Eighth Avenue
New York, NY 10011

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AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,
(II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED
AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE
SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III)
SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO
HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR.
     Section 10.4 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement,
or of the Note, or of any other Loan Document, nor consent to any departure by
Borrower or Lender therefrom, shall in any event be effective unless the same
shall be in a writing signed by the party against whom enforcement is sought,
and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. Except as otherwise expressly
provided in the Loan Documents, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances (unless such future notice or demand is otherwise required
to be given under applicable law).
     Section 10.5 Delay Not a Waiver. Neither any failure nor any delay on the
part of any party in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under the Note or under any other Loan Document, or any other
instrument given as security therefor, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or privilege.
In particular, and not by way of limitation, by accepting payment after the due
date of any amount payable under this Agreement, the Note or any other Loan
Document, Lender shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Agreement, the Note
or the other Loan Documents, or to declare a default for failure to effect
prompt payment of any such other amount.
     Section 10.6 Notices. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, and by telecopier (with
answer back acknowledged), addressed as follows (or at such other address and
Person as

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shall be designated from time to time by any party hereto, as the case may be,
in a written notice to the other parties hereto in the manner provided for in
this Section):

         
 
  If to Lender:   JPMorgan Chase Bank, National Association
 
      383 Madison Avenue
 
      New York, New York 10179
 
      Attention: Joseph E. Geoghan
 
      Facsimile No.: (212) 272-7047
 
       
 
  with a copy to:   JPMorgan Chase Bank, National Association
 
      383 Madison Avenue
 
      New York, New York 10179
 
      Attention: Nancy Alto
 
      Facsimile No.: (212) 623-4779
 
       
 
      and
 
       
 
      Katten Muchin Rosenman LLP
 
      550 S. Tryon Street, Suite 2900
 
      Charlotte, North Carolina 28202
 
      Attention: Daniel S. Huffenus
 
      Facsimile No.: 704-344-3056
 
       
 
  If to Borrower:   c/o Cole Real Estate Investments
 
      2555 East Camelback Road, Ste. 400
 
      Phoenix, Arizona 85016
 
      Attention: Legal Department
 
      Facsimile No.: (480) 449-7012
 
       
 
  with a copy to:   Kutak Rock LLP
 
      8601 North Scottsdale Road, Suite 300
 
      Scottsdale, Arizona 85253
 
      Attention: Mitch Padover
 
      Facsimile No.: (480) 429-5001

     A notice shall be deemed to have been given: in the case of hand delivery,
at the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day; or in the case of telecopy, upon sender’s receipt of a
machine-generated confirmation of successful transmission after advice by
telephone to recipient that a telecopy notice is forthcoming.
     Section 10.7 Trial by Jury. BORROWER 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 THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING

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IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER, 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 BORROWER.
     Section 10.8 Headings. The Article and/or Section headings and the Table of
Contents in this Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.
     Section 10.9 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
     Section 10.10 Preferences. Lender shall have the continuing and exclusive
right to apply or reverse and reapply any and all payments by Borrower to any
portion of the obligations of Borrower hereunder, provided such reapplication is
consistent with the provisions of this Agreement. To the extent Borrower makes a
payment or payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.
     Section 10.11 Waiver of Notice. Borrower shall not be entitled to any
notices of any nature whatsoever from Lender except with respect to matters for
which this Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Lender to Borrower and except with respect
to matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Borrower hereby expressly waives the
right to receive any notice from Lender with respect to any matter for which
this Agreement or the other Loan Documents do not specifically and expressly
provide for the giving of notice by Lender to Borrower.
     Section 10.12 Remedies of Borrower. In the event that a claim or
adjudication is made that Lender or its agents have acted unreasonably or
unreasonably delayed acting in any case where by law or under this Agreement or
the other Loan Documents, Lender or such agent, as the case may be, has an
obligation to act reasonably or promptly, Borrower agrees that neither Lender
nor its agents shall be liable for any monetary damages, and Borrower’s sole
remedies shall be limited to commencing an action seeking injunctive relief or
declaratory judgment. The parties hereto agree that any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an action
seeking declaratory judgment.

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     Section 10.13 Expenses; Indemnity.
     (a) Borrower covenants and agrees to pay or, if Borrower fails to pay, to
reimburse, Lender upon receipt of written notice from Lender for all reasonable
costs and expenses (including reasonable attorneys’ fees and expenses) incurred
by Lender in connection with (i) the preparation, negotiation, execution and
delivery of this Agreement and the other Loan Documents and the consummation of
the transactions contemplated hereby and thereby and all the costs of furnishing
all opinions by counsel for Borrower (including without limitation any opinions
reasonably requested by Lender as to any legal matters arising under this
Agreement or the other Loan Documents with respect to the Properties);
(ii) Borrower’s ongoing performance of and compliance with Borrower’s respective
agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date,
including, without limitation, confirming compliance with environmental and
insurance requirements; (iii) Lender’s ongoing performance and compliance with
all agreements and conditions contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date
other than regular monthly master servicing fees or trustee fees; (iv) the
negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Agreement and the
other Loan Documents or any other documents requested by Borrower or otherwise
required hereunder; (v) securing Borrower’s compliance with any requests made
pursuant to the provisions of this Agreement; (vi) subject to Section 9.3
hereof, the filing and recording fees and expenses, title insurance and
reasonable fees and expenses of counsel for providing to Lender all reasonably
required legal opinions, and other similar expenses incurred in creating and
perfecting the Lien in favor of Lender pursuant to this Agreement and the other
Loan Documents; (vii) subject to Section 9.3 hereof, enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of any
action or proceeding or other litigation, in each case against, under or
affecting Borrower, this Agreement, the other Loan Documents, the Property, or
any other security given for the Loan; and (viii) subject to Section 9.3 hereof,
enforcing any obligations of or collecting any payments due from Borrower under
this Agreement, the other Loan Documents or with respect to the Properties
(including, without limitation, any fees incurred by Servicer in connection with
the transfer of the Loan to a special servicer prior to a Default or Event of
Default) or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a “work-out” or of
any insolvency or bankruptcy proceedings; provided, however, that Borrower shall
not be liable for the payment of any such costs and expenses to the extent the
same arise by reason of the gross negligence, illegal acts, fraud or willful
misconduct of Lender. Any cost and expenses due and payable to Lender may be
paid from any amounts in the Lockbox Account or Cash Management Account, as
applicable.
     (b) Subject to Section 9.3 hereof, Borrower shall indemnify, defend and
hold harmless the Indemnified Parties from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
in connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not an Indemnified Party shall be designated
a party thereto), that may be imposed on, incurred by, or asserted against any
Indemnified Party in any manner relating to or arising out of (i) any breach by
Borrower of its obligations under, or

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any material misrepresentation by Borrower contained in, this Agreement or the
other Loan Documents, or (ii) the use or intended use of the proceeds of the
Loan (collectively, the “Indemnified Liabilities”); provided, however, that
Borrower shall not have any obligation to any Indemnified Party hereunder to the
extent that such Indemnified Liabilities arise from the gross negligence,
illegal acts, fraud or willful misconduct of such Indemnified Party. To the
extent that the undertaking to indemnify, defend and hold harmless set forth in
the preceding sentence may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnified Parties.
     (c) Borrower covenants and agrees to pay for or, if Borrower fails to pay,
to reimburse Lender for, any fees and expenses incurred by any Rating Agency in
connection with any Rating Agency review of the Loan, the Loan Documents or any
transaction contemplated thereby or any consent, approval, waiver or
confirmation obtained from such Rating Agency pursuant to the terms and
conditions of this Agreement or any other Loan Document and Lender shall be
entitled to require payment of such fees and expenses as a condition precedent
to the obtaining of any such consent, approval, waiver or confirmation. Any
Rating Agency fees in connection with the initial Securitization shall be
subject to Section 9.1.2 above.
     Section 10.14 Schedules Incorporated. The Schedules annexed hereto are
hereby incorporated herein as a part of this Agreement with the same effect as
if set forth in the body hereof.
     Section 10.15 Offsets, Counterclaims and Defenses. Any assignee of Lender’s
interest in and to this Agreement, the Note and the other Loan Documents shall
take the same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower may otherwise have against any
assignor of such documents, and no such unrelated counterclaim or defense shall
be interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon such documents and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by Borrower.
     Section 10.16 No Joint Venture or Partnership; No Third Party
Beneficiaries.
     (a) Borrower and Lender intend that the relationships created hereunder and
under the other Loan Documents be solely that of borrower and lender. Nothing
herein or therein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor
to grant Lender any interest in the Properties other than that of mortgagee,
beneficiary or lender.
     (b) This Agreement and the other Loan Documents are solely for the benefit
of Lender and Borrower and nothing contained in this Agreement or the other Loan
Documents shall be deemed to confer upon anyone other than Lender and Borrower
any right to insist upon or to enforce the performance or observance of any of
the obligations contained herein or therein. All conditions to the obligations
of Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of Lender and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled to
assume that

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Lender will refuse to make the Loan in the absence of strict compliance with any
or all thereof and no other Person shall under any circumstances be deemed to be
a beneficiary of such conditions, any or all of which may be freely waived in
whole or in part by Lender if, in Lender’s sole discretion, Lender deems it
advisable or desirable to do so.
     Section 10.17 Publicity. All news releases, publicity or advertising by
Borrower or Lender (including Affiliates of either such party) through any media
intended to reach the general public which refers to Borrower, Lender, the Loan,
the Loan Documents, the financing evidenced thereby, shall be subject to the
prior written approval of the other party; provided however, the foregoing shall
not apply to information included in Disclosure Documents or regulatory filings
of Cole Credit Property Trust III, Inc.
     Section 10.18 Cross-Default; Cross-Collateralization; Waiver of Marshalling
of Assets.
     (a) Each Individual Borrower acknowledges that Lender has made the Loan to
Borrower upon the security of its collective interest in the Properties and in
reliance upon the aggregate of the Properties taken together being of greater
value as collateral security than the sum of each Individual Property taken
separately. Each Individual Borrower agrees that the Mortgages are and will be
cross-collateralized and cross-defaulted with each other so that (i) an Event of
Default under any of the Mortgages shall constitute an Event of Default under
each of the other Mortgages which secure the Note; (ii) an Event of Default
under the Note or this Agreement shall constitute an Event of Default under each
Mortgage; (iii) each Mortgage shall constitute security for the Note as if a
single blanket lien were placed on all of the Properties as security for the
Note; and (iv) such cross-collateralization shall in no event be deemed to
constitute a fraudulent conveyance.
     (b) To the fullest extent permitted by law, Borrower, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower’s partners and others with interests in Borrower, and of the
Properties, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Properties for the collection of the Debt without any
prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Properties in preference to
every other claimant whatsoever. In addition, each Individual Borrower, for
itself and its successors and assigns, waives in the event of foreclosure of any
or all of the Mortgages, any equitable right otherwise available to an
Individual Borrower which would require the separate sale of the Properties or
require Lender to exhaust its remedies against any Individual Property or any
combination of the Properties before proceeding against any other Individual
Property or combination of Properties; and further in the event of such
foreclosure each Individual Borrower does hereby expressly consents to and
authorizes, at the option of Lender, the foreclosure and sale either separately
or together of any combination of the Properties.

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     Section 10.19 Waiver of Counterclaim. Borrower hereby waives the right to
assert a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or its agents.
     Section 10.20 Conflict; Construction of Documents; Reliance. In the event
of any conflict between the provisions of this Agreement and any of the other
Loan Documents, the provisions of this Agreement shall control. The parties
hereto acknowledge that they were represented by competent counsel in connection
with the negotiation, drafting and execution of the Loan Documents and that such
Loan Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue
of the ownership by it or any parent, subsidiary or Affiliate of Lender of any
equity interest any of them may acquire in Borrower, and Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Lender’s exercise of any such rights or
remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.
     Section 10.21 Brokers and Financial Advisors. Borrower represents that
except for Eastdil Secured (“Broker”) it has dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement. Borrower will pay Broker a
commission pursuant to a separate agreement. Borrower shall indemnify, defend
and hold Lender harmless from and against any and all claims, liabilities, costs
and expenses of any kind (including reasonable attorneys’ fees and expenses) in
any way relating to or arising from a claim by any Person (including Broker)
that such Person acted on behalf of Borrower in connection with the transactions
contemplated herein. Lender represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. Lender shall
indemnify, defend and hold Borrower harmless from and against any and all
claims, liabilities, costs and expenses of any kind (including reasonable
attorneys’ fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of Lender in connection with the
transactions contemplated herein. The provisions of this Section 10.21 shall
survive the expiration and termination of this Agreement and the payment of the
Debt.
     Section 10.22 Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, are superseded by the terms of
this Agreement and the other Loan Documents.
     Section 10.23 Joint and Several Liability. If Borrower consists of more
than one (1) Person, the obligations and liabilities of each Person shall be
joint and several. The parties

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hereto acknowledge that the defined term “Borrower” (as well as the defined term
defining each other Collective Group) has been defined to collectively include
each Individual Borrower (and in the case of each Collective Group, defined to
collectively include each member of the same). It is the intent of the parties
hereto in determining whether (a) a breach of a representation or a covenant has
occurred, (b) there has occurred a Default or Event of Default, or (c) an event
has occurred which would create recourse obligations under Section 9.3 of this
Agreement, that any such breach, occurrence or event with respect to any
Individual Borrower (or with respect to any single member of a Collective Group)
shall be deemed to be such a breach, occurrence or event with respect to every
Individual Borrower (and in the case of each Collective Group, each member of
the same) and that every Individual Borrower need not have been involved with
such breach, occurrence or event in order for the same to be deemed such a
breach, occurrence or event with respect to every Individual Borrower (and
likewise that each member of a Collective Group need not have been involved with
such breach, occurrence or event in order for the same to be deemed such a
breach, occurrence or event with respect to such Collective Group). The term
“Collective Group” as used in this Agreement shall refer to each of the groups
of entities represented in this Agreement by the following defined terms:
Borrower and Principal. The obligations and liabilities of each Individual
Borrower shall be joint and several.
     Section 10.24 Certain Additional Rights of Lender (VCOC). Notwithstanding
anything to the contrary contained in this Agreement, Lender shall have:
     (a) the right to routinely consult with and advise Borrower’s management
regarding the significant business activities and business and financial
developments of Borrower; provided, however, that such consultations shall not
include discussions of environmental compliance programs or disposal of
hazardous substances. Consultation meetings should occur on a regular basis (no
less frequently than quarterly) with Lender having the right to call special
meetings at any reasonable times and upon reasonable advance notice;
     (b) the right, in accordance with the terms of this Agreement, to examine
the books and records of Borrower at any reasonable times upon reasonable
notice;
     (c) the right, in accordance with the other terms of this Agreement,
including, without limitation, Section 5.1.11 hereof, to receive monthly,
quarterly and year end financial reports, including balance sheets, statements
of income, shareholder’s equity and cash flow, a management report and schedules
of outstanding indebtedness; and
     (d) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to approve any acquisition by Borrower
of any other significant property (other than personal property required for the
day to day operation of the Properties).
     The rights described above in this Section 10.24 may be exercised by any
entity which owns and controls, directly or indirectly, substantially all of the
interests in Lender.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.

            BORROWER

COLE AB ABILENE TX, LLC, a Delaware limited liability company

COLE AB ALBUQUERQUE (LOMAS BLVD) NM, LLC, a Delaware limited liability company

COLE AB ALBUQUERQUE NM, LLC, a Delaware limited liability company

COLE AB ALEXANDRIA LA, LLC, a Delaware limited liability company

COLE AB ARLINGTON TX, LLC, a Delaware limited liability company

COLE AB BATON ROUGE (COLLEGE DR) LA, LLC, a Delaware limited liability company

COLE AB BATON ROUGE LA, LLC, a Delaware limited liability company

COLE AB BATON ROUGE (GEORGE O’NEAL RD) LA, LLC, a Delaware limited liability
company

COLE AB BOSSIER CITY LA, LLC, a Delaware limited liability company

COLE AB CLOVIS NM, LLC, a Delaware limited liability company

COLE AB DENVER CO, LLC, a Delaware limited liability company

COLE AB DURANGO CO, LLC, a Delaware limited liability company
      By:   /s/ Todd J. Weiss         Name:   Todd J. Weiss as Officer of, and
on        behalf of, each of the 12 entities listed above   

 

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            COLE AB EL PASO TX, LLC, a Delaware limited liability company

COLE AB FARMINGTON NM, LLC, a Delaware limited liability company

COLE AB FORT COLLINS CO, LLC, a Delaware limited liability company

COLE AB FORT WORTH (OAKMONT) TX, LLC, a Delaware limited liability company

COLE AB FORT WORTH TX, LLC, a Delaware limited liability company

COLE AB FORT WORTH (CLIFFORD ST) TX, LLC, a Delaware limited liability company

COLE AB FORT WORTH (SYCAMORE SCHOOL RD) TX, LLC, a Delaware limited liability
company

COLE AB LAFAYETTE LA, LLC, a Delaware limited liability company

COLE AB LAKE HAVASU CITY AZ, LLC, a Delaware limited liability company

COLE AB LOS LUNAS NM, LLC, a Delaware limited liability company

COLE AB MESA AZ, LLC, a Delaware limited liability company

COLE AB MIDLAND TX, LLC, a Delaware limited liability company
      By:   /s/ Todd J. Weiss         Name:   Todd J. Weiss as Officer of, and
on        behalf of, each of the 12 entities listed above   

 

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            COLE AB ODESSA TX, LLC, a Delaware limited liability company

COLE AB PHOENIX AZ, LLC, a Delaware limited liability company

COLE AB SCOTTSDALE AZ, LLC, a Delaware limited liability company

COLE AB SILVER CITY NM, LLC, a Delaware limited liability company

COLE AB TUCSON (GRANT RD) AZ, LLC, a Delaware limited liability company

COLE AB TUCSON AZ, LLC, a Delaware limited liability company

COLE AB WEATHERFORD TX, LLC, a Delaware limited liability company

COLE AB YUMA AZ, LLC, a Delaware limited liability company
      By:   /s/ Todd J. Weiss         Name:   Todd J. Weiss as Officer of, and
on        behalf of, each of the 8 entities listed above   

 

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            JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking association
chartered under the laws of the United States of America
      By:   /s/ Steven Hantz         Name:   Steven Hantz        Title:  
Executive Director   

 

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JOINDER AGREEMENT
          The undersigned (“Joinder Party”) hereby acknowledges and agrees that
it has read and reviewed the foregoing Loan Agreement to which this Joinder
Agreement has been attached. Capitalized terms used but not defined herein shall
have the meaning set forth in the Loan Agreement.
          Joinder Party hereby covenants, represents, warrants, acknowledges and
agrees as follows:
          (a) Joinder Party has read and reviewed the Loan Agreement and is
familiar with the terms and provisions thereof.
          (b) Joinder Party covenants and agrees to observe and perform all of
the covenants and agreements of Joinder Party contained in Section 5.1.26 and
Section 9.1 of the Loan Agreement.
          (c) The obligations of Joinder Party under this Joinder Agreement are
enforceable against Joinder Party and are not subject to any defenses, offsets
or counterclaims.
          (d) The provisions of this Joinder Agreement are for the benefit of
Lender.
          (e) THIS JOINDER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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          IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement
to be duly executed and delivered as of the date first above written.

            JOINDER PARTY:

COLE REIT III OPERATING PARTNERSHIP, LP, a Delaware limited partnership
      By:   Cole Credit Property Trust III, Inc., a Maryland corporation, its
General Partner    

                  By:   /s/ John M. Pons         Name:   John M. Pons       
Title:   Authorized Officer