Exhibit
10.3




AMENDMENT NO. 7 TO CREDIT
AGREEMENT




THIS
AMENDMENT NO. 7 TO CREDIT AGREEMENT (this “Amendment”) is dated
as of October 29, 2010, by and among Cornerstone Operating Partnership, L.P., a
Delaware limited partnership (the “Administrative
Borrower”), each of the “Borrowing Base
Subsidiaries” party hereto (together with the Administrative Borrower,
each a “Borrower” and
collectively, “Borrowers”), the
“Guarantors” signatory hereto (together with Borrowers, the “Credit Parties”), HSH
Nordbank AG, New York Branch, a German banking corporation acting through its
New York branch, as lender (together with its successors and assigns, each a
“Lender” and
collectively the “Lenders”), and HSH
Nordbank AG, New York Branch, a German banking corporation acting through its
New York branch, in its capacity as administrative agent for the Lenders (in its
capacity as administrative agent for the Lenders, together with any permitted
successor administrative agent, the “Administrative
Agent”) and arranger.  Capitalized terms not defined herein
shall have the respective meanings set forth in the Credit Agreement (as defined
below).




Recitals




WHEREAS,
Borrowers, Guarantors, Lenders and Administrative Agent have entered into that
certain Credit Agreement dated as of June 30, 2006 (the “Original Credit
Agreement”), as amended by that certain Amendment and Waiver No. 1 to
Credit Agreement, dated as of July 31, 2007 (“Amendment No. 1 to Credit
Agreement”), that certain Amendment No. 2 to Credit Agreement, dated as
of November 14, 2007 (“Amendment No. 2 Credit
Agreement”), that certain Amendment No. 3 to Credit Agreement, dated as
of June 30, 2008 (“Amendment No. 3 to Credit
Agreement”), that certain Amendment No. 4 to Credit Agreement, dated as
of June 30, 2010 (“Amendment No. 4 to Credit
Agreement”), that certain Amendment No. 5 to Credit Agreement, dated as
of August 31, 2010 (“Amendment No. 5 to Credit
Agreement”) and that certain Amendment No. 6 to Credit Agreement, dated
as of September 30, 2010 (“Amendment No. 6 to Credit
Agreement”, together with the Original Credit Agreement, Amendment No. 1
to Credit Agreement, Amendment No. 2 to Credit Agreement, Amendment No. 3 to
Credit Agreement, Amendment No. 4 to Credit Agreement, Amendment No. 5 to Credit
Agreement and as otherwise modified, amended or supplemented from time to time,
collectively, the “Credit
Agreement”);




WHEREAS,
pursuant to (i) that certain Joinder and Amendment Agreement dated as of
November 30, 2006, among COP-Goldenwest, LLC, a California limited liability
company (“COP-Goldenwest”),
Administrative Borrower, the Guarantors, Lenders and Administrative Agent, (ii)
that certain Joinder Agreement dated as of November 30, 2006, among, COP-Western
Ave., LLC a California limited liability company (“COP-Western”),
COP-Goldenwest, Administrative Borrower, the Guarantors, Lenders and
Administrative Agent, (iii) that certain Joinder Agreement dated as of January
19, 2007, among COP-Deer Valley, LLC, an Arizona limited liability company
(“COP-Deer
Valley”), COP-Western, COP-Goldenwest, Administrative Borrower, the
Guarantors, Lenders and Agent, and (iv) that certain Joinder Agreement dated as
of September 28, 2007, among COP-Pinnacle Peak, LLC, an Arizona limited
liability company (“COP-Pinnacle Peak”),
COP-Western, COP-Goldenwest, COP-Deer Valley, Administrative Borrower, the
Guarantors, Lenders and Agent, each of COP-Goldenwest, COP-Western, COP-Deer
Valley and COP-Pinnacle Peak were joined to the Credit Agreement and the other
Financing Documents, each as a “Borrower” and as a “Borrowing Base
Subsidiary.”





WHEREAS,
the payment of the Obligations and the performance of the other obligations of
Borrowers under the Credit Agreement and the other Financing Documents are
secured by, amongst other things, (i) that certain Deed of Trust, Assignment of
Leases and Rents, Fixture Filing and Security Agreement, by COP-Goldenwest, as
grantor, in favor of Commonwealth Land Title Company, solely as trustee, for the
benefit of Administrative Agent, recorded as of December 1, 2006 in the Official
Records of Orange County, California, as Instrument No. 2006000808373, as
amended by that certain First Amendment to Deed of Trust, dated as of June 30,
2010, recorded as of July 6, 2010 in the Official Records of Orange County,
California as instrument No. 2010000316843 (as amended and modified, from time
to time, the “Goldenwest Deed of
Trust”), (ii) that certain Assignment of Leases and Rents, by
COP-Goldenwest, in favor of Administrative Agent, recorded as of December 1,
2006 in the Official Records of Orange County, California, as Instrument No.
2006000808374 (the “Goldenwest
Assignment”), (iii) that certain Deed of Trust, Assignment of Leases and
Rents, Fixture Filing and Security Agreement, by COP-Western, as grantor, in
favor of Commonwealth Land Title Company, solely as trustee, for the benefit of
Administrative Agent, recorded as of December 1, 2006 in the Official Records of
Los Angeles County, California, as Instrument No. 2006266762, as amended by that
certain First Amendment to Recorded Documents, dated as of June 30, 2010,
recorded as of July 6, 2010 in the Official Records of Los Angeles County,
California as Instrument No. 20100918735 (as amended and modified, from time to
time, the “Western
Deed of Trust”), (iv) that certain Assignment of Leases and Rents, by
COP-Western, in favor of Administrative Agent, recorded as of December 1, 2006
in the Official Records of Los Angeles County, California, as Instrument No.
20062667663, as amended by that certain First Amendment to Recorded Documents,
dated as of June 30, 2010, recorded as of July 6, 2010 in the Official Records
of Los Angeles County, California as Instrument No. 20100918735 (as amended and
modified, from time to time (the “Western Assignment”),
(v) that certain Deed of Trust, Assignment of Leases and Rents, Fixture Filing
and Security Agreement, by COP-Deer Valley, as grantor, in favor of Magnus Title
Agency, solely as trustee, for the benefit of Administrative Agent, recorded as
of January 22, 2007 in the Official Records of Maricopa County, Arizona, as
Instrument No. 20070081545, as amended by that certain First Amendment to
Recorded Documents, dated as of June 30, 2010, recorded as of July 2, 2010 in
the Official Records of Maricopa County, Arizona as Instrument No. 20100566186
(as amended and modified, from time to time, the “Deer Valley Deed of
Trust”), (vi) that certain Assignment of Leases and Rents, by COP-Deer
Valley, in favor of Administrative Agent, recorded as of January 22, 2007 in the
Official Records of Maricopa County, Arizona, as Instrument No. 20070081546, as
amended by that certain First Amendment to Recorded Documents, dated as of June
30, 2010, recorded as of July 2, 2010 in the Official Records of Maricopa
County, Arizona as Instrument No. 20100566186 (as amended and modified, from
time to time, the “Deer Valley
Assignment”), and (vii) that certain Deed of Trust, Assignment of Leases
and Rents, Fixture Filing and Security Agreement, by COP-Pinnacle Peak, as
grantor, in favor of Lawyers Title Insurance Corporation, solely as trustee, for
the benefit of Administrative Agent, recorded as of October 2, 2007 in the
Official Records of Maricopa County, Arizona, as Instrument No. 20071083931, as
amended by that certain First Amendment to Recorded Documents, dated as of June
30, 2010, recorded as of July 2, 2010 in the Official Records of Maricopa
County, Arizona as Instrument No. 20100566179 (as amended and modified, from
time to time, the “Pinnacle Peak Deed of
Trust”) and (viii) that certain Assignment of Leases and Rents, by
COP-Pinnacle Peak, in favor of Administrative Agent, recorded as of October 2,
2007 in the Official Records of Maricopa County, Arizona, as Instrument No.
20071083932, as amended by that certain First Amendment to Recorded Documents,
dated as of June 30, 2010, recorded as of July 2, 2010 in the Official Records
of Maricopa County, Arizona as Instrument No. 20100566179 (as amended and
modified, from time to time, the “Pinnacle Peak
Assignment”).  The Goldenwest Deed of Trust, the Western Deed
of Trust, the Deer Valley Deed of Trust and the Pinnacle Peak Deed of Trust
hereafter collectively the “Existing Deeds of
Trust”.  The Goldenwest Assignment, the Western Assignment, the
Deer Valley Assignment and the Pinnacle Peak Assignment hereafter collectively
the “Existing
Assignments.”


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NOW
THEREFORE in consideration of the promises and mutual covenants contained
herein, the parties hereto agree as follows:




1.  Amendments.  Upon
satisfaction of all of the conditions of effectiveness set forth in Section 2 below, the
following amendments shall take effect:




1.1           The
definition of the term “Maturity Date” set forth in Section 1.01 of the
Loan Agreement is hereby deleted and replaced with the following
text:




““Maturity Date” means
the Initial Maturity Date; provided, however that (a) if
the Borrowers shall have elected to extend the Maturity Date pursuant to the
First Extension Option then, from and after the effectiveness of the First
Extension Option, “Maturity Date” shall
mean the First Extended Maturity Date, (b) if the Borrowers shall have elected
to extend the Maturity Date pursuant to the Second Extension Option then, from
and after the effectiveness of the Second Extension Option, “Maturity Date” shall
mean the Second Extended Maturity Date and (c) if the Borrowers shall have
satisfied the conditions set forth in Amendment No. 7 to Credit Agreement,
“Maturity Date”
shall mean November 14, 2010.  Anything in this definition to the
contrary notwithstanding, if the entire principal balance of the Loans shall
become due and payable by acceleration or otherwise on or before the then
Maturity Date, then from and after such principal balance becoming due, “Maturity Date” shall
mean such earlier date.”




1.2           The
following definitions are added to and made a part of the Credit
Agreement:




“Amendment No. 7 to Credit
Agreement” means that certain Amendment No. 6 to Credit Agreement, dated
as of October 29, 2010 by and among the Credit Parties, Administrative Agent and
Lenders.”




2.  Effectiveness of this
Amendment. The amendments set forth in Section 1 above shall
not be effective or binding (without affecting the other provisions of this
Amendment) until the following conditions have been satisfied or waived in
writing by Administrative Agent, in Administrative Agent’s sole and absolute
discretion (the date on which all such conditions being satisfied or waived, the
“Effective
Date”):


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2.1           Amendment
Fee.  Borrower has paid to Administrative Agent an amendment
fee (the “Amendment
Fee”) in an amount equal to fifteen thousand five hundred and 00/100ths
Dollars ($15,500.00).




2.2           Principal
Reduction.  Borrower has made a principal reduction payment to
Administrative Agent in an amount equal to two hundred thousand and 00/100ths
dollars ($200,000.00) (the “Principal Reduction
Payment”);




2.3           Execution of
Documents.  Administrative Agent shall have received each of
the following documents (collectively the “Transaction
Documents”) duly executed and delivered by each of the parties
thereto:




(a)           this
Amendment; and




(b)           such
other documents and instruments requested by Administrative Agent.




2.4           Title Updates. Administrative
Agent shall have obtained, at Borrowers’ expense, such new lender’s title
policies or modification, date-down or other endorsements to Lenders’ existing
title policies as Administrative Agent may require to insure the continued
validity of the Existing Deeds of Trust, as amended, and their, respective,
continuing first lien priority on each of the Borrower Base Properties, subject
of the Existing Deeds of Trust, over all encumbrances not previously approved in
writing by Administrative Agent.




2.5           No Defaults.  As of
the Effective Date no Default or Event of Default shall have occurred and be
continuing, provided, that the parties hereto acknowledge and agree that
Borrowers are not in compliance with their covenant that REIT shall, at all
times, maintain Unencumbered Cash or Cash Equivalents of not less than
$10,000,000 (the “Existing
Non-Compliance”).  The foregoing shall not constitute a waiver
of any Default or Event of Default under the Financing Documents, provided that
Administrative Agent agrees, until the earlier to occur of (a) the occurrence of
a Default or Event of Default (other than the Existing Non-Compliance) or (b)
the November 14, 2010, the Existing Non-Compliance shall not constitute a
Default or Event of Default.




2.6           Payment of
Expenses.  Borrowers shall have paid to Administrative Agent
all costs and expenses incurred in connection with this Amendment as provided in
Section 7
hereof.




2.7           Representations and
Warranties.  The representations and warranties of the Credit
Parties set forth in Section 3 of this
Amendment shall be true and correct in all material respects on and as of the
Effective Date; provided that any
such representations and warranties that by their express terms are made as of a
specific date shall be true and correct in all material respects as of such
specific date.




3.  Representations and
Warranties.  To induce Lenders and Administrative Agent to
enter into this Amendment, the Credit Parties hereby represent and warrant
that:


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3.1  The
outstanding principal amount of the Loan as of the date hereof, after giving
effect to the Principal Reduction Payment, is $15,545,000.00.




3.2  The
execution, delivery and performance by each Credit Party of this Amendment, the
other Transaction Documents, and any other documents in connection herewith, or
therewith, to which it is a party are (a) within its powers and have been duly
authorized by all necessary action, (b) require no action by or in respect of,
or filing with, any Governmental Authority, any property manager or other third
party, (c) do not contravene, or constitute a breach of or default under, any
provision of applicable law or regulation, any of its constitutive documents or
of any judgment, injunction, order, decree, permit, license, note, mortgage,
agreement or other instrument binding upon such Person or any of its
Subsidiaries or their respective assets and (d) do not result in the creation or
imposition of any Lien on any asset of any Credit Party or any of its
Subsidiaries.




3.3  This
Amendment, the other Transaction Documents and such other documents and
instruments executed by such Credit Party in connection herewith, or therewith,
have been duly executed and delivered by each Credit Party and constitutes a
valid and binding agreement of each Credit Party, in each case enforceable in
accordance with their respective terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization or moratorium or other
similar laws relating to the enforcement of creditors’ rights generally and by
general equitable principles.




3.4  Each
of the representations and warranties contained in Article III of the
Credit Agreement, as modified herein, is true and correct, in all material
respects, as of the date hereof, as though made on, and as of, the date hereof;
provided that
any such representations and warranties that by their express terms are made as
of a specific date shall be true and correct in all material respects as of such
specific date.




4.  Ratification of Credit
Agreement.  Except as specifically amended hereby, the terms
and conditions of the Credit Agreement and the other Financing Documents are in
all respects ratified and confirmed and remain in full force and
effect.




5.  Governing
Law.   THIS AMENDMENT, IN ACCORDANCE WITH SECTION 5-1401
OF THE GENERAL OBLIGATION LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION
OF THE LAWS OF ANY OTHER JURISDICTION, as more fully set forth in Section 9.09 of the
Credit Agreement, which Section 9.09 is
incorporated herein mutatis
mutandisas though set forth herein in full.


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6.      Compliance,
Release.  As additional consideration for Administrative Agent
and Lenders to enter into this Amendment, the Credit Parties hereby acknowledge
and agree that, as of the date of this Amendment: (i) Administrative Agent and
Lenders have fully complied with all of their respective obligations under the
Financing Documents, (ii) the Credit Parties have no knowledge of any act or
omission on the part of Administrative Agent or Lenders that constitutes a
default by Administrative Agent or Lenders under any of the Financing Documents
(or that, with the giving of notice, the passage of time, or both, would
constitute a default by the Administrative Agent or Lenders thereunder), (iii)
the Credit Parties have no knowledge of any fact or circumstance that would
prevent or prohibit Administrative Agent or Lenders from enforcing the Financing
Documents, and (iv) the Credit Parties have no claims, demands, damages, suits,
cross-complaints, causes of action or debts of any kind or nature whatsoever
that can be asserted to reduce or eliminate all or any portion of its obligation
to repay the Loans or to seek any affirmative relief from Administrative Agent
or Lenders with respect to the Loans or the Borrowing Base
Properties.  The Credit Parties hereby release and forever discharge,
and agree to indemnify, defend and hold harmless, Administrative Agent and
Lenders and their respective agents, servants, employees, directors, officers,
trustees, beneficiaries, attorneys, branches, affiliates, subsidiaries,
successors and assigns, of and from all damages, losses, claims, demands,
liabilities, obligations, actions, suits and causes of action whatsoever, that
the Credit Parties may now have or claim to have against Administrative Agent or
Lenders as of the date of this Amendment, and whether presently known or
unknown, and of every nature and extent whatsoever, on account of or in any way
concerning or arising out of the Borrowing Base Properties or the Loans, or
founded upon any of the Financing Documents, including, but not limited to, all
such loss or damage of any kind heretofore sustained or that may arise as a
consequence of the dealings between the parties up to and including the date of
this Amendment.  The Credit Parties acknowledge and agree that this
release is intended to extend to claims they do not know or suspect to
exist.




7.      Payment of Administrative
Agent’s and Lenders’ Expenses.  Borrowers agree to reimburse
Administrative Agent and Lenders for all out-of-pocket expenses incurred by
Administrative Agent and Lenders in connection with the drafting, negotiation,
execution, delivery and performance of this Amendment and all related documents,
including, but not limited to, reasonable attorneys’ fees and costs incurred by
Administrative Agent and Lenders, premiums for any endorsements to Lenders’
existing title policies, recording charges, escrow fees and all other
costs.




8.      Appraisal.  As
additional consideration for Administrative Agent’s agreement to enter into this
Amendment, Borrowers acknowledge and agree that Lender shall be entitled to
immediately order Appraisals, at Borrowers’ sole cost and expense, with respect
to the Borrower Base Properties subject to the Existing Deeds of
Trust.




9.      Counterparts; Integration;
Effectiveness.  This Amendment may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Amendment, and the other Financing Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof.  Except as provided in
Section 3
hereof, this Amendment shall become effective when it shall have been executed
by the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto.  Delivery of an executed counterpart
of a signature page of this Amendment by telecopy shall be effective as delivery
of a manually executed counterpart of this Amendment.


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Signatures
on the following page.


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IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment
as of the date first set forth above.




“BORROWERS”CORNERSTONE
      OPERATING PARTNERSHIP, L.P.By:
                                              Cornerstone
      Core Properties REIT, Inc.its
      General PartnerBy:
                                              /s/
      Sharon C. KaiserName:
      Sharon C. KaiserTitle:
      Chief Financial OfficerCOP-GOLDENWEST,
      LLCBy:
                                              Cornerstone
      Operating Partnership, L.P.its
      sole MemberBy:
                                              Cornerstone
      Core Properties REIT, Inc.its
      General PartnerBy:
                                              /s/
      Sharon C. KaiserName:
      Sharon C. KaiserTitle:
      Chief Financial OfficerCOP-WESTERN
      AVE., LLCBy:
                                              Cornerstone
      Operating Partnership, L.P.its
      sole MemberBy:
                                              Cornerstone
      Core Properties REIT, Inc.its
      General PartnerBy:
                                              /s/
      Sharon C. KaiserName:
      Sharon C. KaiserTitle:
      Chief Financial Officer





signature
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COP-DEER
      VALLEY, LLCBy:
                                Cornerstone
      Operating Partnership, L.P.its
      sole MemberBy:
                                Cornerstone
      Core Properties REIT, Inc.its
      General PartnerBy:
                                /s/
      Sharon C. KaiserName:
      Sharon C. KaiserTitle:
      Chief Financial OfficerCOP-PINNACLE
      PEAK, LLCBy:
                                Cornerstone
      Operating Partnership, L.P.its
      sole MemberBy:
                                Cornerstone
      Core Properties REIT, Inc.its
      General PartnerBy:
                                /s/
      Sharon C. KaiserName:
      Sharon C. KaiserTitle:
      Chief Financial Officer




“GUARANTORS”
      and“RECOURSE
      LIABILITY PARTY”CORNERSTONE
      CORE PROPERTIES REIT, INC.By:
                      /s/
      Sharon C. KaiserName:
      Sharon C. KaiserTitle:
      Chief Financial OfficerCORNERSTONE
      REALTY ADVISORS, LLCBy:
                      /s/
      Sharon C. KaiserName:
      Sharon C. KaiserTitle:
      Chief Financial OfficerBy:
                      /s/
      Sharon C. KaiserName:
      Sharon C. KaiserTitle:
      Chief Financial Officer




signature
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“ADMINISTRATIVE
      AGENT”HSH
      NORDBANK AG, NEW YORK BRANCHBy  :
                                    /s/
      Heidrun MeyerName:
      Heidrun MeyerTitle:
      Senior Vice PresidentBy  :
                                    /s/
      Michael CarterName:
      Michael CarterTitle:
      Senior Vice President“LENDERS”HSH
      NORDBANK AG, NEW YORK BRANCHBy  :
                                    /s/
      Heidrun MeyerName:
      Heidrun MeyerTitle:
      Senior Vice PresidentBy  :
                                    /s/
      Michael CarterName:
      Michael CarterTitle:
      Senior Vice President


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