Document:

cacc_100611ia.htm

 

Execution Copy

 

Exhibit 4(f)(157)

AMENDED AND RESTATED INTERCREDITOR AGREEMENT

 

 

This Amended and Restated Intercreditor Agreement (this “Agreement”), dated October 6, 2011, is among Credit Acceptance Corporation (“CAC”), CAC Warehouse Funding Corporation II (“Warehouse Funding II”), CAC Warehouse Funding III, LLC (“Warehouse Funding III”), CAC Warehouse Funding LLC IV (“Warehouse Funding IV”), Credit Acceptance Funding LLC 2011-1 (“Funding 2011-1”), Credit Acceptance Funding LLC 2010-1 (“Funding 2010-1”), Credit Acceptance Funding LLC 2009-1 (“Funding 2009-1”), Credit Acceptance Auto Loan Trust 2011-1 (the “2011-1 Trust”), Credit Acceptance Auto Loan Trust 2010-1 (the “2010-1 Trust”), Credit Acceptance Auto Loan Trust 2009-1 (the “2009-1 Trust”), Wells Fargo Bank, National Association, as collateral agent under the Wells Fargo Warehouse Securitization Documents (“Wells Fargo”), Fifth Third Bank, as agent under the Fifth Third Securitization Documents (“Fifth Third”), Wells Fargo Bank, National Association, as indenture trustee and trust collateral agent under the 2011-1 Securitization Documents (in either such capacity, the “2011-1 Trustee”, as the context requires), Wells Fargo Bank, National Association, as indenture trustee and trust collateral agent under the 2010-1 Securitization Documents (in either such capacity, the “2010-1 Trustee”, as the context requires), Wells Fargo Bank, National Association, as indenture trustee and trust collateral agent under the 2009-1 Securitization Documents (in either such capacity, the “2009-1 Trustee”, as the context requires), Bank of Montreal, as collateral agent under the BMO Warehouse Securitization Documents (“BMO”), Comerica Bank, as agent under the CAC Credit Facility Documents (“Comerica”), and each other creditor who becomes a party hereto after the date hereof.

 

 

Capitalized terms used but not otherwise defined herein shall have the meaning set forth in Appendix A attached hereto and made part of this Agreement.

 

 

Background

 

 

A.  Pursuant to the terms of the various Dealer Agreements between CAC and the Dealers, Collections from a particular Pool are first used to pay certain collection costs, CAC’s servicing fee and to pay back the Pool’s Advance balance.  After the Advance balance under such Pool has been reduced to zero, the Dealer to whom the Pool relates has a contractual right under the related Dealer Agreement to receive a portion of any further Collections with respect to the Pool (such portion of further Collections otherwise payable to the Dealer is referred to herein as “Back-end Dealer Payments”), subject to CAC’s right of offset as described in paragraph I below.

 

 

B.  CAC has granted a security interest in CAC’s rights with respect to its Pools (to the extent not released) and related assets generally under the CAC Credit Facility Documents to Comerica, as collateral agent for the banks which are parties thereto.

 

 

C.  CAC, Wells Fargo and certain other parties entered into a transaction as set forth in the Wells Fargo Warehouse Securitization Documents (the “Wells Fargo Warehouse

 

  

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Securitization”) pursuant to which the security interest with respect to certain specifically identified Pools, Purchased Loans and related assets was (and during the revolving period under the Wells Fargo Warehouse Securitization Documents will be) released by Comerica, CAC contributed (and will contribute) such Pools, Purchased Loans and related assets to its wholly-owned subsidiary, Warehouse Funding II, and Warehouse Funding II granted Wells Fargo, in its capacity as collateral agent, a security interest in Warehouse Funding II’s rights to such Pools, Purchased Loans and related assets (such Pools, Purchased Loans and related assets are referred to herein as the “Wells Fargo Warehouse Loans”).

 

 

D.  CAC, Fifth Third and certain other parties entered into a transaction as set forth in the Fifth Third Securitization Documents (the “Fifth Third Securitization”) pursuant to which the security interest with respect to certain specifically identified Pools, Purchased Loans and related assets was (and during the revolving period under the Fifth Third Securitization Documents will be) released by Comerica, CAC contributed (and will contribute) such Pools, Purchased Loans and related assets to its wholly-owned subsidiary, Warehouse Funding III, and Warehouse Funding III granted Fifth Third, in its capacity as collateral agent, a security interest in Warehouse Funding III’s rights to such Pools, Purchased Loans and related assets (such Pools, Purchased Loans and related assets are referred to herein as the “Fifth Third Loans”).

 

 

E. CAC, BMO and certain other parties entered into a transaction as set forth in the BMO Warehouse Securitization Documents (the “BMO Warehouse Securitization”) pursuant to which the security interest with respect to certain specifically identified Pools, Purchased Loans and related assets was (and during the revolving period under the BMO Warehouse Securitization Documents will be) released by Comerica, CAC transferred (and will transfer) such Pools, Purchased Loans and related assets to its wholly-owned subsidiary, Warehouse Funding IV, and Warehouse Funding IV granted BMO, in its capacity as collateral agent, a security interest in Warehouse Funding IV’s rights to such Pools, Purchased Loans and related assets (such Pools, Purchased Loans and related assets are referred to herein as the “BMO Warehouse Loans”).

 

 

F.  CAC and the 2009-1 Trustee entered into a transaction as set forth in the 2009-1 Securitization Documents (the “2009-1 Securitization”) pursuant to which the security interest with respect to certain specifically identified Pools, Purchased Loans and related assets was (and during the revolving period under the 2009-1 Securitization Documents will be) released by Comerica, CAC sold and contributed such Pools, Purchased Loans and related assets to its wholly-owned subsidiary, Funding 2009-1, which subsequently sold such Pools, Purchased Loans and related assets to the 2009-1 Trust, a trust the depositor of which is Funding 2009-1, and the 2009-1 Trust granted the 2009-1 Trustee a security interest in its right, title and interest in and to such Pools, Purchased Loans and related assets (such Pools and related assets are referred to herein as the “2009-1 Loans”).

 

 

G.  CAC and the 2010-1 Trustee entered into a transaction as set forth in the 2010-1 Securitization Documents (the “2010-1 Securitization”) pursuant to which the security interest with respect to certain specifically identified Pools, Purchased Loans and related assets was (and during the revolving period under the 2010-1 Securitization

 

  

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Documents will be) released by Comerica, CAC sold and contributed such Pools, Purchased Loans and related assets to its wholly-owned subsidiary, Funding 2010-1, which subsequently sold such Pools, Purchased Loans and related assets to the 2010-1 Trust, a trust the depositor of which is Funding 2010-1, and the 2010-1 Trust granted the 2010-1 Trustee a security interest in its right, title and interest in and to such Pools and related assets (such Pools, Purchased Loans and related assets are referred to herein as the “2010-1 Loans”).

 

 

H.  CAC and the 2011-1 Trustee are entering into a transaction as set forth in the 2011-1 Securitization Documents (the “2011-1 Securitization”) pursuant to which the security interest with respect to certain specifically identified Pools, Purchased Loans and related assets is being (and during the revolving period under the 2011-1 Securitization Documents will be) released by Comerica, CAC is transferring (and will transfer) such Pools, Purchased Loans and related assets to its wholly-owned subsidiary, Funding 2011-1, which is subsequently transferring such Pools, Purchased Loans and related assets to the 2011-1 Trust, a trust the depositor of which is Funding 2011-1, and the 2011-1 Trust is granting the 2011-1 Trustee a security interest in its right, title and interest in and to such Pools and related assets (such Pools, Purchased Loans and related assets are referred to herein as the “2011-1 Loans”).

 

 

I.  Comerica retains a security interest in Pools, Purchased Loans and related assets which (i) have not been (and will not be) released, and a security interest encumbering such Pools, Purchased Loans and related assets has not been (and will not be) granted to Wells Fargo pursuant to the Wells Fargo Warehouse Securitization, (ii) have not been (and will not be) released, and a security interest encumbering such Pools, Purchased Loans and related assets has not been (and will not be) granted to Fifth Third pursuant to the Fifth Third Securitization, (iii) are not being (and will not be) released, and a security interest encumbering such Pools, Purchased Loans and related assets has not been (and will not be) granted to BMO pursuant to the BMO Warehouse Securitization, (iv) have not been (and will not be) released, and a security interest encumbering such Pools, Purchased Loans and related assets has not (and will not) be granted to the 2009-1 Trustee, pursuant to the 2009-1 Securitization, (v) have not been (and will not be) released, and a security interest encumbering such Pools, Purchased Loans and related assets is not being granted to the 2010-1 Trustee pursuant to the 2010-1 Securitization, (vi) have not been (and will not be) released, and a security interest encumbering such Pools, Purchased Loans and related assets is not being granted to the 2011-1 Trustee pursuant to the 2011-1 Securitization (such unreleased Pools, Purchased Loans and related assets are referred to herein as the “Comerica Loans”).

 

 

J.  The Dealer Agreements permit CAC and its assignees, under certain circumstances, to set off any Collections received with respect to any Pool of a Dealer against Advances under other Pools of that Dealer or Purchased Loans from the Dealer and such set off rights are authorized and permitted under the CAC Credit Facility Documents, the Wells Fargo Warehouse Securitization Documents, the Fifth Third Securitization Documents, the BMO Warehouse Securitization Documents, the 2011-1 Securitization Documents, the 2010-1 Securitization Documents and the 2009-1 Securitization Documents.

 

  

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K.  The parties hereto acknowledge that the rights of CAC or its assigns, pursuant to the Dealer Agreements, to set off Collections received with respect to a Pool, or Purchased Loans against the outstanding balance under any other Pool or Purchased Loans are not intended, and should not be permitted, to be used to prejudice the collateral position of any of the parties hereto, and therefore the exercise of such rights should be limited to Back-end Dealer Payments. Funding 2011-1 directs the Owner Trustee of the 2011-1 Trust to enter into this Agreement, Funding 2010-1 directs the Owner Trustee of the 2010-1 Trust to enter into this Agreement and Funding 2009-1 directs the Owner Trustee of the 2009-1 Trust to enter into this Agreement.

 

 

In consideration of the mutual premises and promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

 

Agreements

 

 

1. Confirmation.  Notwithstanding any statement or provision contained in the Financing Documents or otherwise to the contrary, and irrespective of the time, order or method of attachment or perfection of security interests granted pursuant to the Financing Documents, respectively, or the time or order of filing or recording of any financing statements, or other notices of security interests, liens or other interests granted pursuant to the Financing Documents, respectively, or the giving of or failure to give notice of the acquisition or expected acquisition of purchase money or other security interests, and irrespective of anything contained in any filing or agreement to which any Creditor may now or hereafter be a party and irrespective of the ordinary rules for determining priority under the Uniform Commercial Code or under any other law governing the relative priorities of secured creditors, subject, however, to the terms and conditions of this Agreement:

 

 

(a) Release by Wells Fargo.  Wells Fargo, as the collateral agent, (i) releases any and all rights in and to any Collections with respect to the Comerica Loans, the Fifth Third Loans, the BMO Loans, the 2011-1 Loans, the 2010-1 Loans, the 2009- 1 Loans, or in any Back-end Dealer Payments; provided, that no release shall have been granted with respect to amounts collected under any Pools or Purchased Loans which are Back-end Dealer Payments that have been set off by CAC or by Comerica pursuant to the CAC Credit Facility Documents against amounts owing under the Wells Fargo Warehouse Loans and (ii) relinquishes all rights it has or may have to require CAC, individually or as servicer, any successor servicer or Warehouse Funding II to use Collections on its behalf contrary to clause (a)(i).  Wells Fargo, as collateral agent, agrees that the lien and security interest granted to it pursuant to the Wells Fargo Warehouse Securitization Documents does not and shall not attach to any Comerica Loans, Fifth Third Loans, BMO Loans, the 2011-1 Loans, 2010-1 Loans, 2009-1 Loans (or related Collections) or to any Back-end Dealer Payments and shall not assert any claim thereto.

 

 

(b) Release by Fifth Third.  Fifth Third, as the collateral agent, (i) releases any and all rights in and to any Collections with respect to the Comerica Loans, the Wells Fargo Warehouse Loans, the BMO Loans, the 2011-1 Loans, the 2010-1 Loans, the 2009-1 Loans, or in any Back-end Dealer Payments; provided, that no release shall have been granted with respect to amounts collected under any Pools or Purchased Loans which are Back-end Dealer Payments that have been set off by CAC or by Comerica pursuant to the CAC Credit Facility Documents against

 

  

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amounts owing under the Fifth Third Loans and (ii) relinquishes all rights it has or may have to require CAC, individually or as servicer, any successor servicer or Warehouse Funding III to use Collections on its behalf contrary to clause (b)(i).  Fifth Third, as collateral agent, agrees that the lien and security interest granted to it pursuant to the Fifth Third Securitization Documents does not and shall not attach to any Comerica Loans, Wells Fargo Warehouse Loans, BMO Loans, the 2011-1 Loans, 2010-1 Loans, 2009-1 Loans (or related Collections) or to any Back-end Dealer Payments and shall not assert any claim thereto.

 

 

(c) Release by the 2010-1 Trustee.  The 2010-1 Trustee (i) releases any and all rights in and to any Collections with respect to the Comerica Loans, the Wells Fargo Warehouse Loans, the Fifth Third Loans, the BMO Loans, the 2011-1 Loans, the 2009-1 Loans, or in any Back-end Dealer Payments; provided, that no release shall have been granted with respect to amounts collected under any Pools or Purchased Loans which are Back-end Dealer Payments that have been set off by CAC or by Comerica pursuant to the CAC Credit Facility Documents against amounts owing under the 2010-1 Loans and (ii) relinquishes all rights it has or may have to require CAC, individually or as servicer, any successor servicer, Funding 2010-1 or the 2010-1 Trust to use Collections on its behalf contrary to clause (c)(i).  The 2010-1 Trust agrees that the lien and security interest granted to the 2010-1 Trustee pursuant to the 2010-1 Securitization Documents to which it is a party does not and shall not attach to any Comerica Loans, Wells Fargo Warehouse Loans, Fifth Third Loans, BMO Loans, the 2011-1 Loans, 2009-1 Loans (or related Collections) or to any Back-end Dealer Payments and shall not assert any claim thereto.

 

 

(d) Release by the 2009-1 Trustee.  The 2009-1 Trustee (i) releases any and all rights in and to any Collections with respect to the Comerica Loans, the Wells Fargo Warehouse Loans, the Fifth Third Loans, the BMO Loans, the 2011-1 Loans, the 2010-1 Loans, or in any Back-end Dealer Payments; provided, that no release shall have been granted with respect to amounts collected under any Pools or Purchased Loans which are Back-end Dealer Payments that have been set off by CAC or by Comerica pursuant to the CAC Credit Facility Documents against amounts owing under the 2009-1 Loans and (ii) relinquishes all rights it has or may have to require CAC, individually or as servicer, any successor servicer, Funding 2009-1 or the 2009-1 Trust to use Collections on its behalf contrary to clause (d)(i).  The 2009-1 Trust agrees that the lien and security interest granted to the 2009-1 Trustee pursuant to the 2009-1 Securitization Documents to which it is a party does not and shall not attach to any Comerica Loans, Wells Fargo Warehouse Loans, Fifth Third Loans, BMO Loans, the 2011-1 Loans, 2010-1 Loans (or related Collections) or to any Back-end Dealer Payments and shall not assert any claim thereto.

 

 

(e) Release by the 2011-1 Trustee.  The 2011-1 Trustee (i) releases any and all rights in and to any Collections with respect to the Comerica Loans, the Wells Fargo Warehouse Loans, the Fifth Third Loans, the BMO Loans, the 2010-1 Loans, the 2009-1 Loans, or in any Back-end Dealer Payments; provided, that no release shall have been granted with respect to amounts collected under any Pools or Purchased Loans which are Back-end Dealer Payments that have been set off by CAC or by Comerica pursuant to the CAC Credit Facility Documents against amounts owing under the 2011-1 Loans and (ii) relinquishes all rights it has or may have to require CAC, individually or as servicer, any successor servicer, Funding 2011-1 or the 2011-1 Trust to use Collections on its behalf contrary to clause (e)(i).  The 2011-1 Trust agrees that the lien and security interest granted to the 2011-1 Trustee pursuant to the 2011-1 Securitization Documents to which it is a party does not and shall not attach to any Comerica Loans, Wells Fargo Warehouse Loans, Fifth Third Loans, BMO Loans, the 2010-1 Loans, 2009-1 Loans (or related Collections) or to any Back-end Dealer Payments and shall not assert any claim thereto.

 

  

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(f) Release by BMO.  BMO, as the collateral agent, (i) releases any and all rights in and to any Collections with respect to the Comerica Loans, the Wells Fargo Warehouse Loans, the Fifth Third Loans, the 2011-1 Loans, the 2010-1 Loans, the 2009-1 Loans, or in any Back-end Dealer Payments; provided, that no release shall have been granted with respect to amounts collected under any Pools or Purchased Loans which are Back-end Dealer Payments that have been set off by CAC or by Comerica pursuant to the CAC Credit Facility Documents against amounts owing under the BMO Loans and (ii) relinquishes all rights it has or may have to require CAC, individually or as servicer, any successor servicer or Warehouse Funding IV to use Collections on its behalf contrary to clause (f)(i).  BMO, as collateral agent, agrees that the lien and security interest granted to it pursuant to the BMO Warehouse Securitization Documents does not and shall not attach to any Comerica Loans, Wells Fargo Warehouse Loans, Fifth Third Loans, the 2011-1 Loans, 2010-1 Loans, 2009-1 Loans (or related Collections) or to any Back-end Dealer Payments and shall not assert any claim thereto.

 

 

(g) Release by Comerica.  Comerica (i) releases any and all rights in and to any Collections with respect to the Wells Fargo Warehouse Loans, the Fifth Third Loans, the BMO Loans, the 2011-1 Loans, the 2010-1 Loans, the 2009-1 Loans, other than amounts collected under the Wells Fargo Warehouse Loans, the Fifth Third Loans, the BMO Loans, the 2011-1 Loans, the 2010-1 Loans or the 2009-1 Loans which are owed to Dealers as Back-end Dealer Payments and which are subject to set off by CAC pursuant to the related Dealer Agreement and which have not been set off by CAC or by Comerica pursuant to the CAC Credit Facility Documents against amounts owing under the Wells Fargo Warehouse Loans, the Fifth Third Loans, the BMO Loans, the 2011-1 Loans, the 2010-1 Loans and the 2009-1 Loans and (ii) relinquishes all rights it has or may have to require CAC, individually or as servicer, or any successor servicer to use Collections on its behalf contrary to clause (g)(i) above.  Except for Back-end Dealer Payments to the extent provided in clause (g)(i) above, Comerica agrees that the lien and security interest granted to it pursuant to the CAC Credit Facility Documents does not and shall not attach to any Wells Fargo Warehouse Loans, Fifth Third Loans, the BMO Loans, the 2011-1 Loans, the 2010-1 Loans or 2009-1 Loans and shall not assert any claim against the Wells Fargo Warehouse Loans, the Fifth Third Loans, the BMO Loans, the 2011-1 Loans, the 2010-1 Loans or the 2009-1 Loans or Collections related thereto.

 

 

2. Covenant of the CAC Entities.

 

 

(a) Each of the CAC Entities covenants that it shall not use any right it may have under the Dealer Agreements, Purchase Agreements, whether at the direction of Comerica, Wells Fargo, Fifth Third, BMO, the 2011-1 Trustee, the 2010-1 Trustee, the 2009-1 Trustee or otherwise, to set off any Collections, other than amounts which are owed to Dealers as Back-end Dealer Payments, from one Pool against amounts owed under another Pool encumbered in favor of another Creditor.

 

 

(b) Each of the CAC Entities covenants that it will require any other person or entity which hereafter acquires any security interest in the Pools, Dealer Agreements, Purchased Loans

 

  

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and related assets from a CAC Entity to become parties to this Agreement by executing an amendment or acknowledgment, in form and substance reasonably satisfactory to CAC and the Creditors, by which such persons or entities agree to be bound by the terms of this Agreement, and delivering such signed amendment or acknowledgement hereof to each of the CAC Entities and the Creditors; provided, however, that in the event the amount owed by the CAC Entities to any Creditor shall be reduced to zero and such Creditor shall have no obligation or agreement to make any further advances to any CAC Entity, such Creditor shall have no rights under this Section 2(b).

 

 

3. Turnover of Proceeds.  The parties hereto agree that if, at any time, a Creditor (a “Receiving Creditor”) (x) receives any payment, distribution, security or the proceeds thereof to which another Creditor or Creditors shall, under the terms of Section 1 of this Agreement, be entitled (the “Wrong Payments”) and (y) the Receiving Creditor either (A) had actual knowledge, at the time of such receipt, that such payment, distribution or proceeds were wrongfully received by it or (B) another Creditor or Creditors shall have given written notice to the Receiving Creditor, prior to such receipt, of its good faith belief that such payments, distributions or proceeds are being misapplied, and such notice contains evidence reasonably satisfactory to the Receiving Creditor of such misapplication, then such Receiving Creditor shall receive and hold the same separately and in trust for the benefit of, and shall forthwith pay over and deliver the same to the relevant Creditor.  Without limiting the rights and remedies of the other Creditors, to the extent the Wrong Payments have been received and applied by the Receiving Creditor making the turnover of the same impossible, the Receiving Creditor agrees that such Wrong Payments shall be netted against future payments to which it is entitled under the relevant Financing Documents.  For purposes of the foregoing, (i) the actual knowledge of the 2011-1 Trustee shall be determined based on the actual knowledge of the 2011-1 Trustee’s Responsible Officers (as defined in the 2011-1 Indenture), it being understood that each such Responsible Officer shall have no duty to make any inquiry regarding the propriety of any payment, distribution or proceeds, (ii) the actual knowledge of the 2010-1 Trustee shall be determined based on the actual knowledge of the 2010-1 Trustee’s Responsible Officers (as defined in the 2010-1 Indenture), it being understood that each such Responsible Officer shall have no duty to make any inquiry regarding the propriety of any payment, distribution or proceeds, and (iii) the actual knowledge of the 2009-1 Trustee shall be determined based on the actual knowledge of the 2009-1 Trustee’s Responsible Officers (as defined in the 2009-1 Indenture), it being understood that each such Responsible Officer shall have no duty to make any inquiry regarding the propriety of any payment, distribution or proceeds.

 

 

4. Further Assurances.  Each Creditor and CAC Entity agrees that it shall be bound by all of the provisions of this Agreement.  Without limiting any other provision hereof, each of the Creditors and CAC Entities agrees that it will promptly execute such instruments, notices or other documents as may be reasonably requested in writing by any party hereto for the purpose of confirming the provisions of this Agreement or better effectuating the intent hereof.  CAC will reimburse each Creditor for all reasonable expenses incurred by such Creditor pursuant to this Section 4.

 

 

5. Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.  Each of the parties hereto agrees to the non-exclusive jurisdiction of any federal court located within the State of New York.  Each of the

 

  

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parties hereto hereby waives any objection based on forum non conveniens and any objection to venue of any action instituted hereunder in any of the aforementioned courts, and consents to the granting of such legal or equitable relief as is deemed appropriate by such court.

 

 

6. Counterparts.  This Agreement may be executed in two or more counterparts including facsimile transmission thereof (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one of the same instrument.

 

 

7. Severability.  If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions, or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.

 

 

8. No Proceedings.  Each of the parties hereto hereby agrees that it will not institute against, or join any other person in instituting against Warehouse Funding II, Warehouse Funding III, Warehouse Funding IV, Funding 2011-1, the 2011-1 Trust, Funding 2010-1, the 2010-1 Trust, Funding 2009-1 or the 2009-1 Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any federal or state bankruptcy or similar law so long as there shall not have elapsed one year and one day after there are no remaining amounts owed to any of the Creditors by any of the CAC Entities pursuant to the Wells Fargo Warehouse Securitization Documents, the Fifth Third Securitization Documents, the BMO Warehouse Securitization Documents, the 2011-1 Securitization Documents , the 2010-1 Securitization Documents and the 2009-1 Securitization Documents.

 

 

9. Amendment.  This Agreement and the rights and obligations of the parties hereunder may not be changed orally, but only by an instrument in writing executed by all of the parties hereto; provided further that if the amount owed by the CAC Entities to any Creditor shall be reduced to zero and such Creditor shall have no obligation or agreement to make any further advances to any CAC Entity, this Agreement may be amended by the other parties hereto without the consent of such Creditor.

 

 

10. No Third Party Beneficiaries.  This Agreement is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.

 

 

11. Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns, including any successor or assignor to the 2011-1 Trustee under the 2011-1 Securitization Documents, and successor or assignor to the 2010-1 Trustee under the 2010-1 Securitization Documents and any successor or assignor to the 2009-1 Trustee under the 2009-1 Securitization Documents.

 

 

12. Notices.  Except as otherwise provided herein, all notices or demand hereunder to the parties hereto shall be sufficient if made in writing, and either: (i) sent via certified or registered mail (or the equivalent thereof), postage prepaid, (ii) delivered by messenger or overnight courier, or (iii) transmitted via facsimile with a confirmation of the receipt thereof.  Notice shall be deemed to be given for purposes of this Agreement on the day of receipt.  Unless otherwise specified in a notice sent or delivered in accordance with the foregoing provisions of this Section,

 

  

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notices, demands and other communications in writing shall be given to or made upon the respective parties hereto: (a) in the case of any of the CAC Entities, to Silver Triangle Building, 25505 West Twelve Mile Road, Southfield, Michigan 48034-8339, Attention: Douglas W. Busk, telephone: (248) 353-2700 (ext. 4432), facsimile: (866) 743-2704; (b) in the case of Fifth Third, to 38 Fountain Square Plaza, MD 109046, Cincinnati, Ohio 45263, Attention: Brian Gardner: telephone: (513) 534-7949, facsimile: (513) 534-0319; (c) in the case of BMO, to Bank of Montreal, 115 South LaSalle Street, 13th Floor, Chicago, Illinois  60603, Attention: Gary Herron, Facsimile No.: (312) 293-4948, Confirmation No.: (312) 293-4990; (d) in the case of the 2011-1 Trustee, the 2010-1 Trustee and the 2009-1 Trustee, to MAC N9311-161, Sixth and Marquette Avenue, Minneapolis, Minnesota 55479 Attention: Corporate Trust Services – Asset-Backed Administration, telephone: (612) 667-8058, facsimile: (612) 667-3464; and (e) in the case of Comerica, to One Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, Attention: Anthony E. Lemelin, telephone: (313) 222-9224, facsimile: (313) 222-3716.

 

 

13. Termination.  Each party’s rights and obligations under this agreement shall terminate at the time all amounts due to or owed by such party have been paid in full and such party’s applicable Financing Documents have been terminated so long as each party whose rights and obligations are subject to termination pursuant to this Section 13 (i) has no actual knowledge or written notice of payments, distributions, security or the proceeds thereof to which another Creditor or Creditors is entitled, as provided in Section 3 hereof, and (ii) has not received a written notice from Comerica under the CAC Credit Facility Documents that there is a “Default” or an “Event of Default” (as such terms are defined therein) at the time of the termination of the applicable Financing Documents.

 

 

14. Integration; Termination of Prior Agreement.  This Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement.  Without limiting the generality of the foregoing, this Agreement is intended to supersede the Prior Agreement in its entirety.  Each of Comerica, Wells Fargo, Fifth Third, the 2010-1 Trustee, the 2009-1 Trustee and the CAC Entities that were parties to the Prior Agreement further acknowledge and agree that, as among themselves, this Agreement supersedes the Prior Agreement with respect to their rights as against each other and that this Agreement shall govern their rights against each other and the other parties hereto.

 

  

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This Amended and Restated Intercreditor Agreement has been executed and delivered by the parties hereto as of the date first above written.

 

CREDIT ACCEPTANCE CORPORATION

	
By:

	
/s/ Douglas W. Busk

	
Name:

	
Douglas W. Busk

	
Title:

	
Treasurer

 

 

 

CAC WAREHOUSE FUNDING CORPORATION II

 

	
By:

	
/s/ Douglas W. Busk

	
Name:

	
Douglas W. Busk

	
Title:

	
Treasurer

 

 

 

CAC WAREHOUSE FUNDING III, LLC

 

	
By:

	
/s/ Douglas W. Busk

	
Name:

	
Douglas W. Busk

	
Title:

	
Treasurer

 

 

 

CAC WAREHOUSE FUNDING LLC IV

 

	
By:

	
/s/ Douglas W. Busk

	
Name:

	
Douglas W. Busk

	
Title:

	
Treasurer

 

 

[A&R Intercreditor Agreement]

  

  

  

 

CREDIT ACCEPTANCE FUNDING LLC 2011-1

 

	
By:

	
/s/ Douglas W. Busk

	
Name:

	
Douglas W. Busk

	
Title:

	
Treasurer

 

 

 

CREDIT ACCEPTANCE FUNDING LLC 2010-1

 

	
By:

	
/s/ Douglas W. Busk

	
Name:

	
Douglas W. Busk

	
Title:

	
Treasurer

 

 

 

CREDIT ACCEPTANCE FUNDING LLC 2009-1

 

	
By:

	
/s/ Douglas W. Busk

	
Name:

	
Douglas W. Busk

	
Title:

	
Treasurer

[A&R Intercreditor Agreement]

  

  

  

 

CREDIT ACCEPTANCE AUTO

 

 

LOAN TRUST 2011-1

 

 

 

 

By: U.S. Bank Trust National Association,

 

 

Not In Its Individual Capacity But Solely

 

 

As Owner Trustee

 

	
By:

	
/s/ Annette Morgan

	
Name:

	
Annette E. Morgan

	
Title:

	
Assistant Vice President

 

 

 

CREDIT ACCEPTANCE AUTO

 

 

LOAN TRUST 2010-1

 

 

 

 

By: U.S. Bank Trust National Association,

 

 

Not In Its Individual Capacity But Solely

 

 

As Owner Trustee

 

	
By:

	
/s/ Annette Morgan

	
Name:

	
Annette E. Morgan

	
Title:

	
Assistant Vice President

 

 

 

CREDIT ACCEPTANCE AUTO

 

 

LOAN TRUST 2009-1

 

 

 

 

By: U.S. Bank Trust National Association,

 

 

Not In Its Individual Capacity But Solely

 

 

As Owner Trustee

 

 

 

	
By:

	
/s/ Annette Morgan

	
Name:

	
Annette E. Morgan

	
Title:

	
Assistant Vice President

[A&R Intercreditor Agreement]

  

  

  

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

 

Not In Its Individual Capacity But Solely

 

 

as 2009-1 Trustee, 2010-1 Trustee, the 2011-1 Trustee and Collateral Agent

 

 

under the Wells Fargo Warehouse Securitization Documents

 

 

 

	
By:

	
/s/ Julie Tanner Fischer

	
Name:

	
Julie Tanner Fischer

	
Title:

	
Vice President

[A&R Intercreditor Agreement]

  

  

  

 

FIFTH THIRD BANK,

 

 

As Agent

 

	
By:

	
/s/ Brian Gardner

	
Name:

	
Brian Gardner

	
Title:

	
Vice President

[A&R Intercreditor Agreement]

  

  

  

 

BANK OF MONTREAL

 

 

As Lender and Collateral Agent

 

	
By:

	
/s/ Ann Kozak

	
Name:

	
Ann Kozak

	
Title:

	
Vice President

[A&R Intercreditor Agreement]

  

  

  

 

COMERICA BANK,

 

 

As Agent

 

	
By:

	
/s/ Anthony Lemelin

	
Name:

	
Anthony Lemelin

	
Title:

	
Senior Vice President

 

 

[A&R Intercreditor Agreement]

  

  

  

 

APPENDIX A

 

 

DEFINITIONS

 

 

2009-1 Indenture: The Indenture dated as of December 3, 2009, between the 2009-1 Trustee and the 2009-1 Trust, as amended from time to time.

 

 

2009-1 Securitization Documents: The Sale and Servicing Agreement dated as of December 3, 2009, among the 2009-1 Trust, Funding 2009-1, CAC, the 2009-1 Trustee, and Wells Fargo Bank, National Association, as the Backup Servicer, the 2009-1 Indenture, and the documents related thereto, as amended from time to time.

 

 

2010-1 Indenture: the Indenture dated as of November 4, 2010, between the 2010-1 Trustee and the 2010-1 Trust, as amended from time to time.

 

 

2010-1 Securitization Documents: the Sale and Servicing Agreement dated as of November 4 2010, among the 2010-1 Trust, Funding 2010-1, CAC, the 2010-1 Trustee, and Wells Fargo Bank, National Association, as the Backup Servicer, the 2010-1 Indenture, and the documents related thereto, as amended from time to time.

 

 

2011-1 Indenture: the Indenture to be dated on or about October 6, 2011, between the 2011-1 Trustee and the 2011-1 Trust, as amended from time to time.

 

 

2011-1 Securitization Documents: the Sale and Servicing Agreement to be dated on or about October 6, 2011, among the 2011-1 Trust, Funding 2011-1, CAC, the 2011-1 Trustee, and Wells Fargo Bank, National Association, as the Backup Servicer, the 2011-1 Indenture, and the documents related thereto, as amended from time to time.

 

 

Advance: Amounts advanced to a Dealer upon the acceptance of a Contract by CAC pursuant to a Dealer Agreement.

 

 

BMO Warehouse Securitization Documents: The Loan and Security Agreement dated as of August 19, 2011, among Warehouse Funding IV, CAC, BMO, and the other parties from time to time party thereto, and the documents related thereto, as amended from time to time.

 

 

CAC Credit Facility Documents: The Fifth Amended and Restated Credit Acceptance Corporation Credit Agreement, dated as of June 17, 2011, by and among the banks signatory thereto, Comerica and CAC, and the documents related thereto, as amended from time to time.

 

 

CAC Entities: Each of CAC, Warehouse Funding II, Warehouse Funding III, Warehouse Funding IV, Funding 2011-1, the 2011-1 Trust, Funding 2010-1, the 2010-1 Trust, Funding 2009-1 and the 2009-1 Trust.

 

 

Collections: All money, amounts or other payments received or collected by CAC, individually or as servicer, or any successor servicer or any other CAC entity with respect to a contract in the form of cash, checks, wire transfers or other form of payment in accordance with the Contracts or the Dealer Agreements, including, without limitation, with respect to Pool amounts collected under any other Pool which are Back-End Dealer Payments that have been set off by CAC or by Comerica pursuant to the CAC Credit Facility Documents, against amounts owing under such Pool.

 

 

  

A-1

  

 

 

 

Contract: A retail installment contract for the sale of used motor vehicles assigned outright by Dealers to CAC or a subsidiary of CAC or written by Dealers in the name of CAC or a subsidiary of CAC (and funded by CAC or such subsidiary) or assigned by Dealers to CAC or a subsidiary of CAC, as nominee for the Dealer, for administration, servicing, and collection, in each case pursuant to an applicable Dealer Agreement.

 

 

Creditor: Each of Comerica, Wells Fargo, Fifth Third, BMO, the 2011-1 Trustee, the 2010-1 Trustee and the 2009-1 Trustee.

 

 

Dealer: A person engaged in the business of the retail sale or lease of new or used motor vehicles, including both businesses exclusively selling used motor vehicles and businesses principally selling new motor vehicles, but having a used vehicle department, including any such person which constitutes an affiliate of CAC.

 

 

Dealer agreement: The sales and/or servicing agreements between CAC or its subsidiaries and a participating Dealer which sets forth the terms and conditions under which CAC or its subsidiaries (i) accepts, as nominee for such Dealer, the assignment of Contracts for purposes of administration, servicing and collection and under which CAC or its subsidiary may make advances to such Dealers and (ii) accepts outright assignments of Contracts from Dealers or funds Contracts originated by such Dealer in the name of CAC or any of its subsidiaries, in each case as such agreements may be in effect from time to time.

 

 

Financing Documents: The CAC Credit Facility Documents, the Wells Fargo Warehouse Securitization Documents, the Fifth Third Securitization Documents, the BMO Warehouse Securitization Documents, the 2011-1 Securitization Documents, the 2010-1 Securitization Documents and the 2009-1 Securitization Documents.

 

 

Fifth Third Securitization Documents: The Loan and Security Agreement dated as of May 23, 2008 among Warehouse Funding III, CAC, Fifth Third, and the other parties from time to time party thereto, and the documents related thereto, as amended from time to time.

 

 

Pool: A grouping on the books and records of CAC or any of its subsidiaries of Advances or Contracts originated or to be originated with CAC or any of its subsidiaries by a Dealer and bearing the same pool identification number assigned by CAC’s computer system.

 

 

Prior Agreement: The Amended and Restated Intercreditor Agreement dated August 19, 2011, among CAC, Warehouse Funding II, Warehouse Funding III, Warehouse Funding IV, Funding 2009-1, the 2009-1 Trust, Funding 2010-1, the 2010-1 Trust, Wells Fargo Securities, LLC (formerly Wachovia Capital Markets, LLC), Fifth Third, Wells Fargo Bank, National Association, BMO, the 2009-1 Trustee, the 2010-1 Trustee and Comerica.

 

 

Purchased Loan: A motor vehicle retail installment loan relating to the sale of a used automobile or light-duty truck originated by a Dealer, purchased by the Originator from such Dealer and evidenced by a Purchased Loan Contract.

 

 

  

A-2

  

 

Wells Fargo Warehouse Securitization Documents: The Fourth Amended and Restated Loan And Security Agreement dated as of June 16, 2010, as amended, among Warehouse Funding II, CAC, Variable Funding Capital Company LLC, Wells Fargo Securities, LLC, Wells Fargo Bank, National Association and the other parties from time to time party thereto, and the documents related thereto, as amended from time to time.

 

 

  

A-3Exhibit 10.1

	
 

	
 

	
 

	
 

	
TERM LOAN AGREEMENT

	
 

	
by and between

	
 

	
AmREIT LANTERN LANE, LP,

	
a Texas limited partnership, as

	
Borrower

	
 

	
and

	
 

	
U.S. BANK NATIONAL ASSOCIATION,

	
a national banking association,

	
as Lender

	
 

	
Property:

	
Lantern Lane Shopping Center

	
12500 Memorial Drive, Houston, TX

	
 

	
Dated: Effective as of October 7, 2011

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 1
DEFINITIONS AND INTERPRETATION

	
 

	
1

	
 

	
 

	
 

	
 

	
Section 1.1

	
 

	
Defined
Terms

	
 

	
1

	
 

	
Section 1.2

	
 

	
Singular and
Plural Terms

	
 

	
9

	
 

	
Section 1.3

	
 

	
Accounting
Principles

	
 

	
9

	
 

	
Section 1.4

	
 

	
Exhibits
Incorporated

	
 

	
9

	
 

	
Section 1.5

	
 

	
References

	
 

	
9

	
 

	
Section 1.6

	
 

	
Other Terms

	
 

	
10

	
 

	
Section 1.7

	
 

	
Headings

	
 

	
10

	
 

	
Section 1.8

	
 

	
Other
Documents

	
 

	
10

	
 

	
Section 1.9

	
 

	
Intention

	
 

	
10

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 2
THE LOAN

	
 

	
10

	
 

	
 

	
 

	
 

	
Section 2.1

	
 

	
Purpose of Loan

	
 

	
10

	
 

	
Section 2.2

	
 

	
Principal

	
 

	
10

	
 

	
Section 2.3

	
 

	
Interest

	
 

	
11

	
 

	
Section 2.4

	
 

	
Prepayment

	
 

	
12

	
 

	
Section 2.5

	
 

	
Regulatory
Change; Conversion of Interest Rate

	
 

	
12

	
 

	
Section 2.6

	
 

	
Payments

	
 

	
13

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 3
FEES AND COSTS

	
 

	
14

	
 

	
 

	
 

	
 

	
Section 3.1

	
 

	
Commitment Fee

	
 

	
14

	
 

	
Section 3.2

	
 

	
Reimbursement
of Lender

	
 

	
14

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 4
SPECIAL COVENANTS

	
 

	
15

	
 

	
 

	
 

	
 

	
Section 4.1

	
 

	
Voluntary
Cleanup Program; Escrow Account

	
 

	
15

	
 

	
Section 4.2

	
 

	
Deadlines
Regarding Environmental Issues; Cash Reserve Account

	
 

	
16

	
 

	
Section 4.3

	
 

	
CVS Lease;
Lease Trigger Event

	
 

	
17

	
 

	
Section 4.4

	
 

	
Property
Condition Report; Repair Reserve

	
 

	
18

	
 

	
Section 4.5

	
 

	
Rice Lease;
Lease Reserve

	
 

	
18

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 5
LOAN DOCUMENTS

	
 

	
19

	
 

	
 

	
 

	
 

	
Section 5.1

	
 

	
Security
Documents

	
 

	
19

	
 

	
Section 5.2

	
 

	
Guaranty

	
 

	
20

	
 

	
Section 5.3

	
 

	
Environmental
Indemnity; Environmental Insurance

	
 

	
20

	
 

	
Section 5.4

	
 

	
Assignment
and Subordination of Management Agreement

	
 

	
20

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 6
RESERVED

	
 

	
20

	
 

	
 

	
 

	
ARTICLE 7
RESERVED

	
 

	
20

v

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 8
REPRESENTATIONS AND WARRANTIES

	
 

	
20

	
 

	
 

	
 

	
 

	
Section 8.1

	
 

	
Formation,
Qualification and Compliance

	
 

	
20

	
 

	
Section 8.2

	
 

	
Execution
and Performance of Loan Documents

	
 

	
20

	
 

	
Section 8.3

	
 

	
Sole Assets

	
 

	
21

	
 

	
Section 8.4

	
 

	
Tax
Liability

	
 

	
21

	
 

	
Section 8.5

	
 

	
Government
Requirements

	
 

	
21

	
 

	
Section 8.6

	
 

	
No Adverse
Conditions

	
 

	
22

	
 

	
Section 8.7

	
 

	
Rights of
Others

	
 

	
22

	
 

	
Section 8.8

	
 

	
Reserved

	
 

	
22

	
 

	
Section 8.9

	
 

	
Litigation

	
 

	
22

	
 

	
Section 8.10

	
 

	
Reserved

	
 

	
22

	
 

	
Section 8.11

	
 

	
Condemnation

	
 

	
22

	
 

	
Section 8.12

	
 

	
Name and
Principal Place of Business

	
 

	
22

	
 

	
Section 8.13

	
 

	
ERISA

	
 

	
22

	
 

	
Section 8.14

	
 

	
Brokers

	
 

	
22

	
 

	
Section 8.15

	
 

	
Anti-Terrorism
Regulations

	
 

	
22

	
 

	
Section 8.16

	
 

	
Financial
Statements

	
 

	
23

	
 

	
Section 8.17

	
 

	
Title to the
Property

	
 

	
24

	
 

	
Section 8.18

	
 

	
Governmental
Regulations

	
 

	
24

	
 

	
Section 8.19

	
 

	
Utilities

	
 

	
24

	
 

	
Section 8.20

	
 

	
Other Lands

	
 

	
24

	
 

	
Section 8.21

	
 

	
Permits

	
 

	
24

	
 

	
Section 8.22

	
 

	
Representations
and Warranties

	
 

	
25

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 9
AFFIRMATIVE COVENANTS

	
 

	
25

	
 

	
 

	
 

	
 

	
Section 9.1

	
 

	
Protection
of Liens

	
 

	
25

	
 

	
Section 9.2

	
 

	
Payment of
Taxes, Assessments, Costs and Expenses

	
 

	
25

	
 

	
Section 9.3

	
 

	
Reserved

	
 

	
25

	
 

	
Section 9.4

	
 

	
Continued
Compliance

	
 

	
25

	
 

	
Section 9.5

	
 

	
Books and
Records

	
 

	
26

	
 

	
Section 9.6

	
 

	
Maintenance
and Security of Property

	
 

	
26

	
 

	
Section 9.7

	
 

	
Financial
Statements

	
 

	
26

	
 

	
Section 9.8

	
 

	
Notice of
Certain Matters

	
 

	
27

	
 

	
Section 9.9

	
 

	
Notice of
Junior Liens

	
 

	
28

	
 

	
Section 9.10

	
 

	
Additional
Reports and Information

	
 

	
28

	
 

	
Section 9.11

	
 

	
Further
Assurances

	
 

	
28

	
 

	
Section 9.12

	
 

	
Reserved

	
 

	
28

	
 

	
Section 9.13

	
 

	
Continued
Existence

	
 

	
28

	
 

	
Section 9.14

	
 

	
Guarantor
Covenants

	
 

	
28

	
 

	
Section 9.15

	
 

	
Leases

	
 

	
28

	
 

	
Section 9.16

	
 

	
Operating
Income

	
 

	
29

	
 

	
Section 9.17

	
 

	
Single
Purpose Entity

	
 

	
29

	
 

	
Section 9.18

	
 

	
Interest
Rate Protection

	
 

	
31

	
 

	
Section 9.19

	
 

	
Appraisals

	
 

	
32

vi

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 10
NEGATIVE COVENANTS

	
 

	
32

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 10.1

	
 

	
Liens on
Property

	
 

	
32

	
 

	
Section 10.2

	
 

	
Liens on Personal
Property

	
 

	
32

	
 

	
Section 10.3

	
 

	
Reserved

	
 

	
33

	
 

	
Section 10.4

	
 

	
Sale or
Lease of Property

	
 

	
33

	
 

	
Section 10.5

	
 

	
Assignments
of Obligations

	
 

	
33

	
 

	
Section 10.6

	
 

	
Removal of
Personal Property

	
 

	
33

	
 

	
Section 10.7

	
 

	
Transfer of
Equity Interests

	
 

	
34

	
 

	
Section 10.8

	
 

	
ERISA

	
 

	
34

	
 

	
Section 10.9

	
 

	
Debt

	
 

	
34

	
 

	
Section
10.10

	
 

	
Distributions

	
 

	
34

	
 

	
Section
10.11

	
 

	
Management
Agreement

	
 

	
34

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 11
RESERVED

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 12
INSURANCE

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 12.1

	
 

	
Policies
Required

	
 

	
35

	
 

	
Section 12.2

	
 

	
Adjustment
of Condemnation and Insurance Claims

	
 

	
36

	
 

	
Section 12.3

	
 

	
Delivery of
Proceeds to Lender

	
 

	
36

	
 

	
Section 12.4

	
 

	
Utilization
of Compensation and Proceeds

	
 

	
36

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 13
CONDEMNATION

	
 

	
37

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 14
DEFAULTS AND REMEDIES

	
 

	
37

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 14.1

	
 

	
Events of
Default

	
 

	
37

	
 

	
Section 14.2

	
 

	
Remedies
Upon Default

	
 

	
39

	
 

	
Section 14.3

	
 

	
Cumulative
Remedies; No Waiver

	
 

	
40

	
 

	
Section 14.4

	
 

	
Setoff

	
 

	
40

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 15
MISCELLANEOUS

	
 

	
40

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 15.1

	
 

	
Actions

	
 

	
40

	
 

	
Section 15.2

	
 

	
Nonliability
of Lender

	
 

	
40

	
 

	
Section 15.3

	
 

	
No
Representations by Lender

	
 

	
41

	
 

	
Section 15.4

	
 

	
Indemnity

	
 

	
41

	
 

	
Section 15.5

	
 

	
Easements

	
 

	
42

	
 

	
Section 15.6

	
 

	
Joint and
Several; Relationship with Lender

	
 

	
42

	
 

	
Section 15.7

	
 

	
Survival

	
 

	
42

	
 

	
Section 15.8

	
 

	
Reserved

	
 

	
42

	
 

	
Section 15.9

	
 

	
Notices

	
 

	
42

	
 

	
Section
15.10

	
 

	
No Third
Parties Benefited

	
 

	
43

	
 

	
Section
15.11

	
 

	
Binding
Effect

	
 

	
43

	
 

	
Section
15.12

	
 

	
Counterparts

	
 

	
44

	
 

	
Section
15.13

	
 

	
Prior
Agreements; Amendments; Consents

	
 

	
44

vii

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section
15.14

	
 

	
Governing
Law

	
 

	
44

	
 

	
Section
15.15

	
 

	
Maximum Rate

	
 

	
45

	
 

	
Section
15.16

	
 

	
Waivers

	
 

	
45

	
 

	
Section
15.17

	
 

	
Severability
of Provisions

	
 

	
46

	
 

	
Section
15.18

	
 

	
Time of the
Essence

	
 

	
46

	
 

	
Section
15.19

	
 

	
Assignments
and Participations

	
 

	
46

	
 

	
Section
15.20

	
 

	
No
Consequential Damages

	
 

	
47

	
 

	
Section
15.21

	
 

	
Lender Not
in Control

	
 

	
47

	
 

	
Section
15.22

	
 

	
USA Patriot
Act Notice

	
 

	
48

	
 

	
Section
15.23

	
 

	
DTPA Waiver

	
 

	
48

viii

	
 

	
 

	
 

	
 

	
 

	
Exhibits

	
 

	
 

	
Description

	
 

	
 

	
A

	
 

	
Legal
Description of the Land

	
B

	
 

	
Site Plan of
Shopping Center 

	
C

	
 

	
Closing
Conditions

	
C-1

	
 

	
Post-Closing
Conditions

	
D

	
 

	
Insurance
Requirements

	
E

	
 

	
Survey
Requirements

	
F

	
 

	
Extension
Option

ix

TERM LOAN AGREEMENT

          THIS TERM
LOAN AGREEMENT is made and entered into effective as of the 7th day of October,
2011, by and between AmREIT LANTERN LANE, LP, a Texas limited partnership (“Borrower”),
and U.S. BANK NATIONAL ASSOCIATION, a national banking association (“Lender”).

RECITALS

          A.           Borrower
owns fee title to approximately 6.7 acres of real property located in Harris
County, Texas, being more fully described in Exhibit A attached
hereto (the “Land”).

          B.
          The Land is
improved with a retail shopping center (the “Shopping Center”), as
more particularly shown on the site plan of the Shopping Center affixed hereto
as Exhibit
B, containing approximately 79,462 square feet of retail space,
together with applicable parking, amenities, and on-site and off-site
improvements and appurtenances located on the Property (or necessary therefor)
and/or in such improvements (collectively, the “Improvements”).

          C.
          Borrower has
requested that Lender make a term loan (the “Loan”) to Borrower to
refinance certain indebtedness encumbering the Shopping Center, which Loan will
be evidenced, in part, by this Agreement and by a Promissory Note dated of even
date herewith, executed by Borrower and made payable to the order of Lender in
the principal face amount of up to $12,800,000.00 (such Promissory Note it may
hereafter be renewed, extended, supplemented, increased or modified and in
effect from time to time, and all other notes given in substitution therefor,
or in modification, renewal, or extension thereof, in whole or in part, is
herein called the “Note”).

          D.
          The Loan will be
secured by a Deed of Trust, Assignment of Leases and Rents, Security Agreement,
Fixture Filing and Financing Statement dated of even date herewith, executed by
Borrower and Lender, recorded or to be recorded in the Real Property Records of
Harris County, Texas (as amended, restated, modified or supplemented from time
to time, is herein called the “Deed of Trust”), and (ii) an Assignment
of Leases and Rents dated of even date herewith, executed by Borrower and
Lender and recorded or to be recorded in the Real Property Records of Harris
County, Texas (as amended, restated, modified or supplemented from time to
time, is herein called the “Assignment of Leases”). 

          NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS AND INTERPRETATION

          Section
1.1     Defined Terms. As used in this
Agreement (and in all other Loan Documents, unless otherwise defined), the
following capitalized terms shall have the following meanings:

TERM LOAN AGREEMENT - Page 1

                    “Accessibility
Regulation” means any federal, state or local law, statute,
code, ordinance, rule, regulation or requirement including, without limitation,
the United States Americans With Disabilities Act of 1991, as amended, (the “ADA”)
relating to accessibility to facilities or properties for disabled, handicapped,
physically challenged persons or other persons covered by the ADA.

                    “Adjusted
Expenses” means, for any period, the aggregate, actual cash
operating expenses of the Property (excluding non-cash expenses such as
depreciation and expenses paid from reserves) for such period, but: (a) not
including payments of principal or interest on the Loan during such period; and
(b) adjusted to include (but without duplication of the above) appropriate
monthly accruals for the Property for such period for: (1) a management fee of
at least three and one half of one percent (3.50%) per annum, (2) periodic
expenses such as property taxes and insurance, and (3) a reserve (not less than
$0.25 per square foot of leasable space in the Improvements per annum) for
capital repairs and replacements. 

                    “Adjusted
Income” means, for any period, all actual recurring cash rental
income received by Borrower during such period pursuant to Approved Leases,
adjusted for each calendar month during such period as necessary to reflect a
vacancy factor/collection loss equal the greater of (i) 5%, or (ii) the actual
vacancy factor for each month during such period. 

                    “Adjusted
Net Operating Income” means, for any period, (A) the Adjusted
Income for such period, adjusted to include only cash rental income received by
Borrower under Approved Leases pursuant to which the Tenant under such Approved
Lease has (i) accepted and taken occupancy of its respective leased premises in
accordance with such Approved Lease, and (ii) commenced the payment of base
rent under such Approved Lease, minus (B) the Adjusted Expenses for such
period.

                    “Affiliate”
means, as to any Person, any other Person that, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, such Person or any subsidiary of such Person. The term “control”
(including the terms “controlled by” or “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of a Control Percentage, by contract or otherwise.

                    “Agreement” means this Term Loan
Agreement as it may be supplemented, amended, renewed, restated, extended or
replaced from time to time.

                    “Anti-Terrorism
Laws” means any laws relating to terrorism or money laundering,
including Executive Order No. 13224, the USA Patriot Act, the Laws comprising
or implementing the Bank Secrecy Act, and the laws administered by the United
States Treasury Department’s Office of Foreign Asset Control (as any of the
foregoing laws may from time to time be amended, renewed, extended, or
replaced).

                    “Applicable
Rate” is defined in Section 2.3 of this Agreement.

                    “Appraisal”
means an appraisal prepared by an appraiser approved by Lender which appraisal
is acceptable to Lender and done in conformity with the following standards: 

TERM LOAN AGREEMENT - Page 2

Uniform Standards of Professional Appraisal Practice, the requirements
of the Code of Professional Ethics and the Standards of Professional Appraisal
Practice of the Appraisal Institute, the appraisal requirements set forth by
the office of the Comptroller of the Currency and the Federal Reserve Board,
which shall be used for the determination by Lender in its sole and absolute
discretion of the Appraised Value.

                    “Appraised Value” means the value of the
Property or portion thereof as determined by Lender based upon Lender’s review
of a current Appraisal (or a current update to an Appraisal previously reviewed
and approved by Lender) of the Property.

                    “Approved Lease” is defined in Section 9.15
of this Agreement.

                    “Approved
Lease Form” is defined in Section 9.15 of this Agreement.

                    “Assignment
and Subordination of Management Agreement” means the Assignment
of Agreements to be executed and delivered by Borrower, which collaterally assigns
to Lender all rights of Borrower under the Management Agreement.

                    “Assignment
of Leases” is defined in the Recitals to this Agreement.

                    “Borrower”
shall have the meaning given such term in the preamble to this Agreement.

                    “Business
Day” means any day other than a Saturday, a Sunday, or a legal
holiday on which Lender is not open for business.

                    “Cash
Reserve Account” is defined in Section 4.2 of this
Agreement.

                    “Casualty” means any act or occurrence
of any kind or nature that results in damage, loss or destruction to the
Property. 

                    “Claim” means any liability, suit,
action, claim, demand, loss, expense, penalty, fine, judgment, or other cost of
any kind or nature whatsoever, including fees, costs and expenses of attorneys,
consultants, contractors and experts. 

                    “Closing
Date” means the date of this Agreement.

                    “Code”
means The Internal Revenue Code of 1986, as amended.

                    “Commitment”
means an amount equal to the aggregate maximum unpaid principal amount of the
Loan which may from time to time be outstanding hereunder, being the maximum
sum of $12,800,000.00, which amount shall be reduced automatically by payments
of principal on the Loan made by Borrower to Lender. 

                    “Commitment
Fee” is defined in Section 3.1 of this Agreement.

                    “Compensation”
is defined in Article 13.

TERM LOAN AGREEMENT - Page 3

                    “Condemnation” means any taking of title
to, use of, or any other interest in the Property under the exercise of the
power of condemnation or eminent domain, whether temporarily or permanently, by
any Governmental Agency or by any other Person acting under or for the benefit
of a Government Agency.

                    “Control
Percentage” means, with respect to any Person, the percentage of
the outstanding capital stock of such Person having ordinary voting power which
gives the direct or indirect holder of such stock the power to elect a majority
of the Board of Directors of such Person.

                    “CVS Lease”
means that certain Lease dated as of October 3, 2011, executed by Borrower and
CVS Pharmacy, Inc. (“CVS”).

                    “CVS
Reletting Requirement” is defined in Section 4.2 of this
Agreement.

                    “DCR
Program” is defined in Section 4.1 of this Agreement.

                    “Debt” means (a)
indebtedness for borrowed money; (b) obligations evidenced by bonds,
debentures, notes, or other similar instruments; (c) obligations to pay the
deferred purchase price of property or services (including trade obligations);
(d) obligations as lessee under any lease of any property by such Person as
lessee which would, in accordance with generally accepted accounting
principles, be required to be classified and accounted for as a capital lease
on the balance sheet of such Person; and (e) obligations under guaranties,
endorsements, performance bonds, assurances of payment, required investments, assurances
against loss, and all other contingent obligations relating to the assurance of
another Person against loss.

                    “Deed of Trust” is defined in the
Recitals to this Agreement.

                    “Default Rate” means an
annual rate equal to the lesser of (i) 5% in excess of the Applicable Rate, as
such rate may fluctuate from time to time, or (ii) the Maximum Rate.

                    “Environmental Indemnity” means an
Hazardous Substances Indemnity Agreement of even date herewith executed by
Borrower and Guarantor in favor of Lender, as now or hereafter amended,
modified, supplemented, or restated from time to time with the consent of
Lender.

                    “Environmental
Laws” has the meaning assigned to such term in the Environmental
Indemnity.

                    “Environmental
Reports” has the meaning assigned to such term in the
Environmental Indemnity.

                    “Environmental
Trigger Event” is defined in Section 4.2 of this
Agreement.

TERM LOAN AGREEMENT - Page 4

                    “ERISA”
means the Employee Retirement Income Security Act of 1974, as the same may from
time to time be amended, and the rules and regulations promulgated thereunder
by any Governmental Agency, as from time to time in effect.

                    “Escrow
Account” is defined in Section 4.1 of this Agreement.

                    “Escrow
Deposit” is defined in Section 4.1 of this Agreement.

                    “Event of Default” means any event so
designated in Article 14 hereof.

                    “Excess
Cash Flow” is defined in Section 4.2 of this Agreement.

                    “Financing Statement” means any Uniform
Commercial Code - Financing Statement - Form UCC-1,
perfecting the security interest created by the Deed of Trust or any other
security interest or assignment relating to the Loan.

                    “General
Partner” means AmREIT Lantern Lane GP, LLC, a Texas limited
liability company

                    “Governmental
Agency” means any governmental or quasi-governmental entity,
including any court, department, commission, board, bureau, agency,
administration, service, district or other instrumentality of any governmental
entity. 

                    “Guarantor” means, collectively, AmREIT
Monthly Income & Growth Fund III, Ltd., a Texas limited partnership, and
any Person who now or hereafter guarantees, in part or in full, the prompt
payment and performance of any indebtedness or other obligation to Lender under
any of the Loan Documents and the term “Guarantors” means all of such Persons,
collectively.

                    “Guaranty”
that certain Limited Payment Guaranty of even date herewith, executed by
Guarantor to and for the benefit of Lender, as now or hereafter amended,
modified, supplemented, or restated from time to time with the consent of Lender.

                    “Improvements”
is defined in the Recitals to this Agreement.

                    “Indemnitees”
is defined in Section 15.4 of this Agreement.

                    “Interest Rate Protection” means any
agreement, whether or not in writing, relating to any transaction that is a
rate swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap or option, bond, note or bill option,
interest rate option, forward foreign exchange transaction, interest cap,
collar or floor transaction, currency swap, cross-currency rate swap, swap
option, currency option or any other similar transaction (including any option
to enter into the foregoing) or any combination of the foregoing, and, unless
the context otherwise clearly requires, any form of master agreement published
by the International Swaps and Derivatives Association, Inc., or any other
master agreement, entered into between Lender (or its affiliate) and Borrower
(or its affiliate) in connection with the Loan, together with any related
schedules and confirmations, as amended, 

TERM LOAN AGREEMENT - Page 5

supplemented, superseded or replaced from time to time, relating to or
governing any or all of the foregoing.

                    “IRP
Counterparty” is defined in Section 9.18 of this
Agreement.

                    “Land”
is defined in the Recitals to this Agreement. 

                    “Laws” means, collectively, all
international, foreign, federal, state and local statutes, treaties, rules,
regulations, ordinances, codes and administrative or judicial decisions or
precedents, of or by any Governmental Agency.

                    “Lease”
means any and all present and future ground lease, space lease, sublease or
sub-sublease, letting, license, concession or other agreement (whether written
or oral and whether now or hereafter in effect), pursuant to which any Person
is granted a possessory interest in, or right to use or occupy, all or any
portion of any space in the Property, and every modification, amendment or
other agreement relating to such lease, sublease, sub-sublease or other
agreement entered into in connection with such lease, sublease, sub-sublease 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, together with any and all extensions or renewals of said leases
and agreements.

                    “Lease
Payment” is defined in Section 4.5 of this Agreement.

                    “Lease
Reserve” is defined in Section 4.5 of this Agreement.

                    “Lease
Reserve Account” is defined in Section 4.5 of this
Agreement.

                    “Lease
Trigger Event” is defined in Section 4.3 of this
Agreement.

                    “LIBOR
Rate” is defined in Section 2.3 of this Agreement.

                    “Loan” means the loan evidenced by the
Note to be made by Lender to Borrower in the amount of $12,800,000.

                    “Loan Documents” means, collectively,
this Agreement, the Note, the Security Documents, the Guaranty, the
Environmental Indemnity, the Assignment and Subordination of Management
Agreement, the Interest Rate Protection, and any other document that Lender
requires from time to time to effectuate the purposes of this Agreement.

                    “Management
Agreement” means any contract regarding the management or
leasing of the Property now or hereafter executed by Borrower and any Property
Manager, as the same may be amended or modified from time to time in accordance
with the terms of this Agreement.

                    “Material
Adverse Effect” means any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of any Loan Document, (b) is or
could reasonably be expected to be 

TERM LOAN AGREEMENT - Page 6

material and adverse to the condition (financial or otherwise),
business, assets, or operations of Borrower, Guarantor, or the Property or (c)
materially impairs or could reasonably be expected to materially impair the
ability of Borrower or Guarantor to perform the Obligations.

                    “Maturity
Date” means the earlier of (i) April 7, 2013, and (ii) any date
on which the Loan is required to be paid in full, by acceleration or otherwise,
under this Agreement or any of the Loan Documents. The Maturity Date is subject
to extension pursuant to the provisions of Exhibit F attached hereto.

                    “Maximum Rate” is defined in Section
15.15 of this Agreement.

                    “Money
Markets” means one or more wholesale funding markets available
to Lender, including negotiable certificates of deposit, commercial paper,
eurodollar deposits, bank notes, federal funds, interest rate swaps or others.

                    “Net
Operating Income” means, for any period, the amount, if any, by
which the Adjusted Income for such period exceeds the Adjusted Expenses for the
Property for the same period.

                    “New York
Banking Day” means any day (other than a Saturday or Sunday) on which
commercial banks are open for business in New York, New York. 

                    “Note” is defined in the Recitals to
this Agreement.

                    “Obligations”
means all present and future debts, obligations and liabilities of Borrower to
Lender arising pursuant to, or on account of, the provisions of this Agreement,
the Note, the Security Documents, and any of the other Loan Documents, and all
amounts secured by the Security Documents, including the obligation: (a) to pay
all principal, interest, late charges, prepayment premiums (if any) and other
amounts due at any time under the Note; (b) to pay all fees, charges, costs and
expenses, indemnification payments, and other amounts due at any time under the
Security Documents and any of the other Loan Documents, together with interest
thereon as provided in the Security Documents and such other Loan Documents;
(c) to pay and perform all obligations of Borrower under any Interest Rate
Protection; and (d) to perform, observe and comply with all of the terms,
covenants and conditions, expressed or implied, which Borrower is required to
perform, observe or comply with pursuant to the terms of the Security Documents
and the other Loan Documents. 

                    “PBGC”
means The Pension Benefit Guaranty Corporation or any successor board,
authority, agency, officer or official of the United States administering the
principal functions assigned on the date hereof to the Pension Benefit Guaranty
Corporation under ERISA.

                    “Permitted
Costs” is defined in Section 4.1 of this Agreement.

                    “Permitted Encumbrances” is defined in
the Deed of Trust.

                    “Permitted
Transfer” is defined in Section 10.7 of this Agreement.

TERM LOAN AGREEMENT - Page 7

                    “Person” means any entity, whether an
individual, trustee, corporation, partnership, trust, unincorporated
organization, Governmental Agency or otherwise.

                    “Personal Property” means all of
Borrower’s interest in all furniture, furnishings, fixtures, machinery,
equipment, inventory and other personal property of every kind, whether now
existing or hereafter acquired, tangible and intangible, now or hereafter
located on or about the Land, and used or to be used in the future in
connection with the operation of the Improvements.

                    “Proceeds”
is defined in Section 12.3.

                    “Property”
means the Land, the Improvements, and all Personal Property related thereto.

                    “Property
Condition Report” means that certain report entitled “Property
Review Summary, Lantern Lane Shopping Center, Houston, Texas” dated October 4,
2011, prepared for Lender by AECC, Inc. (AECC, Inc. Project No.: 11281).

                    “Property
Manager” means any leasing agent, broker or property management
company providing leasing, brokerage and property management services for the
Property, each of which shall be subject to the reasonable approval by Lender.

                    “Regulation”
is defined in Section 2.5 of this Agreement.

                    “Repair
Reserve” is defined in Section 4.4 of this Agreement.

                    “Repair
Reserve Account” is defined in Section 4.4 of this
Agreement.

                    “Required
Repairs” is defined in Section 4.4 of this Agreement.

                    “Rice
Lease” means that certain Lease dated as of August 25, 1997,
executed by Borrower’s predecessor in title, as landlord, and Rice Food
Markets, Inc. (“Rice”), as tenant, as amended.

                    “Security
Agreement” means that certain Security Agreement (Deposit
Account), dated of even date herewith, executed by Borrower for the benefit of
Lender regarding the Escrow Account, Cash Reserve Account, Lease Reserve
Account and Repair Reserve Account, together with any other security agreements,
assignments, deposit control agreements or other instruments now or hereafter
executed by Borrower in connection with the required pledge and assignment of
funds and accounts to Lender under this Agreement.

                    “Security Documents” means,
collectively, the Deed of Trust, the Financing Statement, the Assignment of
Leases, the Security Agreement, and any other mortgage, deed of trust, security
agreement or assignment now, heretofore or hereafter executed to secure the
obligations of Borrower or Guarantor to Lender under any Loan Document.

TERM LOAN AGREEMENT - Page 8

                    “SNDA”
means, with respect to any Approved Lease, a subordination, non-disturbance and
attornment agreement in form reasonably acceptable to Lender.

                    “TCEQ”
is defined in Section 4.1 of this Agreement.

                    “Tenant”
means each tenant of the Shopping Center under an Approved Lease.

                    “Title Company” means Fidelity National
Title Insurance Company.

                    “Title Policy” shall mean a standard
TLTA mortgagee title insurance policy in the most current approved form
(without modification, revision or amendment) issued by Title Company, insuring
Lender that, on the Closing Date, Borrower owns fee simple title to the Property
and that the Deed of Trust is a valid first lien on the Property, in the amount
of the Loan. 

                    “Treasury
Rate” means, as of any date, the rate of interest per annum on
U.S. Treasury Notes having a maturity of ten (10) years as shown in the 10-year
listing in the “this week” column under the heading “Treasury Constant
Maturities,” of the FEDERAL RESERVE statistical release FORM H-15 which has
been most recently published (or, if for any reason that published rate as of a
date not more than 10 days prior to such first Business Day is not available,
another rate determined by Lender to be comparable, in its discretion
reasonably exercised, shall be used for this purpose).

                    “USA
Patriot Act” means The Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.

                    “VCP”
is defined in Section 4.1 of this Agreement.

                    “Water
Authority” is defined in Section 4.1 of this Agreement.

          Section
1.2     Singular and Plural Terms. Any defined
term used in the plural in any Loan Document shall refer to all members of the
relevant class and any defined term used in the singular shall refer to any
number of the members of the relevant class.

          Section
1.3     Accounting Principles. Any accounting
term used and not specifically defined in any Loan Document shall be construed
in conformity with, and all financial data required to be submitted under any
Loan Document shall be prepared in conformity with, generally accepted
accounting principles applied on a consistent basis.

          Section
1.4     Exhibits Incorporated. All exhibits to
this Agreement, as now existing and as the same may from time to time be
supplemented and modified, are incorporated herein by this reference.

          Section
1.5     References. Any reference to any Loan
Document or other document shall include such document both as originally
executed and as it may from time to time be supplemented and modified.
References herein to Articles, Sections and Exhibits shall be 

TERM LOAN AGREEMENT - Page 9

construed as references to this Agreement unless a different document
is named. References to subparagraphs shall be construed as references to the
same Section in which the reference appears.

          Section
1.6     Other Terms. The term “document” is
used in its broadest sense and encompasses agreements, certificates, opinions,
consents, instruments and other written material of every kind. The terms
“including” and “include” mean including (include) without limitation. The
requirement that any party “deliver” any item to another party shall be
construed to require that the first party “deliver or cause to be delivered”
such item to the second party. The term “any” as a modifier to any noun, shall
be construed to mean “any and/or all” preceding the same noun in the plural.
The terms “herein”, “hereunder” and other similar compounds of the word “here”
refer to the entire document in which the term appears and not to any
particular provision or section of the document. In all cases where Lender’s
approval or consent is required hereunder, such approval or consent may be
withheld in Lender’s sole and absolute discretion.

          Section
1.7     Headings. All headings appearing in
this Agreement and article and section headings in the Loan Documents are for
convenience of reference only and shall be disregarded in construing this
Agreement and the Loan Documents.

          Section
1.8     Other Documents. This Agreement shall
be deemed a supplement to the other Loan Documents and shall not be construed
as a modification thereto. In the event of any conflict between the provisions
of this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control.

          Section
1.9     Intention. The provisions of this
Article 1 shall apply in every instance except where a different meaning,
construction or reference is clearly specified and intended.

ARTICLE 2

THE LOAN

          Section
2.1     Purpose of Loan. Borrower has
purchased the Property and has applied to Lender for a loan for the purpose of
refinancing the existing indebtedness encumbering the Property. Lender is
willing to make such a loan to Borrower on the terms and conditions contained
in this Agreement and the other Loan Documents. Subject to the terms and
conditions hereof, Lender agrees to lend to Borrower and Borrower agrees to
borrow from Lender, the proceeds of the Loan, which proceeds shall be disbursed
by Lender to Borrower in a single advance. 

          Section
2.2     Principal. 

                   
   (a)      From
and after the Closing Date to and until April 7, 2013, interest only shall be
payable on the Loan. If the Maturity Date of the Loan is extended pursuant to Exhibit F
attached hereto, then commencing on May 1, 2013 and continuing on the 1st
day of each calendar month thereafter until the final Maturity Date of the
Loan, Borrower shall make monthly principal payments on the Loan in an amount
per month equal to $16,318.00. 

TERM LOAN AGREEMENT - Page 10

                   
   (b)      The
entire principal balance of the Note shall mature and be payable at the
Maturity Date. 

                   
   (c)      Lender
shall enter in its records the amount of the Loan, the rate of interest borne
thereon and the payments of the principal balance received by Lender, and such
records shall be conclusive evidence of the subject matter thereof, absent
manifest error.

          Section
2.3     Interest. 

                   
   (a)      Interest
on the outstanding principal balance of the Loan shall accrue at a rate per
annum (herein, the “Applicable Rate”) equal to 3.00% plus
the one-month LIBOR rate quoted by Lender from Reuters Screen LIBOR01 Page or
any successor thereto, which shall be the one-month LIBOR rate in effect and
reset each New York Banking Day, adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation, such rate
rounded up to the nearest one-sixteenth percent (a “LIBOR Rate”). If
Borrower elects to obtain Interest Rate Protection from Lender, the LIBOR Rate
shall be modified, by written agreement of Borrower and Lender, to conform to
the repayment obligations in respect of such Interest Rate Protection.

                   
   (b)      If
the interest and/or charges in the nature of interest, if any, provided for by
this Agreement or by any other Loan Document, shall contravene the Maximum
Rate, if any, Borrower shall pay only such amounts as would legally be
permitted; provided, however, that if the defense of usury and all similar
defenses are unavailable to Borrower, Borrower shall pay all amounts provided
for herein. If, for any reason, amounts in excess of the amounts permitted in the
foregoing sentence shall have been paid, received, collected or applied
hereunder, whether by reason of acceleration or otherwise, then, and in that
event, any such excess amounts shall be applied to principal, unless principal
has been fully paid, in which event such excess amount shall be refunded to
Borrower. 

                   
   (c)      Interest
shall accrue on the principal amount of the Loan from and after the date it is
made by Lender to Borrower. Interest computed at the Applicable Rate shall be computed
on the basis of a 360 day year, but shall be charged for the actual number of
days principal is unpaid. 

                   
   (d)      Interest
on the Loan computed at the Applicable Rate shall be payable, as accrued, on
the first day of each calendar month, commencing on the first day of the next
calendar month following the calendar month in which the Loan is funded to
Borrower, and all unpaid, accrued interest shall be paid in full at the
Maturity Date. 

                   
   (e)      If
the Loan has not been repaid on or before the Maturity Date or if an Event of
Default occurs pursuant to this Agreement or any other Loan Document, then the
entire unpaid balance of the Loan shall (without notice to or demand upon
Borrower) become due and payable on said date, together with all unpaid,
accrued interest thereon, and with interest computed at the Default Rate from
and after that date until the Loan is paid in full. Interest at the Default
Rate shall be payable on the first day of each calendar month or on demand, at
Lender’s option.

TERM LOAN AGREEMENT - Page 11

                   
   (f)      If
Borrower fails to make any required payment of principal or interest on the
Loan (other than the balloon payment at the Maturity Date) on or before the
fifth (5th) day following the due date thereof, Borrower shall pay to Lender,
if requested by Lender, in addition to interest at the Default Rate, a late
payment charge equal to five percent (5%) of the amount of the overdue payment,
for the purpose of reimbursing Lender for a portion of the expense incident to
handling the overdue payment. This late charge shall apply individually to all
payments past due and there will be no daily prorated adjustment. This
provision shall not be deemed to excuse a late payment or be deemed a waiver of
any other rights Lender may have including the right to declare the entire
unpaid principal and/or interest immediately due and payable. Borrower agrees
that the “late charge” is a provision for liquidated damages and represents a
fair and reasonable estimate of the damages Lender will incur by reason of the
late payment considering all circumstances known to Borrower and Lender on the
date hereof. Borrower further agrees that proof of actual damages will be
difficult or impossible.

          Section
2.4     Prepayment. Borrower may prepay all or
any portion of the unpaid principal balance of the Note and accrued interest
thereon, in full or in part, without premium or penalty (except as provided in Section
2.5 hereof), after at least three (3) Business Days’ prior written notice
from Borrower to Lender of the date of prepayment. If Borrower shall fail to
provide such three (3) Business Days’ notice when required herein, Lender will
charge, and Borrower shall pay, additional interest on the amount prepaid, at
the Applicable Rate or the Default Rate whichever is applicable, through the
date three (3) Business Days after the date of prepayment, together with any
breakage costs or fees incurred by Lender arising out of such prepayment in
connection with any Interest Rate Protection relating to the Loan. Lender shall
not be obligated hereunder or under any of the other Loan Documents to
re-advance to Borrower any sums prepaid by Borrower, whether prepaid
voluntarily or involuntarily. 

          Section
2.5     Regulatory Change; Conversion of Interest Rate.

                   
   (a)      If
there shall occur any adoption or implementation of, or change to, any
Regulation, or interpretation or administration thereof, which shall have the
effect of imposing on Lender (or Lender’s holding company) any increase or
expansion of or any new: tax (excluding taxes on its overall income and
franchise taxes), charge, fee, assessment or deduction of any kind whatsoever,
or reserve, capital adequacy, special deposits or similar requirements against
credit extended by, assets of, or deposits with or for the account of Lender or
other conditions affecting the extensions of credit under this Agreement; then
Borrower shall pay to Lender such additional amount as Lender deems necessary
to compensate Lender for any increased cost to Lender attributable to the
extension(s) of credit under this Agreement and/or for any reduction in the
rate of return on Lender’s capital and/or Lender’s revenue attributable to such
extension(s) of credit. As used above, the term “Regulation” shall
include any federal, state or international law, governmental or
quasi-governmental rule, regulation, policy, guideline or directive (including
but not limited to the Dodd-Frank Wall Street Reform and Consumer Protection
Act and enactments, issuances or similar pronouncements by the Bank for
International Settlements, the Basel Committee on Banking Regulations and
Supervisory Practices or any similar authority and any successor thereto) that
applies to Lender. Lender’s determination of the additional amount(s) due under
this paragraph shall be binding in the 

TERM LOAN AGREEMENT - Page 12

absence of manifest error, and such amount(s) shall be payable within
15 days of demand and, if recurring, as otherwise billed by Lender.

                   
   (b)      If,
on the date for determining the LIBOR Rate, Lender shall determine (which
determination shall be conclusive in the absence of manifest error) that, by
reason of circumstances affecting the Money Markets, adequate and fair means do
not exist for ascertaining the LIBOR Rate, Lender shall promptly give to
Borrower telephonic notice (confirmed as soon as practicable in writing) of the
nature and effect of such circumstances. After receipt of such notice and
during the existence of such circumstances, the Applicable Rate shall be
determined based upon an alternate index selected by Lender, in its sole
discretion, reasonably comparable to that of LIBOR, intended to generate a
return substantially the same as that generated by the LIBOR rate.

                   
   (c)      Notwithstanding
anything to the contrary herein contained, if any adoption or implementation
of, or change to, any Regulation, or interpretation or administration thereof,
shall make it unlawful for Lender to make or maintain the Loan at the LIBOR Rate
or to give effect to its obligations as contemplated hereby, then, by written
notice to Borrower, Lender may require that the Applicable Rate be converted as
described in the preceding paragraph. Borrower shall indemnify Lender against
any loss or expense which Lender may sustain or incur (including, without
limitation, any loss or expense sustained or incurred in obtaining, liquidating
or employing deposits or other funds acquired to effect, fund or maintain the
LIBOR Rate) as a consequence of (a) any failure of Borrower to make any payment
when due of any amount hereunder, or (b) the occurrence of any Event of
Default, including but not limited to any loss or expense sustained or incurred
or to be sustained or incurred in liquidating or employing deposits from third
parties acquired to effect or maintain the LIBOR Rate. Lender shall provide to
Borrower a statement signed by an officer of Lender explaining any such loss or
expense and setting forth, if applicable, the computation pursuant to the
preceding sentence which, in the absence of manifest error, shall be conclusive
and binding on Borrower.

          Section
2.6     Payments. 

                   
   (a)      All
payments and prepayments of principal of, and interest on, the Note and all
fees, expenses and other obligations under the Loan Documents payable to Lender
shall be made, without deduction, set off, or counterclaim, in immediately
available funds not later than 2:00 o’clock p.m., Dallas, Texas time on the
dates due, to Lender at the office specified by it from time to time, except as
otherwise specifically provided in this Agreement. Funds received on any day
after 2:00 o’clock p.m., Dallas, Texas time shall be deemed to have been
received on the next Business Day. Whenever any payment to be made hereunder or
on the Note shall be stated to be due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of any interest or fees.
Borrower authorizes Lender to charge any of Borrower’s accounts maintained at
Lender for the amount of any payment or prepayment on the Note or other amount
owing pursuant to any of the other Loan Documents, which charge may be made by
Lender if Borrower fails to make any payment required of Borrower under this
Agreement. 

TERM LOAN AGREEMENT - Page 13

                   
   (b)      All
payments received by Lender for application to the principal, interest, fees,
costs and expenses due to Lender shall be applied in the following order: (i) first,
to any fees, costs and expenses due to Lender hereunder; (ii) second,
to any unpaid interest then due to Lender hereunder; and (iii) third,
to the unpaid principal balance of the Note.

ARTICLE 3

FEES AND COSTS

          Section
3.1     Commitment Fee. Borrower agrees to pay
to Lender, a one-time, nonrefundable loan commitment fee (“Commitment Fee”) in
the amount of $128,000, in consideration of the agreement of Lender to make the
Loan to Borrower. Borrower acknowledges and agrees that the Commitment Fee is a
bona fide fee and is intended as reasonable compensation to Lender for such
purpose and shall be deemed fully earned and nonrefundable on the Closing Date.
No termination or reduction of the Commitment shall entitle Borrower to a
refund of any portion of the Commitment Fee. Borrower agrees to keep the above
described Commitment Fee confidential and not to disclose the Commitment Fee
set forth above to any other federal or state savings and loan, national bank
or other lending or banking institution; except that such Commitment Fee may be
disclosed in tax filings, financial statements, to direct or indirect owners of
Borrower or as required by applicable law or court order. 

          Section
3.2     Reimbursement of Lender. Borrower shall
reimburse Lender within fifteen (15) days following receipt of Lender’s demand
for all reasonable payments made by Lender and all reasonable costs incurred by
Lender (including appraisal fees, inspection fees and the fees and expenses of
Lender’s attorneys) in connection with the negotiation, preparation, execution,
delivery, construction loan administration, modification, extension,
performance and enforcement of the Loan Documents and all related matters,
including, but not limited to, the following:

                   
   (a)      Title
insurance premiums, realty tax services, recording fees, filing fees, and
release and reconveyance fees.

                   
   (b)      Funds
advanced by Lender pursuant to the Loan Documents following an Event of Default
or in connection with the performance by Lender of any Obligation that Borrower
has failed or refused to perform.

                   
   (c)      Lender’s
commencement of, appearance in or defense of any action or proceeding
purporting to affect the rights or obligations of Lender with respect to the
Property or of the parties to any Loan Document.

                   
   (d)      All
claims, demands, causes of action, liabilities, losses, commissions and other
costs against which Lender is indemnified hereunder, including specifically
under Section 15.4 and under the Environmental Indemnity.

                   
   (e)      Any
expenditures by Lender on behalf of Borrower pursuant to any other Loan
Document.

TERM LOAN AGREEMENT - Page 14

Borrower’s reimbursement Obligations shall be part of the Loan and part
of the outstanding principal balance of the Note, shall bear interest at the
Default Rate following the date reimbursement is due pursuant to this Section 3.2,
and shall be secured by the Security Documents, notwithstanding that such
Obligations may cause the principal balance of the Note to exceed its face
amount. Borrower’s reimbursement Obligations with respect to costs occurred
prior to cancellation of the Note shall survive the cancellation of the Note
and the release and reconveyance of the Security Documents, provided nothing
herein shall be interpreted to release Borrower from any Obligations specified
in the Loan Documents for Obligations that occur on or after cancellation of
the Note.

ARTICLE 4

SPECIAL COVENANTS

          Section
4.1     Voluntary Cleanup Program; Escrow Account.

                   
   (a)      Borrower
hereby represents to and covenants with Lender as follows: The Property is
currently enrolled in the Texas Commission on Environmental Quality (“TCEQ”)
Voluntary Cleanup Program (“VCP”) due to the prior use of a portion
of the Property for the operation of a dry cleaner plant. TCEQ recommended that
Borrower’s predecessor in title make application for a Municipal Setting
Designation (MSD) for the Property which would permit TCEQ to issue a VCP
Certificate of Completion for the Property without requiring treatment of known
contaminants resulting from the operation of the dry cleaner plant. Borrower
has submitted its application for a MSD and is diligently pursuing (and will
continue to diligently pursue) completion of all requirements for approval of
the MSD for the Property and issuance of the VCP Certificate of Completion.
Borrower has advised Lender that, in order to satisfy all requirements for
approval of its application for the MSD, Borrower was required to (and did)
provide written notice of its pending application for the MSD to one or more
municipal water authorities as required by applicable law (each a “Water
Authority”) and either (i) each Water Authority must adopt a
resolution objecting to or opposing such application, or (ii) a period of 120
days must elapse after Borrower’s notice to such Water Authority without action
by such Water Authority (which failure of such Water Authority to act will be
deemed its approval of Borrower’s application). If, within said 120 day period,
any Water Authority takes action to indicate its disapproval of Borrower’s
application, Borrower will promptly notify Lender and promptly and diligently
take such steps as may be necessary to transfer the Property from the VCP into
the TCEQ’s Dry Cleaner Remediation Program (the “DCR Program”). If each
Water Authority either fails to take action within said 120-day period,
Borrower will promptly notify Lender and will diligently pursue issuance of the
VCP Certificate of Completion.

                   
   (b)      Simultaneously
with the execution of this Agreement, Borrower shall deposit with Lender an
amount in cash equal to $140,000 (the “Escrow Deposit”), which Escrow Deposit
is equal to 150% of the estimated costs to be incurred by or on behalf of
Borrower to complete the process for obtaining a VCP Certificate of Completion
for the Property. The Escrow Deposit shall be deposited into a segregated,
Lender-controlled demand deposit account (the “Escrow Account”)
established by Borrower with Lender as a reserve for the purpose of paying
estimated costs of completing the MSD application process and issuance of the
VCP Certificate of Completion. The Escrow Account shall be a “bank directed”
account and, until the 

TERM LOAN AGREEMENT - Page 15

Obligations have been repaid in full, Borrower shall have no right to
withdraw any monies held in the Escrow Account and Lender shall have no
obligation to release funds on deposit in the Escrow Account to Borrower or any
other Person for any reason, except as provided herein. Funds on deposit in the
Escrow Account shall be disbursed by Lender, no more frequently than once each
calendar month, to Borrower to pay costs and expenses incurred by Borrower in
connection with the completion of the MSD application process and the process
for obtaining a VCP Certificate of Completion and approved by Lender and for no
other purpose (herein, the “Permitted Costs”). Funds will be
disbursed by Lender to Borrower only after receipt by Lender of a written
request from Borrower for disbursement of funds in the Escrow Account, which
request shall be accompanied by, if required by Lender, copies of invoices and
other paid receipts reflecting the Permitted Costs incurred by Borrower. Once
Borrower has obtained a VCP Certificate of Completion for the Property or the
Property has been transferred into the DCR Program and Borrower has no further
obligations under applicable law to monitor or report the scope or extent of
any existing contamination resulting from the use of the Property for a dry cleaner
plant, then so long as no Event of Default exists, all funds then on deposit in
the Escrow Account will be disbursed by Lender to Borrower. If funds on deposit
in the Escrow Account are insufficient to pay all Permitted Costs, Borrower
shall pay all such Permitted Costs from its own source of funds. Upon the
occurrence of an Event of Default under the Loan Documents, Lender may, without
notice to Borrower, apply funds in the Escrow Account to pay any amounts owed
to Lender under the Loan Documents. As additional security for any and all
obligations of Borrower under the Loan Documents, Borrower does hereby
irrevocably and unconditionally grant a security interest in, and assign and
transfer to Lender, all of its rights, titles and interests in and to the
Escrow Account, together with any and all funds on deposit therein, all
interest thereon and all proceeds thereof, and any general intangibles and
choses in action arising therefrom or related thereto. 

          Section
4.2     Deadlines Regarding Environmental Issues; Cash Reserve
Account. Borrower covenants with Lender that on or before
December 31, 2013, Borrower shall cause (i) TCEQ to issue a VCP Certificate of
Completion for the Property, or (ii) the Property to be transferred from the
VCP into the DCR Program and Borrower will provide Lender with documents
reasonably acceptable to Lender evidencing the issuance of a VCP Certificate of
Completion or the Property’s acceptance into the DCR Program, as applicable. As
used herein, the term “Environmental Trigger Event” means the
occurrence of either or both of the following: (i) any Water Authority takes
action, at any time on or before February 1, 2012, to indicate its disapproval
of Borrower’s application for a MSD, or (ii) Borrower fails to cause the
Property to obtain a VCP Certificate of Completion (or, alternatively, cause
the Property to be transferred from the VCP into the DCR Program) on or before
December 31, 2013 and Borrower fails to deliver to Lender documents reasonably
acceptable to Lender evidencing the issuance of a VCP Certificate of Completion
or the Property’s acceptance into the DCR Program. Lender acknowledges that
neither an Environmental Trigger Event nor a Lease Trigger Event (as defined in
Section 4.3 below) shall constitute an Event of Default under the Loan
Documents, however, upon the occurrence of an Environmental Trigger Event or a
Lease Trigger Event Borrower shall immediately establish (and hereby directs
Lender to establish) with Lender an account (which account may, at the
discretion of Lender, be a subaccount of the Escrow Account) (herein, the “Cash
Reserve Account”), which Cash Reserve Account shall be a “bank
directed” account and, until the Obligations has been repaid in full, Borrower
shall have no right 

TERM LOAN AGREEMENT - Page 16

to withdraw any monies held in the Cash Reserve Account and Lender
shall have no obligation to release funds on deposit in the Cash Reserve
Account to Borrower or any other Person for any reason, except as provided
herein. Borrower agrees that, commencing on the fifteenth (15th) day of the
first calendar month following the Environmental Trigger Event or Lease Trigger
Event, as applicable, and on continuing or before the fifteenth (15th) day of
each calendar month thereafter, Borrower shall deposit into the Cash Reserve
Account all excess cash flow generated by the Property after payment of actual
operating expenses incurred for the Property, as approved by Lender, and
payment of all scheduled installments of principal and interest of the Loan (“Excess
Cash Flow”) for the proceeding calendar month. All funds on
deposit in the Cash Reserve Account shall be held by Lender as provided herein
as additional collateral for the payment of the Obligations. Borrower’s
obligation to deposit Excess Cash Flow into the Cash Reserve Account shall
continue until (A) as to an Environmental Trigger Event, the earliest to occur
of (i) repayment of the Loan in full, (ii) receipt by Lender of a copy of the
VCP Certificate of Completion issued by TCEQ for the Property, or (iii) receipt
by Lender of evidence that the Property has been accepted by TCEQ into the DCR
Program, or (B) as to a Lease Trigger Event, (i) if the CVS Lease has been
terminated, the execution by Borrower of a one or more replacement Lease(s)
acceptable to Lender for the entirety of the premises covered by the CVS Lease
with Tenant(s) approved by Lender, the acceptance of such Tenant(s) of
its/their premises under such replacement Lease(s), and commencement of the
payment of base rent by such Tenant(s) under such replacement Lease(s) (the
foregoing being referred to herein as the “CVS Reletting Requirement”), or (ii) if
Borrower has failed to timely deliver an SNDA for the Rice Lease to Lender,
upon delivery of an SNDA signed by Rice reasonably acceptable to Lender. Once Borrower’s
obligation to deposit Excess Cash Flow into the Cash Reserve Account terminates
as provided above, then so long as no Event of Default exists, all funds then
on deposit in the Cash Reserve Account will be disbursed by Lender to Borrower.
If Borrower shall fail to pay any principal or interest on the Loan when due or
any other amount due to Lender under the Loan Documents, Lender shall be
entitled to withdraw, without prior notice to Borrower, available funds then on
deposit in the Cash Reserve Account and apply the such funds towards the
payment of such principal, interest or other amounts. Nothing contained in this
Agreement shall be construed to permit Borrower to defer payment of principal,
interest or other amounts payable to Lender under the Loan Documents beyond the
date(s) due or to relieve Borrower from its absolute obligation to pay the same
in accordance with the Loan Documents. Upon the occurrence of an Event of
Default under the Loan Documents, Lender may, without notice to Borrower, apply
funds in the Cash Reserve Account to pay any amounts owed to Lender under the
Loan Documents. As additional security for any and all obligations of Borrower
under the Loan Documents, Borrower does hereby irrevocably and unconditionally
grant a security interest in, and assign and transfer to Lender, all of its
rights, titles and interests in and to the Cash Reserve Account, together with
any and all funds on deposit therein, all interest thereon and all proceeds
thereof, and any general intangibles and choses in action arising therefrom or
related thereto. 

          Section
4.3     CVS Lease; Lease Trigger Event. Borrower
acknowledges that the CVS Lease provides that CVS will have a period of time
within which to conduct due diligence with respect to the Property and its
intended use by CVS and to obtain all permits and approvals required for CVS to
construct improvements to the leased premises described in the CVS Lease and to
operate its business therefrom. As used in this Agreement, the term “Lease Trigger

TERM LOAN AGREEMENT - Page 17

Event”
means the occurrence of either or both of the following events: (i) CVS elects
to terminate the CVS Lease pursuant to the provisions of Part II, Section 2 of
the CVS Lease (in which Borrower shall promptly notify Lender of such
termination), or (ii) Borrower fails to deliver to Lender, on or before
November 7, 2011, an original SNDA from Rice, in form reasonably acceptable to
Lender. Upon the occurrence of a Lease Trigger Event and Borrower shall
establish the Cash Reserve Account (if not already established) and commence
depositing into the Cash Reserve Account all Excess Cash Flow as required by Section
4.2 above. 

          Section
4.4     Property Condition Report; Repair Reserve.
Borrower acknowledges that Section V of the Property Condition Report
identifies deferred maintenance and repairs recommended to be made to the
Property (the “Required Repairs”). Borrower agrees
that Borrower will, within 120 days after the date of this Agreement, complete
all Required Repairs and deliver evidence to Lender of completion by Borrower
of all such Required Repairs. Simultaneously with the execution of this
Agreement, Borrower shall deposit with Lender an amount in cash equal to
$50,000 (the “Repair Reserve”), which Repair Reserve represents an
estimate of the costs to be incurred by or on behalf of Borrower to complete
all Required Repairs. The Repair Reserve shall be deposited into a segregated,
Lender-controlled demand deposit account (the “Repair Reserve Account”)
established by Borrower with Lender as a reserve for the purpose of paying
estimated costs of completing such application process. The Repair Reserve
Account shall be a “bank directed” account and, until the Obligations have been
repaid in full, Borrower shall have no right to withdraw any monies held in the
Repair Reserve Account and Lender shall have no obligation to release funds on
deposit in the Repair Reserve Account to Borrower or any other Person for any
reason, except as provided herein. Funds on deposit in the Repair Reserve Account
shall be disbursed by Lender to Borrower only upon completion of all of the
Required Repairs to pay or reimburse Borrower for costs and expenses incurred
by Borrower in connection with the completion of the Required Repairs and for
no other purpose. Repair Reserve funds will be disbursed by Lender to Borrower
only after receipt by Lender of a written request from Borrower for
disbursement of funds in the Repair Reserve Account, which request shall be
accompanied by, if required by Lender, copies of invoices and other paid
receipts reflecting the costs and expenses incurred by Borrower in completing
the Required Repairs. If funds on deposit in the Repair Reserve Account are
insufficient to pay all such costs and expenses, Borrower shall pay all such
costs and expenses from its own source of funds. Upon the occurrence of an
Event of Default under the Loan Documents, Lender may, without notice to
Borrower, apply funds in the Repair Reserve Account to pay any amounts owed to
Lender under the Loan Documents. As additional security for any and all
obligations of Borrower under the Loan Documents, Borrower does hereby
irrevocably and unconditionally grant a security interest in, and assign and
transfer to Lender, all of its rights, titles and interests in and to the
Repair Reserve Account, together with any and all funds on deposit therein, all
interest thereon and all proceeds thereof, and any general intangibles and
choses in action arising therefrom or related thereto.

          Section
4.5     Rice Lease; Lease Reserve. Borrower
acknowledges that the Rice Lease, as amended to date and by that certain Second
Lease Amendment dated as of October 6, 2011, requires Borrower to pay to Rice
an amount equal to $350,000 (the “Lease Payment”) within five (5) days
after the CVS Contingency Satisfaction Date (as defined in said Second Lease
Amendment) occurs. Simultaneously with the execution of this Agreement,
Borrower shall 

TERM LOAN AGREEMENT - Page 18

deposit with Lender an amount in cash equal to $350,000 (the “Lease
Reserve”) to secure Borrower’s obligation to make the Lease
Payment. The Lease Reserve shall be deposited into a segregated,
Lender-controlled demand deposit account (the “Lease Reserve Account”)
established by Borrower with Lender. The Lease Reserve Account shall be a “bank
directed” account and, until the Obligations have been repaid in full, Borrower
shall have no right to withdraw any monies held in the Lease Reserve Account
and Lender shall have no obligation to release funds on deposit in the Lease
Reserve Account to Borrower or any other Person for any reason, except as
provided herein. Funds on deposit in the Lease Reserve Account shall be
disbursed by Lender only if and when the Lease Payment is due and payable to
Rice (and Lender reserves the right to [and Borrower hereby consents to having
Lender] wire transfer the Lease Payment directly to Rice if Lender deems it
appropriate to do so to satisfy any obligation or liability of Lender arising
under the SNDA hereafter executed by Lender and Rice). If, for any reason, Rice
waives its right to receive the Lease Payment or Borrower has no further
obligation to make the Lease Payment and CVS terminates the CVS Lease, then
Lender shall continue to hold the Lease Reserve until the CVS Reletting
Requirement has been satisfied (at which time, so long as no Event of Default
exists, Lender will return the funds on deposit in the Lease Reserve Account to
Borrower). Upon the occurrence of an
Event of Default under the Loan Documents, Lender may, without notice to
Borrower, apply funds in the Lease Reserve Account to pay any amounts owed to
Lender under the Loan Documents. As
additional security for any and all obligations of Borrower under the Loan
Documents, Borrower does hereby irrevocably and unconditionally grant a
security interest in, and assign and transfer to Lender, all of its rights,
titles and interests in and to the Lease Reserve Account, together with any and
all funds on deposit therein, all interest thereon and all proceeds thereof,
and any general intangibles and choses in action arising therefrom or related
thereto.

ARTICLE 5

LOAN DOCUMENTS

          Section
5.1     Security Documents. The Loan shall be
secured by the Property and the Property and such other collateral as described
in the Loan Documents. In consideration
of Lender’s execution of this Agreement and as security for (i) the payment of
all amounts owing by Borrower to Lender under the Loan Documents, together with
all extensions, renewals, supplements and modifications of any of them
(including extensions and renewals at different rates of interest and/or
evidenced by new or additional promissory notes reciting that such notes are so
secured); (ii) the performance of all other Obligations, covenants and
agreements of Borrower in the Loan Documents; and (iii) the payment and
performance of all other obligations now or hereafter owing to Lender by
Borrower, Borrower shall, at its sole expense, deliver to Lender (and cause to
be recorded or filed in applicable County and State records, where appropriate)
the following documents, each in such form and substance, and executed by such
Persons, as Lender in its sole discretion requires: (a) the Deed of Trust; (b)
the Assignment of Leases, (c) the Security Agreement, (d) the Financing
Statement; and (e) all other documents reasonably required by Lender, necessary
to confirm or perfect the rights of Lender under the Loan Documents. Borrower hereby authorizes Lender to record
any and all financing statements as Lender may deem necessary to protect or
perfect the security interests granted to Lender herein and in the other Loan
Documents.

TERM LOAN AGREEMENT - Page 19

          Section 5.2     Guaranty. In consideration
of Lender’s execution of this Agreement, Guarantor shall deliver to Lender the
Payment Guaranty. 

          Section
5.3     Environmental Indemnity; Environmental
Insurance. In consideration of Lender’s execution of this Agreement,
Borrower and Guarantor shall execute and deliver to Lender the Environmental
Indemnity. Borrower also shall cause to be delivered to Lender a environmental
contamination insurance policy covering the Property, in form and substance
satisfactory to Lender (the “Environmental
Insurance Policy”). 

          Section
5.4      Assignment and Subordination of Management
Agreement. In consideration of Lender’s execution
of this Agreement, Borrower shall deliver to Lender the Management Agreement
and the Assignment and Subordination of Management Agreement. 

ARTICLE 6 

RESERVED

ARTICLE 7 

RESERVED

ARTICLE 8 

REPRESENTATIONS AND WARRANTIES

          As
a material inducement to Lender’s execution of this Agreement, Borrower
represents and warrants to Lender that: 

          Section
8.1     Formation, Qualification and Compliance.
Borrower (a) is validly existing and in good standing under the Laws of the
State of its organization; (b) has all requisite authority to conduct its
business and own and lease its properties; and (c) is qualified and in good
standing in every jurisdiction in which the nature of its business makes
qualification necessary or where failure to qualify could have a Material
Adverse Effect on its financial condition or the performance of its Obligations
under the Loan Documents. Borrower is in compliance in all respects with all
Laws and requirements applicable to its business, the violation of which might
materially affect its Obligations hereunder, and has obtained all approvals,
licenses, exemptions and other authorizations from, and has accomplished all
filings, registrations and qualifications with, any Governmental Agency that
are necessary for the transaction of its business. 

          Section 8.2     Execution
and Performance of Loan Documents. (a) Borrower
and General Partner each has all requisite power and authority to execute and
perform its respective Obligations under the Loan Documents, and (b) the
execution by Borrower and General Partner and the performance by Borrower and
General Partner of their respective Obligations under each Loan Document have
been authorized by all necessary action and do not and will not: (i) require
any consent or approval not heretofore obtained of any Person having any
interest in Borrower or General Partner; (ii) violate any provision of, or
require any consent or approval not heretofore obtained under, the operating
agreement, articles of organization, bylaws or other governing documents
applicable to Borrower or General Partner; (iii) result in or require the
creation or imposition of any lien, claim, charge or other right of others of
any kind (other than under the Loan Documents) on or with respect to any
property or assets owned or leased by Borrower or 

TERM LOAN AGREEMENT -
Page 20 

General Partner; (iv) violate any provision of any Law, order, writ,
judgment, injunction, decree, determination or award presently in effect; or
(v) conflict with or constitute a breach or default under, or permit the
acceleration of obligations owed pursuant to, any contract, loan agreement,
lease or other document to which Borrower or General Partner is a party or by
which either Borrower or General Partner or any of their respective property is
bound; (c) neither Borrower nor General Partner is in default beyond any
applicable notice and cure period in any respect under any Law, order, writ,
judgment, injunction, decree, determination, award, contract or lease; (d) no
approval, license, exemption or other authorization from, or filing,
registration or qualification with, any Governmental Agency is required in
connection with: (i) the execution by Borrower and General Partner of, and the
performance by Borrower and General Partner of their respective obligations
under the Loan Documents; and (ii) the creation and perfection of the liens
described in the Loan Documents; (e) the Loan Documents, when executed and
delivered, will constitute legal, valid and binding obligations of Borrower
enforceable in accordance with their respective terms; and (f) the signatories
of Borrower and General Partner are fully authorized to execute the Loan
Documents to which they are a party. 

          Section
8.3     Sole Assets.
Borrower’s sole asset is the Property. Borrower has no liabilities other than
those attributable to the Property. 

          Section
8.4     Tax Liability.
Borrower and General Partner have filed all required federal, state and local
tax returns. Borrower and General Partner have paid all federal, state and
local taxes due (including any interest and penalties) other than taxes being
promptly and actively contested by Borrower or a Manager (as applicable) in
good faith and by appropriate proceedings and which have been disclosed to
Lender in writing. 

          Section
8.5     Government Requirements.
To Borrower’s knowledge, no violation of any Laws exists with respect to the
Property (except with respect to violations of Environmental Laws disclosed by
the Environmental Reports). Borrower has obtained and will thereafter comply
with the conditions of, all licenses, exemptions, approvals and other
authorizations of Governmental Agencies required in connection with the
Property, including, without limitation, each of the following as applicable:
(a) zoning (if any), land use and planning requirements, including requirements
arising from, or relating to the adoption or amendment of, any applicable
general plan; (b) subdivision and parcel map requirements; (c) environmental
requirements, including requirements of the National Environmental Policy Act
and the preparation and approval of all required environmental impact
statements and reports; (d) requirements in connection with use, occupancy and
building permits; (e) requirements of public utilities; (f) all restrictive
covenants and all obligations created by private contracts and leases which
affect ownership, construction, equipping, fixturing, use, occupancy, sale or
leasing of the Property (or any portion thereof), and (g) Accessibility
Regulations. Borrower shall be solely responsible for all compliance costs
associated with any Accessibility Regulations with respect to the Property,
including, without limitation, attorneys’ fees and litigation costs, which
responsibility with respect to matters occurring before repayment of the
Obligations or foreclosure of the Property shall survive the repayment of the
Loan and foreclosure of the Property. Borrower will comply and, to the extent
it is able, will cause others to comply with all laws and requirements of
Governmental Agencies having jurisdiction over the processing, approving and
recording of any subdivision map, the Land or construction or sale of the
Improvements (or any of them) and will 

TERM LOAN AGREEMENT -
Page 21 

furnish Lender with reports of any official searches for violation of
any requirements established by such Governmental Agencies. 

          Section
8.6     No Adverse Conditions.
Borrower does not know of any defects, facts or conditions affecting the Land
that would make it unsuitable for the use contemplated hereunder or of any
abnormal hazards (including earth movement or slippage) affecting the Land. 

          Section
8.7     Rights of Others.
To Borrower’s knowledge, the Property is in compliance with, all covenants,
conditions, restrictions, easements, rights of way and other rights of third
parties relating to the Property. 

          Section
8.8     Reserved. 

          Section
8.9     Litigation.
There are no actions or proceedings (excluding for this purpose the VCP)
pending or, to the best of Borrower’s knowledge, threatened against or
affecting Borrower or the Property before any Governmental Agency. 

          Section
8.10     Reserved. 

          Section
8.11     Condemnation.
No condemnation proceeding or moratorium is pending or, to the best of
Borrower’s knowledge, threatened against the Land which would impair the
construction, use, sale or occupancy of the Property. 

          Section
8.12     Name and Principal Place of Business.
Borrower presently uses no trade name other than its actual name. Borrower
shall immediately notify Lender in writing of any change in the jurisdiction of
organization, or the change in the legal, trade or fictitious business names
used by, Borrower, any of its constituent partners, or Guarantor, and Lender is
hereby authorized to file or record any additional financing statements,
amendments and other certificates necessary to reflect any such changes. 

          Section
8.13     ERISA.
Borrower maintains no pension, retirement or profit sharing employee benefit
plan that is subject to any provision of the Employee Retirement Income
Security Act of 1974, as amended from time to time. If applicable, Borrower has
satisfied the minimum funding standards under the Employee Retirement Income
Security Act of 1974 (“ERISA”)
and is in compliance in all respects with the other presently applicable
provisions of ERISA. The making of the Loan by Lender to Borrower will not
violate ERISA, nor constitute a prohibited transaction under ERISA. 

          Section
8.14     Brokers.
Borrower shall indemnify and hold Lender harmless, in accordance with Section
15.4, against any claim or claims by any broker or agent or any other
person that claims they are or may be entitled to a commission or other form of
compensation in connection with the securing of or making of the Loan. 

          Section
8.15     Anti-Terrorism Regulations.

                       (a)     General.
None of Borrower, Guarantor or any Affiliate of Borrower or Guarantor is in
violation of any Anti-Terrorism Law or engages in or conspires to engage in any

TERM LOAN AGREEMENT -
Page 22 

transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law. 

                     (b)     Executive
Order No. 13224. None of Borrower, Guarantor, any Affiliate of Borrower or,
to the best of Borrower’s knowledge, any Affiliate of Guarantor, or, to the
best of Borrower’s knowledge, their respective agents acting or benefiting in
any capacity in connection with the Loan or other transactions hereunder, is
any of the following (each a “Blocked
Person”): 

	
  

 	
  

 
	
  

 	
                     (i)     a
 Person that is listed in the annex to, or is otherwise subject to the
 provisions of, Executive Order No. 13224; 

 
	
  

 	
  

 
	
  

 	
                     (ii)     a
 Person owned or controlled by, or acting for or on behalf of, any Person that
 is listed in the annex to, or is otherwise subject to the provisions of,
 Executive Order No. 13224; 

 
	
  

 	
  

 
	
  

 	
                     (iii)     a
 Person with which Lender is prohibited from dealing or otherwise engaging in
 any transaction by any Anti-Terrorism Law;

 
	
  

 	
  

 
	
  

 	
                     (iv)     a
 Person that commits, threatens or conspires to commit or supports “terrorism”
 as defined in Executive Order No. 13224;

 
	
  

 	
  

 	
  

 
	
  

 	
                      (v)     a
 Person that is named as a “specially designated national” on the most current
 list published by the U.S. Treasury Department Office of Foreign Asset
 Control at its official website or any replacement website or other
 replacement official publication of such list; or 

 
	
  

 	
  

 	
  

 
	
  

 	
                     (vi)     a
 Person who is affiliated or associated with a Person listed above. 

 

                       (c)     None
of Borrower, Guarantor or any Affiliate of Borrower or Guarantor, nor any of their
agents acting in any capacity in connection with the Loan, any letters of
credit or other transactions hereunder (i) conducts any business or engages in
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224. 

                       (d)     Neither
Borrower nor any Affiliate of Borrower, nor any Person owning an interest
therein, are a “Special Designated National” or “Blocked Person” as those terms
are defined in the office of Foreign Asset Control Regulations (31 C.F.R. § 500
et. seq.). 

          Section
8.16     Financial Statements.
All financial statements and other financial information regarding Borrower or
Guarantor furnished by or on behalf of Borrower or Guarantor to Lender are
true, correct, and complete as of the dates specified therein and fully and
accurately present the financial condition of Borrower or Guarantor as of the
dates specified. No change has occurred in Borrower’s or Guarantor’s financial
condition reflected therein since the respective dates of the financial
statements for such Person delivered to Lender. Borrower and Guarantor are
solvent and will remain solvent after giving effect to all borrowings and
guaranties 

TERM LOAN AGREEMENT -
Page 23 

contemplated in the Loan Documents. Borrower will keep accurate books
and records in accordance with generally accepted accounting principles,
consistently applied, in which full, true and correct entries shall be promptly
made with respect to the Property and the operation thereof. Borrower shall
permit Lender, at all reasonable times, to examine and copy the books and
records of Borrower pertaining to the Property. 

          Section
8.17   Title to the Property.
Borrower owns and holds full legal and equitable title to the Land, in fee
simple absolute, subject to no encumbrances other than the Permitted
Encumbrances. No construction work shall be supplied, purchased, or installed
pursuant to agreements whereby a security interest or title is retained or any
right is reserved or accrues to remove or repossess any construction work.
Borrower shall deliver to Lender on request true and correct copies of any
contracts, bills of sale, statements, receipted vouchers or agreements under
which Borrower claims title to any construction work. Borrower will be the sole
owner of all Personal Property acquired by Borrower after the date hereof, free
from any adverse lien, security interest or adverse claim of any kind
whatsoever, except for security interests and liens in favor of Lender and
liens being contested by Borrower in compliance with the provisions of Section
11.11. 

          Section
8.18   Governmental Regulations.
Borrower is not subject to regulation under the Investment Company Act of 1940,
the Federal Power Act, the Public Utility Holding Company Act of 1935, the
Interstate Commerce Act or any federal or state statute or regulation limiting
its ability to incur indebtedness for money borrowed. 

          Section
8.19   Utilities. All utility
and municipal services required for the construction, occupancy, use and
operation of the Improvements are available for use and tap in at the
boundaries of the Land and will be available in sufficient amounts for the
intended use of the Improvements. All binding agreements, allocations or
commitment letters required to ensure the provision of such services have been
obtained or will be available from the applicable utility companies and/or
Governmental Agencies providing such services. All necessary or required
utility, private roadway, parking, access (including curb cuts), easements,
covenants and permits have been granted or issued. 

          Section
8.20   Other Lands. The Land is
not part of a larger tract of land owned by Borrower, Guarantor, or any
affiliate of Borrower or Guarantor, and is not otherwise included under any
unity of title or similar covenant with other lands not encumbered by the Deed
of Trust, except to the extent set forth in a Permitted Encumbrance consented
to by Lender. The Land constitutes a separate tax lot or lots with a separate
tax assessment or assessments for the Land and Improvements, independent of any
other lands or improvements. The Land and Improvements comply with all
subdivision and platting Laws and would so comply if the Land and Improvements
were conveyed as a separate parcel. No portion of the Property is (or will be)
dependent on any other property not subject to the lien of the Deed of Trust to
fulfill any Laws, and no other property not subject to the lien of the Deed of
Trust is (or will be) dependent on any portion of the Property to fulfill any
Laws. 

          Section
8.21   Permits. Borrower has
obtained all permits which are necessary for the ownership and operation of the
Property. 

TERM LOAN AGREEMENT -
Page 24 

          Section
8.22   Representations and Warranties.
Until repayment in full of the Loan and all other Obligations, Borrower shall
ensure that the representations and warranties remain true and complete. 

ARTICLE 9 

AFFIRMATIVE COVENANTS

          While any
Obligation of Borrower under the Loan Documents remains outstanding, Borrower
agrees that: 

          Section
9.1     Protection of Liens.
Borrower will maintain the lien of the Deed of Trust as a first priority lien
on the Property and take all actions, and execute and deliver to Lender all
documents reasonably required by Lender from time to time in connection
therewith; and maintain the security interest created by the Deed of Trust on
the Personal Property as a first priority security interest and take all
actions, and execute and deliver to Lender all documents, reasonably required
by Lender from time to time in connection therewith, including supplemental
security agreements, and other documents extending or perfecting Lender’s
security interest in the Personal Property as it exists from time to time. 

          Section
9.2     Payment of Taxes, Assessments, Costs and
Expenses. Borrower will pay all costs and expenses
required to satisfy the conditions of this Agreement. Without limitation of the
generality of the foregoing, Borrower shall pay and discharge all taxes,
assessments and other governmental charges upon the Property or Improvements
when required pursuant to the Deed of Trust and, except as permitted by Section
11.11 of this Agreement, all claims for work, services, labor and materials
which, if unpaid, might become a lien or charge upon the Property or Improvements.
Borrower shall pay all costs and expenses of Lender and Borrower in connection
with the Property and this Loan, including, but not limited to, all expenses of
hazard and liability insurance premiums, reasonable fees for the examination of
the status of title, preparation and review of Loan Documents, title insurance
premiums and closing and servicing fees, loan fees, surveys, architect and
engineer fees, inspection fees, and out-of-pocket expenses incurred by Lender
in connection with committing for, documenting, closing, making, disbursing and
transferring the Loan, including, but not limited to, recording and filing fees
and all mortgage taxes, documentary taxes and intangible taxes, costs of Title
Company disbursements, if any, as well as all costs related to the repayment of
this Loan, any fees and costs of outside and/or special counsel and fees and
commissions due to brokers in connection with this transaction. Such costs
shall be so paid by Borrower whether or not the Loan is actually closed and/or fully
disbursed. In the event the Note is not paid at maturity, howsoever said
maturity is brought about, and the same is placed in the hands of an attorney
for collection or if collection by suit or through the probate court or
bankruptcy court or by any other legal proceeding is sought, Borrower agrees to
pay all reasonable expenses incurred by Lender, including attorneys fees in
accordance with terms and provisions of the Note.  

          Section
9.3     Reserved. 

          Section
9.4     Continued Compliance.
Borrower will comply with all Laws and requirements of Governmental Agencies,
and all rights of third parties, relating to the Property or 

TERM LOAN AGREEMENT -
Page 25 

Borrower’s business or other properties, all as described more fully in
Section 8.5, and deliver to Lender from time to time, within ten (10) days of
Lender’s request therefor, evidence reasonably satisfactory to Lender that
Borrower has complied with any such Law, requirement or right. 

          Section
9.5     Books and Records.
Borrower will maintain complete books of account and other records reflecting
its operations (in conjunction with any other businesses as well as with
respect to the Property), including all contributions of equity investment
capital, in accordance with sound accounting practices consistently applied,
and permit Lender and its agents, at reasonable times, to inspect and copy any
such document. 

          Section
9.6        Maintenance and Security of Property.
Borrower will maintain the Property in good condition and repair, ordinary wear
and tear accepted, take all measures reasonably required by Lender to protect
the physical security of the Property, and not permit any waste or damage with
respect to the Property and comply with the terms and conditions of all leases
of any portion of the Property. 

             Section
9.7     Financial Statements.
Borrower will deliver to Lender, or cause to be delivered: 

                       (a)     As
soon as available and in any event within one hundred twenty (120) days after
the end of each fiscal year, annual financial statements for Borrower. Such
financial statements shall include, without limitation, a balance sheet as of
the end of such fiscal year, a list of contingent liabilities, the related
statements of income and cash flow for such fiscal year, and, operating
statements for the Property covering the applicable period. 

                       (b)     Financial
statements for Guarantor as required by the terms of the Guaranty. 

                       (c)     As
soon as available and in any event within sixty (60) days after filing a copy
of (i) Borrower’s federal and state tax returns with all exhibits and
schedules, and (ii) Guarantor’s federal and state tax returns with all exhibits
and schedules; 

                       (d)     As
soon as available and in any event within thirty (30) days after the end of
each month, (i) an operating statement for the Property setting forth the
income and expenses for the Property; and (ii) a report of the leasing for the
Property (including rent rolls and delinquencies) for the immediately preceding
month. All such reports shall be in such form and in reasonable detail as
Lender may request. Additionally, Borrower shall deliver a certificate executed
by Borrower certifying that each such operating statement has been prepared in
accordance with generally accepted accounting principles, applied on a
consistent basis and fairly presents the results of the Property’s operations
and that the Property leasing reports are true and correct in all material
respects. 

                       (e)     As
soon as available and in any event within forty-five (45) days prior to the end
of each calendar year, a pro forma operating budget for the Property. 

                       (f)     On
or before the last day of each calendar quarter, a written progress report,
prepared by Borrower, describing the status of Borrower’s efforts to obtain
acceptance of 

TERM LOAN AGREEMENT -
Page 26 

its application for a MSD (and issuance of a VCP Certificate of
Completion) or to transfer the Property to the DCR Program, together with such
documents and information regarding the same as Lender may reasonably require. 

                       (g)     Simultaneously
with the delivery of each set of financial statements referred to in Sections
9.7(a) and (b), a certificate of an authorized officer or signatory
of Borrower and Guarantor respectively, in form and substance satisfactory to
Lender, attesting to compliance with the terms of the Loan Documents, and
stating, to the best of such authorized officer’s knowledge and belief, whether
or not such financial statements are true and correct as of the date of the
delivery of such financial statements. 

                       (h)     Annually
or semi-annually, as applicable, evidence of payment of all real estate taxes
and assessments affecting the Property and payment and renewal of insurance
policies required to be obtained and maintained by Borrower pursuant to the
Loan Documents. 

                       (i)     Borrower
will use commercially reasonable efforts to obtain and deliver to Lender
financial statements for Tenants and other information regarding Tenants and
prospective tenants or other leasing information as Lender may reasonably
request from time to time. 

                       (j)     Such
other documents and information as Lender may reasonably request. 

          Section
9.8     Notice of Certain Matters.
Borrower will give notice to Lender, of each of the following to the extent
that Borrower has actual knowledge of same: 

	
  

 	
  

 
	
  

 	
                        (i)     any
 action or proceeding instituted by or against it, any of its constituent partners,
 or Guarantor in any federal or state court or other regulatory body; or (ii)
 any such proceedings that are threatened against it, any of its constituent
 partners or Guarantor which, if adversely determined, could have a material
 and adverse effect upon any of their businesses, or conditions (financial or
 otherwise) or which would constitute an event of default or a default under
 any other contract, or agreement to which any of them is a party; or (iii)
 any actions, proceedings or notices adversely affecting the Property or
 Lender’s interest therein; 

 
	
  

 	
  

 
	
  

 	
                        (ii)     any
 dispute between Borrower and any Governmental Agency relating to the
 Property, the adverse determination of which might materially affect the
 Property; 

 
	
  

 	
  

 
	
  

 	
                        (iii)     any
 commencement of proceedings in condemnation or eminent domain relating to the
 Property; 

 
	
  

 	
  

 
	
  

 	
                        (iv)     any
 trade name hereafter used by Borrower and any change in Borrower’s principal
 place of business; 

 
	
  

 	
  

 
	
  

 	
                        (v)     any
 Event of Default or event which, with the giving of notice or the passage of
 time or both, would constitute an Event of Default; 

 

TERM LOAN AGREEMENT -
Page 27 

	
  

 	
  

 
	
  

 	
                        (vi)     any
 other event or condition causing a Material Adverse Effect in the financial
 condition of Borrower, General Partner or Guarantor; and 

 
	
  

 	
  

 
	
  

 	
                        (vii)    any
 failure by any party to perform any material obligation under any Lease, any
 event or condition which would permit a Tenant to terminate or cancel a
 Lease, or any notice given by a Tenant with respect to the foregoing,
 specifying in each case the action Borrower has taken or will take with
 respect thereto. 

 

          Section
9.9     Notice of Junior Liens.
Borrower will give notice to Lender of the creation of any lien on any portion
of the Property or the Personal Property within five (5) days after Borrower
receives notice of its creation. 

          Section
9.10     Additional Reports and Information.
Borrower will deliver to Lender, in form and substance reasonably satisfactory
to Lender and within ten (10) days of Lender’s request therefor, (a) copies of
all regular or periodic reports which are available for public inspection or
which Borrower is required to file with any Governmental Agency; (b) a
certificate stating that to Borrower’s actual knowledge no Event of Default
remains uncured or setting forth all existing Events of Default in reasonable
detail; and (c) all other information relating to Borrower, General Partner,
Guarantor, the Property or the Loan reasonably required by Lender from time to
time. 

          Section
9.11     Further Assurances.
Borrower will execute and acknowledge (or cause to be executed and
acknowledged) and deliver to Lender all documents, and take all actions,
reasonably required by Lender from time to time to confirm the rights created
or now or hereafter intended to be created under the Loan Documents, to protect
and further the validity, priority and enforceability of the Security
Documents, to subject to the Security Documents any property intended by the
terms of any Loan Document to be covered by the Security Documents, to
maintain, perfect or insure Lender’s security provided for herein and in the
other Loan Documents, including, without limitation, the filing or recording of
UCC renewal statements or amendments, the execution of such amendments to the
Deed of Trust and the other Loan Documents and the delivery of such
endorsements to the Title Policy, all as Lender reasonably requires to carry
out the purposes of the Loan Documents and the transactions contemplated
thereunder, and Borrower shall pay all fees and expenses (including reasonable
attorneys’ fees) related thereto or incurred by Lender in connection therewith.

          Section
9.12     Reserved. 

          Section
9.13     Continued Existence.
Borrower, Guarantor, and each constituent partner thereof shall maintain and
preserve its respective existence and all rights and franchises material to its
respective business. 

          Section
9.14     Guarantor Covenants.
Borrower shall cause Guarantor to comply with all financial covenants and
conditions contained in the Guaranty. 

          Section
9.15     Leases.
Borrower shall provide to Lender a correct and complete copy of each Lease,
including any exhibits, and each guarantee thereof, if any, prior to execution
unless the Lease in question is deemed to be an Approved Lease (in which event
Borrower shall deliver 

TERM LOAN AGREEMENT -
Page 28 

to Lender such Lease, exhibits and guarantee, if any, promptly after
execution of the same by Borrower and Tenant). No approval of any Lease by
Lender shall be for any purpose other than to protect Lender’s security and to
preserve Lender’s rights under the Loan Documents. No approval by Lender shall
result in a waiver of any default of Borrower. In no event shall any approval
by Lender of a Lease be a representation of any kind, with regard to the Lease
or its adequacy or enforceability, or the financial capacity of any tenant or
guarantor. The term “Approved Lease Form”
means the form of lease agreement hereafter approved in writing by Lender.
Unless disclosed by the terms of such Lease, prior to the review and approval
of any such Lease, Borrower shall deliver to Lender a schedule of all tenant
improvements to be paid for by Borrower and all leasing commissions to be paid
by Borrower in connection with such Lease. The term “Approved Lease” means any Lease
covering space in the Improvements which has either been approved in writing by
Lender or satisfies leasing guidelines, if any, agreed to by Borrower and
Lender after the date of this Agreement. 

          Section
9.16     Operating Income.
Borrower shall first apply all income from Leases, and all other income derived
from the Property, to pay costs and expenses associated with the ownership,
maintenance, development, operating, and marketing of the Improvements,
including all amounts then required to be paid under the Loan Documents, before
using or applying such income for any other purpose. 

          Section
9.17     Single Purpose Entity.
Borrower covenants and agrees that it has not and shall not: (a) engage in any
business or activity other than the acquisition, ownership, operation and
maintenance of the Property, and activities incidental thereto; (b) acquire or
own any material asset other than (i) the Property, and (ii) such incidental
Personal Property as may be necessary for the operation of the Property; (c)
merge into or consolidate with any person or entity or dissolve, terminate or
liquidate in whole or in part, transfer or otherwise dispose of all or
substantially all of its assets or change its legal structure, without in each
case Lender’s consent; (d) fail to preserve its existence as an entity duly
organized, validly existing and in good standing (if applicable) under the laws
of the jurisdiction of its organization or formation, or except as expressly
permitted by this Agreement or without the prior written consent of Lender,
amend, modify, terminate or fail to comply with the provisions of Borrower’s
organizational documents; (e) own any subsidiary or make any investment in or
acquire the obligations or securities of any other person or entity without the
consent of Lender; (f) commingle its assets with the assets of any of its
partner(s), members, shareholders, affiliates, or of any other person or entity
or transfer any assets to any such person or entity other than distributions on
account of equity interests in Borrower permitted hereunder and properly
account for; (g) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Loan, except unsecured
trade and operational debt incurred with trade creditors in the ordinary course
of its business of owning and operating the Property in such amounts as are
normal and reasonable under the circumstances, provided that such debt is paid
when due and provided in any event the outstanding principal balance of such
debt shall not exceed at any one time one percent (1%) of the outstanding Loan;
(h) allow any person or entity to pay its debts and liabilities (except
Guarantor) or fail to pay its debts and liabilities solely from its own assets;
(i) fail to maintain its records, books of account and bank accounts separate
and apart from those of the shareholders, partners, members, principals and affiliates
of Borrower, the affiliates of a shareholder, partner or member of Borrower,
and any other person or entity fail to prepare and 

TERM LOAN AGREEMENT -
Page 29 

maintain its own financial statements in accordance with generally
accepted accounting principles and susceptible to audit, or if such financial
statements are consolidated, fail to cause such financial statements to contain
footnotes disclosing that the Property is actually owned by Borrower; (j) enter
into any contract or agreement with any shareholder, partner, member, principal
or affiliate of Borrower, Guarantor or any shareholder, partner, member,
principal or affiliate thereof, except as expressly permitted by the Loan
Documents and except upon terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an arms-length basis
with third parties other than any shareholder, partner, member, principal or
affiliate of Borrower or Guarantor, or any shareholder, partner, member,
principal or affiliate thereof; (k) seek dissolution or winding up, in whole or
in part; (l) fail to correct any known misunderstandings regarding the separate
identity of Borrower; (m) guarantee or become obligated for debts of any other
entity or person, or hold itself out to be responsible or pledge its assets or
credit worthiness for the debts of another person or entity or allow any person
or entity to hold itself out to be responsible or pledge its assets or credit
worthiness for the debts of the Borrower (except for a Guarantor); (n) make any
loans or advances to any third party, including any shareholder, partner
member, principal or affiliate of Borrower, or any shareholder, partner,
member, principal or affiliate thereof; (o) fail to file its own tax returns or
to use separate contracts, purchase orders, stationery, invoices and checks;
(p) fail either to hold itself out to the public as a legal entity separate and
distinct from any other entity or person or to conduct its business solely in
its own name in order not (i) to mislead others as to the entity with which
such other party is transacting business, or (ii) to suggest that Borrower is
responsible for the debts of any third party (including any shareholder,
partner, member, principal or affiliate of Borrower, or any shareholder,
partner, member, principal or affiliate thereof); (q) fail to allocate fairly
and reasonably among Borrower and any third party (including, without
limitation, any Guarantor) any overhead for common employees, shared office
space or other overhead and administrative expenses; (r) allow any person or
entity to pay the salaries of its own employees or fail to maintain a
sufficient number of employees for its contemplated business operations; (s)
fail to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations; (t) file a voluntary petition or otherwise
initiate proceedings to have Borrower adjudicated bankrupt or insolvent, or consent
to the institution of bankruptcy or insolvency proceedings against Borrower or
file a petition seeking or consenting to reorganization or relief of Borrower
as debtor under any applicable federal or state law relating to bankruptcy,
insolvency, or other relief for debtors with respect to Borrower; or seek or
consent to the appointment of any trustee, receiver, conservator, assignee,
sequester, custodian, liquidator (or other similar official) of Borrower or of
all or any substantial part of the properties and assets of Borrower, or make
any general assignment for the benefit of creditors of Borrower, or admit in
writing the inability of Borrower to pay its debts generally as they become due
or declare or effect a moratorium on Borrower debt or take any action in
furtherance of any such action; (u) hold itself out as or be considered as a
department or division of (i) any shareholder, partner, principal, member or
affiliate of Borrower, (ii) any affiliate of a shareholder, partner, principal,
member or affiliate of Borrower, or (iii) any other person or entity or allow
any person or entity to identify Borrower as a department or division of that
person or entity; (v) conceal assets from any creditor, or enter into any
transaction with the intent to hinder, delay or defraud creditors of Borrower
or the creditors of any other personal or entity; (w) fail to provide in its
(i) articles of organization, certificate of formation and/or operating
agreement, as applicable, if it is a limited liability company, (ii) limited
partnership 

TERM LOAN AGREEMENT -
Page 30 

agreement, if it is a limited partnership or (iii) certificate or
articles of incorporation, if it is a corporation; (x) fail to hold its assets
in its own name; (y) if Borrower is a corporation, fail to consider the
interests of its creditors in connection with all corporate actions to the
extent permitted by applicable Law; (z) have any of its obligations guaranteed
by an affiliate except Guarantor in connection with the Loan. 

          Section
9.18   Interest Rate Protection.

                         (a)     Borrower
may enter into and/or obtain Interest Rate Protection with Lender or its
Affiliate (referred to herein as “IRP
Counterparty”). If Borrower obtains Interest Rate Protection
from another source other than Lender or its affiliate, then the obligations of
Borrower arising under the Interest Rate Protection owing to any IRP
Counterparty other than Lender or an Affiliate of Lender shall not be secured
by the Deed of Trust. Borrower acknowledges and agrees that if Borrower
defaults in its obligations under the Interest Rate Protection to make payments
when due thereunder, Lender may advance funds to be paid, on Borrower’s behalf,
to cure Borrower’s default under any Interest Rate Protection. All amounts
advanced by Lender to the IRP Counterparty, Borrower or others in respect of
Borrower’s obligations in respect of any Interest Rate Protection shall be
deemed a part of the Obligations secured by the Deed of Trust and the other
Loan Documents. All amounts received by Borrower pursuant to any Interest Rate
Protection shall be paid by Borrower to Lender and applied by Lender to the
payment of interest on the Loan or other costs of the Property. Borrower
acknowledges and agrees that, notwithstanding the terms of any Interest Rate
Protection, Borrower shall not modify or terminate any Interest Rate Protection
without the prior written consent of Lender. 

                         (b)     As
additional security for the obligations of Borrower under the Loan Documents,
Borrower hereby transfers, assigns, and conveys to Lender, subject to the terms
and conditions contained herein, all of Borrower’s rights, titles and
interests, but not its obligations, duties or liabilities for any breach, in,
under and to any Interest Rate Protection, any and all amounts received by
Borrower in connection therewith or to which Borrower is entitled thereunder,
and all proceeds of the foregoing. Lender shall have the right at any time (but
shall have no obligation) to take in its name or in the name of Borrower such
action as Lender may at any time determine to be necessary or advisable to cure
any default under or with respect to any Interest Rate Protection or to protect
the rights of Borrower thereunder; provided, however, that prior to the
occurrence of an Event of Default, Lender shall give prior written notice to
Borrower before taking any such action. Lender shall incur no liability if any
action so taken by Lender or on its behalf shall prove to be inadequate or invalid,
and Borrower agrees to hold Lender free and harmless against and from any loss,
cost, liability or expense (including, but not limited to, attorneys’ fees and
expenses) incurred in connection with any such action, as provided in this
Agreement. It is agreed and understood that, in addition to any and all other
remedies to which Lender is entitled at law or in equity, Lender shall have all
rights and benefits to which a secured party is entitled at law or in equity,
including, without limitation under the Uniform Commercial Code as adopted and
in effect in the State of Texas and upon any foreclosure by Lender of its lien
under the Deed of Trust, all rights, titles and interests of Borrower in and to
any Interest Rate Protection and any and all amounts received by Borrower in
connection therewith or to which 

TERM LOAN AGREEMENT -
Page 31 

Borrower is entitled thereunder, and all proceeds of the foregoing,
shall, at the election of Lender, be conveyed in connection therewith. 

                         (c)     Borrower
hereby constitutes and appoints Lender as Borrower’s true and lawful
attorney-in-fact, with the full power of substitution, for it and in its name,
place and stead, or otherwise, on behalf and for the benefit of Lender, to
exercise, at the election of Lender, any and all rights and remedies of
Borrower under any Interest Rate Protection, including, without limitation,
making any payments thereunder and consummating any transactions contemplated
thereby, from time to time to institute and prosecute in the name and at the
expense of Borrower, or otherwise, but for the benefit of Lender, any and all
proceedings at law, in equity, or otherwise, that Lender may deem proper in
order to collect, assert or enforce any claim, right or title, of any kind, in
and to any Interest Rate Protection hereby assigned and conveyed, or intended
so to be, and to defend and compromise, at the election of Lender, any and all
actions, suits or proceedings with respect to any Interest Rate Protection, and
generally to do all and any such action in relation thereto as Lender shall
deem advisable; and Borrower hereby declares that the appointment hereby made
and powers hereby granted are coupled with an interest and are and shall be
irrevocable by Borrower in any manner, or for any reason. 

          Section
9.19    Appraisals. Borrower
agrees that Lender shall have the right to obtain, at Borrower’s expense, an
Appraisal of the Property, at any time that (a) an Event of Default has
occurred hereunder, (b) any material Casualty or event of Condemnation occurs
with respect to the Property, (c) Lender determines in its good faith business
judgment that the security for the Loan has been impaired in any material
manner, (d) Borrower exercises its option to extend the Maturity Date of the
Loan, or (e) such Appraisal is required by then current banking laws or
regulations. If Lender elects to obtain such an Appraisal, Lender may
immediately commission an appraiser acceptable to Lender, at Borrower’s cost
and expense, to prepare the Appraisal and Borrower shall fully cooperate with
Lender and the appraiser in obtaining the necessary information to prepare such
Appraisal. 

ARTICLE 10 

NEGATIVE COVENANTS

          While any
Obligation of Borrower under the Loan Documents remains outstanding, unless
Lender otherwise consents in writing: 

          Section
10.1    Liens on Property.
Borrower will not cause or suffer to become effective any lien, restriction or
other title limitation affecting any part of the Property other than (i) the
Deed of Trust and the Permitted Encumbrances; (ii) taxes and assessments which
are not delinquent; (iii) liens being contested by Borrower in compliance with
the provisions of Section 11.11; and (iv) rights of tenants under Approved
Leases. 

          Section
10.2    Liens on Personal Property.
Borrower will not install in, or use in connection with, the Property any
personal property which any Person other than Lender has the right to remove or
repossess under any circumstances, or on which any Person other than Lender 

TERM LOAN AGREEMENT -
Page 32 

has a lien other than personal property which is leased by Borrower and
not included in the Budget as part of construction costs and personal property
owned by Tenants on the Property. 

          Section
10.3    Reserved. 

          Section
10.4    Sale or Lease of Property.
Except as expressly permitted by this Agreement, without the prior consent of
Lender, Borrower will not sell, transfer, convey, pledge, assign, mortgage, or
otherwise dispose of all or any portion of the Property (unless the Loan is
repaid in full simultaneously with such sale or transfer) or enter into any
Leases for any portion of the Property except as permitted under Section 9.15,
or sell, lease or otherwise transfer any interest in the Property or the
Personal Property other than as permitted under Section 9.15 and other than
dispositions of Personal Property permitted by Section 10.6. No sale, lease or
other transfer shall relieve Borrower from primary liability for its
Obligations under the Loan Documents or relieve Guarantor from any liability
under the Guaranty. If Lender approves any transfer or sale (without implying
any obligation on the part of Lender to approve any such transfer or sale),
Borrower shall remain primarily liable for the payment and performance of all
Obligations in the Loan Documents to the same extent as if no transfer had
occurred, and Borrower shall deliver to Lender all documents reasonably
required by Lender to evidence such continuing primary liability. In connection
with the covenants contained in this Section 10.4, Borrower acknowledges that
Borrower’s particular expertise was an important element in Lender’s decision
to enter into this Agreement and that Lender continues to rely on such
expertise to ensure the satisfactory leasing, operation and management of the
Property.  

          Section
10.5    Assignments of Obligations.
Borrower will not assign any right or delegate any Obligation under the Loan
Documents other than pursuant to the Management Agreement. 

          Section
10.6    Removal of Personal Property.
Borrower will not remove or permit the removal from the Property of any items
of Personal Property (other than tools and construction equipment used in the
construction of the Property and personal property which is leased by Borrower
in the ordinary course of business), unless (i) no Event of Default has
occurred and is continuing; and (ii) Borrower promptly either: (1) substitutes
and installs on the Property other items of equal or greater value in the
operation of the Property, all of which items shall be free of liens and shall
be subject to the liens of the Deed of Trust, and executes and delivers to
Lender all documents required by Lender in connection with the attachment of
such liens to such items; or (2) in the case of the sale or scrapping of any
items, pays to Lender the sale proceeds or scrap value, as applicable; or (3)
in the case of the trade-in of any items for other items of Personal Property
not installed on the Property, pays to Lender the amount of the credit
received; and (4) in the case of any other disposition, pays to Lender an
amount equal to the original cost of the items less depreciation. Upon
Borrower’s written request, Lender shall deliver to Borrower all documents reasonably
necessary to confirm the release of items removed from the lien of the Deed of
Trust in accordance with the foregoing requirements, provided that such request
is accompanied by a certificate executed by Borrower to the effect that the
removal of such items complies in all respects with this Section 10.6. Borrower
shall keep detailed records of each such removal and shall make such records
available to Lender upon request from time to time.  

TERM LOAN AGREEMENT -
Page 33 

          Section
10.7    Transfer of Equity Interests.
Except for Permitted Transfers, Borrower will not permit any sale, pledge,
encumbrance, assignment, transfer or other disposition, voluntarily or
involuntarily, by operation of law or otherwise, of any equity interest in
Borrower or General Partner or any constituent partners, members and
shareholders in General Partner, as the case may be, without the prior written
consent of Lender. As used herein, the term “Permitted Transfer” shall mean the transfer, pledge,
assignment, or sale (herein, a “Transfer”)
of: (i) membership interests in the General Partner of Borrower, (ii) limited
partnership interests in Borrower, in each case, so long as (A) such Transfer
is to an AmREIT Affiliate and Borrower is in compliance with Section 9.17 of
this Agreement, (B) Borrower notifies Lender of such Transfer at least ten (10)
days prior to the proposed Transfer and (C) Borrower delivers or causes to be
delivered to Lender, (i) true and correct copies of all documentation
evidencing the Transfer and, if requested by Lender, true and correct copies of
the formation and organizational documents for the transferee, certified by an
authorized officer, partner or member, as applicable, of such transferee, and
(ii) such other information as may be required by Lender in order to comply any
Anti-Terrorism Laws applicable to Lender. As used herein, “AmREIT Affiliate” means each of the
Guarantor and AmREIT Realty Investment Corporation or another Affiliate of one
or more of the Guarantor or AmREIT Realty Investment Corporation.  

          Section
10.8    ERISA. Borrower
will not permit any employee benefit plan maintained by Borrower which is
subject to Part 3 of Title I of ERISA to have an accumulated funding
deficiency, as such term is defined in Section 302 of ERISA, and Borrower will
not incur any liability to the PBGC. 

          Section
10.9    Debt. Borrower will
not create, assume, incur, suffer to exist, or in any manner become liable,
directly, indirectly, or contingently in respect to, any Debt other than the
following: (a) Debt owed to Lender, including Debt under this Agreement; (b)
Debt listed in the current financial statements of Borrower and any
rearrangements, extensions or refinancings thereof which do not increase the
amount thereof; and (c) Debt in the form of accounts payable to trade creditors
for goods or services which are not aged more than 60 days from the billing
date and current operating liabilities (other than for borrowed money) which
are not more than 60 days past due, in each case incurred in the ordinary
course of business, as presently conducted, and paid within the specified time,
unless contested in good faith and by appropriate proceedings. 

          Section
10.10    Distributions.
During the continuance of an Event of Default, Borrower will not, without the
prior written consent of Lender in its sole discretion, make any distribution
of assets to any partner of Borrower, whether or not such a distribution is
permitted under the terms of Borrower’s limited partnership agreement,
including repayment of any loans made by a partner of Borrower to Borrower,
return of capital contributions, distributions upon termination, liquidation or
dissolution of Borrower or any development, property management, accounting or
other fees payable to a partner in Borrower (unless any such fee has been
approved by Lender, in Lender’s sole discretion). 

          Section
10.11   Management Agreement.
Borrower agrees that it will not enter into any Management Agreement until such
time as (i) Lender has approved the Property Manager, which approval will not
be unreasonably withheld, (ii) Borrower has delivered the proposed form of 

TERM LOAN AGREEMENT -
Page 34 

Management Agreement to Lender, and received the written approval of
such form by Lender, which approval will not be unreasonably withheld, and
(iii) as to any Management Agreement, it has obtained and delivered to Lender
an Assignment and Subordination of Management Agreement executed by the
Property Manager in the form acceptable to Lender. The Management Agreement
shall be subordinate to the Deed of Trust and must be terminable on thirty (30)
days prior written notice after an Event of Default. Except to the extent
provided by Law, upon obtaining title to the Property or any portion thereof
pursuant to the remedies in the Deed of Trust, Lender will not be liable for
unpaid management fees accrued before the acquisition of title by Lender or a
Person owned in whole or in part by Lender. 

ARTICLE 11 

RESERVED

ARTICLE 12 

INSURANCE

          Section
12.1   Policies Required. While
any Obligation of Borrower or Guarantor under any Loan Document remains
outstanding, Borrower shall procure and maintain or shall cause to be procured
and maintained continuously in effect policies of insurance as set forth on Exhibit C in form and amounts and
issued by companies, associations or organizations licensed to do business in
the state the Property is located, satisfactory to Lender covering such
casualties, risks, perils, liabilities and other hazards required by Lender.
All original policies, or certificates thereof, and endorsements and renewals
thereof shall be delivered to and retained by Lender unless Lender waives this
requirement in writing. All policies shall expressly protect or recognize
Lender’s interest as required by Lender. Without limiting the generality of the
foregoing, Borrower shall provide or cause to be provided the following types
of insurance coverage: (a) (i) property insurance on a replacement cost basis
as set forth on Exhibit C,
including flood, hurricane and sinkhole coverages in an amount equal to the
replacement cost of the Improvements and rent loss, and (ii) Comprehensive
General Liability Insurance as set forth on Exhibit C; and (b) such additional insurance as may be
reasonably required by Lender from time to time in the event that the Property
is exposed to hazards and risks with respect to which Lender deems the existing
insurance inadequate to properly protect its interests. Borrower shall furnish
Lender with a certified copy of an original or a certificate of insurance of
all policies of insurance required. All policies or certificates, as the case
may be, of insurance shall set forth the coverage, the limits of liability, the
name of the carrier, the policy number, the Best’s Rating of the carrier and
the period of coverage. In addition, all policies of insurance required under
the terms hereof shall contain an endorsement or agreement by the insurer that
any loss shall be payable in accordance with the terms of such policy notwithstanding
any act or negligence of Borrower or any party holding under Borrower which
might otherwise result in a forfeiture of said insurance and the further
agreement of the insurer waiving all rights of setoff, counterclaim or
deductions against Borrower. At least fifteen (15) days prior to the expiration
of each required policy, Borrower shall deliver to Lender evidence of the
renewal or replacement of such policy, continuing such insurance in the form as
required by this Agreement. All such policies shall contain a provision that
notwithstanding any contrary agreement between Borrower and the applicable
insurance company, such policies will not be canceled, allowed to lapse without

TERM LOAN AGREEMENT -
Page 35 

renewal, surrendered or amended (which provision shall include any
reduction in the scope or limits of coverage) without at least 30 days’ prior
written notice to Lender. 

          Section
12.2   Adjustment of Condemnation and Insurance Claims.
Borrower shall give prompt notice to Lender of any Casualty or any Condemnation
or threatened Condemnation. Lender is authorized, at its sole and absolute
option, to commence, appear in and prosecute, in its own or Borrower’s name,
any action or proceeding relating to any Condemnation or Casualty, and to make
proof of loss for and to settle or compromise any Claim in connection
therewith. Lender shall have the right to receive all Compensation and
Proceeds, and may deduct therefrom any payment all of its related costs and
expenses. However, so long as no Event of Default has occurred and Borrower is
diligently pursuing its rights and remedies with respect to a Claim, Lender
will obtain Borrower’s written consent (which consent shall not be unreasonably
withheld or delayed) before making proof of loss for or settling or
compromising such Claim. Borrower agrees to diligently assert its rights and
remedies with respect to each Claim and to promptly pursue the settlement and
compromise of each Claim subject to Lender’s approval, which approval shall not
be unreasonably withheld or delayed. If, prior to the receipt by Lender of any
Compensation and Proceeds, the Property shall have been sold pursuant to the
provisions of the Deed of Trust, Lender shall have the right to receive such
funds (a) to the extent of any deficiency found to be due upon such sale with
interest thereon (whether or not a deficiency judgment on the Deed of Trust
shall have been sought or recovered or denied), and (b) to the extent necessary
to reimburse Lender for its related costs and expenses. If any Compensation and
Proceeds are paid to Borrower, Borrower shall receive the same in trust for
Lender. Within ten (10) days after Borrower’s receipt of any Compensation and
Proceeds, Borrower shall deliver such awards or proceeds to Lender in the form
in which they were received, together with any endorsements or documents that
may be necessary to effectively negotiate or transfer the same to Lender.
Borrower agrees to execute and deliver from time to time, upon the request of
Lender, such further instruments or documents as may be requested by Lender to
confirm the grant and assignment to Lender of any Compensation and Proceeds. 

          Section
12.3   Delivery of Proceeds to Lender.
In the event that, notwithstanding the “mortgagee clause” or “lender’s loss
payable endorsement” requirements of Exhibit
C, the proceeds (the “Proceeds”)
of any insurance policy described therein are paid to Borrower, Borrower shall
deliver such proceeds to Lender immediately upon receipt and applied as set
forth in Section 12.2 above.  

          Section
12.4   Utilization of Compensation and Proceeds.

                         (a)     Compensation
and Proceeds must be utilized either for payment of the Obligations or for the
restoration of the Property. Compensation and Proceeds may be utilized for the
restoration of the Property only if no Event of Default exists and only if in
the reasonable judgment of Lender (i) there has been no material adverse change
in the financial viability of the construction or operation of the
Improvements, (ii) the Compensation and Proceeds, together with other funds
deposited with Lender for that purpose, are sufficient to pay the cost of the
restoration pursuant to a budget and plans and specifications approved by
Lender, and (iii) the restoration can be completed prior to the Maturity Date
of the Loan. Otherwise, Compensation and Proceeds shall be utilized for payment
of the Obligations. 

TERM LOAN AGREEMENT -
Page 36 

                       (b)     If Compensation and Proceeds are to be utilized for the restoration
of the Property, the Compensation and Proceeds, together with any other funds
deposited with Lender for that purpose, must be deposited in an
interest-bearing account with Lender, which account will be assigned to Lender
as additional security for the Loan. The account will be opened, managed and
controlled by Lender. Advances of funds from the account will be made in a
manner consistent with, and subject to, Lender’s customary requirements for the
funding of a construction loan. 

ARTICLE 13 

CONDEMNATION

          Borrower
hereby assigns to Lender, as security for Borrower’s Obligations under the Loan
Documents, all compensation, awards and other amounts payable to Borrower in
connection with any taking of any portion of the Property for public use, and
any proceeds of any related settlement regardless of whether eminent domain
proceedings are instituted in connection therewith (collectively, “Compensation”). Borrower shall deliver
all Compensation to Lender immediately upon receipt and applied as set forth in
Section 12.2 above. Any Compensation received by Lender shall be applied by
Lender in accordance with the rights, procedures and other provisions set forth
in Section 12.4.  

ARTICLE 14 

DEFAULTS AND REMEDIES

          Section
14.1   Events of Default. The
occurrence of any of the following, whatever the reason therefor, shall
constitute an Event of Default: 

                       (a)     Borrower
fails to (i) make any regularly scheduled payments of principal or interest
under the Note when due and such failure continues for five (5) days after such payment was due, or (ii) repay the
Loan in full at maturity; or 

                       (b)     Borrower
or any Guarantor fails to pay any amount owing to Lender under any Loan
Document (which is not otherwise addressed elsewhere in this Section 14.1) and
such failure continues for five (5) days after such payment was due; or  

                       (c)     Borrower
fails to perform any covenant or agreement or any other non-monetary Obligation
under any Loan Document within twenty (20) days after receipt of notice
thereof; provided that, if cure cannot reasonably be effected within such
20-day period, such failure shall not be an Event of Default hereunder so long
as Borrower promptly (in any event, within ten (10) days after receipt of such
notice) commences cure, and thereafter diligently (in any event, within
forty-five (45) days after receipt of such notice) prosecutes such cure to
completion; and provided further, however, that notwithstanding the 20-day cure
period or extended cure period described above in this subparagraph (c), if a
different notice or cure period is specified under any Loan Document or under
any provision of the Loan Documents as to any such failure or breach, the specific
Loan Document or provision shall control, and Borrower shall have no more time
to cure the failure or breach than is allowed under the specific Loan Document
or provision as to such failure or breach; 

TERM LOAN AGREEMENT -
Page 37 

                       (d)     Any
representation, warranty or statement made in any Loan Document or in any other
document delivered by Borrower or General Partner in connection with any Loan
Document proves to have been incorrect in any material respect when made or becomes
so at any time prior to repayment in full of the Note; or 

                       (e)     [RESERVED];
or 

                       (f)     [RESERVED];
or 

                       (g)     [RESERVED];
or 

                       (h)     Borrower,
any Guarantor or General Partner is dissolved, liquidated or terminated, or all
or substantially all of the assets of Borrower, any Guarantor or General
Partner are sold or otherwise transferred without Lender’s prior written
consent; or 

                       (i)     If
Borrower, General Partner or Guarantor shall (1) be adjudicated as bankrupt or
insolvent; (2) make a general assignment for the benefit of its creditors; (3)
file a petition, answer or consent seeking, or have entered against it (or fail
reasonably to contest the material allegations of any petition for) an order
for relief (or any similar remedy) under any provision of Title 11 of the
United States Code or any other federal, state or foreign Law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, or
consent to the institution of any proceedings thereunder; (4) convene a meeting
of its creditors, or any class thereof, for the purpose of effecting a
moratorium upon or extension or composition of its or his debts; (5) fail to
pay its debts as they mature; (6) admit in writing that it is generally not
able to pay its debts as they mature or generally not pay its debts as they
mature; (7) apply for a consent to the appointment of a receiver, trustee,
custodian, liquidator or other similar official of all or a portion of its
assets; or (8) become insolvent; or 

                       (j)     If
(1) a petition is filed or any case or proceeding described in Section
14.1(i) above is commenced against Borrower, General Partner or Guarantor,
or against the assets of any such Persons or entities, unless such petition and
the case or proceeding initiated thereby is dismissed within 30 days from the
date of the filing; (2) an answer is filed by Borrower, General Partner or Guarantor
admitting the allegations of any such petition; or (3) a court of competent
jurisdiction enters an order, judgment or decree appointing, without the
consent of Borrower, General Partner or Guarantor, a custodian, trustee, agent
or receiver of it, or for all or any part of its property, or authorizing the
taking possession by a custodian, trustee, agent or receiver of it, or all or
any part of its property unless such appointment is vacated or dismissed or
such possession is terminated within 30 days from the date of such appointment
or commencement of such possession, but not later than five (5) days before the
proposed sale of any assets of Borrower, General Partner or such Guarantor by
such custodian, trustee, agent or receiver, other than in the ordinary course
of the business of Borrower, General Partner or Guarantor; or 

                       (k)     With
respect to Guarantor: (1) any failure to pay any amount owing to Lender under
the Guaranty which continues for five days after notice from Lender to
Guarantor that such payment was not made when due, (2) Guarantor fails to
comply with the minimum Net 

TERM LOAN AGREEMENT -
Page 38 

Worth and Liquid Assets covenants set forth in the Guaranty; (3) the
occurrence of any of the events described in Section 14.1(h), (i) or (j)
above as Guarantor; (4) the Guaranty is revoked or terminated without Lender’s
prior written consent, or Guarantor claims that the Guaranty is for any reason
ineffective or unenforceable, in whole or in part and with respect to amounts
then outstanding or amounts that might in the future be outstanding; or (5) the
falsity in any material respect of, or any material omission in, any
representation made to Lender by Guarantor; or 

                        (l)      Borrower
shall be in default under the terms of any of the other Loan Documents beyond
any applicable cure period or Borrower or Guarantor shall be in default under
any other loan documents or guaranty executed by Borrower or Guarantor in
connection with any extension of financial accommodations by Lender to Borrower
or Guarantor; or 

                       (m)     The
Environmental Indemnity, at any time and for any reason ceases to be in full
force and effect; or 

                       (n)      Borrower
shall fail to maintain insurance as required by this Agreement or shall fail to
furnish to Lender proof of payment of all premiums for such insurance. 

          Section
14.2   Remedies Upon Default.
Upon the occurrence of any Event of Default, Lender may, at its option and
without further notice to Borrower or Guarantor, do any or all of the
following: 

                         (a)     Declare
the principal of all amounts outstanding under the Loan Documents together with
all accrued interest thereon and all other amounts owing in connection
therewith, to be immediately due and payable, regardless of any other specified
maturity or due date, and without written notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor, notice of
intent to accelerate or notice of acceleration, or other notice or demand of
any kind, and without the necessity of prior recourse to any security; provided
that any Event of Default described in Section 14.1(h), (i) or (j) shall
automatically, without declaration or other action on Lender’s part, cause all
such amounts to be immediately due and payable without notice or demand; 

                         (b)     Take
possession of the Property and let contracts for, or otherwise proceed with all
actions necessary or desirable, in Lender’s opinion, for the operation,
management, leasing of the Property; 

                         (c)     Lender
may cure the Event of Default on behalf of Borrower, and, in doing so, may
enter upon the Property, and may expend such sums as it may deem desirable,
including attorneys’ fees, all of which shall be deemed to be advances
hereunder, even though causing the Loan to exceed the face amount of the Note; 

                         (d)     Exercise
any of its rights under the Loan Documents and any rights provided by Law,
including the right to foreclose on any security and exercise any other rights
with respect to any security, all in such order and manner as Lender in its
sole discretion may determine.

TERM LOAN AGREEMENT -
Page 39 

          Section
14.3   Cumulative Remedies; No Waiver.
Lender’s rights and remedies under the Loan Documents are cumulative and shall
be in addition to all rights and remedies provided by Law or in equity from
time to time, including any banker’s lien or right of offset. The exercise by
Lender of any right or remedy shall not constitute a cure or waiver of any
default, nor invalidate any notice of default or any act done pursuant to any
such notice, nor prejudice Lender in the exercise of any other right or remedy,
until Lender realizes all amounts owed to it under the Loan Documents and all
Events of Default are cured. No waiver by Lender of any default shall be
implied from any omission by Lender to take action on account of such default
if such default persists or is repeated. No waiver by Lender of any default
shall affect any default other than the default expressly waived, and any such
waiver shall be operative only for the time and to the extent stated. No waiver
of any covenant or condition of any Loan Document shall be construed as a
waiver of any subsequent breach of the same covenant or condition. Lender’s
consent to or approval of any act by Borrower requiring further consent or
approval shall not be deemed to waive or render unnecessary Lender’s consent to
or approval of any subsequent act. 

          Section
14.4   Setoff. Upon the
occurrence and during the continuance of any Event of Default, Lender is hereby
authorized at any time and from time to time to the fullest extent permitted by
Law, without notice to Borrower (any such notice being expressly waived by
Borrower) to set off and to apply any and all balances, credits, deposits
(general or special, time or demand, provisional or final), accounts or monies
at any time held and other indebtedness at any time owing by Lender or any
affiliate of Lender to or for the account of Borrower against any and all of
the Obligations of Borrower now or hereafter existing under this Agreement or
any other agreement or instrument delivered by Borrower to Lender in connection
therewith, whether or not Lender shall have made any demand hereunder or
thereunder and although such Obligations may be contingent or unmatured.
Subject to the foregoing provisions of this Section, the rights of Lender under
this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which Lender may have. 

ARTICLE 15 

MISCELLANEOUS

          Section
15.1    Actions. Lender
shall have the right to commence, appear in and defend any action or proceeding
purporting to affect the rights or obligations of the parties to any Loan
Document. 

          Section
15.2    Nonliability of Lender.
Borrower acknowledges and agrees that: 

                       (a)     the
relationship between Borrower and Lender is and shall remain solely that of
borrower and lender, and Lender neither undertakes nor assumes any
responsibility to select, review, inspect, supervise, pass judgment upon or
inform Borrower of any matter in connection with the Property; 

                       (b)     notwithstanding
any other provision of any Loan Document: (i) Lender is not a partner, joint
venturer, alter-ego, manager, controlling person or other business associate or
participant of any kind of Borrower and Lender does not intend to ever assume
any such status; 

TERM LOAN AGREEMENT -
Page 40 

and (ii) Lender shall not be deemed responsible for or a participant in
any acts, omissions or decisions of Borrower; and 

                       (c)     Lender
shall not be directly or indirectly liable or responsible for any loss or
injury of any kind to any Person or property resulting from any construction
on, or occupancy or use of, the Property, whether arising from: (i) any defect
in any building, grading, landscaping or other onsite or offsite improvement;
(ii) any act or omission of Borrower or any of Borrower’s agents, employees,
independent contractors, licensees or invitees; (iii) any accident on the
Property or any fire, flood or other casualty or hazard thereon; (iv) the
failure of Borrower or any of Borrower’s licensees, employees, invitees,
agents, independent contractors or other representatives to maintain the
Property in a safe condition; and (v) any nuisance made or suffered on the
Property; unless any of the foregoing arises from or results from the active
gross negligence or willful misconduct of Lender, its employees or agents. 

          Section
15.3    No Representations by Lender.
By accepting or approving anything required to be performed or given to Lender
under the Loan Documents, including any certificate, financial statement,
survey, appraisal or insurance policy, Lender shall not be deemed to have
warranted or represented the sufficiency or legal effect of the same, and no
such acceptance or approval shall constitute a warranty or representation by
Lender to anyone. 

          Section
15.4     Indemnity.
Borrower hereby indemnifies and holds harmless Lender and its directors,
officers, agents and employees (collectively the “Indemnitees”) from and against: 

                       (a)     all
claims, demands and causes of action asserted against any Indemnitee by any
Person if the claim, demand or cause of action directly or indirectly relates
to (i) a claim, demand or cause of action that the Person has or asserts
against the Property, Borrower or General Partner; (ii) the payment of any
commission, charge or brokerage fee incurred in connection with the Loan; (iii)
any act or omission of Borrower, any contractor, subcontractor or material
supplier, engineer, architect or other Person with respect to the Property; or
(iv) any claim or cause of action of any kind by any Person which would have
the effect of denying Lender the full benefit or protection of any provision of
any Loan Document (excluding charges and assessments by Governmental Agencies
imposed upon Lender in the normal course of Lender’s business); and 

                       (b)     all
liabilities, losses and other costs (including court costs and attorneys’ fees)
incurred by any Indemnitee as a result of any claim, demand or cause of action
described in subparagraph (a). 

INDEMNITEES’ RIGHTS OF INDEMNITY SHALL NOT BE
DIRECTLY OR INDIRECTLY LIMITED, PREJUDICED, IMPAIRED OR ELIMINATED IN ANY WAY
BY AN INDEMNITEE’S STRICT LIABILITY, OR SOLE, CONTRIBUTORY OR COMPARATIVE
NEGLIGENCE OR ANY FINDING OR ALLEGATION THAT AN INDEMNITEE’S CONDUCT IS ACTIVE,
PASSIVE OR SUBJECT TO ANY OTHER CLASSIFICATION OR THAT AN INDEMNITEE IS
DIRECTLY OR INDIRECTLY RESPONSIBLE UNDER ANY THEORY OF ANY KIND FOR ANY ACT OR
OMISSION BY BORROWER OR ANY OTHER PERSON. NOTWITHSTANDING THE 

TERM LOAN AGREEMENT -
Page 41 

FOREGOING, BORROWER SHALL NOT BE OBLIGATED TO
INDEMNIFY ANY INDEMNITEE WITH RESPECT TO ANY INTENTIONAL TORT, WILLFUL
MISCONDUCT OR ACT OF GROSS NEGLIGENCE WHICH SUCH INDEMNITEE IS PERSONALLY
DETERMINED BY THE JUDGMENT OF A COURT OF COMPETENT JURISDICTION (SUSTAINED ON
APPEAL, IF ANY) TO HAVE COMMITTED. BORROWER’S OBLIGATIONS UNDER THIS SECTION
SHALL SURVIVE THE CANCELLATION OF THE NOTE AND THE RELEASE AND RECONVEYANCE OF
THE SECURITY DOCUMENTS. 

          Section
15.5   Easements. Borrower shall
not, without the prior written consent of Lender, (a) initiate, join in or
consent to any private restrictive covenant or other public or private restrictions
as to the use of the Property or any zoning reclassification of the Property
(or any part thereof); or (b) seek any variance under (or deviation from) any
existing zoning Laws or ordinances applicable to the Property (or any part
thereof); or (c) voluntarily grant any easement; right of way, privilege,
license, franchise or other property right affecting the Property. 

          Section
15.6   Joint and Several; Relationship with Lender.
If Borrower consists of more than one (1) individual and/or entity, each of
said individuals and/or entities shall be jointly and severally liable for each
covenant, agreement, representation and warranty of Borrower hereunder. The
relationship between Borrower, Lender created hereby and by the other Loan
Documents shall be that of a borrower and a lender only, and not be deemed to
be a partner of, or a joint venturer with, Borrower. 

          Section
15.7   Survival. All
representations and warranties of Borrower in the Loan Documents shall survive
the making of the Loan and the execution and delivery of the Note, are
material, and have been or will be relied on by Lender notwithstanding any
investigation made by or on behalf of Lender. All agreements, made in this
Agreement shall survive and shall continue until Lender receives payment in
full of all Obligations of Borrower incurred under this Agreement and under the
other Loan Documents. 

          Section
15.8   Reserved. 

          Section
15.9  Notices. All notices required
shall be in writing and shall be sent delivered by (a) registered or certified
mail, postage prepaid, return receipt requested, (b) Federal Express, Airborne
or another reputable overnight courier, or (c) delivered by hand by commercial
courier service, addressed to the party to be so notified at its address. Any
Notice shall be deemed to have been received: (i) three (3) days after the date
such Notice is mailed, (ii) on the date of delivery by hand (or refusal to
accept such delivery) if delivered during business hours on a Business Day (otherwise
on the next Business Day), and/or (iii) on the next Business Day if sent by an
overnight commercial courier. Notices shall be deemed effective if delivered by
counsel to either party, as if given directly by such party. Any party may
change the address to which any such Notice is to be delivered by furnishing
ten (10) days prior written notice of such change to the other parties. Notices
shall be deemed to have been given on the date as set forth above, even if
there is an inability to actually deliver any such Notice because of a changed
address of which no Notice was given, or there is a rejection or refusal to
accept any Notice offered for delivery. 

TERM LOAN AGREEMENT -
Page 42 

	
  

 	
  

 	
  

 
	
 If to
 Borrower or Guarantor:

 	
  

 	
 AmREIT
 Lantern Lane, LP

 
	
  

 	
  

 	
 8 Greenway
 Plaza, Suite 1000

 
	
  

 	
  

 	
 Houston,
 Texas 77046

 
	
  

 	
  

 	
 Attn: Chad
 C. Braun

 
	
  

 	
  

 	
  

 
	
 With a copy
 to:

 	
  

 	
 Bass, Berry
 & Sims PLC

 
	
  

 	
  

 	
 The Tower at
 Peabody Place

 
	
  

 	
  

 	
 100 Peabody
 Place

 
	
  

 	
  

 	
 Memphis,
 Tennessee 38103

 
	
  

 	
  

 	
 Attention:
 T. Gaillard Uhlhorn

 
	
  

 	
  

 	
  

 
	
 If to
 Lender:

 	
  

 	
 US. Bank National
 Association

 
	
  

 	
  

 	
 14241 Dallas
 Parkway, Suite 490

 
	
  

 	
  

 	
 Dallas,
 Texas 75254

 
	
  

 	
  

 	
 Attn:
 Gregory Kaye

 
	
  

 	
  

 	
  

 
	
 With a copy
 to:

 	
  

 	
 U.S. Bank
 National Association

 
	
  

 	
  

 	
 14241 Dallas
 Parkway, Suite 490

 
	
  

 	
  

 	
 Dallas TX
 75254

 
	
  

 	
  

 	
 Attn: Becky
 Aduddell

 
	
  

 	
  

 	
  

 
	
 With a copy
 to:

 	
  

 	
 Greenberg
 Traurig, LLP

 
	
  

 	
  

 	
 2200 Ross
 Avenue, Suite 5200

 
	
  

 	
  

 	
 Dallas,
 Texas 75201

 
	
  

 	
  

 	
 Attn: Tina
 M. Ross

 

Addresses for notice may be changed from time to time by written notice
to all other parties. Any communication given by mail will be effective upon
the earlier of (a) three Business Days following deposit in a post office or
other official depository under the care and custody of the United States
Postal Service; or (b) actual receipt, as indicated by the return receipt; if
given by telephonic facsimile, when sent; and if given by personal delivery or
by overnight air courier, when delivered to the appropriate address set forth
above. 

          Section
15.10   No Third Parties Benefited.
Except as expressly provided in Section 15.19 hereof, this Agreement is made
for the purpose of setting forth certain rights and Obligations of Borrower and
Lender in connection with the Loan. It is made for the sole protection of
Borrower, Lender and Lender’s successors and assigns, and no other Person shall
have any rights hereunder or by reason hereof. No third party shall be entitled
to rely upon this Agreement unless such third party is an express assignee of
the interest of Lender hereunder.  

          Section
15.11   Binding Effect. This
Agreement shall bind, and shall inure to the benefit of, Borrower and Lender
and their respective successors and assigns, subject to the provisions of
Section 10.5 hereof; provided, however, that neither this Agreement nor the
proceeds of the Loan may be assigned by Borrower, without the prior written
consent of Lender. 

TERM
LOAN AGREEMENT - Page 43 

          Section 15.12 Counterparts. Any Loan
Document other than the Note may be executed in any number of counterparts and
any party thereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which, taken together,
will be deemed to be but one and the same document. The execution of any Loan
Document by any party will not become effective until counterparts have been
executed by all of the parties thereto.

          Section 15.13 Prior Agreements; Amendments;
Consents. This Agreement contains the entire agreement between
Lender and Borrower with respect to the Loan and all prior negotiations,
understandings and agreements are superseded by this Agreement. No supplement,
extension, termination or other modification of any provision of any Loan
Document, and no consent to any departure by Borrower therefrom, shall be
effective unless in writing and signed by Lender, and then only in the specific
instance and for the specific purpose given. Pursuant to Section 26.02 of
the Texas Business & Commerce Code, Borrower is hereby given the
following notice:

                    (a)          A
LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE LOAN AGREEMENT EXCEEDS
$50,000.00 IN VALUE IS NOT ENFORCEABLE UNLESS THE AGREEMENT IS IN WRITING AND
SIGNED BY THE PARTY TO BE BOUND OR BY THAT PARTY’S AUTHORIZED REPRESENTATIVE.

                    (b)          THE
RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO SUBSECTION (i)
ABOVE SHALL BE DETERMINED SOLELY FROM THE WRITTEN LOAN AGREEMENT, AND ANY PRIOR
ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED AND MERGED INTO THE LOAN
AGREEMENT.

                    (c)          THE
WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.

                    (d)          THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                    (e)          As
used in Subsections (a)-(d) above the term “Loan Agreement” shall mean
and refer to all the Loan Documents.

          Section 15.14 Governing Law. All of the Loan Documents shall be governed
by, and construed and enforced in accordance with, the Laws of the State of
Texas. Without limiting the right of Lender to bring any action or proceeding
against Borrower or the Property arising out of or relating to its Obligation
under the Loan Documents (an “Action”) in the courts of other
jurisdictions, Borrower hereby irrevocably submits to the jurisdiction of the
courts of the County of Dallas, State of Texas, or any federal court in the
Northern District of Texas, Dallas Division, and Borrower hereby irrevocably
agrees that any Action may be heard and determined in such state or federal
court. Borrower hereby irrevocably waives, to the fullest extent that it may 

TERM LOAN AGREEMENT - Page 44

effectively do so, the defense of an inconvenient forum to the
maintenance of any Action in the jurisdiction. Borrower hereby irrevocably
agrees that the summons and complaint or any other process in any Action in any
jurisdiction may be served by mailing to any of the addresses set forth herein
or by hand delivery to a person of suitable age and discretion at any such
address. Such service shall be complete on the date such process is so mailed
or delivered.

          Section 15.15 Maximum Rate. As used
herein, the term “Maximum Rate” shall mean and
refer to the maximum rate of nonusurious interest, if any, that Lender may from
time to time charge Borrower and in regard to which Borrower would be prevented
successfully from raising the claim or defense of usury under applicable Law as
now, or to the extent permitted by Law, as may hereafter be, in effect (said
Law permitting the highest rate being herein referred to as the “Interest
Law”). Unless changed in accordance with Law, the
applicable rate ceiling under Texas Law shall be the “weekly ceiling”, from time to time in effect, as provided in Chapter 303 of the Texas Finance Code, as amended. It is
the intention of Borrower and Lender to conform strictly to the Interest Law
applicable to this loan transaction. Accordingly, it is agreed that
notwithstanding any provision to the contrary in this Agreement, the Note or in
any of the Loan Documents or instruments relating thereto, the aggregate of all
interest and any other charges or consideration constituting interest under
applicable Interest Law that is taken, reserved, contracted for, charged or
received under this Agreement, the Note or under any of the other aforesaid
agreements or otherwise in connection with this loan transaction shall under no
circumstances exceed the maximum amount of interest allowed by the Interest Law
applicable to this loan transaction. If any excess of interest in such respect
is provided for, or shall be adjudicated to be so provided for, in this
Agreement, the Note or in any of the Loan Documents or other instruments
relating thereto, then in such event (a) the provisions of this Section shall
govern and control, (b) neither Borrower nor Borrower’s heirs, legal
representatives, successors or assigns or any other party liable for the
payment of the Note shall be obligated to pay the amount of such interest to
the extent that it is in excess of the maximum amount of interest allowed by
the Interest Law applicable to this loan transaction, (c) any excess shall be
deemed a mistake and canceled automatically and, if theretofore paid, shall be
credited on the Note by Lender (or if the Note shall have been paid in full, refunded
to Borrower) and (d) the effective rate of interest shall be automatically
subject to reduction to the Maximum Rate as now or hereafter construed by
courts of appropriate jurisdiction. All sums paid or agreed to be paid Lender
for the use, forbearance or detention of the indebtedness evidenced by the Note
shall, to the extent permitted by the Interest Law applicable to this loan
transaction, be amortized, prorated, allocated and spread throughout the full
term of the Note.

          Section 15.16 Waivers. Each of the
parties hereto recognizes that in matters related to this Agreement, it may be
entitled to a trial in which matters of fact are determined by a jury (as
opposed to a trial in which such matters are determined by a federal or state
judge). Each of the undersigned also recognizes that one of the remedies
available to it in any trial may, under certain circumstances, be the right to
receive damages in excess of those actually sustained by it. In the past, in
some instances, such damages have equaled or exceeded the amount of actual
damages.

          EACH
PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF

TERM LOAN AGREEMENT - Page 45

ACTION
(i) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (ii) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO
OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

          EACH
OF THE UNDERSIGNED HEREBY CERTIFIES THAT NEITHER ANY REPRESENTATIVE OR AGENT OF
LENDER NOR LENDER’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS. EACH OF THE UNDERSIGNED ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO OR BECOME A SURETY WITH RESPECT TO THIS TRANSACTION BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.

          The waiver
of rights related to damages shall not apply to any transaction subject to the
Texas Deceptive Trade Practices Act, except as provided in Section 15.19
hereof, or to Chapter 6, 6A or 7 of the Texas Consumer Credit Code.

          Section 15.17 Severability of Provisions.
No provision of any Loan Document that is held to be inoperative, unenforceable
or invalid shall affect the remaining provisions, and to this end all
provisions of the Loan Documents are hereby declared to be severable.

          Section 15.18 Time of the Essence.
Time is of the essence hereof with respect to the dates, terms and conditions
of this Agreement and all of the other Loan Documents.

          Section 15.19 Assignments and Participations.
Borrower agrees that Lender may elect, at any time, to sell, assign or grant
participations in all or any portion of its rights and obligations under the
Loan Documents, and that any such sale, assignment or participation may be to
one or more financial institutions, private investors, and/or other entities,
at Lender’s sole discretion (“Participant”). Borrower further agrees
that Lender may disseminate to any such actual or potential purchaser(s),
assignee(s) or participant(s) all documents and information (including, without
limitation, all financial information) which has been or is hereafter provided
to or known to Lender with respect to: (a) the Property and Improvements and
its operation; (b) any party connected with the Loan (including, without
limitation, Borrower, any member of Borrower, any constituent partner or member
of any partner of Borrower and/or Guarantor);

TERM LOAN AGREEMENT - Page 46

and/or (c) any lending relationship other than the Loan which Lender
may have with any party connected with the Loan. In the event of any such sale,
assignment or participation, Lender and the parties to such transaction shall
share in the rights and obligations of Lender as set forth in the Loan
Documents only as and to the extent they agree among themselves. In connection
with any such sale, assignment or participation, Borrower further agrees that
the Loan Documents shall be sufficient evidence of the obligations of Borrower
to each purchaser, assignee, or participant, and upon written request by Lender,
Borrower shall enter into such amendments or modifications to the Loan
Documents as may be reasonably required in order to evidence any such sale,
assignment or participation; provided that Borrower’s rights hereunder shall
not be decreased and Borrower’s obligations hereunder shall not be increased as
a result of any such amendments or modifications. The indemnity obligations of
Borrower under the Loan Documents shall also apply with respect to any
purchaser, assignee or participant. Anything in this Agreement to the contrary
notwithstanding, and without the need to comply with any of the formal or
procedural requirements of this Agreement, including this Section, Lender may
at any time and from time to time pledge and assign all or any portion of its
rights under all or any of the Loan Documents to a Federal Reserve Bank;
provided that no such pledge or assignment shall release Lender from its
obligations thereunder. 

          Section 15.20 No Consequential Damages.
NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF
THIS AGREEMENT, EACH PERSON PARTY HERETO FOR ITSELF AND ON BEHALF OF ITS
AFFILIATES AGREES THAT THE RECOVERY OF ANY DAMAGES SUFFERED OR INCURRED AS A
RESULT OF ANY BREACH BY ANY PERSON OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR
OBLIGATIONS UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE LIMITED TO
THE ACTUAL DAMAGES SUFFERED OR INCURRED AS A RESULT OF THE BREACH BY THE
BREACHING PARTY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS HEREUNDER OR
UNDER ANY OTHER LOAN DOCUMENT AND IN NO EVENT SHALL THE BREACHING PARTY BE
LIABLE TO ANY NON-BREACHING PARTY FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL,
EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON
ACCOUNT OF LOST PROFITS OR OPPORTUNITIES OR LOST OR DELAYED PRODUCTION)
SUFFERED OR INCURRED BY THE NON-BREACHING PARTY AS A RESULT OF THE BREACH BY
THE BREACHING PARTY OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT.

          Section 15.21 Lender Not in Control.
None of the covenants or other provisions contained in the Loan Documents shall
or shall be deemed to, give Lender the rights or power to exercise control over
the affairs and/or management of Borrower, Guarantor, the power of Lender being
limited to the right to exercise the remedies provided in the Loan Documents;
provided, however, that if Lender becomes the owner of any ownership interests
in any Person, whether through foreclosure or otherwise, Lender shall be
entitled (subject to requirements of Law) to exercise such legal rights as it
may have by being owner of such Ownership Interests in such Person.

TERM LOAN AGREEMENT - Page 47

          Section 15.22 USA Patriot Act Notice.
Lender hereby notifies Borrower that pursuant to the requirements of the USA
Patriot Act it is required to obtain, verify and record information that
identifies Borrower, which information includes the name and address of
Borrower and other information that will allow Lender to identify Borrower in accordance
with the USA Patriot Act.

          Section 15.23 DTPA Waiver. Borrower
hereby waives the provisions of the Texas Deceptive Trade Practices Act,
Chapter 17, Subchapter E, Sections 17.41 through 17.63,
inclusive (other than Section 17.555, which is not waived), of the Texas
Business & Commerce Code. To evidence its ability to grant such
waiver, Borrower hereby represents and warrants to Lender that it (a) is in the
business of seeking or acquiring, by purchase or lease, goods or services for
commercial or business use, and is represented by legal counsel in connection
therewith and in connection with this Agreement, (b) has knowledge and
experience in financial and business matters that enable it to evaluate the
merits and risks of the transaction contemplated hereby and (c) is not in a
significantly disparate bargaining position.

 [THE REMAINDER OF THIS PAGE INTENTIONALLY
LEFT BLANK]

TERM LOAN AGREEMENT - Page 48

          IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BORROWER:

 
	
  

 	
  

 	
  

 
	
  

 	
 AmREIT
 LANTERN LANE, LP, a Texas limited partnership

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 AmREIT
 Lantern Lane GP, LLC, a Texas limited liability company, its general partner

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
      /s/
 Chad C. Braun

 	
  

 
	
  

 	
  

 	
 Name:             Chad
 C. Braun

 
	
  

 	
  

 	
 Title:               Vice
 President

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 LENDER:

 
	
  

 	
  

 	
  

 
	
  

 	
 U.S. BANK
 NATIONAL ASSOCIATION, a national banking association

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
      /s/
 Gregory N. Kaye

 	
  

 
	
  

 	
 Name:             Gregory
 N. Kaye

 
	
  

 	
 Title:               Senior
 Vice President

 

TERM LOAN AGREEMENT
- Signature Page

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY

A tract of parcel of land containing 6.7624 acres or 294,570 square
feet of land, situated in the George Bellows Survey, Abstract No. 3, Harris
County, Texas being out of and a part of Lot 20 of Benignus Acres, map or plat
thereof recorded in Vol. 15, Pg. 8 of the Harris County Map Records said 6.7624
acre tract being that same tract of land conveyed to AmREIT Lantern Lane, LP in
that certain Warranty Deed filed under Harris County Clerk’s File No
20060084602 and being more particularly described by metes and bounds as
follows:

Beginning at a 5/8 inch iron rod found on the westerly right of way
line of Benignus Road (based on width of 60 feet) marking the southeast corner
of Memorial Pines, Section Two, map or plat thereof recorded in Vol. 68, Pg. 1,
H.C.M.R. for the northeast corner of the herein described tract;

Thence South, along and with the said westerly right of way line of
Benignus Road, a distance of 350.90 feet to a 3/4 inch iron pipe found marking
the northwest corner of the intersection of the said westerly right of way line
of Benignus Road, with the northerly right of way line of Memorial Drive (based
on a width of 100 feet) for the southeast corner of the herein described tract;

Thence West, along and with the said northerly right of way line of
Memorial Drive, a distance of 839.32 feet to a 5/8 inch iron rod found marking
the northeast corner at the intersection of the said northerly right of way
line of Memorial Drive with the easterly right of way line of Tallowwood Road
(based on a width of 60 feet) for the southwest corner of the herein described
tract;

Thence North 00 deg. 17 min. 0 sec. East, along and with the said
easterly right of way line of Tallowwood Road, a distance of 351.76 feet to a
5/8 inch iron rod found marking the southwest corner of said Memorial Pines,
Section Two for the northwest corner of the herein described tract, from which
a 5/8 inch iron rod found for reference bears South 22 deg. 13 min. East 1.6
feet;

Thence South 89 deg. 56 min. 30 sec. East, along and with the southerly
line of said Memorial Pines, Section Two, a distance of 837.58 feet to THE
POINT OF BEGINNING AND CONTAINING 6.7624 ACRES OR 294,570 FEET OF LAND.

EXHIBIT A - Page 1 of 1  

EXHIBIT B

SITE
PLAN OF SHOPPING CENTER

EXHIBIT B 

EXHIBIT B 

EXHIBIT C

CLOSING CONDITIONS

As conditions precedent to the closing of the Loan and to the extent
required by Lender, Lender shall have received and approved the following
(which receipt and approval shall be deemed to have occurred upon the execution
of this Agreement by Lender, unless noted below):

          1.          Fees and
Expenses. Any and all required commitment and other fees payable
to Lender herein or in any separate agreement, and evidence satisfactory to
Lender that Borrower has paid all other fees, costs and expenses (including the
fees and costs of Lender’s counsel) then required to be paid pursuant to this
Agreement and all other Loan Documents, including, without limitation, all
fees, costs and expenses that Borrower is required to pay pursuant to any loan
application or commitment.

          2.          Financial
Statements. The Financial Statements of Borrower and Guarantor
or any other party required by any loan application or commitment or otherwise
required by Lender including, without limitation, a proposed operating budget
for the Property for its first year of operation and the most current available
financial statements of Borrower and Guarantor, together with financial
statements of each of said parties for each of the three (3) previous fiscal
years.

          3.          Appraisal.
A current Appraisal of the Property acceptable to Lender, prepared by an
appraiser acceptable to Lender, at Borrower’s expense, and satisfactory to
Lender in all respects, as reviewed, adjusted and approved by Lender in
accordance with its customary internal appraisal requirements. The Appraisal
must reflect that the Commitment amount is not greater than 70% of the
“as-stabilized” Appraised Value of the Property.

          4.          Loan
Documents. Borrower, Guarantor and each other Person required by
Lender shall have duly executed, acknowledged, sworn to, recorded, filed, and
delivered to Lender all Loan Documents then required by Lender, dated the
Closing Date, and in form and content satisfactory to Lender. 

          5.          Authorization.
Evidence Lender requires of the existence, good standing, authority and
capacity of Borrower, Guarantor, and their respective constituent partners,
members, managers and owners (however remote) to execute, deliver and perform
their respective obligations to Lender under the Loan Documents, including:

	
  

 	
  

 
	
  

 	
              (a)          For
 each partnership (including a joint venture or limited partnership): (i) a
 true and complete copy of an executed partnership agreement or limited
 partnership agreement, and all amendments thereto; (ii) for each limited
 partnership, a copy of the certificate of limited partnership and all
 amendments thereto accompanied by a certificate issued by the appropriate
 governmental official of the jurisdiction of formation that the copy is true
 and complete, and evidence Lender requires of registration or qualification
 to do business in the state where Borrower’s principal place of business is
 located and the state where the Property is located, and (iii) a partnership
 affidavit certifying who will be authorized to execute or attest any of the
 Loan Documents, and a true and complete copy 

 

EXHIBIT C - Page 1

	
  

 	
  

 
	
  

 	
of the
partnership resolutions approving the Loan Documents and authorizing the transactions
contemplated in this Agreement and the other Loan Documents.

 
	
  

 	
  

 
	
  

 	
              (b)          For
 each corporation: (i) a true and complete copy of its articles of
 incorporation and by laws, and all amendments thereto, a certificate of
 incumbency of all of its officers who are authorized to execute or attest to
 any of the Loan Documents, and a true and complete copy of resolutions
 approving the Loan Documents and authorizing the transactions contemplated in
 this Agreement and the other Loan Documents; and (ii) certificates of
 existence, good standing and qualification to do business issued by the
 appropriate governmental officials in the state of its formation and, if
 different, the state in which the Property is located.

 
	
  

 	
  

 
	
  

 	
              (c)          For
 each limited liability company or limited liability partnership: (i) a true
 and complete copy of the articles of organization and operating agreement,
 and all amendments thereto, a certificate of incumbency of all of its
 partners who are authorized to execute or attest to any of the Loan
 Documents, and a true and complete copy of resolutions approving the Loan
 Documents and authorizing the transactions contemplated in this Agreement and
 the other Loan Documents; and (ii) certificates of existence, good standing
 and qualification to do business issued by appropriate governmental officials
 in the state of its formation and, if different, the state in which the
 Property is located. 

 
	
  

 	
  

 
	
  

 	
              (d)          For
 each entity or organization that is not a corporation, partnership, limited
 partnership, joint venture, limited liability company or limited liability
 partnership, a copy of each document creating it or governing the existence,
 operation, power or authority of it or its representatives.

 
	
  

 	
  

 
	
  

 	
              (e)          All
 certificates, resolutions, and consents required by Lender applicable to the
 foregoing.

 

          6.          Opinions.
The written opinion(s) of counsel satisfactory to Lender for Borrower, each
Guarantor, and any other persons or entities addressed to Lender and dated the
date of this Agreement.

          7.          Survey;
No Special Flood Hazard. Three (3) prints of an original survey
of the Property and existing improvements thereon, if any, complying with the
requirements of Exhibit E attached hereto or otherwise
in form satisfactory to Lender and the Title Company and a flood insurance
policy in an amount equal to the lesser of the maximum Loan amount or the
maximum amount of flood insurance available under the Flood Disaster Protection
Act of 1973 (“FDPA”), as amended, and otherwise in compliance with the
requirements of the Loan Documents, or evidence satisfactory to Lender that
none of the Property is or will be located in a flood hazard area (or if any
portion of the Property will be located in the flood hazard area such documents
as may be deemed necessary by Lender to comply with the FDPA and the
regulations promulgated thereunder).

          8.          Title
Insurance. An ALTA title insurance policy (or a title insurance
policy promulgated by the laws of the state in which the Property is located if
an ALTA insurance

EXHIBIT C -
Page 2

policy is not available), issued by the Title Company in the maximum
amount of the Loan plus any other amount secured by the Deed of Trust, on a
coinsurance and/or reinsurance basis if and as required by Lender, insuring
without exclusion or exception for creditors’ rights that the Deed of Trust
constitutes a valid lien covering the Property, having the priority required by
Lender and subject only to those exceptions and encumbrances (regardless of
rank or priority) Lender approves, in a form acceptable to Lender, and with all
“standard” exceptions which can be deleted, including the exception for matters
which a current survey would show, deleted to the fullest extent authorized
under applicable title insurance rules, and Borrower shall satisfy all requirements
therefor permitted; containing no exception for standby fees or real estate
taxes or assessments other than those for the year in which the closing occurs
to the extent the same are not then due and payable and endorsed “not yet due
and payable” and no exception for subsequent assessments for prior years;
providing full coverage against mechanics’ and materialmens’ liens to the
extent authorized under applicable title insurance rules, and Borrower shall
satisfy all requirements therefor; insuring that no restrictive covenants shown
in the Title Policy have been violated, and that no violation of the
restrictions will result in a reversion or forfeiture of title; insuring all
appurtenant easements; insuring that marketable fee simple title to the Property
is vested in Borrower; containing such affirmative coverage and endorsements as
Lender may require and are available under applicable title insurance rules,
and Borrower shall satisfy all requirements therefor; insuring any easements,
leasehold estates or other matters appurtenant to or benefiting the Property
and/or the Improvements as part of the insured estate; insuring the right of
access to the Property to the extent authorized under applicable title
insurance rules, and Borrower shall satisfy all requirements therefor. Borrower
and Borrower’s counsel shall not have any interest, direct or indirect, in the
Title Company (or its agent) or any portion of the premium paid for the Title
Policy.

          9.          Insurance.
The insurance policies required by Lender pursuant to this Agreement, together
with evidence satisfactory to Lender that all premiums therefor have been paid
for a period of not less than one (1) year from the date of this Agreement and
that the policies are in full force and effect.

          10.        Project
Agreements. Each of the following: 

	
  

 	
  

 
	
  

 	
                (a)          true
 and correct copies of all executed letters of intent and Leases and such
 evidence confirming the validity thereof, absence of defaults thereunder,
 good standing and financial ability of the parties thereto to perform,
 together with the standard lease form for the Property;

 
	
  

 	
  

 
	
  

 	
                (b)          true
 and correct copies of the Management Agreement and any other noncancellable
 agreement relating to the management, operation or maintenance of the
 Property and of each such agreement which cannot be cancelled by thirty (30)
 days’ or less notice, together with a subordination and consent, in form
 acceptable to Lender, executed by the applicable party thereto.

 

          11.          Environmental
Compliance/Report. Evidence satisfactory to Lender that, except
as it relates to the Dry Cleaner Contamination (as defined in the Environmental
Indemnity) the Property does not contain and is not within or near any area
designated as a 

EXHIBIT C - Page 3

hazardous waste site by any Governmental Agency, that neither the
Property nor any adjoining property contains or has ever contained any
substance classified as hazardous or toxic (or otherwise regulated, such as,
without limitation, asbestos, radon and/or petroleum products) under applicable
Laws pertaining to health or the environment, and that neither the Property nor
any use or activity thereon violates or is or could be subject to any response,
remediation, clean up or other obligation under applicable Laws pertaining to
health or the environment including without limitation, a written report of an
environmental assessment of the Property, by an engineering firm, and of a
scope and in form and content satisfactory to Lender, complying with Lender’s
established guidelines, showing that there is no evidence of any such substance
which has been generated, treated, stored, released or disposed of in the
Property, and such additional evidence as may be required by Lender. 

          12.          Environmental
Insurance. The Environmental Insurance Policy.

          13.          Tax
Certificates. Evidence satisfactory to Lender (a) of the
identity of all taxing authorities and utility districts (or similar
authorities) having jurisdiction over the Property or any portion thereof; (b)
that all taxes, standby fees and any other similar charges have been paid,
including copies of receipts or statements marked “paid” by the appropriate
authority; and (c) that the Property is a separate tax lot or lots with
separate assessment or assessments of the Property and Improvements,
independent of any other land or improvements.

          14.          Access.
Satisfactory evidence that the Property abuts and has fully adequate direct and
free access to one or more public streets and that all of the streets providing
access to the Property have been dedicated to public use and have been fully
installed and accepted by the appropriate Governmental Agencies.

          15.          Priority.
Lender shall have received and approved the following:

	
  

 	
  

 
	
  

 	
                (i)          evidence
 satisfactory to Lender that prior to and as of the time the Deed of Trust was
 filed for record no activity or circumstance was visible on or near the
 Property which would constitute inception of a mechanic’s or materialman’s
 lien against the Property; and

 
	
  

 	
  

 
	
  

 	
                (ii)          certificates
 of a reporting service acceptable to Lender, reflecting the results of a
 search of the central and local Uniform Commercial Code records made not
 earlier than ten (10) days prior to the Closing Date, showing no filings
 against Borrower or any of the collateral for the Loan except those, if any,
 approved by Lender.

 

          18.          Other
Documents. Borrower, Guarantor and their constituent Persons and
representatives shall have delivered to Lender, in form and content
satisfactory to Lender, such other documents and certificates as Lender may
reasonably request in connection with the transactions contemplated in this Agreement.

EXHIBIT C - Page 4

EXHIBIT C-1

POST-CLOSING
CONDITIONS

Borrower agrees that Borrower will deliver to Lender, or satisfy or
cause to be satisfied, the following on or before the dates specified below:

1.          Rice SNDA.
On or before November 7, 2011, Borrower will cause to be delivered to Lender an
original SNDA from Rice, in form reasonably acceptable to Lender. 

2.          SNDAs and
Tenant Estoppels. On or before January 15, 2012, Borrower will
cause to be delivered to Lender original SNDAs from CVS and Fidelity Brokerage
Services, LLC (and such other tenants as Lender may require), each in form
reasonably acceptable to Lender. Alternatively, if requested by Lender with
respect to certain Tenants, Borrower shall deliver to Lender tenant estoppel
certificates from such Tenants, in form reasonably acceptable to Lender.

3.          Required
Repairs. Within 120 days after the date of this Agreement,
Borrower shall complete all Required Repairs pursuant to Section 4.4 of this
Agreement.

4.          Notice
Regarding MSD Approval. Within 120 days after the date of this
Agreement, Borrower shall notify Lender whether an Environmental Trigger has
occurred, as described in Section 4.1 of this Agreement.

EXHIBIT C-1 -
Page 1

EXHIBIT D

INSURANCE REQUIREMENTS

	
  

 	
  

 
	
 I.

 	
 PROPERTY INSURANCE 

 
	
  

 	
  

 
	
 A.

 	
 DURING CONSTRUCTION. An ORIGINAL (or certified copy) Builder’s
 All-Risk, Completed Value, Non-Reporting Form Policy or ORIGINAL Acord 28
 (2003/10) Certificate of Insurance naming the borrowing entity as an insured,
 reflecting coverage of 100% of the replacement cost, and written by a carrier
 approved by Lender with a current A.M. Best’s Insurance Guide Rating of at
 least A- IX (which is authorized to do business in the state in which the property
 is located) that affirmatively includes the following:

 
	
  

 	
  

 
	
 1.

 	
 Mortgagee Clause naming U.S. Bank National Association, as mortgagee,
 with a 30-day notice to Lender in the event of cancellation, non-renewal or
 material change

 
	
  

 	
  

 
	
 2.

 	
 Lender’s Loss Payable Endorsement (ISO 1218 or similar) with a
 Severability of Interest Clause with a 30-day notice to Lender in the event
 of cancellation, non-renewal or material change

 
	
  

 	
  

 
	
 3.

 	
 Replacement
 Cost Endorsement

 
	
  

 	
  

 
	
 4.

 	
 No Exclusion
 for Acts of Terrorism

 
	
  

 	
  

 
	
 5.

 	
 No Coinsurance
 Clause

 
	
  

 	
  

 
	
 6.

 	
 Flood
 Insurance

 
	
  

 	
  

 
	
 7.

 	
 Coastal and
 Other Wind Coverage

 
	
  

 	
  

 
	
 8.

 	
 Collapse and
 Earthquake Coverage

 
	
  

 	
  

 
	
 9.

 	
 Vandalism
 and Malicious Mischief Coverage

 
	
  

 	
  

 
	
 10.

 	
 Boiler and
 Machinery Coverage (aka Electrical and Mechanical Breakdown)

 
	
  

 	
  

 
	
 11.

 	
 Demolition,
 Increased Cost of Construction Coverage

 
	
  

 	
  

 
	
 12.

 	
 In-Transit
 Coverage

 
	
  

 	
  

 
	
 13.

 	
 Partial
 Occupancy Permitted

 
	
  

 	
  

 
	
 14.

 	
 Borrower’s
 coverage is primary and non-contributory with any insurance or self-insurance
 carried by Lender.

 
	
  

 	
  

 
	
 15.

 	
 Waiver of
 Subrogation against any party whose interest are covered in the policy

 
	
  

 	
  

 
	
 16.

 	
 Delay in
 Completion or Delay in Rents/Startup Coverage

 

EXHIBIT D - Page 1

	
  

 	
  

 
	
 17.

 	
 Coverage to be effective upon the date of the Notice to Proceed, the
 date of site mobilization or the start of any shipment of materials,
 machinery or equipment to the site, whichever is earlier, and to remain in
 effect until replaced by permanent All Risk Property Insurance described
 below, or until such other time as may be mutually agreed upon by Lender and
 Borrower. Coverage should be non-cancellable
 through term of Loan with automatic extension provision of at least 60 days.

 
	
  

 	
  

 
	
 B.

 	
 UPON COMPLETION.
 An ORIGINAL (or certified copy) All-Risk Hazard Insurance Policy or ORIGINAL
 Acord 28 (2003/10) Certificate of Insurance naming the borrowing entity as an
 insured, reflecting coverage of 100% of the replacement cost, and written by
 a carrier approved by Lender with a current A.M. Best’s Insurance Guide
 Rating of at least A- IX (which is authorized to do business in the state in
 which the property is located) that affirmatively includes the following:

 
	
  

 	
  

 
	
 1.

 	
 Mortgagee Clause naming U.S. Bank National Association, as mortgagee,
 with a 30-day notice to Lender in the event of cancellation, non-renewal or
 material change.

 
	
  

 	
  

 
	
 2.

 	
 Lender’s Loss Payable Endorsement with a Severability of Interest
 Clause with a 30-day notice to Lender in the event of cancellation,
 non-renewal or material change

 
	
  

 	
  

 
	
 3.

 	
 Replacement
 Cost Endorsement

 
	
  

 	
  

 
	
 4.

 	
 No Exclusion
 for Acts of Terrorism

 
	
  

 	
  

 
	
 5.

 	
 No
 Coinsurance Clause

 
	
  

 	
  

 
	
 6.

 	
 Boiler and
 Machinery Coverage (aka Electrical and Mechanical Breakdown)

 
	
  

 	
  

 
	
 7.

 	
 Sprinkler
 Leakage Coverage

 
	
  

 	
  

 
	
 8.

 	
 Vandalism
 and Malicious Mischief Coverage

 
	
  

 	
  

 
	
 9.

 	
 Flood
 Insurance

 
	
  

 	
  

 
	
 10.

 	
 Loss of Rents Insurance in an amount of not less than 100% of one
 year’s Rental Value of the Property.
 “Rental Value” shall include: (a) the total projected gross rental
 income from tenant occupancy of the Property as set forth in the Budget, (b)
 the amount of all charges which are the legal obligation of tenants and which
 would otherwise be the obligation of Borrower, and (c) the fair rental value
 of any portion of the Property which is occupied by Borrower.

 
	
  

 	
  

 
	
 11.

 	
 One year’s
 business interruption insurance in an amount acceptable to Lender.

 
	
  

 	
  

 
	
 12.

 	
 Collapse and
 Earthquake Coverage

 
	
  

 	
  

 
	
 13.

 	
 Coastal
 & Other Wind Coverage

 

EXHIBIT D - Page 2

	
  

 	
  

 
	
 14.

 	
 Extra
 Expense Coverage

 
	
  

 	
  

 
	
 15.

 	
 Borrower’s
 coverage is primary and non-contributory with any insurance or self-insurance
 carried by Lender.

 
	
  

 	
  

 
	
 16.

 	
 Waiver of
 Subrogation against any party whose interest are covered in the policy

 
	
  

 	
  

 
	
 17.

 	
 Demolition
 and Increased Cost of Construction

 
	
  

 	
  

 
	
  

 	
  

 
	
 II.

 	
 LIABILITY INSURANCE.
 An ORIGINAL Acord 25-S Certificate of General Comprehensive Liability Insurance
 naming the borrowing entity as an insured, providing coverage on an
 “occurrence” rather than a “claims made” basis and written by a carrier
 approved by the Lender, with a current A.M.Best’s Insurance Guide Rating of
 at least A- IX. (which is
 authorized to do business in the state in which the property is located) that
 affirmatively includes the following:

 
	
  

 	
  

 
	
 1.

 	
 Combined general liability policy limit of at least $5,000,000.00
 each occurrence and aggregate applying liability for Bodily Injury, Personal
 Injury, Property Damage, Contractual, Products and Completed Operations which
 combined limit may be satisfied by the limit afforded under the Commercial
 General Liability Policy, or by such Policy in combination with the limits
 afforded by an Umbrella or Excess Liability Policy (or policies); provided,
 the coverage afforded under any such Umbrella or Excess Liability Policy is
 at least as broad in all material respects as that afforded by the underlying
 Commercial General Liability Policy. Such policies must contain a Separations
 of Insureds / Severability of Interest clause.

 
	
  

 	
  

 
	
 2.

 	
 No Exclusion
 for Acts of Terrorism 

 
	
  

 	
  

 
	
 3.

 	
 Aggregate
 limit to apply per location

 
	
  

 	
  

 
	
 4.

 	
 Borrower’s
 coverage is primary and non-contributory with any insurance or self-insurance
 carried by Lender.

 
	
  

 	
  

 
	
 5.

 	
 Waiver of
 Subrogation against any party whose interest are covered in the policy

 
	
  

 	
  

 
	
 6.

 	
 Additional Insured Endorsement naming Lender as an additional insured
 with a 30-day notice to Lender in the event of cancellation, non-renewal or
 material change. A Severability of
 Interests provision should be included.

 
	
  

 	
  

 
	
 III.

 	
 WORKER’S COMPENSATION. An ORIGINAL Certificate indicating
 Worker’s Compensation coverage in the statutory amount and Employer’s
 Liability Coverage with minimum limits of $500,000 / $500,000 / $500,000
 naming the General Contractor and written by a carrier approved by Lender.

 

EXHIBIT D - Page 3

EXHIBIT E

SURVEY REQUIREMENTS

	
  

 	
  

 
	
 A.

 	
 Boundary Survey and Foundation Survey
 Requirements

 
	
  

 	
  

 
	
 These items are to be included and shown on the Boundary/Foundation
 Survey: 

 
	
  

 
	
 1.

 	
 The complete and correct legal description of the Land as shown on
 the title insurance commitment or preliminary title report. (Note: It must be
 possible to trace the legal description of the Land on the survey by
 following the bearings and dimensions around the boundaries of the Land). 

 
	
  

 	
  

 
	
 2.

 	
 The location of all recorded easements and of all unrecorded
 easements ascertainable by an inspection of the Land, which benefit or burden
 the Land. (Note: All recorded easements are to be identified by a document
 recording number or other document reference). 

 
	
  

 	
  

 
	
 3.

 	
 All areas affected by any recorded restrictions or access
 limitations. (Note: All such areas are to be identified by a document
 recording number or other document reference). 

 
	
  

 	
  

 
	
 4.

 	
 The location of all adjoining streets, roads, highways and alleys,
 with names, rights-of-way widths and distances from the Land noted. If none
 adjoin the Land, then the location of the nearest public street, road or
 highway and its distance from the Land. 

 
	
  

 	
  

 
	
 5.

 	
 The location of public access to the Land and of all appurtenant
 access easements, entrance drives and curb cuts. 

 
	
  

 	
  

 
	
 6.

 	
 A directional indicator showing North. 

 
	
  

 	
  

 
	
 7.

 	
 The street address of any existing improvements. 

 
	
  

 	
  

 
	
 8.

 	
 The dimensions of the Land and the locations of existing improvements
 as measured in both directions from property lines. 

 
	
  

 	
  

 
	
 9.

 	
 The perimeter dimensions of existing improvements and the proposed
 locations of contemplated improvements. 

 
	
  

 	
  

 
	
 10.

 	
 Interior lot lines, if any. 

 
	
  

 	
  

 
	
 11.

 	
 All applicable municipal building setback lines. 

 
	
  

 	
  

 
	
 12.

 	
 The location of existing connections and onsite utility and service
 lines for natural gas, electricity, water, and sanitary and storm sewers. 

 
	
  

 	
  

 
	
 13.

 	
 The area of the Land.

 

EXHIBIT E - Page 1

	
  

 	
  

 
	
 14.

 	
 Any portion of the Land which is located in a flood plain or in any
 other flood hazard or flood danger area as designated by any Governmental
 Agency claiming jurisdiction over the Land. 

 
	
  

 	
  

 
	
 15.

 	
 The following certification of surveyor (land only). 

 
	
  

 	
  

 
	
  

 	
 “I hereby certify to [insert names of Borrower, Lender
 and Title Company] and to their heirs, successors and assigns,
 that this map or plat and the survey on which it is based were made in
 accordance with the “Minimum Standard Detail Requirements for ALTA/ACSM Land
 Title Surveys” jointly established and adopted by ALTA and NSPS in 2005, and
 include optional items 1, 2, 4 (in square feet or acres), 6, 8, 10, 11(b),
 16, 17, 18 and if buildings are located on the land, optional items 7(a),
 7(b)(1), and 7(b)(2) and 9 of Table A thereof. Pursuant to the Accuracy
 Standards as adopted by ALTA and NSPS and in effect on the date of this
 certification, the undersigned further certifies that in my professional
 opinion, as a land surveyor registered in the State/Commonwealth of
 ______________, the maximum Relative Positional Accuracy resulting from the
 measurements made on the survey does not exceed the Allowable Relative
 Positional Accuracy for Measurements Controlling Land Boundaries on ALTA/ACSM
 Land Title Surveys (0.07 feet or 20 mm + 50 ppm).

 
	
  

 	
  

 
	
  

 	
 Dated this ___ day of _______________, 200__.

 
	
  

 	
  [LICENSED SURVEYOR’S
 SIGNATURE]

 
	
  

 	
  

 
	
  

 	
 (Seal)        [NAME OF
 SURVEYOR]

 
	
  

 	
 Registration Number:

 
	
  

 	
  

 
	
 16.

 	
 The following certification of surveyor (land and existing
 buildings). 

 
	
  

 	
  

 
	
  

 	
 “I hereby certify to [insert names of Borrower, Lender
 and Title Company] and to their heirs, successors and assigns,
 that this map or plat and the survey on which it is based were made in
 accordance with “Minimum Standard Detail Requirements for ALTA/ACSM Land
 Title Surveys”, jointly established and adopted by ALTA and NSPS in 2005, and
 includes Items of Table A thereof. Pursuant to the Accuracy Standards as
 adopted by ALTA and NSPS and in effect on the date of this certification, the
 undersigned further certifies that in my professional opinion, as a land
 surveyor registered in the State of __________, the Relative Positional
 Accuracy of this survey does not exceed that which is specified therein the
 allowable Positional Tolerance.

 
	
  

 	
  

 
	
  

 	
 Dated this ___ day of _______________, 200__.

 
	
  

 	
  

 
	
  

 	
 [LICENSED SURVEYOR’S SIGNATURE] (Seal)
           [NAME OF SURVEYOR]

 
	
  

 	
 Registration Number:

 
	
  

 	
  

 
	
 B.

 	
 As-Built Survey Requirements.
 In addition to the requirements listed above, include these items: 

 
	
  

 	
  

 
	
 1.

 	
 Location and size of internal driveways and paved parking areas and
 the location and number of individual parking spaces contained therein. 

 

EXHIBIT E - Page 2

	
  

 	
  

 
	
 2.

 	
 Location of walkways. 

 
	
  

 	
  

 
	
 3.

 	
 Location of ingress and egress (curb cuts and driveways). 

 
	
  

 	
  

 
	
 4.

 	
 Location of all buildings and improvements, as built, including the
 distances from each building to the two nearest property boundary lines, and
 the exterior dimensions of each building. 

 
	
  

 	
  

 
	
 5.

 	
 Street address of each building. 

 
	
  

 	
  

 
	
 6.

 	
 Square foot area of each building. 

 
	
  

 	
  

 
	
 7.

 	
 All entrances to and exits from each building. 

 
	
  

 	
  

 
	
 8.

 	
 All utility lines, as built, from each building to their points of
 connection with trunk lines in public rights of way. 

 
	
  

 	
  

 
	
 9.

 	
 All water retention areas and drainage water receptacles. 

 

EXHIBIT E - Page 3

EXHIBIT F

EXTENSION OPTION

Borrower shall have the option to extend the Maturity Date of the Loan
for one period of twelve (12) months (such 12 month period, herein, the “Extension Period”), at which time the
term “Maturity Date” shall mean the Maturity Date, as extended pursuant to this
Exhibit F. The exercise of
such extension option shall be effective only if all of the following
conditions have been satisfied on the initial Maturity Date:

	
  

 	
  

 
	
  

 	
           (a)          No
 Event of Default shall have occurred which has not been cured or waived in
 writing by Lender as of the date of such extension.

 
	
  

 	
  

 
	
  

 	
           (b)          The
 representations and warranties of Borrower and Guarantor in the Loan
 Documents shall be true and correct in all material respects as of the first
 day of the Extension Period, as changed based upon events or activities not
 prohibited by the Loan Documents.

 
	
  

 	
  

 
	
  

 	
           (c)          No
 later than forty-five (45) days and no earlier than ninety (90) days prior to
 the date of the proposed extension, Lender shall have received written notice
 from Borrower that Borrower desires to exercise its option to extend the
 Maturity Date.

 
	
  

 	
  

 
	
  

 	
           (e)          As
 a condition to such extension, Borrower shall pay to Lender, on or prior to
 the first day of the Extension Period, an extension fee equal to the product
 of (A) 0.25 percent times (B) the outstanding principal
 balance of the Loan on the first day of the Extension Period. 

 
	
  

 	
  

 
	
  

 	
           (f)          The
 balance of the Loan, plus any other amounts owed to Lender under the Loan
 Documents with respect to the Property, shall not be greater than seventy
 percent (70%) of the “as-stabilized” Appraised Value of the Property, as
 determined by Lender pursuant to a current Appraisal of the Property.
 Borrower may satisfy the foregoing condition prior to the first day of the
 Extension Period by making a principal payment on the Loan in an amount
 sufficient to cause the Property to comply with the foregoing condition.

 
	
  

 	
  

 
	
  

 	
           (g)          The
 Adjusted Net Operating Income from the Property, verified by Lender (based upon
 the Adjusted Net Operating Income from the Property for each of the three (3)
 calendar months immediately preceding the first day of the Extension Period,
 multiplied by four) is not less than 130% of the monthly payments of
 principal and interest on the Loan which would be required for a period of
 twelve (12) calendar months if the outstanding principal balance of the Loan
 (as of the date of calculation by Lender hereunder) was to be fully amortized
 in consecutive level payments of principal and interest over a period of 30
 years at an interest rate per annum equivalent to the greater of (A) 7.00% or
 (B) 2.50% plus the Treasury Rate which, as of the date that is 30 days prior
 to the date of any such determination by Lender hereunder, has been most
 recently published (or, if for any reason that published rate is not
 available as of such date, another rate determined by Lender to be
 comparable, in its discretion reasonably exercised, shall

 

EXHIBIT H - Page 1

	
  

 	
  

 
	
  

 	
 be used for this purpose). Borrower may satisfy the foregoing
 condition prior to the first day of the Extension Period by making a
 principal payment on the Loan in an amount sufficient to cause the Property
 to comply with the foregoing condition.

 
	
  

 	
  

 
	
  

 	
           (h)          Lender
 shall have received all financial statements and other information as may be
 required to be submitted to Lender under the Loan Documents regarding
 Borrower, Guarantor and the Property and Lender shall have determined, in its
 judgment, that no Material Adverse Effect has occurred with respect to the
 Property or the financial condition or creditworthiness of Borrower or
 Guarantor.

 
	
  

 	
  

 
	
  

 	
           (i)          Borrower
 shall cause to be delivered to Lender at Borrower’s expense an endorsement to
 the Title Policy as required by Lender, reflecting that title to the Property
 is subject only to the Permitted Encumbrances, current ad valorem taxes to
 the extent not yet due and payable, and such other exceptions as Lender has
 approved in writing.

 
	
  

 	
  

 
	
  

 	
           (j)          Either
 Borrower shall have received a VCP Certificate of Completion for the Property
 from TCEQ or Borrower shall have submitted evidence reasonably satisfactory
 to Lender that the Property has been transferred into the DCR Program.

 
	
  

 	
  

 
	
  

 	
           (k)          Whether
 or not any extension becomes effective, Borrower shall pay all out-of-pocket
 costs and expenses incurred by Lender in connection with the proposed
 extension (pre- and post-closing), including, without limitation, appraisal
 fees and reasonable legal fees; all such costs and expenses incurred up to
 the time of Lender’s written agreement to the extension shall be due and
 payable prior to Lender’s execution of that agreement (or if the proposed
 extension does not become effective, then upon demand by Lender), and any
 future failure to pay such amounts shall constitute a default under the Loan
 Documents.

 
	
  

 	
  

 
	
  

 	
           (l)          Borrower
 and Guarantor shall have executed and delivered to Lender a modification and
 extension agreement, providing for, among other things (1) the extension of
 the Maturity Date, (2) the reaffirmation by Borrower of its representations,
 warranties, duties and obligations under the Loan Documents and Guarantor’s
 representations, warranties, duties and obligations under the Guaranty, and
 (3) the waiver and release by Borrower and Guarantor of any defenses, claims,
 counterclaims, and rights of offset, if any, which Borrower may then have in
 respect of Lender and the Obligations, together with such other agreements,
 documents or amendments to the Loan Documents as are reasonably requested by
 Lender to properly document the extension, all in form and content
 satisfactory to Lender.

 

EXHIBIT H - Page 2

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