Document:

Exhibit 10.4 Staunton Plaza Promissory Note

PROMISSORY NOTE SECURED BY DEED OF TRUST

Loan No. 61-0903985
San Francisco, California
September 22, 2006

$14,100,000.00 
MERS MIN # 800010100000025956

1.    PROMISE TO PAY. For value received, the undersigned STAUNTON PLAZA, LLC, a Virginia limited liability company ("Borrower"), promise(s) to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender"), 1320 Willow Pass Road, Suite 205, Concord, California 94520, or at such other place as may be designated in writing by Lender, the principal sum of FOURTEEN MILLION ONE HUNDRED THOUSAND AND NO/l00THS DOLLARS ($14,l00,000.00) ("Loan"), with interest thereon as specified herein. All sums owing hereunder are payable in lawful money of the United States of America, in immediately available funds, without offset, deduction or counterclaim of any kind.

2.    SECURED BY DEED OF TRUST. This Note is secured by, among other things, that Deed of Trust and Absolute Assignment of Rents and Leases and Security Agreement (and Fixture Filing) ("Security Instrument") of even date herewith given by Borrower for the benefit of Mortgage Electronic Registration Systems, Inc. a Delaware corporation, identifying this Note as an obligation secured thereby and encumbering certain real property described therein ("Property").

3.    DEFINITIONS. For the purposes of this Note, the following terms shall have the following meanings:
"30/360 Basis" means on the basis of a 360-day year consisting of 12 months of 30 days each.
"Actual/360 Basis" means on the basis of a 360-day year and charged on the basis of actual days elapsed for any whole or partial month in which interest is being calculated.
"Adjusted Note Rate" means the interest rate of this Note from and after the Anticipated Repayment Date, which shall be equal to the greater of (i) Initial Note Rate plus five (5) percent per annum; or (ii) the Treasury Rate for the week ending prior to the Anticipated Repayment Date plus five (5) percent per annum.
"Amortization Period" means 30 years.
"Anchor Tenant" means Giant Food Stores, LLC and its successors and assigns.
"Anchor Tenant Lease" means that certain Lease between Anchor Tenant and Borrower dated January 13, 2005, and all amendments and modifications thereto.
"Anticipated Repayment Date" means October l. 2016. 
"Business Day" means any day other than a Saturday, Sunday, legal holiday or other day on which commercial banks in California are authorized or required by law to close. All references in this Note to a 

"day" or a "date" shall be to a calendar day unless specifically referenced as a Business Day.
"Code" means the Internal Revenue Code of 1986, as amended to date and as further amended from time to time, or any successor statutes thereto, together with applicable regulations issued pursuant thereto in temporary or final form. "Collateral" shall have the meaning stated in the Security Instrument.
"Credit Rating Event" means that Standard and Poor's Rating Services has issued a senior unsecured corporate credit rating for Lease Guarantor that is below "B+", or an equivalent rating has been issued by Moody's Investors Service, Inc., or by another credit rating agency acceptable to Lender in the event such credit rating agencies cease to exist or cease to provide credit rating services.
"Default" shall have the meaning stated in the Security Instrument.
"Default Rate" means the lesser of (a) a fixed annual rate equal to 5% plus the Note Rate and (b) the maximum rate of interest permitted by applicable law.
"Defeasance" means the Borrower's substitution of Defeasance Collateral and Lender's release of the lien of the Security Instrument upon satisfaction of all of the terms and conditions of Section 12.
"Defeasance Collateral" means obligations or securities, not subject to prepayment, call or early redemption, each of which qualifies as a "Government security" as defined in Section 2(a)(l6) of the Investment Company Act of 1940, as amended (15 U.S.C. §80a-l et seq.), together with all revenues and proceeds of such obligations or securities.
"Defeasance Date" means the date upon which the Defeasance is completed. "Defeasance Option End Date" means August 3l, 2016.
"Defeasance Option Period" means the period from and including the Defeasance Option Start Date to and including the Defeasance Option End Date.
"Defeasance Option Start Date" means the later of (a) the twenty-fifth Due Date following the Startup Day of any REMIC which holds this Note on the Defeasance Date and (b) October 1, 2009.
"Defeasance Security Agreements" means a pledge and security agreement and an account control agreement, each in form and substance customary in commercial mortgage defeasance transactions.
"Disbursement Date" means the date upon which the Loan proceeds are funded by Lender into escrow in connection with the closing of the Loan.
"Due Date" means the first day of each calendar month during the period commencing on the First Due Date and ending on September l, 2036.
"Effective Date" means the earlier of (a) the date the Security Instrument is recorded in the Office of the County Recorder of the county where the Property is located and (b) the date Lender authorizes the Loan proceeds to be released to Borrower.
"Excess Cash Flow" means all funds generated from the Property on a monthly basis, less each of the following: (i) Monthly P&I Payment Amount, (ii) payment of all Impounds due under Section 3 of Exhibit A of this Note; and (iii) funds sufficient to pay the Monthly Operating Expense Amount for the calendar month in which such Monthly P&I Payment Amount Becomes due.
"First Due Date" means October 1, 2006.
"First P&I Due Date" means November 1, 2006.
"Hyperamortization Commencement Date" means the Due Date immediately preceding the Anticipated Repayment Date.
"Initial Note Rate" means a fixed annual rate of 5.99%.
"Lease Guarantor" means KONINKLIJKE AHOLD N.V., a corporation organized under the laws of the 

Netherlands.
"Leased Premises" means the premises demised by Anchor Tenant under the Anchor Tenant Lease. "Loan Documents" means the documents identified as such in Exhibit B.
"Maturity Date" means October 1, 2036.
"Monthly Operating Expense" means the monthly amount payable for operating expenses as set forth in the approved Annual Budget (defined in Exhibit A hereto) not otherwise paid or reserved for in the accounts for Impounds (described at Section 3 of Exhibit A hereto), together with other amounts incurred by Borrower (and approved by Lender) in connection with the operation and maintenance of the Property.
"New Lease" means a lease acceptable to Lender that (i) demises the Leased Premises or any portion thereof, (ii) is executed by a New Tenant, and (iii) contains (A) a term that extends no less than 5 years beyond the Anticipated Repayment Date at a minimum rent of $16.00 per square foot, or (B) other terms acceptable to Lender in its sole discretion.
"New Tenant" means a new tenant (or a renewal tenant) at the Property acceptable to Lender that executes a New Lease.
"Note Rate" means the Initial Note Rate or the Adjusted Note Rate, as applicable.
"Open Period Start Date" means September 1, 2016.
"P&I Payment Amount" means $84,446.00, based on the Note Rate and the Amortization Period.
"Prepayment Lockout End Date" means August 31, 2016.
"Prepayment Lockout Period" means the period from and including the Effective Date to and including the Prepayment Lockout End Date.
"Rating Agencies" means Fitch, Inc., Moody's Investors Service, Inc., Standard & Poor's Rating Services and any other nationally-recognized statistical rating organization that, in connection with the securitization of the Loan by a REMIC maintains a rating, on the Defeasance Date, of the securities issued by the REMIC.
"REMIC" means a "real estate mortgage investment conduit" within the meaning of Section 860D of the Code. 
"Startup Day" means the "startup day" within the meaning of Section 860G(a)(9) of the Code.
"Successor Borrower" means an entity designated by Lender whose sole purpose is to own the Defeasance Collateral delivered by Borrower under Section 12 and assume Borrower's obligations with respect to the Loan either alone, or together with the Defeasance Collateral for other, previously defeased loans or portions of loans assumed by Successor Borrower which are also held by the REMIC that holds this Note. Successor Borrower shall, in either case, be restricted from taking actions that could result in its bankruptcy or dissolution.
"Suspension Event" means the first Due Date immediately following the occurrence of one of the following, provided that no Default has occurred and no event has occurred that with the passage of time or giving of notice would be deemed a Default:
(i) following a Termination Event (as hereinafter defined), each of the following has occurred:
(A) a New Lease has been executed by one or more New Tenants demising the Leased Premises;
(B) all of the Leased Premises are occupied;
(C) each New Tenant is paying rent in accordance with the terms and conditions of its New Lease and is open for business;
(D) no New Tenant is in default under the terms and conditions of its New Lease, and there is no 

event which, with the passage of time or giving of notice, or both, would constitute a default under such lease, and
(E) Borrower has delivered to Lender an estoppel certificate acceptable to Lender from each New Tenant, or
(ii) following a Credit Rating Event, Standard & Poors Rating Services has issued a senior unsecured corporate credit rating for Lease Guarantor that is "BB" or above or an equivalent rating has been issued by Moody's Investors Service, Inc. (or by another credit rating agency acceptable to Lender in the event such credit rating agencies cease to exist or cease to provide credit rating services), and such credit rating has been maintained by Lease Guarantor for a period of at least six consecutive months.
"Termination Event" means that either (i) Anchor Tenant has (A) terminated its Anchor Tenant Lease or delivered notice terminating its Anchor Lease, (B) vacated the Leased Premises, (C) subleased the Leased Premises to a tenant that is not wholly owned by Anchor Tenant, or (D) ceased doing business at the Leased Premises, or (ii) Lease Guarantor has terminated or withdrawn its guaranty of the Anchor Tenant Lease.
"Treasury Rate" means the yield calculated by the linear interpolation of the yields, as reported in Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant Maturities for the week ending prior to the Anticipated Repayment Date, of U.S. Treasury constant maturities with maturity dates (one longer and one shorter) most nearly approximating the Anticipated Repayment Date. (If Release H.15 is no longer published, Lender shall select a comparable publication to determine the Treasury Rate).
"Trigger Event" means the occurrence of a Termination Event or Credit Rating Event.

4.    INTEREST; PAYMENTS.

4.1 Interest Accrual. Interest on the outstanding principal balance of this Note shall accrue from the Disbursement Date at the Note Rate calculated on an Actual/360 Basis.
4.2 Payments. Monthly payments, each in the P&I Payment Amount, shall commence on the First P&I Due Date and continue on each Due Date thereafter. In addition, if the Disbursement Date is not the first day of a calendar month, an interest-only payment shall be due on the First Due Date. Borrower acknowledges that the P&I Payment Amount was determined using a 30/360 Basis despite the fact that interest on this Note accrues on an Actual /360 Basis. All interest shall be paid in arrears. Except as otherwise specifically provided in this Note or the other Loan Documents, all payments and deposits due under this Note or the other Loan Documents shall be made to Lender not later than 12:00 noon, California time, on the day on which such payment or deposit is due. Any funds received by Lender after such time shall, for all purposes, be deemed to have been received on the next succeeding Business Day.
If all unpaid principal and accrued but unpaid interest is not fully repaid on the Anticipated Repayment Date, (i) the Note Rate shall increase from the Initial Note Rate to the Adjusted Note Rate, and (ii) the cash management procedures set forth in Section 13 below shall immediately become applicable. Interest accrued at the Adjusted Note Rate and not paid pursuant to the cash management provisions set forth in Section 13 shall be deferred and added to the principal balance of this Note (together with all accrued interest thereon) and shall earn interest at the Adjusted Note Rate to the extent permitted by applicable law (such accrued interest, together with any interest accrued thereon is hereinafter defined as "Accrued Interest"). All of the outstanding principal balance, including any Accrued Interest, shall be due and payable on the Maturity Date.
4.3 Acknowledgments. Borrower acknowledges that interest calculated on an Actual/360 Basis exceeds 

interest calculated on a 30/360 Basis and, therefore: (a) a greater portion of each monthly installment of principal and interest will be applied to interest using the Actual/360 Basis than would be the case if interest accrued on a 30/360 Basis; and (b) the unpaid principal balance of this Note on the Maturity Date will be greater using the Actual/360 Basis than would be the case if interest accrued on a 30/360 Basis.
4.4 Application of Payments. In the absence of a specific determination by Lender to the contrary, all payments paid by Borrower to Lender in connection with the obligations of Borrower under this Note and under the other Loan Documents shall be applied in the following order of priority: (a) to amounts, other than principal and interest, due to Lender pursuant to this Note or the other Loan Documents; (b) to accrued but unpaid interest on this Note; and (c) to the unpaid principal balance of this Note. Borrower irrevocably waives the right to direct the application of any payments at any time received by Lender from or on behalf of Borrower, and Borrower agrees that Lender shall have the continuing exclusive right to apply any such payments to the then due and owing obligations of Borrower in such order of priority as Lender may deem advisable.

5.    LATE CHA RGE; DEFAULT RATE.
5.1 Late Charge. If all or any portion of any payment (including, without limitation, any payment of any interest, P&I Payment Amount, impound or other deposit) required hereunder (other than the payment due on the Maturity Date) is not paid or deposited on or before the seventh day following the day on which the payment is due Borrower shall pay a late or collection charge, as liquidated damages, equal to 5% of the amount of such unpaid payment. If all or any portion of the payment due on the Maturity Date is paid after the Maturity Date and on a date which is not the first day of a month, Borrower shall pay a late or collection charge, as liquidated damages, equal to the interest which would have accrued on such amount during the period commencing on the date payment of such amount is actually made and ending on the last day of the calendar month in which payment of such amount is actually made. Borrower acknowledges that Lender will incur additional expenses as a result of any late payments or deposits hereunder, which expenses would be impracticable to quantify, and that Borrower's payments under this Section 5.1 are a reasonable estimate of such expenses.
5.2 Default Rate. Commencing upon a Default and continuing until such Default shall have been cured by Borrower, all sums owing on this Note shall bear interest until paid in full at the Default Rate.

6.    MAXIMUM RATE PERMITTED BY LAW. Neither this Note nor any of the other Loan Documents shall require the payment or permit the collection of any interest or any late payment charge in excess of the maximum rate permitted by law. If any such excess interest or late payment charge is provided for under this Note or any of the other Loan Documents or if this Note or any of the other Loan Documents shall be adjudicated to provide for such excess, neither Borrower nor Borrower's successors or assigns shall be obligated to pay such excess, and the right to demand the payment of any such excess shall be and hereby is waived, and this provision shall control any other provision of this Note or any of the other Loan Documents. If Lender shall collect amounts which are deemed to constitute interest and which would increase the effective interest rate to a rate in excess of the maximum rate permitted by law, all such amounts deemed to constitute interest in excess of the maximum legal rate shall, upon such determination, at the option of Lender, be returned to Borrower or credited against the outstanding principal balance of this Note.

7.    ACCELERATION. If (a) Borrower shall fail to pay when due any sums payable under this Note, (b) any other Default shall occur; or (c) any other event or condition shall occur which, under the terms of the Security Instrument or any other Loan Document, gives rise to a right of acceleration of sums owing 

under this Note, then Lender, at its sole option, shall have the right to declare all sums owing under this Note immediately due and payable; provided, however, that if the Security Instrument or any other Loan Document provides for the automatic acceleration of payment of sums owing under this Note, all sums owing under this Note shall be automatically due and payable in accordance with the terms of the Security Instrument or such other Loan Document.

8.    BORROWER'S LIABILITY.
8.1 Limitation. Except as otherwise provided in this Section 8, Lender's recovery against Borrower under this Note and the other Loan Documents shall be limited solely to the Property and the Collateral.
8.2 Exceptions. Nothing contained in Section 8.1 or elsewhere in this Note or the other Loan Documents, however, shall limit in any way the personal liability of Borrower owed to Lender (a) for any losses or damages incurred by Lender (including, without limitation, any impairment of Lender's security for the Loan) with respect to any of the following matters: (i) fraud or willful misrepresentation, (ii) material physical waste of the Property or the Collateral, (iii) failure to pay property or other taxes, assessments or charges (other than amounts paid to Lender for taxes, assessments or charges pursuant to Impounds as defined in Exhibit A and where Lender elects not to apply such funds toward payment of the taxes, assessments or charges owed) which may create liens senior to the lien of the Security Instrument on all or any portion of the Property; (iv) failure to deliver any insurance or condemnation proceeds or awards or any security deposits received by Borrower to Lender or to otherwise apply such sums as required under the terms of the Loan Documents or any other instrument now or hereafter securing this Note, (v) failure to apply any rents, royalties, accounts, revenues, income, issues, profits and other benefits from the Property which are collected or received by Borrower during the period of any Default or after acceleration of the indebtedness and other sums owing under the Loan Documents to the payment of either (A) such indebtedness or other sums or (B) the normal and necessary operating expenses of the Property, or (vi) any breach by Borrower of any covenant in this Note or in any other Loan Document regarding Hazardous Materials (as defined in the Security Instrument) or any representation or warranty of Borrower regarding Hazardous Materials proving to have been untrue when made, (b) in the event the Property or the Collateral shall become an asset in (i) a voluntary bankruptcy or insolvency proceeding or
(ii) an involuntary bankruptcy or insolvency proceeding (other than one filed by Lender) which is not dismissed within 90 days of filing; (c) in the event of a Default resulting from a Prohibited Property Transfer (as defined in the Security Instrument) or a Prohibited Equity Transfer (as defined in the Security Instrument); (d) in the event of a Default resulting from Borrower's breach of any covenant contained in Section 3.3 of Exhibit A hereto; or (e) if any representation or warranty contained in Section 5.2 of the Security Instrument related to the conduct, action or inaction of Borrower prior to the date hereof is false, incorrect or misleading in any material respect.
8.3 No Release or Impairment. Nothing contained in Section 8.1 shall be deemed to release, affect or impair the indebtedness evidenced by this Note or the obligations of Borrower under, or the liens and security interests created by the Loan Documents, or Lender's rights to enforce its remedies under this Note and the other Loan Documents, including, without limitation, the right to pursue any remedy for injunctive or other equitable relief, or any suit or action in connection with the preservation, enforcement or foreclosure of the liens, mortgages, assignments and security interests which are now or at any time hereafter security for the payment and performance of all obligations under this Note or the other Loan Documents.
8.4 Prevail and Control. The provisions of this Section 8 shall prevail and control over any contrary provisions elsewhere in this Note or the other Loan Documents.

9.     NON-GRANTOR BORROWER. If any Borrower is not also a Grantor (as defined in the Security Instrument), such Borrower hereby makes all representations and warranties contained in Article 5 of the Security Instrument, all covenants contained in Section 6.15 of the Security Instrument, and all indemnities contained in Section 6.19 of the Security lnstrument, jointly and severally with the Grantor, to and for the benefit of Beneficiary and Beneficiary Group (both as defined in the Security Instrument).

10.     MISCELLANEOUS.
10.1 Joint and Several Liability. If this Note is executed by more than one person or entity as Borrower, the obligations of each such person or entity shall be joint and several. No person or entity shall be a mere accommodation maker, but each shall be primarily and directly liable hereunder.
10.2 Waiver of Presentment. Except as otherwise provided in any other Loan Document, Borrower hereby waives presentment, demand, notice of dishonor, notice of default or delinquency, notice of intent to accelerate, notice of acceleration, notice of nonpayment, notice of costs, expenses or losses and interest thereon, and notice of interest on interest and late charges.
10.3 Delay In Enforcement. No previous waiver or failure or delay by Lender in acting with respect to the terms of this Note or the Security Instrument shall constitute a waiver of any breach, default or failure of condition under this Note, the Security Instrument or the obligations secured thereby. A waiver of any term of this Note, the Security Instrument or of any of the obligations secured thereby must be made in writing signed by Lender, shall be limited to the express terms of such waiver, and shall not constitute a waiver of any subsequent obligation of Borrower. The acceptance at any time by Lender of any past-due amount shall not be deemed to be a waiver of the right to require prompt payment when due of any other amounts then or thereafter due and payable.
10.4 Time of the Essence. Time is of the essence with respect to every provision hereof.
10.5 Governing Law. This Note shall be governed and construed generally according to the laws of the jurisdiction in which the real property collateral for this Note is located without regard to the conflicts of law provisions thereof ("Governing State").
10.6 Consent to Jurisdiction. BORROWER HEREBY CONSENTS TO PERSONAL JURISDICTION IN THE GOVERNING STATE. VENUE OF ANY ACTION BROUGHT TO ENFORCE THIS NOTE OR ANY OTHER LOAN DOCUMENT OR ANY ACTION RELATING TO THE LOAN OR THE OBLIGATIONS SECURED THEREUNDER OR THE RELATIONSHIPS CREATED BY OR UNDER THE LOAN DOCUMENTS ("ACTION") SHALL, AT THE ELECTION OF LENDER, BE IN (AND IF ANY ACTION IS ORIGINALLY BROUGHT IN ANOTHER VENUE, THE ACTION SHALL AT THE ELECTION OFLENDER BE TRANSFERRED TO) A STATE OR FEDERAL COURT OF APPROPRIATE JURISDICTION LOCATED IN THE GOVERNING STATE. BORROWER HEREBY CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF THE STATE COURTS OF THE GOVERNING STATE AND OF FEDERAL COURTS LOCATED IN THE GOVERNING STATE IN CONNECTION WITH ANY ACTION AND HEREBY WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY OTHER STATE TO OBJECT TO JURISDICTION WITHIN SUCH STATE FOR PURPOSES OF ANY ACTION. Borrower hereby waives and agrees not to assert, as a defense to any Action or a motion to transfer venue of any Action, (i) any claim that it is not subject to such jurisdiction, (ii) any claim that any Action may not be brought against it or is not maintainable in those courts or that this Note or any of the other Loan Documents may not be enforced in or by those courts, or that it is exempt or immune from execution, (iii) that the Action is brought in an inconvenient forum, or (iv) that the venue for the Action is in any way improper.
10.7 Counterparts. This Note may be executed in any number of counterparts, each of which when executed and delivered shall be deemed an original and all of which taken together shall be deemed to be 

one and the same Note.
10.8 Heirs, Successors and Assigns. All of the terms, covenants, conditions and indemnities contained in this Note and the other Loan Documents shall be binding upon the heirs, successors and assigns of Borrower and shall inure to the benefit of the successors and assigns of Lender. The foregoing sentence shall not be construed to permit Borrower to assign the Loan except as otherwise permitted in this Note or the other Loan Documents.
10.9 Severability. If any term of this Note, or the application thereof to any person or circumstances, shall, to any extent, be invalid or unenforceable, the remainder of this Note, or the application of such term to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term of this Note shall be valid and enforceable to the fullest extent permitted by law.
10.10 Consents and Approvals. Wherever Lender's consent, approval, acceptance or satisfaction is required under any provision of this Note or any of the other Loan Documents, such consent, approval, acceptance or satisfaction shall not be unreasonably withheld, conditioned or delayed by Lender unless such provision expressly so provides.
10.11 Notices. All notices and other communications that are required or permitted to be given to a party under this Note shall be in writing and shall be sent to such party, either by personal delivery, by overnight delivery service, by certified first class mail, return receipt requested, or by facsimile transmission to the address or facsimile number below. All such notices and communications shall be effective upon receipt of such delivery or facsimile transmission. The addresses and facsimile numbers of the parties shall be:
Borrower:     
Staunton Plaza, LLC
3060 Peachtree Road, Suite 1850
Atlanta, Georgia 30305
FAX No.' (404) 233-8039
Lender:
Wells Fargo Bank, National Association
1320 Willow Pass Road, Suite 205
Concord, CA 94520
Loan No. 61-0903985
FAX No.: (925) 691-5249

10. 12 Exhibits. Exhibits A and B attached hereto are incorporated herein by this reference.

11.    PREPAYMENT-DEFEASANCE ONLY. Borrower acknowledges that any prepayment of this Note will cause Lender to lose its interest rate yield on this Note and will possibly require that Lender reinvest any such prepayment amount in loans of a lesser interest rate yield (including, without limitation, in debt obligations other than first mortgage loans on commercial properties). As a consequence, Borrower agrees as follows, as an integral part of the consideration for Lender's making the Loan:
11.1 Voluntary Prepayment.  Any voluntary prepayment of this Note (a) is prohibited during the Prepayment Lockout Period and (b) is permitted in full only, and not in part.

11.2 Prepayment Charge.
a. Basic Charge. Except as provided below, if this Note is prepaid prior to the Open Period Start Date, whether such prepayment is involuntary or upon acceleration of the principal amount of this Note by Lender following a Default, Borrower shall pay to Lender on the prepayment date (in addition to all other sums then due and owing to Lender under the Loan Documents) a prepayment charge equal to the greater of the following two amounts: (i) an amount equal to 1% of the amount prepaid; or (ii) an amount equal to (A) the amount, if any, by which the sum of the present values as of the prepayment date of all unpaid principal and interest payments required under this Note, calculated by discounting such payments from their respective Due Dates (or, with respect to the payment required on the Maturity Date, from the Anticipated Repayment Date) back to the prepayment date at a discount rate equal to the Periodic Treasury Yield (defined below) exceeds the outstanding principal balance of the Loan as of the prepayment date, multiplied by (B) a fraction whose numerator is the amount prepaid and whose denominator is the outstanding principal balance of the Loan as of the prepayment date. For purposes of the foregoing, "Periodic Treasury Yield" means (iii) the annual yield to maturity of the actively traded non-callable United States Treasury fixed interest rate security (other than any such security which can be surrendered at the option of the holder at face value in payment of federal estate tax or which was issued at a substantial discount) that has a maturity closest to (whether before, on or after) the Anticipated Repayment Date (or if two or more such securities have maturity dates equally close to the Anticipated Repayment Date, the average annual yield to maturity of all such securities), as reported in The Wall Street Journal or other authoritative publication or news retrieval service on the fifth Business Day preceding the prepayment date, divided by (iv) 12, if the scheduled Due Dates are monthly, or 4, if the Due Dates are quarterly.
b. Additional Charge. If this Note is prepaid on any day other than a Due Date, whether such prepayment is voluntary, involuntary or upon Full acceleration of the principal amount of this Note by Lender following a Default, Borrower shall pay to Lender on the prepayment date (in addition to the basic prepayment charge described in Section 11.2.a above and all other sums then due and owing to Lender under this Note and the other Loan Documents) an additional prepayment charge equal to the interest which would otherwise have accrued on the amount prepaid (had such prepayment not occurred) during the period from and including the prepayment date to and including the last day of the month in which the prepayment occurred.
c. Exclusion. Notwithstanding the foregoing, no prepayment charge of any kind shall apply in respect to any prepayment resulting from Lender's application of any insurance proceeds or condemnation awards to the outstanding principal balance of the Loan.
11.3 Effect of Prepayment. No partial prepayment of this Note shall change any Due Date or the P&I Payment Amount, unless Lender otherwise agrees in writing.
11.4 Waiver. Borrower waives any right to prepay this Note except under the terms and conditions set forth in this Section 11 and agrees that if this Note is prepaid, Borrower shall pay the prepayment charge set forth above. Borrower hereby acknowledges that (a) the inclusion of this waiver of prepayment rights and agreement to pay the prepayment charge for the right to prepay this Note was separately negotiated with Lender; (b) the economic value of the various elements of this waiver and agreement was discussed; and (c) the consideration given by Borrower for the Loan was adjusted to reflect the specific waiver and agreement negotiated between Borrower and Lender and contained herein.
Borrower's Initials:

12.     DEFEASANCE-FULL.
12.1 Borrower Right to Defease. At any time during the Defeasance Option Period, Borrower may elect to effect Defeasance in accordance with the provisions of this Section 12, at Borrower's sole cost and expense.
12.2 Conditions. Borrower shall only have the right to cause a Defeasance if all of the following conditions have been satisfied:
a. Notice. Borrower shall give at least 60 days but not more than 90 days written notice to Lender specifying the Borrower's intended Defeasance Date. Simultaneously with the delivery of such notice, Borrower shall deposit with Lender an amount estimated by Lender to be sufficient to reimburse Lender's anticipated expenses in connection with the Defeasance, for which Borrower shall be solely responsible whether or not the Defeasance shall be completed. If any such notice shall have been given by Borrower, Borrower shall be obligated to complete the Defeasance on the Defeasance Date, unless such notice is revoked in writing by Borrower prior to the Defeasance Date. Upon completion of the Defeasance or revocation by Borrower as specified above, Lender shall return any surplus deposit to Borrower,
b. No Default. No Default shall exist or would exist with notice or passage of time, or both, either on the
date of receipt of Borrower's notice under Section l2.2.a above or on the Defeasance Date,
c. Payments. Borrower shall pay in full, on or before the Defeasance Date (i) all unpaid interest accruing under this Note to and including the Defeasance Date (or otherwise cause Successor Borrower to assume liability for such interest), (ii) all other sums due under this Note and the other Loan Documents on or before the Defeasance Date, (iii) all escrow, closing, recording, legal, appraisal, Rating Agency and other fees, costs and expenses paid or incurred by Lender or its agents in connection with the Defeasance, the release of the lien of the Security Instrument on the Property, the review of the proposed Defeasance Collateral and the preparation of the Defeasance Security Agreements and related documentation, (iv) a defeasance fee to Lender of l% of the outstanding principal balance of the Loan as of the Defeasance Date, and (v) any revenue, documentary stamp, intangible or other taxes, charges or fees due in connection with the transfer or assumption of this Note or the Defeasance;
d. Deliveries. Borrower shall, at Borrower's sole cost and expense, deliver the following items to Lender
on or before the Defeasance Date:
(i) The Defeasance Collateral, as substitute collateral for the Loan; provided however, that the principal and interest payments under the Defeasance Collateral (without regard to earnings from reinvestment of proceeds) must be, in timing and amounts, sufficient to provide for payment prior, but as close as possible, to (A) all Due Dates occurring after the Defeasance Date, with each such payment being equal to or greater than the amount of the corresponding P&I Payment Amount, and (B) the Anticipated Repayment Date (with such payment being equal to or greater than the amount of the principal and interest payment that would otherwise be due on the Maturity Date); and provided further, however, that Borrower shall take such actions, enter such agreements and issue such orders or directions (including those specified below), as are necessary or appropriate and in accordance with customary commercial standards to effectuate book-entry transfers and pledges through the book-entry facilities of the institution holding the Defeasance Collateral or otherwise to create and perfect a valid, enforceable, first priority security interest in the Defeasance Collateral in favor of Lender;
(ii) The Defeasance Security Agreements creating, attaching and perfecting a first priority security interest in favor of Lender in the Defeasance Collateral under the law of the jurisdiction selected by Lender, which agreements shall provide, among other things, that all payments generated by the Defeasance Collateral shall be paid directly to Lender and applied by Lender to amounts then due and payable under this Note;
(iii) A certificate of Borrower certifying that all of the requirements of this Section 12 have been satisfied;

(iv) Opinions of counsel for Borrower, addressed to Lender and all Rating Agencies and delivered by counsel satisfactory to Lender, subject only to customary assumptions, qualifications and exceptions, stating, among other things, that (A) Lender has a perfected first priority security interest in the Defeasance Collateral, (B) the Defeasance Security Agreements are enforceable against Borrower in accordance with their terms and (C) any REMIC that holds this Note immediately prior to the Defeasance Date will not, as a result of the Defeasance, fail to maintain its status as a REMIC;
(v) A certificate, addressed to Lender and all Rating Agencies, from a firm of independent certified public accountants acceptable to Lender, subject only to customary assumptions, qualifications and exceptions, certifying that the Defeasance Collateral satisfies the requirements of Section 12.2.d. (i) above and certifying that in no fiscal year of Successor Borrower will the interest earned on the Defeasance Collateral exceed the interest payable for the same period on the Loan under this Note,
(vi) If this Note is held by a REMIC, written evidence from all of the Rating Agencies that the Defeasance will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to the Defeasance for any securities representing interests in such REMIC which are then outstanding; and
(vii) Such other certificates, opinions, documents or instruments as are customary in commercial
mortgage defeasance transactions to effect the Defeasance.
e. Release of Lien. Upon satisfaction of all conditions specified in this Section 12, the Property and the Collateral shall be released from the lien of the Security Instrument and the other Loan Documents, and the Defeasance Collateral and the proceeds thereof shall constitute the only collateral securing the obligations of Borrower under this Note and the other Loan Documents. Lender shall, at Borrower's expense, prepare, execute and deliver any instruments reasonably necessary to release the lien of the Security Instrument from the Property and the Collateral.
f.  Assignment and Assumption. In connection with the Defeasance, Borrower shall, at the request of Lender, assign all of its right, title and interest in and to the pledged Defeasance Collateral and all its obligations and rights under this Note and the Defeasance Security Agreements to Successor Borrower. Successor Borrower shall execute an assumption agreement in form and substance customary in commercial mortgage defeasance transactions, pursuant to which it shall assume Borrower's obligations under this Note and the Defeasancc Security Agreements. As conditions to such assignment and assumption, Borrower shall (i) deliver to Lender opinions of counsel addressed to Lender and all Rating Agencies, in form and substance customary in commercial Defeasance transactions and delivered by counsel satisfactory to Lender, and subject only to customary assumptions, qualifications and exceptions, stating, among other things, that such assumption agreement is enforceable against Borrower and Successor Borrower in accordance with its terms and that this Note and the Defeasance Security Agreements, as so assumed, are enforceable against Successor Borrower in accordance with their respective terms, and that the bankruptcy of any affiliate of Successor Borrower will not affect the assets of Successor Borrower; and (ii) pay all costs and expenses incurred by Lender or its agents in connection with such assignment and assumption (including, without limitation, the formation or review of Successor Borrower and the preparation of the assumption agreement and related documentation). Upon such assumption by Successor Borrower, Borrower shall be relieved of its obligations under this Note, the Defeasance Security Agreements and the other Loan Documents other than (iii) representations and warranties made in connection with the Defeasance, (iv) the obligation to effect the Defeasance in accordance with this Section 12, and to provide further assurances as necessary to do so, (v) liability for losses to Lender resulting from an avoidance, rescission or set-aside of the Defeasance as a result of actions taken or suffered by Borrower, and (vi) those obligations which are specifically intended to survive the repayment of the Loan or other termination, satisfaction or assignment of this Note, the Defeasance Security Agreements or the other Loan Documents or Lender's exercise of its rights and 

remedies under any of such documents and instruments.

13.      HYPERAMORTIZATION. (a) Contemporaneously herewith, Borrower has executed a Cash Management Agreement (Springing Hard) ("Cash Management Agreement") pursuant to which upon the occurrence of the Hyperamortization Commencement Date or the Trigger Event, all rents and all other income, proceeds and other revenues generated or otherwise derived from or attributable to the Property shall be deposited in a deposit account with a financial institution named by Lender ("Cash Management Account"). If the Trigger Event occurs prior to the Anticipated Repayment Date, following deposit into the Cash Management Account, all Excess Cashflow shall be deposited into an Impound held by Lender as additional collateral for the Loan (the "Excess Cashflow Impound") until the first to occur of the Suspension Event or the Anticipated Repayment Date. From and after the Anticipated Repayment Date, (notwithstanding the occurrence of any Trigger Event), provided no Default has occurred and no event has occurred which, with the passage of time, notice or both, would constitute a Default, the funds deposited into the Cash Management Account shall be disbursed in accordance with this Section 13 in the following specified order of payment:
(i) First, payments to be made to the Tax Impound and Insurance Impound in accordance with the terms of this Note and the Security Instrument;
(ii) Second, payment of the P&I Payment Amount (plus, if applicable, interest at the Default Rate and any other charges then due to Lender under the Loan Documents) to be applied first to the payment of interest computed at the Initial Note Rate with the remainder applied to the reduction of the principal balance of this Note,
(iii) Third, payments required to be made to any other Impounds (other than the Excess Cash Flow Impound, as defined in Exhibit A) established pursuant to this Note or any of the other Loan Documents,
(iv) Fourth, payments of the monthly operating expenses incurred for the Property ("Monthly Operating Expenses"), pursuant to the terms of the approved Annual Budget (as hereinafter defined), but excluding any Affiliate Expenses (as hereinafter defined);
(v) Fifth, payment of Extraordinary Expenses (as hereinafter defined) approved in writing by Lender, in any;
(vi) Sixth, payment of any other amounts due under any of the Loan Documents, including, without limitation, any advances made by Lender thereunder for the protection of the Property or Lender's liens and security interests;
(vii) Seventh, payment to Lender to be applied against the principal balance of this Note (but not including any Accrued Interest) until such principal amount (not including any Accrued Interest) is paid in full;
(viii) Eighth, payment of Accrued Interest;
(ix) Ninth, payment of Affiliate Expenses; and
(x) Tenth, payment to Borrower of any remaining funds (unless the Trigger Event shall have occurred, upon which such funds shall be deposited with Lender into the Excess Cash Flow Impound (as defined in Exhibit A) until the occurrence of the Suspension Event).
(b) Nothing provided above shall limit, reduce or otherwise affect Borrower's obligations under the Loan Documents including, without limitation, me obligations of Borrower to: (i) operate and maintain (and to pay currently all expenses to operate and maintain) the Property; (ii) pay the P&I Payment Amount on each Due Date; (iii) fund all Impounds established or required under the Loan Documents; and (iv) pay all other amounts due at any time under this Note, the Security Instrument, and the other Loan Documents, 

even though the sums available in the Accounts (as defined in the Cash Management Agreement) under the Cash Management Agreement may be insufficient at any time to make such payments.

14.     WAIVER OF JURY TRIAL. TO THE EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF LENDER OR BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN TO BORROWER.

15.      FINAL EXPRESSION/NO ORAL AGREEMENTS. READ THIS DOCUMENT CAREFULLY. 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.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

16.     LOCAL LAW PROVISIONS. In the event of any inconsistencies between the terms and conditions of this Section and any other terms and conditions of this Note, the terms and conditions of this Section shall be binding.
a. None

/ [REMAINDER OF PAGE INTENTIQNALLY LEFT BLANK]

Intending to be fully bound, Borrower has executed this Note effective as of the day and year first above written.
"BORROWER"

STAUNTON PLAZA, LLC,
a Virginia limited liability company
By:  /s/ Roland Guyot
Roland Guyot, Managing Member

By: /s/ Stephen B. Swartz
Stephen B. Swartz, Managing Member

Loan No. 61-0903985

EXHIBIT A TO PROMISSORY NOTE
Additional Terms And Conditions

This Exhibit A is attached to and forms a part of that Promissory Note ("Note") executed by STAUNTON PLAZA, LLC, a Virginia limited liability company ("Borrower") in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender").
1.     DISBURSEMENT OF LOAN PROCEEDS: LIMITATION OF LIABILITY. Borrower hereby authorizes Lender to disburse the proceeds of the Loan, after deducting any and all fees owed by Borrower to Lender in connection with the Loan, to Pioneer Title, Virginia Beach as agent for First American Title Insurance Company. With respect to such disbursement, Borrower understands and agrees that Lender does not accept responsibility for errors, acts or omissions of others, including, without limitation, the escrow company, other banks, communications carriers or clearinghouses through which the transfer of Loan proceeds may be made or through which Lender receives or transmits information, and no such entity shall be deemed Lender's agent. As a consequence, Lender shall not be liable to Borrower for any actual (whether direct or indirect), consequential or punitive damages which may arise with respect to the disbursement of Loan proceeds, whether or not (a) any claim for such damages is based on ton or contract, or (b) either Lender or Borrower knew or should have known of the likelihood of such damages in any situation.
2.     FINANCIAL STATEMENTS.
2.1 Statements Required. During the term of the Loan and while any liabilities of Borrower to Lender under any of the Loan Documents remain outstanding and unless Lender otherwise consents in writing, Borrower shall provide to Lender the following:
a. Operating Statement. Not later than 10 days after and as of the end of each calendar month during the period prior to any sale of the Loan, and thereafter not later than 30 days after and as of the end of each calendar quarter, an operating statement, signed and dated by Borrower, showing all revenues and expenses during such month or quarter and year-to-date, relating to the Property, including, without limitation, all information requested under any of the Loan Documents;
b. Rent Roll. Not later than 10 days after and as of the end of each calendar month during the period prior to any sale of the Loan, and thereafter not later than 30 days after and as of the end of each calendar quarter, a rent roll signed and dated by Borrower, showing the following lease information with regard to each tenant: the name of the tenant, monthly or other periodic: rental amount, dates of commencement and expiration of the lease, and payment status;
c. Balance Sheet. If requested by Lender, not later than 90 days after and as of the end of each fiscal year, a balance sheet, signed and dated by Borrower, showing all assets and liabilities of Borrower; and
d. Other Information. From time to time, upon Lender's delivery to Borrower of at least 10 days' prior written notice, such other information with regard to Borrower, principals of Borrower, guarantors or the Property as Lender may reasonably request in writing.
e. Annual Budget. For each fiscal year commencing January 1, Borrower shall submit to Lender for Lender's written approval an operating budget for the next succeeding fiscal year, on a month by month basis, including cash flow projections and all proposed capital replacements and improvements and other expenses of the Property (the "Annual Budget") not later than sixty (60) days prior to the commencement of such fiscal year, in form and substance satisfactory to Lender. Lender shall have the right to approve 

such Annual Budget and in the event that Lender objects to the proposed Annual Budget submitted by Borrower, Lender shall advise Borrower of such objections and Borrower shall within five (5) days after receipt of notice of any such objections, revise such Annual Budget and resubmit the same to Lender. This procedure shall be repeated until Lender approves an Annual Budget. Until such time as Lender approves a proposed Annual Budget, the most recently approved Annual Budget shall apply; provided that such approved Annual Budget shall be adjusted to reflect actual increases in real estate taxes, insurance premiums, and utility expenses and to defer any management fees, leasing commissions, or other payments to, or any personal expenses of, Borrower or any person or entity which is directly or indirectly controlling, controlled by, or under common control with, Borrower or any guarantor or indemnitor with respect to the Loan ("Affiliate Expenses"). In the event that Borrower proposes to incur an extraordinary operating expense or capital expense not set forth in the approved Annual Budget then in effect (an "Extraordinary Expense"), then Borrower shall promptly deliver to Lender a reasonably detailed explanation of such proposed Extraordinary Expense for Lender's written approval. Borrower covenants and agrees to incur costs only in accordance with the approved Annual Budget.
2.2 Form: Warranty. Borrower agrees that all financial statements to be delivered to Lender pursuant to Section 2.1 shall: (a) be complete and correct; (b) present fairly the financial condition of the party; (c) disclose all liabilities that are required to be reflected or reserved against; and (d) be prepared in accordance with the same accounting standard used by Borrower to prepare the financial statements delivered to and approved by Lender in connection with the making of the Loan or other accounting standards acceptable to Lender. Borrower shall be deemed to warrant and represent that, as of the date of delivery of any such financial statement, there has been no material adverse change in financial condition, nor have any assets or properties been sold, transferred, assigned, mortgaged, pledged or encumbered since the date of such financial statement except as disclosed by Borrower in a writing delivered to Lender. Borrower agrees that all rent rolls and other information to be delivered to Lender pursuant to Section 2.1 shall not contain any misrepresentation or omission of a material fact.
2.3 Late Charge. If any financial statement, leasing schedule or other item required to be delivered to Lender pursuant to Section 2.1 is not timely delivered, Borrower shall promptly pay to Lender, as a late charge, the sum of $500 per item. In addition, Borrower shall promptly pay to Lender an additional late charge of $500 per item for each full month during which such item remains undelivered following written notice from Lender, Borrower acknowledges that Lender will incur additional expenses as a result of any such late deliveries, which expenses would be impracticable to quantify, and that Borrower's payments under this Section 2.3 are a reasonable estimate of such expenses.
3.     IMPOUNDS.
3.1 Tax Impound. Borrower shall deposit with Lender the following amount(s) (collectively, "Tax lmpound"): (a) $l8.595.00 on the Disbursement Date and (b) on the First P&I Due Date and on each Due Date thereafter, an amount estimated from time to time by Lender in its sole discretion to be sufficient to pay the taxes, assessments and other liabilities payable by Borrower under Section 6.9 of the Security Instrument ("Taxes") at least 45 days prior to each date on which Taxes become delinquent ("Delinquency Date"). The initial estimated monthly amount to be deposited by Borrower for Taxes on each Due Date is $3,719.00. If Lender determines at any time that the Tax Impound will not be sufficient to pay any Taxes at least 45 days prior to the Delinquency Date, Lender shall notify Borrower of such determination and Borrower shall deposit with Lender the amount of such deficiency not more than 10 days after Borrower's receipt of such notice, provided, however, if Borrower receives notice of any such deficiency less than 45 days prior to the Delinquency Date, Borrower shall deposit the amount of such deficiency with Lender not more than 3 Business Days after Borrower's receipt of such notice but in no event later than the Business Day immediately preceding the Delinquency Date. So long as no Default exists, Lender shall apply the Tax Impound to the payment of the Taxes.

3.2 Insurance Impound. Borrower shall deposit with Lender the following amounts(s) (collectively, "Insurance Impound"): (a) $1,996.00 on the Disbursement Date and (b) on the First P&I Due Date and on each Due Date thereafter, an amount estimated from time to time by Lender in its sole discretion to be sufficient to pay the premiums for insurance required to be maintained by Borrower under Section 6.10 of the Security Instrument ("Insurance Premiums") at least 45 days prior to the date on which the current such insurance policies expire ("Insurance Expiration Date"). The initial estimated monthly amount to be deposited by Borrower for Insurance Premiums on each Due Date is $998.00. If Lender determines at any time that the Insurance Impound will not be sufficient to pay the Insurance Premiums at least 45 days prior to the Insurance Expiration Date, Lender shall notify Borrower of such determination and Borrower shall deposit with Lender the amount of such deficiency not more that 10 days after Borrower's receipt of such notice; provided, however, if Borrower receives notice of any such deficiency less than 45 days prior to the Insurance Expiration Date, Borrower shall deposit the amount of such deficiency with Lender not more than 3 Business Days after Borrower's receipt of such notice but in no event later than the day immediately preceding the Insurance Expiration Date. So long as no Default exists, Lender shall apply the Insurance Impound to the payment of the Insurance Premiums.
3.3 Excess Cash Flow Impound: Cash Management.
(a) Commencing upon the occurrence of the Trigger Event and continuing until the Suspension Event, the Excess Cash Flow shall be deposited into an account maintained by Lender or its servicing agent, which may be segregated or commingled with other accounts (the "Excess Cash Flow Impound"). The Excess Cash Flow Impound shall be held by Lender as additional collateral for the Loan and may be applied by Lender during the term of the Loan as Lender deems appropriate in Lender's sole discretion. Notwithstanding the immediately preceding sentence to the contrary, all funds then remaining in the Excess Cash Flow Impound shall be disbursed to Borrower in one disbursement (rather than multiple partial disbursements) upon the occurrence of each of the following: (i) a Suspension Event, (ii) Borrower's written request to Lender for disbursement, and (iii) if the Trigger Event occurred due to a Lease Termination, satisfaction of the Disbursement Criteria (as defined below). For purposes herein, the "Disbursement Criteria" shall mean the satisfaction of each of the following, as determined by Lender in its sole discretion:
(i) Borrower has delivered to Lender each fully executed New Lease,
(i) Borrower has delivered to Lender (A) a written certification that all tenant improvements have been paid for and completed in a lien-free and workmanlike manner in accordance with each New Lease, and (B) paid invoices, mechanic's lien waivers and other evidence Lender may require indicating such lien-free completion; and
(ii) Borrower has delivered to Lender an estoppel certificate executed by each New Tenant, including such tenant's acknowledgment that all tenant improvements have been satisfactorily completed.
(b) If upon the occurrence of a Suspension Event, (i) the Anticipated Repayment Date has not yet occurred, the obligations under the Cash Management Agreement shall be suspended until the first to occur of another Trigger Event or the Hyperamortization Commencement Date, and (ii) the Anticipated Repayment Date has occurred, the obligations under the Cash Management Agreement shall continue in accordance with its terms.
3.4 Capital Expenditures Impound. Borrower shall deposit with Lender the following amount(s) (collectively, "Capital Expenditures Impound"): $975.00 on the First P&I Due Date and on each Due Date thereafter for payment or reimbursement of the Capital Expenditures (defined below) until the amount of $11,700.00 ("Cap Ex Threshold") is achieved. So long as no Default exists, Lender shall disburse funds from the Capital Expenditures Impound to Borrower no more frequently than monthly, in increments of no less than $5,000.00 per disbursement, to pay or reimburse Borrower for the Capital Expenditures, 

provided, however, that Lender shall have received and approved each of the following:
(a) Borrower's written request for such disbursement, including a reasonably detailed description and cost breakdown of the Capital Expenditures covered by the request and Borrower's certification that all such Capital Expenditures have been paid or incurred by Borrower for work completed lien-free and in a workmanlike manner;
(b) copies of invoices supporting the request for such disbursement;
(c) (if required by Lender, an inspection report signed by an inspector selected by Lender; and 
(d) such other evidence as Lender shall require in support of Borrower's certification.
Borrower shall complete the lien-free performance or installation of the Capital Expenditures from time to time as necessary, in a workmanlike manner and in accordance with all applicable laws, ordinances, rules and regulations.
Once the Cap Ex Threshold has been achieved at any time and funds are subsequently disbursed in accordance with provisions above so that the balance available for disbursement from the Capital Expenditures Impound is less than the Cap Ex Threshold, Borrower shall be required to pay the amount of $975.00 to Lender commencing on the next following Due Date and continuing on each Due Date thereafter until the Cap Ex Threshold has again been achieved.
"Capital Expenditures" shall mean major repairs and replacements to maintain or improve the Property, including, without limitation, structural repairs, roof replacements, HVAC repairs and replacements, mechanical and plumbing repairs and replacements and boiler repair and replacements.
3.5 Deferred Maintenance Impound. Lender has agreed to waive the requirement of an Impound for Deferred Maintenance Work (defined below). Notwithstanding such waiver, within 6 months after the Effective Date, Borrower shall complete the lien-free performance of the Deferred Maintenance Work, and shall furnish to Lender satisfactory evidence of such completion. Borrower shall perform the Deferred Maintenance Work in a workmanlike manner and in accordance with all applicable laws, ordinances, rules and regulations.
"Deferred Maintenance Work" shall mean those items set forth on Exhibit C attached hereto and as more fully described in the Property Condition Report dated August 31, 2006, prepared by Land America Assessment Corporation.
3.6 Disbursement. Lender shall disburse any Impounds to Borrower through a funds transfer of such Impounds initiated by Lender to the following account or such other account as Borrower specifies in a notice to Lender:
Bank Name:
ABA Routing No.: 
Account Name: 
Reference: 
Advise:
Lender shall determine the funds transfer system and other means to be used in making each such disbursement. Borrower agrees that each such funds transfer initiated by Lender shall be deemed to be a funds transfer properly authorized by Borrower, even if the transfer is not actually properly authorized by Borrower. Borrower acknowledges that Lender shall rely on the account number and ABA routing number set forth above or specified in a notice from Borrower to Lender, even if such account number identifies an account with a name different from the name so specified, or the routing number identifies a bank different from the bank so specified. If Borrower learns of any error in the transfer of any Impounds or of 

any transfer which was not properly authorized, Borrower shall notify Lender as soon as possible in writing but in no ease more than 14 days after Lender's first confirmation to Borrower of such transfer.
3.7 General. All deposits required to be made by Borrower under this Section 3 constitute Impounds (as defined in the Security Instrument) and reference is made to the Security Instrument for other provisions regarding Impounds, including, without limitation, a description of the account(s) into which Impounds shall be deposited. Lender shall have the right to enter upon the Property at all reasonable times to inspect any work for which Impounds are now or hereafter required but Lender shall not be obligated to supervise or inspect any such work or to inform Borrower or any third party regarding any aspect of any such work. Borrower shall pay to Lender all reasonable fees, costs and expenses charged, paid or incurred by Lender from time to time in connection with any request of Borrower for a disbursement of funds from the Impounds (other than the Tax Impound and the Insurance Impound). Borrower authorizes Lender to disburse directly to Lender, from the Impounds or from funds to be disbursed to Borrower from the Impounds, such sums as may be necessary, at any time and from time to time, to pay all such fees, costs and expenses.

4.     TWO-TIME RIGHT OF TRANSFER OF PROPERTY. Notwithstanding anything to the contrary contained in Section 6.15 of the Security Instrument, Lender shall, two times only, consent to the voluntary sale or exchange of all of the Property by Grantor (as defined in the Security Instrument) so long as no Default has occurred and is continuing and all of the following conditions precedent have been satisfied:
4.1 Notice. Lender's receipt of not less than 60 days' prior written notice of the proposed sale or exchange,
4.2 Credit Review and Underwriting. Lender's reasonable determination that the proposed purchaser, the proposed guarantor(s), if any, and the Property all satisfy Lender's then applicable credit review and underwriting standards, taking into consideration, among other things, (a) any decrease in the Property's cash flow which would result from any increase in read property taxes due to any anticipated reassessment of the Property for tax purposes and (b) Any requirement of Lender that the purposed purchaser satisfy Lender's then applicable criteria for a single purpose bankruptcy remote entity;
4.3 Experience. Lender's reasonable determination that the proposed purchaser possesses satisfactory recent experience in the ownership and operation of properties similar to the Property,
4.4 Impounds. Lender's receipt of such new or increased Impounds as Lender may require, including, without limitation, new or increased Impounds for taxes, insurance, tenant improvements and leasing commissions, capital improvements, capital expenditures and deferred maintenance, and the amendment of the Loan Documents to require the purchaser to make monthly deposits of such new or increased Impounds for such purposes thereafter;
4.5 Documents and Instruments. Lender 's receipt of such fully executed documents and instruments as Lender shall reasonably require, in form and content reasonably satisfactory to Lender, including, without limitation,
(a) an assumption agreement under which the purchaser assumes all obligations and liabilities of Borrower under this Note and the other Loan Documents and agrees to such amendments to the Loan Documents as Lender may reasonably require in order to reflect the change in the borrowing entity and principals and any new or increased Impounds and (b) a consent to the sale or exchange by each existing guarantors and a reaffirmation of each guarantor's obligations and liabilities under each guaranty or the execution of new guaranties by new guarantors reasonably satisfactory to Lender;
4.6 Title Insurance. If required by Lender, delivery to Lender of evidence of title insurance reasonably satisfactory to Lender insuring Lender that the lien of the Security Instrument and the priority thereof will 

not be impaired or affected by reason of such sale or exchange of the Property;
4.7 Assumption Fee. Payment to Lender of an assumption fee equal to 1% of the then outstanding principal balance of this Note, but not less than $15,000;
4.8 Costs and Expenses. Reimbursement to Lender of any and all costs and expenses paid or incurred by Lender in connection with such sale or exchange and Lender's consent thereto, including, without limitation, all in- house or outside counsel attorneys' fees, title insurance fees, appraisal fees, inspection fees, environmental consultant's fees and any fees or charges of the applicable Rating Agencies,
4.9 No Downgrade. If required by Lender, delivery to Lender of written evidence from the Rating Agencies that such sale or exchange will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to the sale or exchange for any securities issued in connection with the securitization of the Loan which are then outstanding; and
4.10 No Adverse REMIC Event. If required by Lender, delivery to Lender of an opinion of tax counsel, in form and content and issued by tax counsel satisfactory to Lender's counsel, that such sale or exchange shall not (a) constitute a "significant modification" of the Loan within the meaning of Treasury Regulation Section l.860G-2(b) or (b) cause the Loan to fail to be a "qualified mortgage" within the meaning of Section 860G(&)(3)(A) of the Code.
Lender shall fully release Borrower and each existing guarantor from any further obligation or liability to Lender under this Note and the other Loan Documents upon the assumption by the purchaser and each new guarantor of all such obligations and liabilities and the satisfaction of all other conditions precedent to a sale or exchange in accordance with the provisions of this Section.
5.     PREPAYMENT.
5.1 The Note contains provisions which permit: Full Defeasance Only.

Loan No. 61-0903985
EXHIBIT B TO PROMISSORY NOTE
Loan Documents and Other Related Documents
This Exhibit B is attached to and forms a part of that Promissory Note ("Note") executed by STAUNTON PLAZA, LLC, a Virginia limited liability company ("Borrower") in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender").
1. LOAN DOCUMENTS. The documents numbered 1.1 through 1.14 below of even date herewith (unless otherwise specified) and any amendments, modifications and supplements thereto which have received the prior written approval of Lender and any documents executed in the future that are approved by Lender and that recite that they are "Loan Documents" for purposes of this Note are collectively referred to as the "Loan Documents."
1.1 This Note;
1.2 Security Instrument,
1.3 State of Virginia Uniform Commercial Code - Financing Statements - Form UCC-1,
1.4 Limited Liability Company Borrowing Certificate;
1.5 Estoppels, Non-Disturbance and Attornment Agreements of various date(s);
1.6 Subordination Agreements, and Estoppels, Non-Disturbance and Attornment Agreements of various
date(s);
1.7 Assignment of Management Contracts,
1.8 Payment Method Agreement/Autodebit Authorization;
1.9 Agreement Regarding Required Insurance,
1.10 Hazardous Materials Indemnity Agreement;
1.1 1 Springing Hard Cash Management Agreement,
1.12 Agreement for Disbursement Prior to Recording and Amendment to Note,
1.13 Limited Guaranty (Guyot); and 4
1.14 Limited Guaranty (Swartz);

EXHIBIT C TO PROMISSORY NOTE
DEFERRED MAINTENANCE

Table 1
IMMEDIATE REPAIR ANDFERRED MAINTENANCE EXPENDITURESExhibit 10.5 Staunton Loan Assumption Agreement

ASSUMPTION AGREEMENT 
This Assumption Agreement ("Assumption Agreement") is made this 30th of April, 2014, by MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware corporation ("MERS"), as nominee for U.S. BANK NATIONAL ASSOCIATION, as Trustee, successor-in-interest to Bank of America, N.A., as Trustee, successor by merger to LaSalle Bank National Association, as Trustee for Bear Stearns Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-PWR14 (together with its successors and assigns, "Noteholder"), STAUNTON PLAZA, LLC, a Virginia limited liability company ("Borrower"), ROLAND GUYOT, an individual ("Guyot") and STEPHEN B. SWARTZ, an individual ("Swartz"; and together with Guyot, jointly and severally, "Original Guarantor"), STAUNTON STATION LLC, a Delaware limited liability company ("Assumptor") and PHILLIPS EDISON - ARC GROCERY CENTER OPERATING PARTNERSHIP II L.P., a Delaware limited partnership ("Operating Partnership") and PHILLIPS EDISON-ARC GROCERY CENTER REIT H, INC., a Maryland corporation ("REIT"; and together with Operating Partnership, jointly and severally, "New Guarantor"). Borrower, Original Guarantor, Assumptor and New Guarantor are collectively referred to herein as the "Borrower Parties." The Borrower Parties and Noteholder are collectively referred to herein as the "Parties."
RECITALS
A.    Noteholder's predecessor in interest, Wells Fargo Bank, National Association ("Original
Lender"), made a loan to Borrower in the original principal amount of Fourteen Million One Hundred Thousand and no/100 Dollars ($14,100,000.00) ("Loan"), under the terms and provisions set forth in the following loan documents, all of which are dated as of September 22, 2006, unless otherwise noted:
		
	1.
	Promissory Note Secured By Deed Of Trust (together with all renewals, modifications, increases and extensions thereof, the "Note") in the original principal amount of the Loan, made by Borrower and payable to Original Lender, as thereafter endorsed to Lender;

		
	2.
	Deed of Trust and Absolute Assignment of Rents and Leases and Security Agreement (and Fixture Filing) executed by Borrower to David F. Belkowitz and Paul Davenport, each of Hirschler Fleischer, a Professional Corporation ("Trustee") for the benefit of MERS, as beneficiary and Original Lender's nominee, which secures the Note and other obligations of Borrower (as the same may be amended, restated, extended, or otherwise modified from time to time, the "Security Instrument"), and which Security Instrument was recorded in the Clerk's Office of the Circuit Court of the City of Staunton, Virginia (the "Official Records") on September 25, 2006, as Instrument No. 060003835. The land, improvements and other real property which are subject to the Security Instrument are hereinafter referred to as the "Property" and the equipment, machinery and other personal property which are subject to the Security Instrument are hereinafter referred to as the "Collateral";

		
	3.
	UCC-1 Financing Statement naming Borrower as Debtor and MERS as Secured Party, recorded in the Office of the Clerk of the State Corporation Commission for the State of Virginia (the "State Filing Office") on September 28, 2006, under File Number 06-09-28-7360-7 ("State UCC");

		
	4.
	Limited Guaranty executed by Guyot ("Guyot Guaranty") and Limited Guaranty executed by Swartz ("Swartz Guaranty"; and together with the Guyot Guaranty, the "Guaranty");

		
	5.
	Assignment of Management Contracts ("Assignment"), executed by Borrower;

		
	6.
	Consent and Agreement of Manager ("Consent"), executed by ACL Realty Corp., a Georgia corporation ("Original Property Manager");

		
	7.
	Cash Management Agreement (Springing Hard) by and between Borrower, Original Manager and Original Lender ("Cash Management Agreement");

		
	8.
	Hazardous Materials Indemnity Agreement by Borrower and Original Guarantor in favor of Original Lender ("Environmental Indemnity");

		
	9.
	Agreement Regarding Required Insurance executed by Borrower and Original Lender;

		
	10.
	Subordination, Non-Disturbance and Attornment Agreement between Borrower, Original Lender and Giant Food Stores, LLC (the "SNDA").

The documents described in the foregoing paragraphs 1 through 10 are hereinafter collectively defined as the "Original Loan Documents". The Original Loan Documents (excluding documents 4, 5, 6 and 8 above), and all other documents evidencing or securing the Loan, together with and as modified by this Assumption Agreement, are hereinafter collectively defined as the "Assumed Loan Documents". All defined terms not otherwise defined herein shall have the meanings given them in the Note, or if not defined therein, the Security Instrument.
B.    As of April 28, 2014:
		
	1.
	The principal balance outstanding under the Note was $12,617,620.67;

		
	2.
	Accrued interest on the Note has been paid through March 31, 2014;

		
	3.
	The balance of the Tax Impound held by Noteholder was $83,237.67;

		
	4.
	The balance of the Insurance Impound held by Noteholder was $10,670.42;

		
	5.
	The balance of the Excess Cash Flow Impound held by Noteholder was $0.00;

		
	6.
	The balance of the Capital Expenditures Impound held by Noteholder was $16,575.00;

		
	7.
	The balance of the Deferred Maintenance Impound held by Noteholder was $0.00; and

		
	8.
	The balance of the Designated TI Impound held by Noteholder was $0.00.

C.    Borrower is about to sell and convey the Property and the Collateral to Assumptor, and both parties desire to obtain from Noteholder its consent to the sale and conveyance and a waiver of any right Noteholder may have under the Loan Documents to accelerate the Maturity Date of the Note by virtue of such conveyance of the Property and Collateral to Assumptor.

D.    Subject to the terms and conditions hereof, Noteholder is willing to consent to the sale and conveyance of the Property and the Collateral, and to waive any right of acceleration of the Maturity Date of the Note upon assumption by Assumptor of all obligations of Borrower under the Assumed Loan Documents.
NOW THEREFORE, FOR VALUABLE CONSIDERATION, including, without limitation, the mutual covenants and promises contained herein, the Parties agree as follows:
		
	1.
	Incorporation. The foregoing recitals are incorporated herein by this reference.

		
	2.
	Assumption Fee.    As consideration for Noteholder's execution of this Assumption Agreement and in addition to any other sums due hereunder, Assumptor agrees to pay Noteholder or Noteholder's servicer(s) (all as set forth in the escrow instructions to be executed in connection with the closing of this assumption) an assumption fee of $126,176.21 (1.00% of the loan balance), due on execution of this Assumption Agreement by Noteholder (the "Assumption Fee").

		
	3.
	Conditions Precedent. The following are conditions precedent to Noteholder's obligations under this Assumption Agreement, all of which Noteholder hereby agrees are satisfied:

		
	(a)
	The irrevocable commitment of Chicago Title Insurance Company ("Title Company") to issue a new lender's title policy (or deliver endorsements to Noteholder's existing lender's title policy issued by Chicago Title Insurance Company) in form and substance acceptable to Noteholder and without deletions or exceptions other than as expressly approved by Noteholder in writing, insuring Noteholder that the priority and validity of the Security Instrument has not been and will not be impaired by this Assumption Agreement, the conveyance of the Property, or the transaction contemplated hereby;

		
	(b)
	Receipt and approval by Noteholder of: (i) an original of this Assumption Agreement executed by the Borrower Parties; (ii) an original Memorandum of Assumption Agreement in the form attached hereto as EXHIBIT A, executed by the Borrower Parties with signatures notarized, and otherwise in form and substance acceptable to Noteholder ("Memorandum of Assumption Agreement"); and (iii) any other documents and agreements which are required pursuant to this Assumption Agreement, in form and content acceptable to Noteholder;

		
	(c)
	Execution and delivery by Assumptor and New Guarantor of such other documents and agreements, if any, required pursuant to this Assumption Agreement or which Noteholder has requested to be recorded or filed;

		
	(d)
	Assumptor's delivery to Noteholder of UCC-1 Financing Statements and UCC-3 Financing Statement Amendments in proper form for filing in the appropriate jurisdictions as determined by Noteholder, which Assumptor expressly authorizes Noteholder to file;

		
	(e)
	Execution and delivery to Noteholder by New Guarantor of a Limited Guaranty ("New Guaranty") in favor of Noteholder and in form and substance acceptable to Noteholder, pursuant to which New Guarantor irrevocably guarantees payment for certain matters under the Loan as more specifically set forth in the New Guaranty, along with delivery to Noteholder of such resolutions or certificates of New Guarantor as Noteholder may require, in form and content acceptable to Noteholder;

		
	(f)
	Execution and delivery to Noteholder by Assumptor and New Guarantor of a Hazardous Materials Indemnity Agreement ("New Environmental Indemnity") in favor of Noteholder and in form and substance acceptable to Noteholder;

		
	(g)
	Receipt by Noteholder of a copy of the new property management agreement for the Property in form and substance, and with a manager, acceptable to Noteholder ("New Manager"), along with an executed consent and subordination of management agreement acceptable to Noteholder ("New Management Agreement Subordination");

		
	(h)
	Execution and delivery to Noteholder by Assumptor and New Manager of a First Amendment to Cash Management Agreement (the "Cash Management Agreement Amendment"), amending the Cash Management Agreement as more specifically set forth in the First Amendment to Cash Management Agreement, in form and content acceptable to Noteholder;

		
	(i)
	Receipt by Noteholder of a Certificate of Authority executed by Assumptor, with notary acknowledgements ("Certificate of Authority"), indicating which persons are authorized to act on behalf of Assumptor for all purposes including, but not limited to, obtaining any and all information pertaining to the Loan, requesting any action specified in the

		
	(j)
	Loan Documents, and requesting disbursement of any escrow or reserve funds;

Delivery to Noteholder of the organizational documents and evidence of good standing of Assumptor, its constituent parties, and of New Guarantor, together with such resolutions or certificates as Noteholder may require, in form and content acceptable to Noteholder, authorizing the assumption of the Loan and executed by the appropriate persons and/or entities on behalf of Assumptor and New Guarantor;
		
	(k)
	The representations and warranties contained herein are true and correct in all material respects;

		
	(l)
	Receipt by Noteholder of evidence of Assumptor's casualty insurance

policy and comprehensive liability insurance policy with respect to the Property (or insurance certificates specifying the terms of such policies), each in form and amount required under the Loan Documents, with the annual premium for same to be paid at closing;
		
	(m)
	Receipt by Noteholder of a copy of the deed by which title to the Property will be conveyed to Assumptor, and the purchase and sale agreement documenting the sale of the Property to Assumptor (as amended, the "Contract");

		
	(n)
	Receipt by Noteholder of an executed Form W-9 for Assumptor;

		
	(o)
	Noteholder shall have received an opinion of counsel to Noteholder with respect to the compliance of this Assumption Agreement, the transfer to Assumptor, and the transactions referenced herein with the provisions of the Internal Revenue Code as the same pertain to real estate mortgage investment conduits and such other opinion letters as Noteholder's counsel shall require;

		
	(p)
	Payment of the Assumption Fee provided for in Section 2;

		
	(q)
	All items on the closing checklist of Noteholder's counsel shall be satisfied or waived by Noteholder or its counsel; and

		
	(r)
	Borrower's or Assumptor's reimbursement to Noteholder of Noteholder's costs and expenses actually and reasonably incurred in connection with this Assumption Agreement and the transactions contemplated hereby, including, without limitation, title insurance costs, escrow and recording fees, attorneys' fees, appraisal, engineers' and inspection fees and documentation costs and charges, whether such services are furnished by Noteholder's employees, agents or independent contractors.

 4.    Effective Date. The effective date of this Assumption Agreement ("Effective Date") shall be the earlier of (i) the date the Memorandum of Assumption Agreement is recorded in the Official Records, or (ii) in the event the transaction contemplated by this Assumption Agreement is closed by way of a "gap" closing, the date that the escrow company engaged in connection with the transaction deems the transaction "closed".

5.    Assignment. Borrower hereby grants, transfers, sets over and assigns to Assumptor, all of Borrower's right, title and interest in and to the Assumed Loan Documents.

6.    Assumption. Assumptor hereby assumes and agrees to pay when due all sums due or to become due or owing under the Note, the Security Instrument and the other Assumed Loan Documents and shall hereafter faithfully perform all of Borrower's obligations under and be bound by all of the provisions of the Assumed Loan Documents and assumes all liabilities of Borrower under the Assumed Loan Documents as if Assumptor were an original signatory thereto. The execution of this Assumption Agreement by Assumptor shall be deemed its execution of the Note, the Security Instrument, the Assignment of Leases and the other Assumed Loan Documents. Assumptor shall henceforth be deemed to be the "Mortgagor," "Assignor," "Trustor," "Grantor," "Indenmitor" and/or "Borrower", as the case may be, under each of the Assumed Loan Documents. Without limiting the generality of the foregoing, Assumptor's assumption includes the assumption of all obligations, liabilities, and waivers of Borrower set forth in the Note, including, without limitation, the liabilities of Borrower under Section 8.2 thereof. The foregoing assumption by Assumptor is absolute and
unconditional.    Notwithstanding the foregoing, Noteholder agrees and 
acknowledges that any breach by Borrower or Original Guarantor of any of the representations, warranties or covenants of the Original Loan Documents or this Assumption Agreement that are personal to Borrower or Original Guarantor (such as maintaining existence and bankruptcy) shall not in and of itself constitute a default by Assumptor under the Assumed Loan Documents.

7.    Partial Release of Borrower. Noteholder hereby releases (on the Effective Date) Borrower from any and all liability under the Original Loan Documents as to acts, events or omissions occurring or obligations arising after the Effective Date; provided however, that the Parties hereby acknowledge and agree that Borrower is expressly not released from and nothing contained herein is intended to limit, impair, terminate or revoke, any of Borrower's obligations with respect to the matters set forth in Section 8.2 of the Note, to the extent the same arise out of or in connection with any acts, events or omissions occurring or obligations arising on or before the Effective Date (the "Retained Obligations"), and that such obligations shall continue in full force and effect in accordance with the terms and provisions thereof and hereof. Borrower's obligations under the Original Loan Documents with respect to the Retained Obligations shall not be discharged or reduced by any extension, amendment, renewal or modification to the Note, the Security Instrument or any other Loan Documents, including, without limitation, changes to the terms of repayment thereof, modifications, extensions or renewals of repayment dates, releases or subordinations of security
in whole or in part, changes in the interest rate or advances of additional funds by Noteholder in its discretion for purposes related to those set forth in the Loan Documents.
8.    Confirmation of Guaranty and Environmental Indemnity; Partial Release of Original Guarantor. Effective upon the Effective Date, Original Guarantor shall be released from any and all liability under the Guaranty and the Environmental Indemnity as to acts, events or omissions occurring or obligations arising after the Effective Date; provided, however, such release shall not apply to any acts, events or omissions which occurred prior to the Effective Date, whether or not the effects of or damages from such acts, events or omissions are apparent or ascertainable as of the Effective Date. Nothing contained herein is intended to limit, impair, terminate or revoke Original Guarantor's obligations under the Guaranty to the extent the same arise out of or in connection with any acts, events or omissions occurring or obligations arising on or before the Effective Date.
9.    Release of Noteholder Parties and Covenant Not to Sue. Each Borrower Party, on behalf of itself and its heirs, successors and assigns, hereby releases and forever discharges Noteholder, any trustee with regard to the Loan, any servicer of the Loan, each of their respective predecessors-in-interest and successors and 

assigns, together with the officers, directors, partners, employees, investors, certificate holders and agents of each of the foregoing (collectively, the "Noteholder Parties"), from all debts, accountings, bonds, warranties, representations, covenants, promises, contracts, controversies, agreements, claims, damages, judgments, executions, actions, inactions, liabilities, demands or causes of action of any nature, at law or in equity, known or unknown, which any Borrower Party now has by reason of any cause, matter, or thing through and including the date hereof, arising out of or relating to: (a) the Loan, including, without limitation, its funding, administration and servicing, (b) the Loan Documents, (c), the Property or Collateral, (d) any reserve and/or escrow balances held by Noteholder or any servicers of the Loan, or (e) the sale, conveyance, assignment and transfer of the Property and Collateral. The foregoing, however, shall not release any of the terms and provisions of this Agreement. Each Borrower Party, on behalf of itself and its heirs, successors and assigns, covenants and agrees never to institute or cause to be instituted or continue prosecution of any suit or other form of action or proceeding of any kind or nature whatsoever against any of the Noteholder Parties by reason of or in connection with any of the foregoing matters, claims or causes of action.
THE RELEASE CONTAINED IN THIS SECTION 9 INCLUDES CLAIMS OF WHICH BORROWER PARTIES (INDIVIDUALLY AND COLLECTIVELY) ARE PRESENTLY UNAWARE OR WHICH BORROWER PARTIES (INDIVIDUALLY AND COLLECTIVELY) DO NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY A BORROWER PARTY WOULD MATERIALLY AFFECT ITS RELEASE OF THE NOTEHOLDER PARTIES.
BY EXECUTING THIS AGREEMENT, EACH BORROWER PARTY ACKNOWLEDGES THAT (i) THIS SECTION 9 HAS BEEN READ AND FULLY UNDERSTOOD, (ii) EACH BORROWER PARTY HAS EACH HAD THE CHANCE TO ASK QUESTIONS OF ITS COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE AND (iii) EACH BORROWER PARTY HAS ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS SECTION 9.
10.    Loan Document Modifications. The following modifications are hereby made
to the Assumed Loan Documents:
		
	(a)
	From and after the date hereof, all references to the defined term "Loan Documents" in any of the Assumed Loan Documents (and any documents executed concurrently with this Agreement) shall be deemed to mean, collectively, (i) this Assumption Agreement, (ii) the Assumed Loan Documents, (iii) the New Guaranty, (iv) the New Environmental Indemnity, (v) the New Management Agreement Subordination, and (vi) any new UCC-1 financing statements filed or recorded in connection herewith.

		
	(b)
	From and after the date hereof, all references to the defined terms "Note," and "Security Instrument" in any of the Assumed Loan Documents shall be deemed to mean such document as modified hereby.

		
	(c)
	From and after the date hereof, the Note shall be modified as follows:

		
	(i)
	Clause (a)(iii) of Section 8.2 of the Note shall be amended and restated as follows:

"(iii) failure to pay property or other taxes, assessments or charges (other than (A) amounts paid to Lender for taxes, assessments or charges pursuant to Impounds as defined in Exhibit A and where Lender elects not to apply such funds toward payment of the taxes, assessments or charges owed, and (B) where cash flow from the Property is insufficient to pay such amounts) which may create liens senior to the lien of the Security Instrument on all or any portion of the Property;"
		
	(ii)
	Clause (a)(vii) of Section 8.2 of the Note shall be amended and restated as follows:

"or (vii) other than as provided in clause (e) below, if any representation or warranty contained in Section 5.2 of the Security Instrument related to the conduct, action or inaction of Borrower prior to the date hereof is false, incorrect or misleading in any material respect;"
		
	(iii)
	Clause (b)(ii) of Section 8.2 of the Note shall be amended and restated as follows:

"(ii) an involuntary bankruptcy or insolvency proceeding (other than one filed by Lender) which is not contested by Borrower within 30 days of filing (and which contest is thereafter pursued with commercially reasonable diligence) and dismissed within 180 days of filing."
(iv)     Clause (e) of Section 8.2 of the Note shall be amended and restated as follows:
"(e) if any representation or warranty contained in Section 5.2 of the Security Instrument related to the conduct, action or inaction of Borrower prior to the date hereof is false, incorrect or misleading in any material respect 

and a court orders the assets and liabilities of Borrower to be substantively consolidated with the assets and liabilities of any other person or entity based partially or wholly upon the conduct giving rise to the breach of such representation or warranty in Section 5.2."
(v)    Section 2.1.a and Section 2.1.b of Exhibit A to the Note shall be amended and restated as follows:
"a.    Operating Statement. Not later than 30 days after the end of
each calendar quarter, an operating statement, signed and dated by Borrower, showing all revenues and expenses during such quarter and year-to-date, relating to the Property, including, without limitation, all information requested under any of the Loan Documents;
b.    Rent Roll. Not later than 30 days after the end of each calendar
quarter, a rent roll signed and dated by Borrower, showing the following lease information with regard to each tenant: the name of the tenant, monthly or other periodic rental amount, dates of commencement and expiration of the lease, and payment status;"
(d)    From and after the date hereof, the Security Instrument shall be modified
as follows:
(i)    In the preamble, the notice addresses for Borrower and Lender
shall be restated as follows:
Lender:    U.S. Bank National Association, as Trustee for
Bear Steams Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-PWR14 c/o Wells Fargo Commercial Mortgage Servicing 1901 Harrison St., 7th Floor
Oakland, CA 94612
MAC A0227-020
Attn: Asset Manager
Borrower:    Staunton Station LLC
do Phillips Edison & Company Ltd.
11501 Northlake Drive 
Cincinnati, OH 45249
Attn: Chief Financial Officer
(ii)    The following subsections of Section 5.2 of the Security
Instrument shall be amended and restated as follows (and the other subsections shall remain unmodified):
"h.    such entity has maintained and will maintain its accounts,
books and records separate from any other person or entity; except that such entity's financial position, assets, results of operations and cash flows may be included in the consolidated financial statements of an Affiliate in accordance with generally accepted accounting principles so long as Borrower's separateness is noted in any such consolidated financial statement;"
"m.     such entity has prepared and will prepare separate tax returns and financial statements to the extent that such entity is: (i) not part of a consolidated group filing a consolidated return (so long as such entity is shown as a separate member of such group); or (ii) not treated as a division solely for tax purposes of another taxpayer."
"n.    such entity has paid and will pay its own liabilities and expenses out of its own funds and assets, provided the foregoing shall not require any member of Borrower to make additional capital contributions to Borrower."
"z.    such entity has maintained and, to the extent that the

Property is generating sufficient cash flow, will maintain adequate capital in light of its contemplated business operations, provided the foregoing shall not require any member of Borrower to make additional capital contributions to Borrower."
(iii)    Section 6.15.c(ii) of the Security Instrument shall be amended and
restated as follows:
"(ii) Permitted Equity Transfers. Notwithstanding anything to the contrary contained in this Deed of Trust or any other Loan Document to the contrary, for so long as one or both of PHILLIPS EDISON - ARC GROCERY CENTER OPERATING PARTNERSHIP II L.P., a Delaware limited partnership (the "Grocery Center OP"), or PHILLIPS EDISON-ARC GROCERY CENTER REIT II, INC., a Maryland corporation (the "Grocery Center REIT"), is the New Guarantor (as defined in that certain Assumption Agreement dated April 30, 2014 (the "Assumption Agreement")) and STAUNTON STATION LLC, a Delaware limited liability company, is the Assumptor (as defined in the Assumption Agreement), the following transfers shall constitute permitted transfers (subject only to any conditions set forth below) and shall not require Lender's consent or the payment of a transfer fee in connection therewith (each, a "Permitted PECO Transfer"):
(a)the listing of common stock in the Grocery Center REIT on the New York Stock Exchange ("NYSE") or such other nationally recognized stock exchange (the "REIT Listing") provided (i) the Grocery Center REIT satisfies all of the listing requirements of the U.S. Securities and Exchange Commission at the time of and as a condition of the REIT Listing, including, but not limited to, the net worth requirements and (ii) the REIT Listing does not result in or cause a Change of Control (as defined below);
(b)the issuance, sale, pledge, conveyance, transfer or other disposition (each, a "REIT Share Transfer") of any shares of common stock in the Grocery Center REIT (the "REIT Shares") so long as (i) at the time of the REIT Share Transfer, the REIT Shares are listed on the NYSE or any other nationally recognized stock exchange and (ii) the REIT Share Transfer does not result in or cause a Change of Control;
(c)the issuance, sale, pledge, conveyance, transfer or other disposition (each an "OP Transfer"), of any limited partnership interests (the "OP Interests") in the Grocery Center OP so long as the OP Transfer does not result in or cause a Change of Control;
(d)any issuance, sale, pledge, conveyance, transfer or other disposition of REIT Shares during the period prior to the REIT Listing (i.e., while the Grocery Center REIT is a publicly traded but non-listed entity), provided that such activities, singularly or taken as a whole, do not result in or cause a Change of Control; and
(e)any merger or consolidation of the Grocery Center REIT or the Grocery Center OP with Phillips Edison - ARC Shopping Center Operating Partnership, L.P., a Delaware limited partnership, Phillips Edison - ARC Shopping Center REIT, Inc., a Maryland corporation, Phillips Edison Limited Partnership ("PELP") or any of PELP's subsidiaries so long as (i) the Grocery Center REIT or the Grocery Center OP, as applicable, is the surviving entity, (ii) such transaction does not result in or cause a Change of Control, (iii) Lender is given at least thirty (30) days prior written notice of such merger or consolidation, along with a transaction summary and other documentation reasonably requested by Lender, and a review fee of $10,000, and (iv) upon request of Lender, the Grocery Center REIT and/or the Grocery Center OP shall execute and deliver to Lender a ratification agreement, in form and content reasonably satisfactory to Lender, ratifying its existing obligations under the Loan
Documents, and shall pay the reasonable fees of Lender's counsel in preparing the ratification.
For purposes of this Section 6.15,c(ii), a "Change of Control" shall occur when: (a) the Grocery Center OP is no longer the sole member of Borrower, (b) PE-ARC GROCERY CENTER OP GP II LLC, a Delaware limited liability company ("GP") is no longer the sole general partner of the Grocery Center OP,
(c) the Grocery Center REIT is no longer the sole member of GP, and/or the Grocery Center REIT's direct interest in the Grocery Center OP and/or its indirect interest in the Borrower falls below 51%, (d) any transfer of interests or series of transfers of interests in the Grocery Center REIT, which results in more than 49% of the ownership interests of the Grocery Center REIT being held by any single person or entity or related group of people or entities, or (e) the individuals comprising the Board of Directors of the Grocery Center REIT, as the same exists for the twelve (12) month period immediately prior to the Permitted PECO Transfer, fail to represent a majority of the Board of Directors of the Grocery Center REIT as of the date of completion of the 

Permitted PECO Transfer, subject to the terms of the following sentence. For purposes of determining the occurrence of the preceding subclause (e), the following shall be expressly excluded: any change in directors resulting from (x) the death or incapacity of any director, and/or (y) the resignation or removal of any director for reasons unrelated to a Permitted PECO Transfer, provided any replacement director has been approved by a vote of at least a majority (or such higher percentage as may be required by the governing documents of the Grocery Center REIT) of the board of directors of the Grocery Center REIT then in office."
(iv)    Section 7.1(a)(vi) of the Security Instrument (which identified the
prior Guarantors as Key Persons) shall be deleted.
11.    Representations and Warranties.
(a)    Assignment. Borrower and Assumptor each hereby represents and
warrants to Noteholder that Borrower has irrevocably and unconditionally transferred and assigned to Assumptor all of Borrower's right, title and interest in and to:
		
	(i)
	The Property and the Collateral;

		
	(ii)
	The Assumed Loan Documents;

		
	(iii)
	All leases related to the Property or the Collateral;

		
	(iv)
	All rights as named insured under all casualty and liability insurance policies (and all endorsements in connection therewith) relating to the Property or the Collateral (unless, but only to the extent that, Assumptor is obtaining its own such insurance policies);

		
	(v)
	All reciprocal easement agreements, operating agreements, and declarations of conditions, covenants and restrictions related to the Property;

		
	(vi)
	All prepaid rents and security deposits, if any, held by Borrower in connection with leases of any part of the Property or the Collateral; and

		
	(vii)
	All funds, if any, deposited in impound accounts held by or for the benefit of Noteholder pursuant to the terms of the Loan Documents.

Borrower and Assumptor each hereby further represents and warrants to Noteholder, as to itself only (and not jointly), that no consent to the transfer of the Property and the Collateral to Assumptor is required under any agreement to which Borrower or Assumptor is a party, including, without limitation, under any lease, operating agreement, mortgage or security instrument (other than the Loan Documents), or if such consent is required, that it has been obtained and is in full force and effect.

(b)    No Defaults. Borrower hereby represents and warrants, to the best of its knowledge, that (i) no default, event of default, breach or failure of condition has occurred, or would exist with notice or the lapse of time or both, under any of the Original Loan Documents, and (ii) all representations and warranties herein and in the other Original Loan Documents are true and correct (except (A) to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date, and (B) for such representations and warranties which are qualified by their terms by references to "materiality," which such representations and warranties as so qualified shall be true and correct in all respects). Assumptor hereby represents and warrants, to the best of its knowledge, that no default, event of default, breach or failure of condition has occurred, or would exist with notice or the lapse of time or both, under any of the Assumed Loan Documents, as modified by this Assumption Agreement, and all representations and warranties herein and in the other Assumed Loan Documents are true and correct (except (A) to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date, and (B) for such representations and warranties which are qualified by their terms by references to "materiality," which such representations and warranties as so qualified shall be true and correct in all respects).
(c)    Loan Documents. Assumptor represents and warrants to Noteholder that Assumptor has actual knowledge of all terms and conditions of the
Assumed Loan Documents, and agrees that Noteholder has no obligation or duty to provide any information to Assumptor regarding the terms and conditions of the Assumed Loan Documents. After giving effect to the transfer consented to under this Agreement, Assumptor further agrees that all representations, agreements and warranties in 

the Assumed Loan Documents (as modified by this Assumption Agreement), regarding Borrower, its status, authority, financial condition and business shall apply to Assumptor as well as to Borrower, as though Assumptor were the borrower originally named in the Assumed Loan Documents. Assumptor further understands and acknowledges that, except as expressly provided in a writing executed by Noteholder, Noteholder has not waived any right of Noteholder or obligation of Borrower or Assumptor under the Assumed Loan Documents and except as expressly provided herein, Noteholder has not agreed to any modification of any provision of any Assumed Loan Document or to any extension of the Loan.
(d)    Financial Statements. Assumptor represents and warrants to Noteholder that the financial statements of Assumptor and New Guarantor, if any, previously delivered by Borrower, Assumptor or any of such parties to Noteholder: (i) are materially complete and correct; (ii) as of the date of such statement, present fairly the financial condition of each of such parties; and (iii) have been prepared in accordance with generally accepted accounting principles consistently applied or other accounting standards approved by Noteholder.
(e)    Reports. Assumptor represents and warrants to Noteholder that all reports, documents, instruments and information delivered to Noteholder in connection with Assumptor's assumption of the Loan: (i) are, in all material respects, correct and sufficiently complete to give Noteholder accurate knowledge of their subject matter; and (ii) do not contain any misrepresentation of a material fact or omission of a material fact which omission makes the provided information misleading.
(f)    Assumptor Location. Assumptor represents and warrants that its chief executive office is located at the following address: do Phillips Edison & Company Ltd., 11501 Northlake Drive, Cincinnati, OH 45249. Assumptor represents and warrants that its state of formation is Delaware. All organizational documents of Assumptor delivered to Noteholder are complete and accurate in every material respect. Assumptor's legal name is exactly as shown on page one of this Assumption Agreement.
(g)    No Adverse Change. Assumptor represents and warrants to Noteholder that, since the date of the financial statements delivered to Noteholder, there has been no material adverse change in the financial condition of any of such parties which could be reasonably expected to materially
impair the ability of such parties to perform their respective obligations hereunder.
(h)    No Pledge of Equity Interests. Assumptor and New Guarantor represent and warrant to Noteholder that no direct equity interest in Assumptor or New Guarantor has been pledged, hypothecated or otherwise encumbered as security for any obligation, and that no portion of the capital contributed to Assumptor, directly or indirectly, in connection with Assumptor's acquisition of the Property consists of borrowed funds.
(i)    Embargoed Person. Assumptor and New Guarantor represent and warrant that none of the funds or other assets of Assumptor or New Guarantor constitute property of, or are beneficially owned, directly or indirectly, by any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the USA PATRIOT Act (including the anti-terrorism provisions thereof), the International Economic Powers Act, 50 U.S.C. §§ 1701, et. seq., the Trading with the Enemy Act, 50 U.S.C. App. 1 et. seq., and any Executive Orders or regulations promulgated thereunder, including those related to Specially Designated Nationals and Specially Designated Global Terrorists ("Embargoed Person") and further warrant and represent that, to the best of Assumptor's and New Guarantor's knowledge, no Embargoed Person has any interest of any nature whatsoever in Assumptor or New Guarantor with the result that the investment in Assumptor (whether directly or indirectly) is prohibited by law.
(j)    Authority and Enforceability. In addition to all representations and warranties in the Loan Documents, each of the Borrower Parties represents and warrants as to itself that (i) it has full power, authority, legal right and capacity to execute, deliver and perform its respective obligations under this Assumption Agreement and the other Loan Documents to which it is a party and enter into the Contract as contemplated by this Agreement; (ii) the Loan Documents to which it is a party, including, without limitation, this Assumption Agreement, constitute valid, enforceable and binding obligations of such party, subject to the effect of federal bankruptcy, state insolvency, or similar creditors' rights laws; and (iii) as of the Effective Date, there are no counterclaims, defenses or offsets of any nature whatsoever to any of its respective obligations under the Loan Documents to which it is a party.
(k)    Organizational Status. Borrower and Assumptor each represent and warrant as to itself (and not jointly) that it is (i) duly organized, validly existing and in good standing under the laws of its State of organization; and (ii) duly qualified to transact business and in good standing in the State where the Property is located.
Additional Representations and Warranties of Borrower. Borrower represents, warrants and confirms to Lender that the Fashion Bug Claims (as defined in the Note) have been paid or otherwise satisfied and Fashion Bug has no outstanding claims against Borrower or which relate to the Property.

12.    Waiver of Acceleration. Effective upon the satisfaction of, and subject to, all the terms and conditions set forth in this Assumption Agreement, Noteholder hereby consents to the sale and conveyance of the Property and Collateral and agrees that it shall not exercise its right to cause all sums secured by the Security Instrument to become immediately due and payable because of the conveyance of the Property and the Collateral from Borrower to Assumptor; provided, however, Noteholder reserves its right under the terms of the Security Instrument or any other Loan Document to accelerate all principal and interest in the event of any subsequent sale, transfer, encumbrance or other conveyance of the Property, the Collateral or any interest in Assumptor, except as permitted by the Loan Documents.
13.    Hazardous Substances. Without in any way limiting any other provision of this Assumption Agreement, Borrower expressly reaffirms to Lender only as of the date hereof: (a) each and every representation and warranty in the Original Loan Documents respecting "Hazardous Materials"; and (b) each and every covenant and indemnity in the Original Loan Documents respecting "Hazardous Materials" but only with respect to matters first arising or accruing prior to the Effective Date. Without in any way limiting any other provision of this Assumption Agreement, Assumptor expressly affirms to Lender only: (a) each and every representation and warranty in the Assumed Loan Documents respecting "Hazardous Materials"; and (b) each and every covenant and indemnity in the Assumed Loan Documents respecting "Hazardous Materials".
14.    Multiple Parties. If more than one person or entity has signed this Assumption Agreement as Assumptor or Borrower, then all references in this Assumption Agreement to Assumptor or Borrower shall mean each and all of the persons so signing, as applicable. The liability of all persons and entities signing shall be joint and several with all others similarly liable.
15.    Confirmation of Security Interest; Ratification. Nothing contained herein shall affect or be construed to affect any lien, charge or encumbrance created by any Loan Document or the priority of that lien, charge or encumbrance. All assignments and transfers by Borrower to Assumptor are subject to any security interest(s) held by Noteholder. Assumptor hereby ratifies and reaffirms (i) each grant, pledge, assignment and conveyance to Noteholder of, and Assumptor grants pledges, assigns and conveys to Noteholder a lien on, pledge of, and security interest in, the Property and the Collateral pursuant to the terms of the Security Instrument (as amended hereby), including all rights, interests and property hereafter acquired, and all products and proceeds thereof and additions and accessions thereto, and (ii) that as of the Effective Date, all of the terms,
representations, warranties, covenants and provisions of the Assumed Loan Documents remain in full force and effect, without modification, except as necessary to implement the terms and provisions of this Assumption Agreement. Borrower ratifies and reaffirms to Lender that as of the Effective Date, all of the terms, representations, warranties, covenants and provisions of the Original Loan Documents remain in full force and effect, and are true and correct with respect to Borrower, without modification, except as necessary to implement the terms and provisions of this Assumption Agreement (provided however Borrower's ratification and reaffirmation is subject to the qualifications and limitations set forth in Section 11(b) above).
16.    Notices. All notices to be given to Assumptor pursuant to the Loan Documents shall be addressed as follows:
Staunton Station LLC
c/o Phillips Edison & Company Ltd.
11501 Northlake Drive
Cincinnati, OH 45249
Attn: Chief Financial Officer
With a copy to:
Honigman Miller Schwartz and Cohn LLP 39400 Woodward Avenue, Suite 101 Bloomfield Hills, MI 48304
Attn: J. Adam Rothstein
17.    Integration; Interpretation. The Loan Documents, including this Assumption Agreement, contain or expressly incorporate by reference the entire agreement of the Parties with respect to the matters contemplated herein and supersede all prior negotiations. The Loan Documents shall not be further modified except by written instrument executed by Noteholder and Assumptor (and any other party thereto). Any reference in any of the Loan Documents to the Property or the Collateral shall include all or any parts of the Property or the Collateral.

18.    Successors and Assigns. This Assumption Agreement is binding upon and shall inure to the benefit of the heirs, successors and assigns of the Parties but subject to all prohibitions of transfers contained in any of the Loan Documents.
19.    Attorneys' Fees; Enforcement. If any attorney is engaged by Noteholder to enforce, construe or defend any provision of this Assumption Agreement, or as a consequence of any default under or breach of this Assumption Agreement, with or without the filing of any legal action or proceeding, Assumptor shall pay to Noteholder, upon demand, the amount of all attorneys' fees and costs reasonably incurred by Noteholder in connection therewith, together with interest thereon from the date of such demand at the rate of interest applicable to the principal balance of the Note as specified therein.
20.    Right of Transfer of Property. The Parties acknowledge that Section 4 of Exhibit A to the Note provides that Noteholder shall consent to a sale or exchange of the Property two (2) times, all subject, however, to the terms and conditions set forth therein and in the Loan Documents. The Parties agree that this Assumption Agreement and the actions to be taken as contemplated herein shall constitute the first such sale or exchange.
21.    Deferred Maintenance. Assumptor covenants and agrees that it will repair or cause to have repaired, in a good and workmanlike manner, all of the Conditions Requiring Repair listed on Schedule A attached hereto (the "Deferred Maintenance") in accordance with the requirements of Section 6.1 of the Security Instrument. Assumptor further covenants and agrees that should such items of Deferred Maintenance not be repaired to Noteholder's reasonable satisfaction within one hundred twenty (120) days after the date of this Agreement, that an immediate Event of Default shall have occurred, and that Noteholder shall have all remedies available to it under the terms of the Loan Documents, including but not limited to the immediate right to accrue interest on the Loan at the Default Interest Rate. Notwithstanding the foregoing, as to item 3 on Schedule A (which requires access to a tenant's premises in order to complete the required repairs), Assumptor shall use good faith, commercially reasonable efforts to cause such repairs to be completed.
22.    Further Documents, Etc. The Borrower Parties each hereby agree (as to themselves only and not jointly) to execute and deliver to Noteholder, and authorize the filing and/or recording by Noteholder of, any and all further documents and instruments required by Noteholder to effectuate the transaction contemplated by this Assumption Agreement, to create, perfect and/or modify the liens and security interests granted to Noteholder under the Loan Documents and/or to give effect to the terms and provisions of this Assumption Agreement, including, without limitation, appropriate UCC financing statements or amendments. Notwithstanding the foregoing, no such further documents or instruments should (a) materially impair any right of any of the Borrower Parties in connection with the Loan Documents; or (b) materially amend or increase any obligation of any of the Borrower Parties in connection with the Loan Documents.
23.    Miscellaneous.
(a)    This Assumption Agreement shall be governed and interpreted in
accordance with the laws of the jurisdiction(s) specified in the Security Instrument. In any action brought or arising out of this Assumption Agreement, Borrower and Assumptor, and general partners, members and joint venturers of them, hereby consent to the jurisdiction of any state or federal court having proper venue as specified in the other Loan Documents and also consent to the service of process by any means authorized by the law of such jurisdiction(s). Except as expressly provided otherwise herein, all terms used herein shall have the meaning
given to them in the Loan Documents. Time is of the essence of each term of the Loan Documents, including this Assumption Agreement. If any provision of this Assumption Agreement or any of the other Loan Documents shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that portion shall be deemed severed therefrom and the remaining parts shall remain in full force as though the invalid, illegal, or unenforceable portion had not been a part thereof. This Assumption Agreement, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of any party, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.
(b)    Notwithstanding anything to the contrary herein, this Assumption Agreement is subject to the provisions of Section 8.2 of the Note as if such provisions were set forth at length herein.

(c)    Assumptor acknowledges that in connection with the transactions contemplated by this Assumption Agreement it has not relied on any representations by Noteholder or any loan servicer regarding the Property, the title thereto or any other matter.
24.    Counterparts. This Assumption Agreement may be executed in any number of
counterparts, each of which when executed and delivered will be deemed an original and all of which taken together will be deemed to be one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Parties have caused this Assumption Agreement to be duly executed as of the date first above written.
IVIERS:
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware corporation
By:  /s/ Larry C. Cowling
Name:  Larry C. Cowling
Title:  Assistant Secretary

NOTEHOLDER: 
U.S. BANK NATIONAL ASSOCIATION, as Trustee, successor-in-interest to Bank of America, N.A., as Trustee, successor by merger to LaSalle Bank National Association, as Trustee for Bear Stearns Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-PWRI4
By:    Wells Fargo Bank, N.A., solely in its capacity as
Master Servicer
By:  /s/ Larry C. Cowling
Name:  Larry C. Cowling
Title:  Assistant Vice President

CALIFORNIA NOTARY 
ACKNOWLEDGEMENT
State of California
)ss
County of Alameda
On April 28, 2014, before me, Wayne Ventus, Jr., Notary Public, personally appeared Larry C. Cowling, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
/s/ Wayne Ventus Jr.

CALIFORNIA NOTARY 
ACKNOWLEDGEMENT
State of California
)ss
County of Alameda
On April 28, 2014, before me, Wayne Ventus, Jr., Notary Public, personally appeared Larry C. Cowling, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
IN WITNESS WHEREOF, the Parties have caused this Assumption Agreement to be duly executed as of the date first above written.

WITNESS my hand and official seal.
/s/ Wayne Ventus Jr.

IN WITNESS WHEREOF, the Parties have caused this Assumption Agreement to be duly executed as of the date first above written.
BORROWER:
STAUNTON PLAZA, LLC, a Virginia limited liability company
By:  /s/ Roland Guyot
Name:  Roland Guyot
Title:  Managing Member

By:  /s/ Stephen B. Swartz
Name:  Stephen B. Swartz
Title:  Managing Member

ORIGINAL GUARANTOR:
/s/ Roland Guyot
ROLAND GUYOT, an individual

/s/ Stephen B. Swartz
STEPHEN B. SWARTZ, an individual

ACKNOWLEDGMENT OF BORROWER
STATE OF     GEORGIA    )
) ss
COUNTY OF     FULTON     )
On this the 28 day of April, 2014, before me, the undersigned Notary Public, personally appeared Roland Guyot, as Managing Member of STAUNTON PLAZA, LLC, a Virginia limited liability company, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Melita J. Ellington
Notary Public
My Commission Expires:  MARCH 12, 2017

ACKNOWLEDGMENT OF BORROWER
STATE OF     GEORGIA    )
) ss
COUNTY OF     FULTON     )

On this the 28 day of April, 2014, before me, the undersigned Notary Public, personally appeared Stephen B. Swartz, as Managing Member of STAUNTON PLAZA, LLC, a Virginia limited liability company, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.

/s/ Melita J. Ellington
Notary Public
My Commission Expires:  MARCH 12, 2017

ACKNOWLEDGMENT OF ORIGINAL GUARANTOR
STATE OF     GEORGIA    )
) ss
COUNTY OF     FULTON     )
On this the 28 day of April, 2014, before me, the undersigned Notary Public, personally appeared ROLAND GUYOT, an individual, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his individual capacity.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

/s/ Melita J. Ellington
Notary Public
My Commission Expires:  MARCH 12, 2017

ACKNOWLEDGMENT OF ORIGINAL GUARANTOR
STATE OF     GEORGIA    )
) ss
COUNTY OF     FULTON     )

On this the 28 day of April, 2014, before me, the undersigned Notary Public, personally appeared STEPHEN B. SWARTZ, an individual, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his individual capacity.
IN WITNESS WHEREOF, i hereunto set my hand and official seal.
/s/ Melita J. Ellington
Notary Public
My Commission Expires:  MARCH 12, 2017

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

ASSUMPTOR:
STAUNTON STATION LLC, a Delaware limited liability company
By:  /s/ Joe Schlosser
Name:  Joe Schlosser
Title:  Vice President

NEW GUARANTOR:
PHILLIPS EDISON - ARC GROCERY CENTER OPERATING PARTNERSHIP II L.P., a Delaware limited partnership
By:  PE-ARC GROCERY CENTER OP GP II LLC, a Delaware limited liability company, its general partner

By:  /s/ D.J. Belock
Name:  D.J. Belock
Title:  Vice President
     PHILLIPS EDISON-ARC GROCERY CENTER REIT II, INC., a Maryland corporation
By:  /s/ D.J. Belock
Name:  D.J. Belock
Title:  Vice President

ACKNOWLEDGMENT OF ASSUMPTOR

State of OHIO                          )
                                                   ) ss
County of HAMILTON            )

On this the 28 day of April, 2014, before me, the undersigned Notary Public, personally appeared Joe Schlosser, Vice President of Staunton Station LLC, a Delaware limited liability company, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.

/s/ Valerie Woodham
Notary Public

My Commission Expires:
August 14, 2014

ACKNOWLEDGMENT OF NEW GUARANTOR

STATE OF OHIO

COUNTY OF HAMILTON

On this the 28 day of April, 2014, before me, the undersigned Notary Public, personally appeared D.J. Belock, Vice President of PE-ARC GROCERY CENTER OP GP II LLC, a Delaware limited liability company, as general partner of PHILLIPS EDISON - ARC GROCERY CENTER OPERATING PARTNERSHIP II L.P., a Delaware limited partnership, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Valerie Woodham
Notary Public

My Commission Expires:
August 14, 2014

ACKNOWLEDGMENT OF NEW GUARANTOR 
STATE OF OHIO
COUNTY OF HAMILTON
On this the 28 day of April, 2014, before me, the undersigned Notary Public, personally appeared D.J. Belock, Vice President of PHILLIPS EDISON-ARC GROCERY CENTER REIT II, INC., a Maryland corporation, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Valerie Woodham
Notary Public

My Commission Expires:
August 14, 2014

EXHIBIT A
TO ASSUMPTION AGREEMENT
NOTE TO CLERK: THIS IS AN AMENDMENT OF AN INSTRUMENT ON WHICH RECORDATION TAX HAS BEEN PAID ON THE PRINCIPAL AMOUNT OF $14,100,000.00. THE PRIOR INSTRUMENT IS RECORDED IN THE CLERK'S OFFICE OF THE CIRCUIT COURT OF THE CITY OF STAUNTON, VIRGINIA IN DEED BOOK PAGE 0073 / INSTRUMENT NO. 060003835. THE PRINCIPAL AMOUNT SECURED BY THE DEED OF TRUST HAS NOT BEEN INCREASED. ACCORDINGLY, PURSUANT TO § 58.1-809 OF THE CODE OF VIRGINIA (1950), NO RECORDATION TAX IS DUE.
Prepared by Harold A. Hagen, Esq. outside of the Commonwealth of Virginia
After recording, return to:
Harold A. Hagen, Esq.
Bryan Cave LLP
560 Mission Street, 25fli Floor San Francisco, CA 94105
GP1N/Map No. 444-10550
(Space Above For Recorder's Use Only)
MEMORANDUM OF ASSUMPTION AGREEMENT
THIS MEMORANDUM OF ASSUMPTION AGREEMENT ("Memorandum"),
made this    day of April 2014, by and among MORTGAGE ELECTRONIC 
REGISTRATION SYSTEMS, INC., a Delaware corporation ("MERS"), as nominee for U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, N.A., AS TRUSTEE, SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES, INC., COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-PWR14, with a mailing address do Wells Fargo Bank, N.A., Commercial Mortgage Servicing, 1901 Harrison Street, 7th Floor, Oakland, CA 94612, Attn: Asset Manager (together with its successors and assigns, "Noteholder"), STAUNTON PLAZA, LLC, a Virginia limited liability company, with a mailing address at 3060 Peachtree Road NW, Suite 1545, Atlanta, GA 30305 ("Borrower"), ROLAND GUYOT, an individual, with a mailing address of do Staunton Plaza, LLC, 3060 Peachtree Road NW, Suite 1545, Atlanta, GA 30305 ("Guyot") and STEPHEN B. SWARTZ, an individual, with a mailing address of c/o Staunton Plaza, LLC, 3060 Peachtree Road NW,
Suite 1545, Atlanta, GA 30305 ("Swartz" and, together with Guyot, jointly and severally, "Original Guarantor"), STAUNTON STATION LLC, a Delaware limited liability company, with a mailing address at c/o Phillips Edison & Company Ltd., 11501 Northlake Drive, Cincinnati, OH 45249 ("Assumptor") and PHILLIPS EDISON - ARC GROCERY CENTER OPERATING PARTNERSHIP II L.P., a Delaware limited partnership ("Operating Partnership") and PHILLIPS EDISON - ARC GROCERY CENTER REIT II, INC., a Maryland corporation ("REIT"; and together with Operating Partnership, jointly and severally, "New Guarantor"), each having a mailing address at c/o Phillips Edison & Company Ltd., 11501 Northlake Drive, Cincinnati, OH 45249, as parties to that certain ASSUMPTION AGREEMENT dated of even date herewith ("Assumption Agreement"). The undersigned parties agree that all obligations of Borrower under that certain Promissory Note Secured By Deed Of Trust (together with all renewals, modifications, increases and extensions thereof, the "Note") dated September 22, 2006, in the original principal amount of Fourteen Million One Hundred Thousand and no/100 Dollars ($14,100,000.00), and secured by that certain Deed of Trust and Absolute Assignment of Rents and Leases and 

Security Agreement (and Fixture Filing) (as the same may be amended, restated, extended, or otherwise modified from time to time, the "Security Instrument") executed by Borrower to DAVID F. BELKOWITZ and PAUL DAVENPORT, each of Hirschler Fleischer, a Professional Corporation, with a mailing address at 2100 East Cary Street, Richmond, Virginia, 23223 ("Trustee") for the benefit of MERS, as beneficiary and nominee of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Original Lender") and which Security Instrument was recorded in the Clerk's Office of Staunton, Virginia, on September 25, 2006, as Instrument No. 060003835; securing the real property described on EXHIBIT A (the "Property"), together with the obligations of Borrower under the Security Instrument and certain other Loan Documents (as such terms are defined in the Assumption Agreement), have been assumed by Assumptor as of the Effective Date, subject to the terms and conditions set forth in the Assumption Agreement. The Assumption Agreement is by this reference incorporated herein and made a part hereof. This Memorandum of Assumption Agreement may be executed in any number of counterparts, each of which when executed and delivered will be deemed an original and all of which taken together will be deemed to be one and the same instrument. This Memorandum of Assumption Agreement is executed and recorded in the Official Records to evidence the Assumption Agreement and shall not be construed to limit, amend or modify the provisions of the Assumption Agreement in any way.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
[To include signature blocks, notary pages and Exhibit A property description]

SCHEDULE A
Conditions Requiring Repair

1.    The masonry block wall is cracked on the southeast end of the subject.
2.    Paint is peeling off the metal stairways at two rear service entrances.
3.    Floor tile is cracked near the seafood department in Martins Food Store.
4.    Sidewalk has on large crack outside the Country Cookin entrance.
5.    Gas pipes are rusted on the southeast end of the Five Guys restaurant.

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