Document:

EX-10.1

 

Exhibit 10.1

EXECUTION COPY

 

AGREEMENT AND PLAN OF MERGER

Dated as of June 29, 2006

by and among

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED,

CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED,

CPA 14 ACQUISITION INC.,

CPI HOLDINGS INCORPORATED

and

CPA 12 MERGER SUB INC.

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I THE MERGER	 	 	2	 
	Section 1.1.
	 	The Merger	 	 	2	 
	Section 1.2.
	 	Closing	 	 	2	 
	Section 1.3.
	 	Effective Time	 	 	2	 
	Section 1.4.
	 	Charter and Bylaws	 	 	2	 
	Section 1.5.
	 	Merger Consideration	 	 	2	 
	Section 1.6.
	 	Dissenters Rights	 	 	3	 
	Section 1.7.
	 	Adjustments to Common Stock Ratio and Cash Exchange Ratio	 	 	3	 
	Section 1.8.
	 	Recordation of Exchange; Payment of Merger Consideration	 	 	3	 
	(a)
	 	Delivery of CPA:14 Common Stock	 	 	4	 
	(b)
	 	Paying Agent and Exchange Agent	 	 	4	 
	(c)
	 	No Interest	 	 	4	 
	(d)
	 	No Further Ownership Rights	 	 	4	 
	(e)
	 	Termination of Exchange Fund	 	 	4	 
	(f)
	 	No Liability	 	 	4	 
	(g)
	 	Investment of Exchange Fund	 	 	4	 
	(h)
	 	Withholding Rights	 	 	5	 
	(i)
	 	Fractional Shares	 	 	5	 
	(j)
	 	Directors	 	 	5	 
	ARTICLE II REPRESENTATIONS AND WARRANTIES	 	 	5	 
	Section 2.1.
	 	Representations and Warranties of CPA:12	 	 	5	 
	(a)
	 	Organization, Standing and Corporate Power of CPA:12	 	 	5	 
	(b)
	 	Subsidiaries	 	 	6	 
	(c)
	 	Capital Structure	 	 	6	 
	(d)
	 	Authority; No Violations; Consents and Approval	 	 	7	 
	(e)
	 	SEC Documents	 	 	8	 
	(f)
	 	Absence of Certain Changes or Events	 	 	9	 
	(g)
	 	No Undisclosed Material Liabilities	 	 	9	 
	(h)
	 	No Default	 	 	10	 
	(i)
	 	Compliance with Applicable Laws	 	 	10	 
	(j)
	 	Litigation	 	 	10	 
	(k)
	 	Taxes	 	 	10	 
	(l)
	 	Pension and Benefit Plans	 	 	12	 
	(m)
	 	Information Supplied	 	 	12	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	(n)
	 	Intangible Property	 	 	13	 
	(o)
	 	Environmental Matters	 	 	13	 
	(p)
	 	Properties	 	 	14	 
	(q)
	 	Insurance	 	 	16	 
	(r)
	 	Opinion of Financial Advisor	 	 	16	 
	(s)
	 	Vote Required	 	 	16	 
	(t)
	 	Brokers	 	 	16	 
	(u)
	 	Investment Company Act of 1940	 	 	17	 
	(v)
	 	Contracts	 	 	17	 
	(w)
	 	State Takeover Statutes; Charter Waiver	 	 	17	 
	(x)
	 	Related Party Transactions	 	 	18	 
	Section 2.2.
	 	Representations and Warranties of CPA:14	 	 	18	 
	(a)
	 	Organization, Standing and Corporate Power	 	 	18	 
	(b)
	 	Capital Structure	 	 	18	 
	(c)
	 	Authority; No Violations; Consents and Approval	 	 	19	 
	(d)
	 	SEC Documents	 	 	20	 
	(e)
	 	Absence of Certain Changes or Events	 	 	21	 
	(f)
	 	No Undisclosed Material Liabilities	 	 	21	 
	(g)
	 	No Default	 	 	21	 
	(h)
	 	Compliance with Applicable Laws	 	 	21	 
	(i)
	 	Litigation	 	 	22	 
	(j)
	 	Taxes	 	 	22	 
	(k)
	 	Pension and Benefit Plans.	 	 	23	 
	(l)
	 	Information Supplied	 	 	24	 
	(m)
	 	Intangible Property	 	 	24	 
	(n)
	 	Environmental Matters	 	 	24	 
	(o)
	 	Properties	 	 	26	 
	(p)
	 	Insurance	 	 	27	 
	(q)
	 	Opinion of Financial Advisor	 	 	27	 
	(r)
	 	Vote Required	 	 	27	 
	(s)
	 	Brokers	 	 	27	 
	(t)
	 	Investment Company Act of 1940	 	 	28	 
	(u)
	 	Contracts	 	 	28	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	(v)
	 	Related Party Transactions	 	 	28	 
	(w)
	 	Transaction Financing	 	 	29	 
	ARTICLE III   COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER	 	 	29	 
	Section 3.1.
	 	Conduct of Business by CPA:12	 	 	29	 
	Section 3.2.
	 	Conduct of Business by CPA:14	 	 	31	 
	Section 3.3.
	 	No Control of Other Party’s Business	 	 	33	 
	ARTICLE IV   ADDITIONAL COVENANTS	 	 	34	 
	Section 4.1.
	 	Preparation of the Form S-4 and the Joint Proxy Statement/Prospectus; Stockholders Meetings	 	 	34	 
	Section 4.2.
	 	Reasonable Best Efforts	 	 	35	 
	Section 4.3.
	 	Tax Treatment	 	 	36	 
	Section 4.4.
	 	No Solicitation of Transactions	 	 	37	 
	Section 4.5.
	 	Public Announcements	 	 	38	 
	Section 4.6.
	 	Transfer and Gains Taxes	 	 	38	 
	Section 4.7.
	 	Indemnification; Directors’ and Officers’ Insurance	 	 	38	 
	Section 4.8.
	 	Purchases and Redemptions of CPA:12 Common Stock	 	 	39	 
	Section 4.9.
	 	Access; Confidentiality	 	 	39	 
	Section 4.10.
	 	Sale Agreement	 	 	39	 
	ARTICLE V   CONDITIONS PRECEDENT	 	 	39	 
	Section 5.1.
	 	Conditions to Each Party’s Obligation to Effect the Merger	 	 	39	 
	Section 5.2.
	 	Conditions to Obligations of CPA:14, Holdings, Acquisition and Merger Sub	 	 	40	 
	Section 5.3.
	 	Conditions to Obligations of CPA:12	 	 	41	 
	ARTICLE VI   BOARD ACTIONS	 	 	42	 
	Section 6.1.
	 	Board Actions	 	 	42	 
	ARTICLE VII   TERMINATION, AMENDMENT AND WAIVER	 	 	43	 
	Section 7.1.
	 	Termination	 	 	43	 
	Section 7.2.
	 	Expenses	 	 	44	 
	Section 7.3.
	 	Effect of Termination	 	 	45	 
	Section 7.4.
	 	Amendment	 	 	45	 
	Section 7.5.
	 	Extension; Waiver	 	 	45	 
	Section 7.6.
	 	Payment of Expenses	 	 	45	 
	ARTICLE VIII  GENERAL PROVISIONS	 	 	46	 

-iii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 8.1.
	 	Nonsurvival of Representations and Warranties	 	 	46	 
	Section 8.2.
	 	Notices	 	 	47	 
	Section 8.3.
	 	Interpretation	 	 	47	 
	Section 8.4.
	 	Counterparts	 	 	47	 
	Section 8.5.
	 	Entire Agreement; No Third-Party Beneficiaries	 	 	47	 
	Section 8.6.
	 	Governing Law	 	 	48	 
	Section 8.7.
	 	Assignment	 	 	48	 
	Section 8.8.
	 	Enforcement	 	 	48	 
	Section 8.9.
	 	Exhibits; Disclosure Letters	 	 	48	 
	ARTICLE IX   CERTAIN DEFINITIONS	 	 	48	 
	Section 9.1.
	 	Certain Definitions	 	 	48	 
	ARTICLE X   ALTERNATE MERGER	 	 	50	 
	Section 10.1.
	 	Introduction	 	 	50	 
	Section 10.2.
	 	Alternative Merger and Consideration	 	 	50	 
	Section 10.3.
	 	Transfer Taxes	 	 	50	 
	Section 10.4.
	 	Representations and Warranties of Holdings, Acquisition and Merger Sub	 	 	50	 
	Section 10.5.
	 	Guaranty of Obligations of Holdings by CPA:14	 	 	52	 
	Section 10.6.
	 	Further Action	 	 	52	 
	Section 10.7.
	 	Conditions Precedent	 	 	52	 
	Section 10.8.
	 	Additional Covenant	 	 	53	 
	Section 10.9.
	 	Dissenters Rights	 	 	53	 

	 	 	 
	EXHIBIT A:

	 	FORM OF SALE AGREEMENT
	EXHIBIT B:

	 	FORM OF INDEMNIFICATION AGREEMENT
	EXHIBIT C:

	 	FORM OF ARTICLES OF MERGER
	ANNEX A:

	 	CPA:12 ASSETS TO BE SOLD TO WP CAREY

-iv-

 

INDEX OF DEFINED TERMS

	 	 	 	 	 
	Acquisition
	 	 	2	 
	Acquisition Common Stock
	 	 	52	 
	Advisory Agreement
	 	 	40	 
	Affiliate
	 	 	49	 
	Agreement
	 	 	2	 
	Alternate Merger
	 	 	2	 
	Articles of Merger
	 	 	2	 
	Cash Exchange Ratio
	 	 	2	 
	CERCLA
	 	 	13	 
	Claim
	 	 	38	 
	Closing
	 	 	2	 
	Closing Date
	 	 	2	 
	Commitment
	 	 	30	 
	Common Stock Exchange Ratio
	 	 	2	 
	Competing Transaction
	 	 	37	 
	CPA
	 	 	2	 
	12
	 	 	2	 
	12 Bylaws
	 	 	6	 
	12 Charter
	 	 	6	 
	12 Common Stock
	 	 	2	 
	12 Disclosure Letter
	 	 	6	 
	12 Intangible Property
	 	 	12	 
	12 Leases
	 	 	16	 
	12 Material Adverse Effect
	 	 	5	 
	12 Material Contracts
	 	 	17	 
	12 Permits
	 	 	10	 
	12 Properties
	 	 	14	 
	12 Property
	 	 	14	 
	12 Property Restrictions
	 	 	15	 
	12 Rent Roll
	 	 	15	 
	12 SEC Documents
	 	 	8	 
	12 Stockholder Approval
	 	 	16	 
	12 Stockholder Meeting
	 	 	7	 
	12 Stockholders
	 	 	2	 
	12 Subsidiary
	 	 	49	 
	14
	 	 	2	 
	14 Break-Up Expenses
	 	 	45	 
	14 Bylaws
	 	 	18	 
	14 Charter
	 	 	18	 
	14 Common Stock
	 	 	2	 
	14 Disclosure Letter
	 	 	18	 
	14 Intangible Property
	 	 	24	 
	14 Leases
	 	 	27	 
	14 Material Adverse Effect
	 	 	18	 
	14 Material Contracts
	 	 	28	 
	14 Permits
	 	 	21	 
	14 Properties
	 	 	26	 
	14 Property
	 	 	26	 
	14 Property Restrictions
	 	 	26	 
	14 Rent Roll
	 	 	26	 
	14 SEC Documents
	 	 	20	 
	14 Stockholder Approval
	 	 	27	 
	14 Stockholder Meeting
	 	 	19	 
	14 Stockholders
	 	 	19	 
	14 Subsidiary
	 	 	49	 
	Dissenting Shares
	 	 	3	 
	Dissenting Stockholder
	 	 	3	 
	Effective Time
	 	 	2	 
	Employee Benefit Plans
	 	 	49	 
	Environmental Law
	 	 	13	 
	Exchange Act
	 	 	8	 
	Exchange Fund
	 	 	4	 
	Expense Amount
	 	 	46	 
	Form S-4
	 	 	34	 
	GAAP
	 	 	8	 
	Governmental Entity
	 	 	4	 
	Hazardous Material
	 	 	13	 
	Holdings
	 	 	2	 
	Holdings Common Stock
	 	 	50	 
	Indemnification Agreement
	 	 	2	 
	Indemnified Parties
	 	 	38	 
	IRS
	 	 	49	 
	Joint Proxy Statement/Prospectus
	 	 	34	 
	Knowledge
	 	 	49	 
	Law
	 	 	49	 
	Lien
	 	 	6	 
	Merger
	 	 	2	 
	Merger Consideration
	 	 	2	 
	Merger Sub
	 	 	2	 
	Merger Sub Common Stock
	 	 	52	 
	MGCL
	 	 	2	 
	Paying and Exchange Agent
	 	 	4	 
	PCBs
	 	 	13	 
	Person
	 	 	49	 
	Qualifying Income
	 	 	46	 
	REIT
	 	 	11	 
	Release
	 	 	13	 
	Reorganization Opinions
	 	 	3	 
	Sale Agreement
	 	 	2	 
	Sale of Assets
	 	 	2	 
	SEC
	 	 	8	 
	Securities Act
	 	 	8	 
	SOX Act
	 	 	8	 
	Special Distribution
	 	 	2	 
	Subsidiary
	 	 	49	 
	Superior Competing Transaction
	 	 	37	 
	Surviving Company
	 	 	2, 50	 
	Takeover Statute
	 	 	17	 
	Tax
	 	 	49	 

 

 

	 	 	 	 	 
	Tax Protection Agreement
	 	 	49	 
	Tax Return
	 	 	50	 
	Termination Date
	 	 	43	 
	Transaction Documents
	 	 	7	 
	Transfer and Gains Taxes
	 	 	38	 
	Voting Debt
	 	 	50	 

     AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of June 29, 2006, by
and among Corporate Property Associates 14 Incorporated, a Maryland corporation (“CPA:14”),
Corporate Property Associates 12 Incorporated, a Maryland corporation (“CPA:12”), CPA 14
Acquisition Inc., a Maryland corporation (“Acquisition”), CPI Holdings Incorporated, a
Maryland corporation (“Holdings”) and CPA 12 Merger Sub Inc., a Maryland corporation
(“Merger Sub”).

RECITALS

     A. Holdings, Acquisition, Merger Sub, CPA:12 and CPA:14 intend to, upon the terms and subject
to the conditions set forth in this Agreement, merge CPA:12 with and into CPA:14, with CPA:14
continuing as the surviving entity in the merger (the “Merger”).

     B. This Agreement has been approved by the respective boards of directors of CPA:12, CPA:14,
Merger Sub, Holdings and Acquisition.

     C. For U.S. federal income Tax purposes, it is intended that (a) the Merger shall qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the “Code”), (b) this Agreement constitutes, and is hereby adopted as, a plan of
reorganization within the meaning of Section 354 of the Code, and (c) CPA:14 and CPA:12 will each
be a party to such reorganization within the meaning of Section 368(b) of the Code.

     D. In the event CPA:14 and CPA:12 do not receive opinions of counsel that the Merger will
qualify as a reorganization under the Code, (i) Merger Sub will be merged with and into CPA:12
whereupon CPA:12 will be the surviving company and Merger Sub will cease to exist and (ii)
Acquisition will be merged with and into CPA:14 whereupon CPA:14 will be the surviving company and
Acquisition will cease to exist (together, the “Alternate Merger”).

     E. Prior to the Merger, CPA:12 intends (a) to sell the assets listed on Annex A to W.
P. Carey & Co. LLC in exchange for cash and the assumption of debt (the “Sale of Assets”)
pursuant to an Agreement for Sale and Purchase between the parties dated as of June 29, 2006 (the
“Sale Agreement”), in substantially the form set forth as Exhibit A, and (b) to
make a pro rata special distribution to the CPA:12 Stockholders of (i) the initial proceeds of the
Sale of Assets and (ii) the right to receive the additional consideration contemplated by Section 6
of the Sale Agreement (collectively, the “Special Distribution”).

     F. As a condition and inducement to the willingness of CPA:14 to enter into this Agreement and
consummate the transactions contemplated hereby, CPA:14 has required Carey Asset Management Corp.
to enter into an indemnification agreement, of even date herewith (the “Indemnification
Agreement”), in substantially the form set forth as Exhibit B.

     G. The parties desire to make certain representations, warranties and agreements in connection
with the Merger.

AGREEMENT

     In consideration of the premises and the mutual representations, warranties, covenants and
agreements contained in this Agreement, the parties hereto hereby agree as follows:

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ARTICLE I

THE MERGER

     Section 1.1. The Merger. Upon the terms and subject to the conditions set forth in
this Agreement and in accordance with Section 3-114 of the Maryland General Corporation Law (the
“MGCL”) and subject to the applicability of Article X, CPA:12 shall be merged with and into
CPA:14, with CPA:14 being the surviving entity (the “Surviving Company”).

     Section 1.2. Closing. The closing (the “Closing”) of the Merger will take
place commencing at 10:00 a.m., local time, on a date to be specified by the parties, which shall
be no later than the third business day after satisfaction or waiver of the conditions set forth in
Article V (the “Closing Date”), at the offices of Clifford Chance US LLP, 31 West
52nd Street, New York, New York 10019, unless another date or place is agreed to in
writing by the parties hereto.

     Section 1.3. Effective Time. Upon the terms and subject to the conditions set forth
herein, as part of the Closing CPA:12 and CPA:14 shall execute Articles of Merger ( the
“Articles of Merger”) in substantially the form attached hereto as Exhibit C and
shall file such Articles of Merger in accordance with the MGCL with the State Department of
Assessments and Taxation of Maryland and shall make all other filings and recordings required under
such statute with respect to the Merger. The Merger shall become effective (the “Effective
Time”) at such times as CPA:12 and CPA:14 shall agree should be specified in the Articles of
Merger; provided, that such time does not exceed 30 days after the Articles of Merger are accepted
for record. Unless otherwise agreed, the parties shall cause the Effective Time to occur on the
Closing Date.

     Section 1.4. Charter and Bylaws. The CPA:14 Charter and CPA:14 Bylaws as in effect
immediately prior to the Effective Time of the Merger, shall, except for any required amendments,
continue in full force and effect after the Merger as the charter and bylaws of the Surviving
Company, until further amended in accordance with the respective terms of such charter and bylaws
and applicable Maryland Law.

     Section 1.5. Merger Consideration.

     (a) By virtue of the Merger and without any further action on the part of CPA:12, CPA:14, or
any stockholder of CPA:12 (the “CPA:12 Stockholders”), each share of CPA:12’s common stock,
$.001 par value per share (“CPA:12 Common Stock”), outstanding immediately prior to the
Effective Time shall be cancelled and, in exchange for cancellation of such share, the rights
attaching to such share shall be converted into the right to receive, at the election of each
CPA:12 Stockholder, either: (i) subject to the application of Article X, that number of shares of
CPA:14’s common stock, $.001 par value per share (“CPA:14 Common Stock”) equal to the
product of (A) the number of shares of CPA:12 Common Stock owned by such CPA:12 Stockholder and (B)
0.8692 (the “Common Stock Exchange Ratio”) together with any cash in lieu of fractional
shares; or (ii) an amount of cash equal to the product of (A) the number of shares of CPA:12 Common
Stock owned by such CPA:12 Stockholder and (B) $10.30 (the “Cash Exchange Ratio”) (the
“Merger Consideration”). CPA:12 Stockholders must make their election at the time they cast
their vote either in favor of or against the Merger and such election may be revoked as set forth
in the Joint Proxy Statement/Prospectus (as defined herein). CPA:12 Stockholders who do not vote
with respect to the Merger or who abstain from voting with respect to the Merger will be deemed to
have elected to receive CPA:14 Common Stock pursuant to Section 1.5(a)(i) above.

     (b) At the Effective Time, all shares of CPA:12 Common Stock shall no longer be outstanding
and shall automatically be canceled and shall cease to exist, and each holder of CPA:12

-2-

 

Common
Stock shall cease to have any rights with respect thereto, except the right to receive the Merger
Consideration described above.

     (c) In the event counsels to CPA:12 and CPA:14 are unable to deliver the opinions set forth in
Sections 5.2(f) and 5.3(f), respectively, that the transaction described in Section 1.1 through
Section 1.5 will qualify as a reorganization within the meaning of Section 368(a) of the Code (the
“Reorganization Opinions”), then, in addition to the transactions contemplated by Section
1.1 through Section 1.5, the provisions of Article X shall apply. The provisions of Article X shall
apply if and only if counsels to CPA:12 and CPA:14 are unable to deliver the Reorganization
Opinions.

     Section 1.6. Dissenters Rights.

     (a) Notwithstanding any provision of this Agreement to the contrary, to the extent that the
right to demand payment of fair value of the CPA:12 Common Stock in connection with the Merger is
available under the MGCL, any outstanding shares of CPA:12 Common Stock (“Dissenting
Shares”) held by a Dissenting Stockholder shall not be converted into the Merger Consideration
but shall become the right to receive such consideration as may be determined to be due to such
Dissenting Stockholder pursuant to the MGCL; provided, however, that each share of CPA:12 Common
Stock outstanding immediately prior to the Effective Time and held by a Dissenting Stockholder who,
after the Effective Time, withdraws his demand or fails to perfect or otherwise loses his right to
receive payment of fair value, pursuant to the MGCL, shall be deemed to be converted as of the
Effective Time into the right to receive the Merger Consideration, in the form of CPA:14 Common
Stock, without interest. As used in this Agreement, “Dissenting Stockholder” means any
record holder or beneficial owner of shares of CPA:12 Common Stock who is entitled to demand and
receive payment of the fair value of such holder’s shares pursuant to Section 3-202 of the MGCL and
who does not vote for the Merger and complies with all provisions of the MGCL (including all
provisions of Section 3-203 of the MGCL) concerning the right of holders of shares of CPA:12 Common
Stock to object to the Merger and obtain fair value for their shares.

     (b) CPA:12 shall give CPA:14 (i) prompt notice of any demands for payment of fair value
pursuant to the applicable provisions of the MGCL received by CPA:12, attempted withdrawals of such
demands, and any other instruments served pursuant to the MGCL and received by CPA:12 relating to
rights of appraisal and (ii) the opportunity to participate in and direct the conduct of all
negotiations and proceedings with respect to demands for payment of fair value under the MGCL.
CPA:12 shall not, except with the prior written consent of CPA:14, make any payment with respect to
any such demands for payment of fair value, or settle, or offer to settle, or otherwise negotiate
any such demands for payment of fair value.

     Section 1.7. Adjustments to Common Stock Ratio and Cash Exchange Ratio. The Common
Stock Ratio and Cash Exchange Ratio shall be adjusted to reflect fully the effect of any
reclassification, combination, subdivision, share split, reverse split, share dividend (including
any share dividend or distribution of securities convertible into CPA:12 Common Stock),
reorganization, recapitalization or other like change with respect to CPA:12 Common Stock (or for
which a record date is established) after the date hereof and prior to the Effective Time.

     Section 1.8. Recordation of Exchange; Payment of Merger Consideration.

     (a) Delivery of CPA:14 Common Stock. As soon as practicable following the Effective
Time, CPA:14 shall cause the transfer agent for the CPA:14 Common Stock to record the transfer on
the stock records of CPA:14 the amount of CPA:14 Common Stock issuable as Merger Consideration to
each

-3-

 

holder of CPA:12 Common Stock pursuant to proper election made by such holder pursuant to
Section 1.5(a).

     (b) Paying Agent and Exchange Agent. Prior to the Effective Time, CPA:14 shall
designate a bank or trust company reasonably acceptable to CPA:12 to act as agent for the payment
of the Merger Consideration (the “Paying and Exchange Agent”). CPA:14 shall take all steps
necessary to enable, and shall cause, the Surviving Company to provide to the Paying and Exchange
Agent immediately following the Effective Time the cash portion of the Merger Consideration payable
upon cancellation of the CPA:12 Common Stock pursuant to Section 1.5. The funds deposited with the
Paying and Exchange Agent in respect of the Merger Consideration is hereinafter referred to as the
“Exchange Fund.” As soon as practicable after the Effective Time, the Paying and Exchange
Agent shall pay to each holder of CPA:12 Common Stock the amount of cash such holder is entitled to
receive pursuant to proper election made by such holder pursuant to Section 1.5(a).

     (c) No Interest. No interest shall be paid or shall accrue on the Merger
Consideration, or unpaid dividends declared in respect of the CPA:12 Common Stock and with a record
date prior to the Effective Time and which remain unpaid at the Effective Time.

     (d) No Further Ownership Rights. All Merger Consideration paid by CPA:14 in accordance
with the terms of this Article I shall be deemed to have been paid in full satisfaction of all
rights pertaining to the CPA:12 Common Stock in respect of which such Merger Consideration was
paid. At the close of business on the day on which the Effective Time occurs, the share transfer
books of CPA:12 shall be closed, and there shall be no further registration of transfers on the
share transfer books of the Surviving Company of the shares of CPA:12 Common Stock that were
outstanding, immediately prior to the Effective Time.

     (e) Termination of Exchange Fund. Any portion of the Exchange Fund that remains
undistributed to the holders of CPA:12 Common Stock one year after the Effective Time shall be
delivered to CPA:14 or its designated Affiliate, upon demand, and any holder of CPA:12 Common Stock
who has not theretofore complied with this Article I shall thereafter look only to the Surviving
Company or its successor in interest for payment of its claim for Merger Consideration.

     (f) No Liability. Neither CPA:14 nor the Surviving Company shall be liable to any
person for any part of the Merger Consideration or for dividends or distributions with respect
thereto delivered to a public official pursuant to any applicable abandoned property, escheat or
similar Law. Any amounts remaining unclaimed by holders of any such shares five years after the
Effective Time or at such earlier date as is immediately prior to the time at which such amounts
would otherwise escheat to, or become property of, any Federal, state, local government, or agency
or any court, regulatory or administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (a “Governmental Entity”), shall, to the extent
permitted by applicable Law, become the property of CPA:14 or its designated Affiliate free and
clear of any claims or interest of any such holders or their successors, assigns or personal
representatives previously entitled thereto.

     (g) Investment of Exchange Fund. The Paying and Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by CPA:14, on a daily basis; provided, however, that
such investments shall be in (i) obligations of or guaranteed by the United States of America and
backed by the full faith and credit of the United States of America, (ii) commercial paper
obligations rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s
Corporation, respectively, (iii) certificates of deposit maturing not more than 180 days after the
date of purchase issued by a bank organized under the Laws of the United States or any state
thereof having a combined capital and surplus of at least $3,000,000,000 or (iv) a money market
fund having assets of at least $500,000,000. Any interest and

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other income resulting from such
investments shall be the property of, and paid to, CPA:14 or its designated Affiliate.

     (h) Withholding Rights. The Surviving Company or the Paying and Exchange Agent, as
applicable, shall be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of CPA:12 Common Stock, such amounts as it is required to
withhold with respect to such payments under the Code or any other provision of state, local or
foreign Tax Law. Any such amounts so withheld shall be paid over to the applicable Governmental
Entity in accordance with applicable Law and shall be treated for all purposes of this Agreement as
having been paid to the former holder of a Certificate with respect to which such deduction and
withholding was made.

     (i) Fractional Shares. No certificates for fractional shares of CPA:14 Common Stock
shall be issued hereunder. To the extent that a holder of CPA:12 Common Stock would otherwise be
entitled to receive a fraction of a share of CPA:14 Common Stock, computed on the basis of the
aggregate number of shares of CPA:12 Common Stock held by such holder, such holder shall instead
receive a cash payment in an amount equal to such fraction multiplied by $10.30.

     (j) Directors. Unless otherwise determined by the parties, the directors of CPA:12
and the directors of CPA:14 immediately prior to the Effective Time shall together be the directors
of the Surviving Company, until duly removed or replaced in accordance with the Bylaws of the
Surviving Company and the MGCL.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

     Section 2.1. Representations and Warranties of CPA:12. CPA:12 represents and warrants
to CPA:14 as follows:

     (a) Organization, Standing and Corporate Power of CPA:12. CPA:12 is a corporation
duly organized, validly existing and in good standing under the Laws of the State of Maryland and
has the requisite trust power and authority to own, lease and operate its properties and to carry
on its business as now being conducted. CPA:12 is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which the nature of the business it is conducting, or the
ownership, operation or leasing of its properties or the management of properties for others makes
such qualification or licensing necessary, other than in such jurisdictions where the failure to be
so qualified or licensed, individually or in the aggregate, (x) would not have, or would not be
reasonably likely to have, a material adverse effect on the business, properties, financial
condition or results of operations of CPA:12 and the CPA:12 Subsidiaries (as defined herein) taken
as a whole or (y) would not, or would not be reasonably likely to, prevent or materially delay the
performance by CPA:12 of its obligations under this Agreement or the consummation of the Merger or
any other transaction contemplated by this Agreement (such effect, a “CPA:12 Material Adverse
Effect”), provided that as used in this Agreement, the parties agree that a CPA:12 Material
Adverse Effect shall not include any change with respect to CPA:12 or any CPA:12 Subsidiary to the
extent resulting from or attributable to (i) general national, international or regional economic,
financial or political conditions or events, including, without limitation, the effects of
terrorist acts that do not result in the destruction or material physical damage of a material
portion of the CPA:12 Properties (as defined herein), (ii) the announcement, pendency or
consummation of this Agreement or the other Transaction Documents or the transactions contemplated
thereby or (iii) conditions generally affecting the securities markets or the industries in which
CPA:12 and the CPA:12 Subsidiaries operate to the extent such conditions do not disproportionately
affect CPA:12. CPA:12 has heretofore made available to CPA:14

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complete and correct copies of its
charter, as amended and supplemented to the date hereof (the “CPA:12 Charter”), and its
bylaws, as amended to the date hereof (“CPA:12 Bylaws”).

     (b) Subsidiaries. Each CPA:12 Subsidiary that is a corporation is duly incorporated,
validly existing and in good standing under the Laws of its jurisdiction of incorporation and has
the requisite corporate power and authority to own, lease and operate its properties and to carry
on its business as now being conducted. Each CPA:12 Subsidiary that is a partnership, limited
liability company or trust is duly organized, validly existing and in good standing under the Laws
of its jurisdiction of organization and has the requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted. Each CPA:12 Subsidiary
is duly qualified or licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership, operation or leasing of its properties or the
management of properties for others makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed, individually or in the
aggregate, would not reasonably be expected to have a CPA:12 Material Adverse Effect. All
outstanding shares of capital stock of each CPA:12 Subsidiary that is a corporation have been duly
authorized, are validly issued, fully paid and nonassessable, and are not subject to any preemptive
rights and are owned by CPA:12 or another CPA:12 Subsidiary, except as disclosed in Schedule 2.1(b)
of the CPA:12 Disclosure Letter dated as of the date of this Agreement and delivered to CPA:14 in
connection with the execution hereof (the “CPA:12 Disclosure Letter”), and are so owned
free and clear of all pledges, claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever (each, a “Lien” and collectively, “Liens”), except for
Liens in connection with international transactions. All equity interests in each CPA:12
Subsidiary that is a partnership, limited liability company, trust or other entity, have been duly
authorized and are validly issued and are owned by CPA:12 or another CPA:12 Subsidiary, except as
disclosed in Schedule 2.1(b) of the CPA:12 Disclosure Letter, and are so owned free and clear of
all Liens, except for Liens in connection with international transactions. Schedule 2.1(b) of the
CPA:12 Disclosure Letter sets forth (A) all CPA:12 Subsidiaries and their respective jurisdictions
of incorporation or organization and (B) each owner and the respective amount of such owner’s
equity interest in each CPA:12 Subsidiary. Except as set forth on Schedule 2.1(b) of the CPA:12
Disclosure Letter, CPA:12 does not have any Subsidiaries or any equity investment or other interest
in, nor has CPA:12 made advances or loans to, any corporation, association, partnership, joint
venture or other entity.

     (c) Capital Structure.

          (i) As of the date of this Agreement, the authorized shares of common stock of CPA:12 consist
of 40,000,000 shares of CPA:12 Common Stock, 31,167,902 of which are issued and outstanding. All
outstanding shares of CPA:12 Common Stock are duly authorized, validly issued, fully paid and
nonassessable and not subject to, or issued in violation of, any preemptive right, purchase option,
call option, right of first refusal, subscription or any other similar right. All dividends or
distributions on securities of CPA:12 or any CPA:12 Subsidiary that have been declared or
authorized prior to the date of this Agreement have been paid in full.

          (ii) Except as set forth in Schedule 2.1(c)(ii) of the CPA:12 Disclosure Letter, there are
issued and outstanding or reserved for issuance: (1) no stock, Voting Debt or other voting
securities or equity securities of CPA:12; (2) no securities of CPA:12 or any CPA:12 Subsidiary or
securities or assets of any other entity convertible into or exchangeable for shares of stock,
Voting Debt or other voting securities or equity securities of CPA:12 or any CPA:12 Subsidiary; and
(3) no subscriptions, options, warrants, conversion rights, calls, performance stock awards, stock
appreciation rights or phantom stock rights, rights of first refusal, rights (including preemptive
rights), commitments or arrangements or agreements to which CPA:12 or any CPA:12 Subsidiary is a
party or by which it is bound obligating CPA:12 or any CPA:12 Subsidiary to issue, deliver, sell,
purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or
acquired, additional shares of stock, Voting Debt or other

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voting securities of CPA:12 or of any
CPA:12 Subsidiary, or obligating CPA:12 or any CPA:12 Subsidiary to grant, extend or enter into any
such subscription, option, warrant, conversion right, call, performance stock award, stock
appreciation right or phantom stock right, right of first refusal, right, commitment or arrangement
or agreement.

          (iii) There are no (x) stockholder agreements, voting trusts or other agreements or
understandings relating to the voting of any shares of capital stock of CPA:12 or any CPA:12
Subsidiary or (y) agreements or understandings relating to the sale or transfer of any shares of
CPA:12 or any ownership interests in any CPA:12 Subsidiary (other than those listed on Schedule
2.1(g) of the CPA:12 Disclosure Letter), in the case of (x) and (y) to which CPA:12 or any CPA:12
Subsidiary is a party other than as listed on Schedule 2.1(c)(iii) of the CPA:12 Disclosure Letter.

          (iv) Except as set forth in Schedule 2.1(c)(iv) of the CPA:12 Disclosure Letter, no holder of
securities in CPA:12 or any CPA:12 Subsidiary has any right to have such securities registered by
CPA:12 or any CPA:12 Subsidiary, as the case may be. All prior issuances of securities by CPA:12
or any CPA:12 Subsidiary were, in all respects, made in compliance with all applicable Federal and
state securities Laws.

     (d) Authority; No Violations; Consents and Approval.

          (i) The Board of Directors of CPA:12 has approved and declared advisable the Merger and the
other transactions contemplated by the Transaction Documents and has authorized that the Merger be
submitted for consideration at a special meeting of the CPA:12 Stockholders (the “CPA:12
Stockholder Meeting”). CPA:12 has all requisite power and authority to enter into this
Agreement and all other documents to be executed in connection with the transactions contemplated
thereby (each, a “Transaction Document” and collectively, the “Transaction
Documents”) and, subject to receipt of the CPA:12 Stockholder Approval (as defined herein), to
consummate the transactions contemplated thereby. The execution and delivery of the Transaction
Documents and the consummation of the transactions contemplated thereby have been, or when executed
will have been, duly authorized by all necessary action on the part of CPA:12, subject to receipt
of the CPA:12 Stockholder Approval, and are enforceable in accordance with their terms, subject to
enforceability, to bankruptcy, insolvency, reorganization, moratorium and other Laws of general
applicability relating to or affecting creditors’ rights and to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at Law).

          (ii) Assuming the consents, approvals, authorizations or permits and filings or notifications
referred to in Schedule 2.1(d)(ii) of the CPA:12 Disclosure Letter are duly and timely obtained or
made and the CPA:12 Stockholder Approval has been obtained, the execution and delivery of the
Transaction Documents by CPA:12 do not, and the consummation of the transactions contemplated
thereby, and compliance with the provisions hereof or thereof, will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any material obligation, or give
rise to a right of purchase under, result in the creation of any Lien upon any of the properties or
assets of CPA:12 or any of the CPA:12 Subsidiaries under or require the consent or approval of any
third party under, any provision of (A) the CPA:12 Charter or the CPA:12 Bylaws or any provision of
the comparable charter or organizational documents of any of the CPA:12 Subsidiaries, (B) any
CPA:12 Material Contract (as defined herein) (it being understood that no representation is being
given as to whether the Surviving Company and the CPA:12 Subsidiaries will be in compliance with
any financial covenants contained therein following the Merger) or (C) any judgment, order, decree,
statute, Law, ordinance, rule or regulation applicable to CPA:12 or any of the CPA:12 Subsidiaries,
or any of their respective properties or assets, other than, in the case of clauses (B) or (C), any
such conflicts, violations, defaults, rights or

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Liens that, individually or in the aggregate, would
not reasonably be expected to have a CPA:12 Material Adverse Effect.

          (iii) No consent, approval, order or authorization of, or registration, declaration or filing
with, or permit from any Governmental Entity, is required by or with respect to CPA:12 or any of
the CPA:12 Subsidiaries in connection with the execution and delivery of the Transaction Documents
by CPA:12 or the consummation by CPA:12 or the applicable CPA:12 Subsidiaries of the transactions
contemplated thereby, except for: (A) the filing with the Securities and Exchange Commission (the
“SEC”) of (1) (a) the Joint Proxy Statement/Prospectus or (b) other documents otherwise
required in connection with the transactions contemplated hereby and (2) such reports under Section
13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such
other compliance with the Exchange Act and the rules and regulations thereunder, as may be required
in connection with the Transaction Documents and the transactions contemplated thereby; (B) the
filing of the Articles of Merger with, and the acceptance for record of the Articles of Merger by,
the State Department of Assessments and Taxation of Maryland; (C) such filings and approvals as may
be required by any applicable Environmental Laws (as defined herein) and (D) any such consent,
approval, order, authorization, registration, declaration, filing or permit that the failure to
obtain or make individually or in the aggregate, would not reasonably be expected to have a CPA:12
Material Adverse Effect.

     (e) SEC Documents.

          (i) CPA:12 has made available to CPA:14 (by public filing with the SEC or otherwise) a true
and complete copy of each report, schedule, registration statement and definitive proxy statement
filed by CPA:12 with the SEC since January 1, 2003 (the “CPA:12 SEC Documents”) which are
all of the documents required to have been filed by CPA:12 with the SEC since that date. As of
their respective dates, the CPA:12 SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the “Securities Act”), the Exchange
Act or the Sarbanes-Oxley Act of 2002 (the “SOX Act”), as the case may be, and the rules
and regulations of the SEC thereunder applicable to such CPA:12 SEC Documents and none of the
CPA:12 SEC Documents contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, except to the extent such
statements have been modified or superseded by later CPA:12 SEC Documents filed and publicly
available prior to the date of this Agreement. CPA:12 does not have any outstanding and unresolved
comments from the SEC with respect to the CPA:12 SEC Documents. The consolidated financial
statements of CPA:12 and CPA:12 Subsidiaries included in the CPA:12 SEC Documents complied as to
form in all material respects with the applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (“GAAP”) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto, or, in the case of the unaudited
statements, as permitted by Rule 10-01 of Regulation S-X under the Exchange Act) and fairly
presented, in accordance with applicable requirements of GAAP and the applicable rules and
regulations of the SEC (subject, in the case of the unaudited statements, to normal, recurring
adjustments, none of which are material), the consolidated financial position of CPA:12 and the
CPA:12 Subsidiaries, taken as a whole, as of their respective dates and the consolidated statements
of income and the consolidated cash flows of CPA:12 and the CPA:12 Subsidiaries for the periods
presented therein, in each case, except to the extent such financial statements have been modified
or superseded by later CPA:12 SEC Documents filed and publicly available prior to the date of this
Agreement. No CPA:12 Subsidiary is required to make any filing with the SEC.

          (ii) CPA:12 maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or

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specific authorizations, (ii) access to assets is permitted only in accordance with management’s
general or specific authorization and (iii) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.

          (iii) CPA:12’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act) are reasonably designed to ensure that (A) all information (both
financial and non-financial) required to be disclosed by CPA:12 in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC and (B) all such information is accumulated and
communicated to CPA:12’s management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the principal executive officer and principal
financial officer of CPA:12 required under the Exchange Act with respect to such reports.

          (iv) Since December 31, 2005, CPA:12 has not received any notification of (A) a “significant
deficiency” or (B) a “material weakness” in CPA:12’s internal controls. For purposes of this
Agreement, the terms “significant deficiency” and “material weakness” shall have the meanings
assigned to them in Release 2004-001 of the Public Company Accounting Oversight Board, as in effect
on the date of this Agreement.

     (f) Absence of Certain Changes or Events. Except as disclosed or reflected in the
CPA:12 SEC Documents filed with the SEC prior to the date of this Agreement or as disclosed in
Schedule 2.1(f) of the CPA:12 Disclosure Letter, since December 31, 2005 there has not been: (i)
(A) any declaration, setting aside or payment of any dividend or other distribution (whether in
cash, shares or property) with respect to any of CPA:12’s capital stock except for regular
quarterly dividends on the CPA:12 Common Stock; (B) any amendment of any term of any outstanding
equity security of CPA:12 or any CPA:12 Subsidiary; (C) any repurchase, redemption or other
acquisition by CPA:12 or any CPA:12 Subsidiary of any outstanding shares of capital stock or other
equity securities of, or other ownership interests in, CPA:12 or any CPA:12 Subsidiary, except
pursuant to CPA:12’s regular redemption program; (D) any change in any method of accounting or
accounting practice or any Tax method, practice or election by CPA:12 or any CPA:12 Subsidiary that
would materially adversely affect its assets, liabilities or business, except insofar as may have
been required by a change in applicable Law or GAAP; (E) any CPA:12 Material Adverse Effect or (F)
any incurrence, assumption or guarantee by CPA:12 or any CPA:12 Subsidiary of any indebtedness for
borrowed money other than in the ordinary course of business consistent with past practices.

     (g) No Undisclosed Material Liabilities. Except as disclosed in the CPA:12 SEC
Documents, as set forth in Schedule 2.1(g) of the CPA:12 Disclosure Letter or as otherwise would
not reasonably be expected to have a CPA:12 Material Adverse Effect, there are no liabilities of
CPA:12 or any of the CPA:12 Subsidiaries of a nature that would be required under GAAP to be set
forth on the financial statements of CPA:12 or the notes thereto, other than: (i) liabilities
adequately provided for on the balance sheet of CPA:12 dated as of December 31, 2005 (including the
notes thereto) as required by GAAP or (ii) liabilities incurred in the ordinary course of business
subsequent to December 31, 2005. Schedule 2.1(g) of the CPA:12 Disclosure Letter sets forth, with
respect to CPA:12 and the CPA:12 Subsidiaries, a complete list of all capitalized lease obligations
and other indebtedness to any Person which is outstanding as of the date of this Agreement, other
than individual items of indebtedness in a principal amount less than $1,000,000. For purposes of
this Section 2.1(g), “indebtedness” means, with respect to any Person, without duplication (i) all
obligations of such Person for borrowed money or obligations with respect to deposits or advances
of any kind to such Person, (ii) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (iii) all obligations of such Person upon which interest charges are
customarily paid, (iv) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person, (v) all obligations

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of such
Person issued or assumed as the deferred purchase price of property or services (excluding
obligations of such Person to creditors for raw materials, inventory, services and supplies
incurred in the ordinary course of such Person’s business, consistent with past practice), (vi) all
capitalized lease obligations of such Person other than leases for office and computer equipment
incurred in the ordinary course of business, (vii) all obligations of such Person under interest
rate or currency hedging transactions (valued at the termination value thereof), (viii) all letters
of credit issued for the account of such Person, and (ix) all guarantees and arrangements having
the economic effect of a guarantee of such Person of any indebtedness of any other Person.

     (h) No Default. None of CPA:12 or any of the CPA:12 Subsidiaries is in default or
violation (and no event has occurred which, with notice or the lapse of time or both, would
constitute a default or violation) of any term, condition or provision of (i) the CPA:12 Charter or
the CPA:12 Bylaws or the comparable charter or organizational documents of any of the CPA:12
Subsidiaries, (ii) any loan or credit agreement, note, or any bond, mortgage or indenture, to which
CPA:12 or any of the CPA:12 Subsidiaries is a party or by which CPA:12, any of the CPA:12
Subsidiaries or any of their respective properties or assets is bound, or (iii) any order, writ,
injunction, decree, statute, rule or regulation applicable to CPA:12 or any of the CPA:12
Subsidiaries, except in the case of (ii) and (iii) for defaults or violations which, individually
or in the aggregate, would not reasonably be expected to have a CPA:12 Material Adverse Effect.

     (i) Compliance with Applicable Laws. Except for environmental matters, which are
addressed in Section 2.1(o), CPA:12 and the CPA:12 Subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities necessary for the lawful
conduct of their respective businesses (the “CPA:12 Permits”), except where the failure so
to hold such CPA:12 Permits, individually or in the aggregate, would not reasonably be expected to
have a CPA:12 Material Adverse Effect. CPA:12 and the CPA:12 Subsidiaries are in compliance with
the terms of the CPA:12 Permits, except where the failure to so comply, individually or in the
aggregate, would not reasonably be expected to have a CPA:12 Material Adverse Effect. Except as
disclosed in the CPA:12 SEC Documents, the businesses of CPA:12 and the CPA:12 Subsidiaries are not
being conducted in violation of any Law, except for violations which, individually or in the
aggregate, would not reasonably be expected to have a CPA:12 Material Adverse Effect. No
investigation or review by any Governmental Entity with respect to CPA:12 or any CPA:12 Subsidiary
is pending or, to CPA:12’s Knowledge, threatened, other than those the outcome of which,
individually or in the aggregate, would not reasonably be expected to have a CPA:12 Material
Adverse Effect.

     (j) Litigation. Except as disclosed in Schedule 2.1(j) of the CPA:12 Disclosure Letter
or the CPA:12 SEC Documents, there is no suit, action or proceeding pending or, to the Knowledge of
CPA:12, threatened against or affecting CPA:12 or any CPA:12 Subsidiary or any of their respective
properties or assets that, individually or in the aggregate, would reasonably be expected to have a
CPA:12 Material Adverse Effect or materially adversely affect the right or ability of CPA:14 or its
Affiliates to own and operate the business and assets of CPA:12 or any CPA:12 Subsidiary.

     (k) Taxes. (i) Each of CPA:12 and the CPA:12 Subsidiaries has timely filed all
material Tax Returns (as defined herein) required to be filed by it (after giving effect to any
valid extension to file). Each such Tax Return is true, correct and complete in all material
respects. CPA:12 and each CPA:12 Subsidiary has paid (or CPA:12 has paid on its behalf), all
material Taxes required to be paid. All material Taxes which CPA:12 or the CPA:12 Subsidiaries are
required by Law to withhold or collect, including Taxes required to have been withheld in
connection with amounts paid or owing to any employee, independent contractor, creditor,
shareholder or other third party and sales, gross receipts and use Taxes, have been duly withheld
or collected and, to the extent required, have been paid over to the proper Governmental Entities
within the time period prescribed by Law. The most recent audited

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financial statements contained
in the CPA:12 SEC Documents filed with the SEC prior to the date of this Agreement reflect an
adequate reserve in accordance with GAAP for all material Taxes payable by CPA:12 and the CPA:12
Subsidiaries for all taxable periods and portions thereof through the date of such financial
statements. CPA:12 and each CPA:12 Subsidiary has established (and until the Closing Date shall
continue to establish and maintain) on its books and records reserves that are adequate for the
payment of all material Taxes not yet due and payable. Since December 31, 2005, CPA:12 has
incurred no liability for any material Taxes under Sections 857(b), 860(c) or 4981 of the Code, IRS
Notice 88-19, Treasury Regulation Section 1.337(d)-5, or Treasury Regulation Section 1.337(d)-6
including, without limitation, any material Tax arising from a prohibited transaction described in
Section 857(b)(6) of the Code, and neither CPA:12 nor any of the CPA:12 Subsidiaries has incurred
any material liability for Taxes other than in the ordinary course of business and other than
transfer or similar Taxes arising in connection with the sales of property. No event has occurred,
and no condition or circumstance exists, which presents a material risk that any material Tax
described in the preceding sentences will be imposed upon CPA:12 or any CPA:12 Subsidiary. Neither
CPA:12 nor any CPA:12 Subsidiary is the subject of any audit, examination, or other proceeding in
respect of Federal income Taxes; to the Knowledge of CPA:12, no audit, examination or other
proceeding in respect of Federal income Taxes involving CPA:12 or any CPA:12 Subsidiary is being
considered by any Tax authority; and no audit, examination or proceeding in respect of Federal
income Taxes involving CPA:12 or any CPA:12 Subsidiary has occurred since December 31, 2000. No
deficiencies for any Taxes have been asserted or assessed in writing (or to the Knowledge of CPA:12
or any CPA:12 Subsidiary, proposed) against CPA:12 or any of the CPA:12 Subsidiaries, including
claims by any taxing authority in a jurisdiction where CPA:12 or any CPA:12 Subsidiary does not
file Tax Returns but in which any of them is or may be subject to taxation, which individually or
in the aggregate would be material, and no requests for waivers of the time to assess any such
Taxes have been granted and remain in effect or are pending. There are no Liens for Taxes upon the
assets of CPA:12 or the CPA:12 Subsidiaries except for statutory Liens for Taxes not yet due or
payable and, for which appropriate reserves have been established on their respective financial
statements in accordance with GAAP.

          (ii) CPA:12 (A) for each taxable year beginning with its taxable year ended on December 31,
1994, has been subject to taxation as a real estate investment trust (a “REIT”) within the
meaning of the Code and has satisfied the requirements to qualify as a REIT for such years, (B) has
operated, and intends to continue to operate, consistent with the requirements for qualification
and taxation as a REIT through the Effective Time and (C) has not taken or omitted to take any
action which could reasonably be expected to result in the loss of its qualification as a REIT, and
no such challenge is pending, or to CPA:12’s Knowledge, threatened. Each CPA:12 Subsidiary which
is a partnership, joint venture or limited liability company has since its acquisition by CPA:12
(A) been classified for Federal income Tax purposes as a partnership or treated as a disregarded
entity and not as an association taxable as a corporation, or a “publicly traded partnership”
within the meaning of Section 7704(b) of the Code, and (B) not owned any assets (including, without
limitation, securities) that would cause CPA:12 to violate Section 856(c)(4) of the Code. Each
CPA:12 Subsidiary which is a corporation, and each other issuer of securities in which CPA:12 holds
securities (within the meaning of Section 856(c) of the Code but excluding “straight debt” of
issuers as described in Section 856(c)(7) of the Code) having a value of more than 10 percent of
the total value of the outstanding securities of such issuer, has since its acquisition by CPA:12
been a REIT, a qualified REIT subsidiary under Section 856(i) of the Code or a taxable REIT
subsidiary under Section 856(l) of the Code or otherwise qualified as a “real estate asset” within
the meaning of Section 856(c)(5)(B) of the Code. Neither CPA:12 nor any CPA:12 Subsidiary holds
any asset (x) the disposition of which would be subject to rules similar to Section 1374 of the
Code as announced in IRS Notice 88-19 or Treasury Regulation Section 1.337(d)-5 or Treasury
Regulation Section 1.337(d)-6 or (y) that is subject to a consent filed pursuant to Section 341(f)
of the Code and the regulations thereunder.

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          (iii) As of the date of this Agreement, CPA:12 does not have any earnings and profits
attributable to CPA:12 or any other corporation in any non-REIT year within the meaning of Section
857 of the Code.

          (iv) None of CPA:12 or any of the CPA:12 Subsidiaries is (i) subject, directly or indirectly,
to any Tax Protection Agreement or (ii) in violation of or in default under any Tax Protection
Agreement.

          (v) As of the date hereof, CPA:12 is a “domestically-controlled qualified investment entity”
within the meaning of Section 897(h) of the Code.

          (vi) Neither CPA:12 nor any CPA:12 Subsidiary is a party to any Tax allocation or sharing
agreement or has changed any method of accounting for Tax purposes.

          (vii) CPA:12 does not have any liability for the Taxes of any person other than CPA:12 and the
CPA:12 Subsidiaries and the CPA:12 Subsidiaries do not have any liability for the Taxes of any
person other than CPA:12 and the CPA:12 Subsidiaries (A) under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local or foreign Law), (B) as a transferee or successor, (C) by
contract or (D) otherwise.

          (viii) Neither CPA:12 nor any CPA 12 Subsidiary (x) has requested, received or is subject to
any written ruling of a Governmental Entity related to Taxes or has entered into any written and
legally binding agreement with a Governmental Entity relating to Taxes or (y) has engaged in any
transaction of which it has made (or was required to make) disclosure to any Governmental Entity to
avoid the imposition of any penalties related to Taxes.

     (l) Pension and Benefit Plans. Except as set forth in the CPA:12 SEC Documents,
neither CPA:12 nor any CPA:12 Subsidiary maintains or has maintained any Employee Benefit Plans or
has any obligations or liabilities in respect of Employee Benefit Plans. CPA:12 has no employees.
None of the agreements to which CPA:12 or any of the CPA:12 Subsidiaries is a party, would,
individually or in the aggregate, constitute excess parachute payments (as defined in Section 280G
of the Code (without regard to subsection (b)(4) thereof)) or would exceed the amount deductible
pursuant to Section 162(m) of the Code.

     (m) Information Supplied. None of the information supplied or to be supplied by
CPA:12 in writing for inclusion or incorporation by reference in the Form S-4 or the Joint Proxy
Statement/Prospectus will (a) in the case of the Form S-4, at the time it becomes effective,
contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading or (b) in the case of the Joint Proxy
Statement/Prospectus, at the time of the mailing thereof or at the time the CPA:12 Stockholder
Meeting is to be held, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein
not misleading. The Form S-4 and the Joint Proxy Statement/Prospectus will (with respect to
CPA:12, its officers, directors and the CPA:12 Subsidiaries) comply in all material respects with
the applicable requirements of the Securities Act and the Exchange Act; provided, that no
representation is made as to statements made or incorporated by reference by CPA:14.

     (n) Intangible Property. CPA:12 and the CPA:12 Subsidiaries own, possess or have
adequate rights to use all trademarks, trade names, patents, service marks, brand marks, brand
names, computer programs, databases, industrial designs and copyrights necessary for the operation
of the businesses of each of CPA:12 and the CPA:12 Subsidiaries (collectively, the “CPA:12
Intangible Property”), except

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where the failure to possess or have adequate rights to use such
properties, individually or in the aggregate, would not reasonably be expected to have a CPA:12
Material Adverse Effect. All of the CPA:12 Intangible Property is owned or licensed by CPA:12 or
the CPA:12 Subsidiaries free and clear of any and all Liens, except those that, individually or in
the aggregate, would not reasonably be expected to have a CPA:12 Material Adverse Effect, and
neither CPA:12 nor any such CPA:12 Subsidiary has forfeited or otherwise relinquished any CPA:12
Intangible Property which forfeiture has resulted in, individually or in the aggregate, or would
reasonably be expected to result in a CPA:12 Material Adverse Effect. To the Knowledge of CPA:12,
the use of CPA:12 Intangible Property by CPA:12 or the CPA:12 Subsidiaries does not in any material
respect, conflict with, infringe upon, violate or interfere with or constitute an appropriation of
any right, title, interest or goodwill, including, without limitation, any intellectual property
right, trademark, trade name, patent, service mark, brand mark, brand name, computer program,
database, industrial design, copyright or any pending application therefor, of any other Person,
and there have been no claims made, and neither CPA:12 nor any of the CPA:12 Subsidiaries has
received any notice of any claim or otherwise knows that any of the CPA:12 Intangible Property is
invalid or conflicts with the asserted rights of any other Person or has not been used or enforced
or has failed to have been used or enforced in a manner that would result in the abandonment,
cancellation or unenforceability of any of the CPA:12 Intangible Property, except for any such
conflict, infringement, violation, interference, claim, invalidity, abandonment, cancellation or
unenforceability that, individually or in the aggregate, would not reasonably be expected to have a
CPA:12 Material Adverse Effect.

     (o) Environmental Matters. For purposes of this Agreement, (x) “Environmental
Law” means any Law of any Governmental Entity relating to human health, safety or protection of
the environment, including, but not limited to, the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“CERCLA”) and (y) “Hazardous
Material” means (A) any petroleum or petroleum products, regulated radioactive materials,
asbestos-containing materials, urea formaldehyde foam insulation, and transformers and other
equipment that contain dielectric fluid containing greater than 50 parts per million
polychlorinated biphenyls (“PCBs”); or (B) any chemicals, materials, substances or wastes
which are defined as or included in the definition of “hazardous substances,” “hazardous wastes,”
“hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic
substances,” “toxic pollutants” or words of similar import, under any applicable Environmental Law.
Except as disclosed in Schedule 2.1(o) of the CPA:12 Disclosure Letter, the CPA:12 SEC Documents
or in the environmental audits/reports listed therein or except as would not reasonably be expected
to have a CPA:12 Material Adverse Effect:

          (i) None of CPA:12 or the CPA:12 Subsidiaries has received written notice that any
administrative or compliance order has been issued that is still in effect, any complaint has been
filed that remains unresolved, any penalty has been assessed that has not been paid and any
investigation or review is pending or threatened by any Governmental Entity with respect to any
alleged failure by CPA:12 or any CPA:12 Subsidiary to have any permit required under any applicable
Environmental Law or with respect to any treatment, storage, recycling, transportation, disposal or
“release” (as defined in 42 U.S.C. (S) 9601(22) (“Release”)) by CPA:12 or any CPA:12
Subsidiary of any Hazardous Material in material violation of any Environmental Law.

          (ii) To the Knowledge of CPA:12, except in material compliance with applicable Environmental
Laws, (A) there are no asbestos-containing materials present on any property owned or operated by
CPA:12 or any CPA:12 Subsidiary, (B) there are no regulated levels of PCBs present on any property
owned or operated by CPA:12 or any CPA:12 Subsidiary, and (C) there are no underground storage
tanks, active or abandoned, used for the storage of Hazardous Materials currently present on any
property owned or operated by CPA:12 or any CPA:12 Subsidiary.

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          (iii) None of CPA:12 or any CPA:12 Subsidiary has received written notice of a claim, that has
not been resolved, to the effect that it is liable to a third party, including a Governmental
Entity, as a result of a Release of a Hazardous Material into the environment in material violation
of any Environmental Law at any property currently or formerly owned or operated by CPA:12 or a
CPA:12 Subsidiary.

          (iv) None of CPA:12 or any CPA:12 Subsidiary has received written notice of (A) any Liens
arising under or pursuant to any applicable Environmental Law on any CPA:12 Property or (B) any
action taken which could subject any CPA:12 Property to such Liens. To the Knowledge of CPA:12, no
such action is in process. CPA:12 and the CPA:12 Subsidiaries currently do not have any duty under
any applicable Environmental Law to place any restriction relating to the presence of Hazardous
Material at any CPA:12 Property.

          (v) None of CPA:12 or the CPA:12 Subsidiaries has transported or arranged for the
transportation of any Hazardous Material to any location which, to the Knowledge of CPA:12, is the
subject of any action, suit or proceeding that could be reasonably expected to result in claims
against CPA:12 or the CPA:12 Subsidiaries related to such Hazardous Material for clean-up costs,
remedial work, damages to natural resources or personal injury claims, including but not limited to
claims under CERCLA and the rules and regulations promulgated thereunder.

          (vi) CPA:12 and the CPA:12 Subsidiaries have made notification of Releases of a Hazardous
Material where required by applicable Environmental Law, and no property now or, to the Knowledge
of CPA:12, previously owned or operated by CPA:12 or the CPA:12 Subsidiaries is listed or, to the
Knowledge of CPA:12, proposed for listing on the National Priorities List promulgated pursuant to
CERCLA or on any similar list of sites under any Environmental Law of any other Governmental Entity
where such listing requires active investigation or clean-up.

          (vii) CPA:12 and the CPA:12 Subsidiaries have not entered into any agreements to provide
indemnification to any third party purchaser pursuant to Environmental Laws in relation to any
property or facility previously owned or operated by CPA:12 and the CPA:12 Subsidiaries.

          (viii) None of CPA:12 or the CPA:12 Subsidiaries has in its possession or control any
environmental assessment or investigation reports prepared within the last four years that (A) have
not been provided to CPA:14 prior to the execution of this Agreement or (B) that disclose a
material environmental condition with respect to the CPA:12 Properties which is not being addressed
or remediated or has not been addressed or remediated or been made the subject of an environmental
insurance policy listed in Schedule 2.1(q) of the CPA:12 Disclosure Letter, except for such reports
that (1) contain information regarding the environmental condition of any such property that has
been provided to CPA:14 or (2) reflect the results of an asbestos survey and/or abatement work
performed in the ordinary course of renovation or demolition activities.

     (p) Properties.

          (i) (A) Except as listed in Schedule 2.1(p)(i) of the CPA:12 Disclosure Letter, CPA:12 or a
CPA:12 Subsidiary owns fee simple title to or has a valid leasehold interest in, or has an interest
in an entity that owns fee simple title to or has a valid leasehold interest in, each of the real
properties reflected on the most recent balance sheet of CPA:12 included in the CPA:12 SEC
Documents (each, a “CPA:12 Property” and collectively, the “CPA:12 Properties”),
which are all of the real estate properties owned or leased by them, in each case free and clear of
Liens except for (1) debt and other matters identified on Schedule 2.1(p)(i) of the CPA:12
Disclosure Letter, (2) inchoate mechanics’, workmen’s, repairmen’s and other inchoate Liens imposed
for construction work in progress or otherwise

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incurred in the ordinary course of business, (3)
mechanics’, workmen’s and repairmen’s Liens (other than inchoate Liens for work in progress) which
have heretofore been bonded or insured; (4) (x) all matters disclosed on existing title policies or
(y) as would be disclosed on current title reports, zoning reports or surveys and would not have a
material adverse effect on the value or use of the affected property (excluding outstanding
indebtedness); (5) real estate Taxes and special assessments not yet due and payable which are
being contested in good faith in the ordinary course of business and (6) Liens that would not cause
a material adverse effect on the value or use of the affected property;

               (B) except as would not reasonably be expected to have a material adverse effect on the value
or use of the affected property, the CPA:12 Properties are not subject to any rights of way,
written agreements, Laws, ordinances and regulations affecting building use or occupancy, or
reservations of an interest in title (collectively, “CPA:12 Property Restrictions”), except
for (1) CPA:12 Property Restrictions imposed or promulgated by Law with respect to real property,
including zoning regulations, which would not reasonably be expected to have a material adverse
effect on the value or use of the affected property, (2) leases, easement agreements and all
matters disclosed on existing title policies, title reports, zoning reports or surveys or as would
be disclosed on current title reports, title policies, zoning reports or surveys (excluding
outstanding indebtedness) and (3) real estate Taxes and special assessments;

               (C) except as would not reasonably be expected to have a material adverse effect on the value
or use of the affected property, none of CPA:12 or a CPA:12 Subsidiary has received written notice
to the effect that there are any (1) condemnation or rezoning proceedings that are pending or, to
the Knowledge of CPA:12 and the CPA:12 Subsidiaries, threatened with respect to any material
portion of any of the CPA:12 Properties or (2) zoning, building or similar Laws or orders that are
presently being violated or will be violated by the continued maintenance, operation or use of any
buildings or other improvements on any of the CPA:12 Properties or by the continued maintenance,
operation or use of the parking areas located thereon or appurtenant thereto or used in connection
therewith;

               (D) except as would not reasonably be expected to have a material adverse effect on the value
or use of the affected property, none of CPA:12 or any CPA:12 Subsidiary has received written
notice that it is currently in default or violation of any CPA:12 Property Restrictions; and

               (E) except for the owners of the CPA:12 Properties in which CPA:12, any CPA:12 Subsidiary or
any joint venture involving CPA:12 or the CPA:12 Subsidiaries listed on Schedule 2.1(b) of the
CPA:12 Disclosure Schedule has a leasehold interest, no Person (other than CPA:12, a CPA:12
Subsidiary or any joint venture involving CPA:12 or the CPA:12 Subsidiaries listed on Schedule
2.1(b) of the CPA:12 Disclosure Letter) has any ownership interest in any of the CPA:12 Properties.

          (ii) Except as would not reasonably be expected to have a CPA:12 Material Adverse Effect, all
properties currently under development or construction by CPA:12 or the CPA:12 Subsidiaries and all
properties currently under contract for acquisition, development or commencement of construction as
of the date of this Agreement by CPA:12 and the CPA:12 Subsidiaries are listed as such in Schedule
2.1(p)(ii) of the CPA:12 Disclosure Letter.

          (iii) Schedule 2.1(p)(iii) of the CPA:12 Disclosure Letter sets forth the rent roll for each
of the CPA:12 Properties (the “CPA:12 Rent Roll”) as of June 1, 2006 including any leases
which have been executed for which the term has not yet commenced. Except as disclosed in Schedule
2.1(p)(iii) of the CPA:12 Disclosure Letter and for discrepancies that, either individually or in
the aggregate, would not reasonably be expected to have a CPA:12 Material Adverse Effect, (1) the
information set forth in the CPA:12 Rent Roll is true, correct and complete as of the date thereof;
(2) no

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brokerage fees, commissions or any similar payments are owed or payable by the lessor under
any of the leases listed on the CPA:12 Rent Roll (the “CPA:12 Leases”) to any third party
in connection with the existence or execution thereof, or in connection with any renewal, expansion
or extension of any CPA:12 Lease which has occurred prior to, or may occur after, the date hereof;
(3) to the Knowledge of CPA:12, all work to be performed by any party to any of the CPA:12 Leases
has been completed and fully paid for; (4) no tenants under the CPA:12 Leases are entitled to any
free rent, abatement of rent or similar concession, nor to CPA:12’s Knowledge, to any claim of any
offset or defense against the payment of rent; and (5) no person other than those identified on the
CPA:12 Rent Roll (and those claiming by, through or under them) is in occupancy of any portion of
any CPA:12 Property.

          (iv) Schedule 2.1(p)(iv) of the CPA:12 Disclosure Letter lists (1) all agreements existing as
of the date of this Agreement to which CPA:12 or any CPA:12 Subsidiary is a party providing (x) for
the sale of, or option to sell, any CPA:12 Property or the purchase of, or option to purchase, by
CPA:12 or any CPA:12 Subsidiary, on the one hand, or the other party thereto, on the other hand,
any real estate not yet consummated as of the date hereof or (y) a right of first offer or right of
first refusal with regard to any CPA:12 Properties and (2) all tenants of CPA:12 Properties who
have been granted early termination rights with respect to their lease obligations.

          (v) Schedule 2.1(p)(v) of the CPA:12 Disclosure Letter contains a list, as of the date of this
Agreement, of (A) all unfunded capital improvements required to have been conducted by CPA:12 or
any CPA:12 Subsidiary in excess of $750,000 in any instance, (B) all outstanding leasing
commissions in excess of $750,000 in any instance and (C) all committed capital expenditures in
excess of $750,000 in any instance, excluding capital expenditures related to development projects
of CPA:12 or any CPA:12 Subsidiary.

     (q) Insurance. Schedule 2.1(q) of the CPA:12 Disclosure Letter is a complete list as
of the date of this Agreement of insurance policies which CPA:12 or any CPA:12 Subsidiary maintains
with respect to its respective businesses or properties. CPA:12 has not been informed that any
such policies are not in full force and effect in all material respects, as of the date of this
Agreement. All premiums due and payable by CPA:12 or any CPA:12 Subsidiary thereof under each such
policy obtained by CPA:12 or any CPA:12 Subsidiary have been paid.

     (r) Opinion of Financial Advisor. The Board of Directors of CPA:12 has received the
opinions of Stifel Nicholas dated as of the date of this Agreement, to the effect that, as of such
date, the Merger Consideration is fair from a financial point of view to the holders of CPA:12
Common Stock, which opinion has been made available to CPA:14. CPA:12 has been advised that Stifel
Nicholas will permit the inclusion of the opinion in its entirety and, subject to prior review and
consent by Stifel Nicholas, a reference to the opinion in the Form S-4 and the Joint Proxy
Statement/Prospectus.

     (s) Vote Required. The affirmative vote of the holders of a majority of the CPA:12
Common Stock (the “CPA:12 Stockholder Approval”) is the only vote of holders of securities
of CPA:12 required to approve the Merger and the other transactions contemplated by the Transaction
Documents.

     (t) Brokers. Except for the fees and expenses payable to Stifel Nicholas (which fees
have been disclosed to CPA:14), no broker, investment banker or other Person is entitled to any
broker’s, finder’s or other similar fee or commission in connection with the transactions
contemplated by the Transaction Documents based upon arrangements made by or on behalf of CPA:12 or
any CPA:12 Subsidiary. CPA:12 has previously provided CPA:14 with a true and complete copy of the
engagement letter with Stifel Nicholas as in effect on the date hereof, pursuant to which such fees
and expenses are payable, and the amounts payable by CPA:12 pursuant to such letter shall not have
been increased between the date of this Agreement and the Closing Date.

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     (u) Investment Company Act of 1940. Neither CPA:12 nor any of the CPA:12 Subsidiaries
is, or at the Effective Time will be, required to be registered as an investment company under the
Investment Company Act of 1940, as amended.

     (v) Contracts.

          (i) Schedule 2.1(v)(i) and Schedule 2.1(g) of the CPA:12 Disclosure Letter list all CPA:12
Material Contracts of CPA:12 and the CPA:12 Subsidiaries as of the date of this Agreement. Except
as set forth in Schedule 2.1(v)(i) of the CPA:12 Disclosure Letter or in the CPA:12 SEC Documents,
each CPA:12 Material Contract is valid, binding and enforceable and in full force and effect with
respect to CPA:12 and the CPA:12 Subsidiaries, and to the Knowledge of CPA:12 the other parties
thereto, except where such failure to be so valid, binding and enforceable and in full force and
effect would not, individually or in the aggregate, reasonably be expected to have a CPA:12
Material Adverse Effect, and there are no defaults by CPA:12 or any CPA:12 Subsidiary, or to the
Knowledge of CPA:12 the other parties thereunder, except those defaults that would not,
individually or in the aggregate, reasonably be expected to have a CPA:12 Material Adverse Effect.
For purposes of this Agreement, “CPA:12 Material Contracts” shall mean (i) the mortgage
loans set forth on Schedule 2.1(g) of the CPA:12 Disclosure Letter, (ii) each material commitment,
contractual obligation, borrowing, capital expenditure or transaction entered into by CPA:12 or any
CPA:12 Subsidiary which may result in total payments by or liability of CPA:12 or any CPA:12
Subsidiary in excess of $1,000,000, (iii) any other agreements filed or required to be filed as
exhibits to the CPA:12 SEC Documents pursuant to Item 601(b)(10) of Regulation S-K of Title 17,
Part 229 of the Code of Federal Regulations, (iv) any interest rate cap, interest rate collar,
interest rate swap, currency hedging transaction and any other agreement relating to a similar
transaction to which CPA:12 or any CPA:12 Subsidiary is a party or an obligor with respect thereto,
and (v) any agreement, commitment, instrument or obligation of a type described in Sections
2.1(v)(ii) through 2.1(v)(v).

          (ii) The Merger and the other transactions contemplated by the Transaction Documents will not
trigger any due-on-sale provision on any mortgages, except as set forth in Schedule 2.1(v)(ii) of
the CPA:12 Disclosure Letter.

          (iii) Except for those agreements set forth in Schedule 2.1(v)(iii) of the CPA:12 Disclosure
Letter or agreements in which CPA:12 agrees not to sell a CPA:12 Property to a competitor of the
CPA:12 Property’s current tenant, there are no non-competition agreements or other contracts or
agreements that contains covenants that restrict CPA:12’s ability to conduct its business in any
location or present a material restriction on the conduct of the business of CPA:12 or the CPA:12
Subsidiaries.

          (iv) Except as set forth in Schedule 2.1(v)(iv) of the CPA:12 Disclosure Letter, there are no
indemnification agreements entered into by and between CPA:12 and any director or officer of CPA:12
or any of the CPA:12 Subsidiaries, other than in respect of independent directors as may be
required in connection with financing the CPA:12 Properties.

     (w) State Takeover Statutes; Charter Waiver. CPA:12 has taken all action necessary to
exempt the transactions contemplated by this Agreement between CPA:14 and CPA:12 and its Affiliates
from operation of any “fair price,” “business combination,” “moratorium,” “control share
acquisition” or any other anti-takeover statute or similar statute enacted under Federal or state
Laws of the United States or similar statute or regulation (a “Takeover Statute”). CPA:12
and the CPA:12 Board of Directors have taken all appropriate and necessary actions to waive or
remove, or to exempt CPA:14 and its beneficial owners from triggering, any and all limitations on
ownership of CPA:12 Common Stock contained in the CPA:12 Charter or CPA:12 Bylaws by reason of the
Merger and the other transactions contemplated by this Agreement.

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     (x) Related Party Transactions. Except as expressly described in the CPA:12 SEC
Documents or as set forth in Schedule 2.1(x) of the CPA:12 Disclosure Letter, there are no material
arrangements, agreements or contracts entered into by CPA:12 or any of the CPA:12 Subsidiaries, on
the one hand, and any Person who is an officer, director or Affiliate of CPA:12 or any CPA:12
Subsidiary, any relative of the foregoing or an entity of which any of the foregoing is an
Affiliate, on the other hand. Copies of any such documents have been previously provided to
CPA:14.

     Section 2.2. Representations and Warranties of CPA:14. CPA:14 represents and warrants
to CPA:12 as follows:

     (a) Organization, Standing and Corporate Power. CPA:14 is a corporation duly
organized, validly existing and in good standing under the Laws of the State of Maryland and has
the requisite trust power and authority to own, lease and operate its properties and to carry on
its business as now being conducted. CPA:14 is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of the business it is conducting, or the
ownership, operation or leasing of its properties or the management of properties for others makes
such qualification or licensing necessary, other than in such jurisdictions where the failure to be
so qualified or licensed, individually or in the aggregate, (x) would not have, or would not be
reasonably likely to have, a material adverse effect on the business, properties, financial
condition, or results of operations of CPA:14 and the CPA:14 Subsidiaries taken as a whole or (y)
would not, or would not be reasonably likely to, prevent or materially delay the performance by
CPA:14 of its obligations under this Agreement or the consummation of the Merger or any other
transaction contemplated by this Agreement (such effect, a “CPA:14 Material Adverse
Effect”), provided that as used in this Agreement, the parties agree that a CPA:14 Material
Adverse Effect shall not include any change with respect to CPA:14 or any CPA:14 Subsidiary to the
extent resulting from or attributable to (i) general national, international or regional economic,
financial or political conditions or events, including, without limitation, the effects of
terrorist acts that do not result in the destruction or material physical damage of a material
portion of the CPA:14 Properties (as defined herein), (ii) the announcement, pendency or
consummation of this Agreement or the other Transaction Documents or the transactions contemplated
thereby or (iii) conditions generally affecting the securities markets or the industries in which
CPA:14 and the CPA:14 Subsidiaries operate to the extent such conditions do not disproportionately
affect CPA:14. CPA:14 has heretofore made available to CPA:12 complete and correct copies of its
charter, as amended and supplemented to the date hereof (the “CPA:14 Charter”), and its
bylaws, as amended to the date hereof (“CPA:14 Bylaws”).

     (b) Capital Structure.

          (i) As of the date of this Agreement, the authorized shares of common stock of CPA:14 consist
of 120,000,000 shares of CPA:14 Common Stock, 68,524,439.34 of which are issued and outstanding.
All outstanding shares of CPA:14 Common Stock are duly authorized, validly issued, fully paid and
nonassessable and not subject to, or issued in violation of, any preemptive right, purchase option,
call option, right of first refusal, subscription or any other similar right. All dividends or
distributions on securities of CPA:14 or any CPA:14 Subsidiary that have been declared or
authorized prior to the date of this Agreement have been paid in full.

          (ii) Except as set forth in Schedule 2.2(b)(ii) of the CPA:14 Disclosure Letter dated as of
the date of this Agreement and delivered to CPA:12 in connection with the execution hereof (the
“CPA:14 Disclosure Letter”), there are issued and outstanding or reserved for issuance: (1)
no shares of stock, Voting Debt or other voting securities or equity securities of CPA:14; (2) no
securities of CPA:14 or any CPA:14 Subsidiary or securities or assets of any other entity
convertible into or exchangeable for shares of stock, Voting Debt or other voting securities or
equity securities of CPA:14 or any CPA:14 Subsidiary; and (3) no subscriptions, options, warrants,
conversion rights, calls, performance stock

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awards, stock appreciation rights or phantom stock
rights, rights of first refusal, rights (including preemptive rights), commitments or arrangements
or agreements to which CPA:14 or any CPA:14 Subsidiary is a party or by which it is bound
obligating CPA:14 or any CPA:14 Subsidiary to issue, deliver, sell, purchase, redeem or acquire, or
cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of stock,
Voting Debt or other voting securities of CPA:14 or of any CPA:14 Subsidiary, or obligating CPA:14
or any CPA:14 Subsidiary to grant, extend or enter into any such subscription, option, warrant,
conversion right, call, performance stock award, stock appreciation right or phantom stock right,
right of first refusal, right, commitment or arrangement or agreement.

          (iii) Except as set forth in Schedule 2.2(b)(iii) of the CPA:14 Disclosure Letter, no holder
of securities in CPA:14 or any CPA:14 Subsidiary has any right to have such securities registered
by CPA:14 or any CPA:14 Subsidiary, as the case may be. All prior issuances of securities by
CPA:14 or any CPA:14 Subsidiary were, in all respects, made in compliance with all applicable
Federal and state securities Laws.

     (c) Authority; No Violations; Consents and Approval.

          (i) The Board of Directors of CPA:14 has approved and declared advisable the Merger and the
other transactions contemplated by the Transaction Documents and has authorized that the Merger be
submitted for consideration at a special meeting (the “CPA:14 Stockholder Meeting”) of the
stockholders of CPA:14 (the “CPA:14 Stockholders”). CPA:14 has all requisite power and
authority to enter into the Transaction Documents and, subject to receipt of the CPA:14 Stockholder
Approval (as defined herein), to consummate the transactions contemplated thereby. The execution
and delivery of the Transaction Documents and the consummation of the transactions contemplated
thereby have been, or when executed will have been, duly authorized by all necessary action on the
part of CPA:14, subject to receipt of the CPA:14 Stockholder Approval, and are enforceable in
accordance with their terms, subject to enforceability, to bankruptcy, insolvency, reorganization,
moratorium and other Laws of general applicability relating to or affecting creditors’ rights and
to general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at Law).

          (ii) Assuming the consents, approvals, authorizations or permits and filings or notifications
referred to in Schedule 2.2(c)(ii) of the CPA:14 Disclosure Letter are duly and timely obtained or
made and the CPA:14 Stockholder Approval has been obtained, the execution and delivery of the
Transaction Documents by CPA:14 do not, and the consummation of the transactions contemplated
thereby, and compliance with the provisions hereof or thereof, will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any material obligation, or give
rise to a right of purchase under, result in the creation of any Lien upon any of the properties or
assets of CPA:14 under or require the consent or approval of any third party under, any provision
of (A) the CPA:14 Charter or the CPA:14 Bylaws, (B) any CPA:14 Material Contract (as defined
herein) or (C) any judgment, order, decree, statute, Law, ordinance, rule or regulation applicable
to CPA:14, or any of its properties or assets, other than, in the case of clauses (B) or (C), any
such conflicts, violations, defaults, rights or Liens that, individually or in the aggregate, would
not reasonably be expected to have a CPA:14 Material Adverse Effect.

          (iii) No consent, approval, order or authorization of, or registration, declaration or filing
with, or permit from any Governmental Entity, is required by or with respect to CPA:14 or any of
the CPA:14 Subsidiaries in connection with the execution and delivery of the Transaction Documents
by CPA:14 or the consummation by CPA:14 or the applicable CPA:14 Subsidiaries of the transactions
contemplated thereby, except for: (A) the filing with the SEC of (1) (a) the Joint Proxy
Statement/Prospectus or (b) other documents otherwise required in connection with the transactions
contemplated hereby and (2) such reports under Section 13(a) of the Exchange Act, and such other

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compliance with the Exchange Act and the rules and regulations thereunder, as may be required in
connection with the Transaction Documents and the transactions contemplated thereby; (B) the filing
of the Articles of Merger with, and the acceptance for record of the Articles of Merger by, the
State Department of Assessments and Taxation of Maryland; (C) such filings and approvals as may be
required by any applicable Environmental Laws and (D) any such consent, approval, order,
authorization, registration, declaration, filing or permit that the failure to obtain or make
individually or in the aggregate, would not reasonably be expected to have a CPA:14 Material
Adverse Effect.

     (d) SEC Documents.

          (i) CPA:14 has made available to CPA:12 (by public filing with the SEC or otherwise) a true
and complete copy of each report, schedule, registration statement and definitive proxy statement
filed by CPA:14 with the SEC since January 1, 2003 (the “CPA:14 SEC Documents”) which are
all of the documents required to have been filed by CPA:14 with the SEC since that date. As of
their respective dates, the CPA:14 SEC Documents complied in all material respects with the
requirements of the Securities Act, the Exchange Act or the SOX Act, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such CPA:14 SEC Documents and none of the
CPA:14 SEC Documents contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, except to the extent such
statements have been modified or superseded by later CPA:14 SEC Documents filed and publicly
available prior to the date of this Agreement. CPA:14 does not have any outstanding and unresolved
comments from the SEC with respect to the CPA:14 SEC Documents. The consolidated financial
statements of CPA:14 and CPA:14 Subsidiaries included in the CPA:14 SEC Documents complied as to
form in all material respects with the applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP applied
on a consistent basis during the periods involved (except as may be indicated in the notes thereto,
or, in the case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X under the
Exchange Act) and fairly presented, in accordance with applicable requirements of GAAP and the
applicable rules and regulations of the SEC (subject, in the case of the unaudited statements, to
normal, recurring adjustments, none of which are material), the consolidated financial position of
CPA:14 and the CPA:14 Subsidiaries, taken as a whole, as of their respective dates and the
consolidated statements of income and the consolidated cash flows of CPA:14 and the CPA:14
Subsidiaries for the periods presented therein, in each case, except to the extent such financial
statements have been modified or superseded by later CPA:14 SEC Documents filed and publicly
available prior to the date of this Agreement. No CPA:14 Subsidiary is required to make any filing
with the SEC.

          (ii) CPA:14 maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) access to assets is permitted only in accordance with management’s
general or specific authorization and (iii) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.

          (iii) CPA:14’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act) are reasonably designed to ensure that (A) all information (both
financial and non-financial) required to be disclosed by CPA:14 in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC and (B) all such information is accumulated and
communicated to CPA:14’s management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the principal executive officer and principal
financial officer of CPA:14 required under the Exchange Act with respect to such reports.

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          (iv) Since December 31, 2005, CPA:14 has not received any notification of (A) a “significant
deficiency” or (B) a “material weakness” in CPA:14’s internal controls. For purposes of this
Agreement, the terms “significant deficiency” and “material weakness” shall have the meanings
assigned to them in Release 2004-001 of the Public Company Accounting Oversight Board, as in effect
on the date of this Agreement.

     (e) Absence of Certain Changes or Events. Except as disclosed or reflected in the
CPA:14 SEC Documents filed with the SEC prior to the date of this Agreement or as disclosed in
Schedule 2.2(e) of the CPA:14 Disclosure Letter, since December 31, 2005 there has not been: (i)
(A) any declaration, setting aside or payment of any dividend or other distribution (whether in
cash, shares or property) with respect to any of CPA:14’s capital stock except for regular
quarterly dividends on the CPA:14 Common Stock; (B) any amendment of any term of any outstanding
equity security of CPA:14 or any CPA:14 Subsidiary; (C) any repurchase, redemption or other
acquisition by CPA:14 or any CPA:14 Subsidiary of any outstanding shares of capital stock or other
equity securities of, or other ownership interests in, CPA:14 or any CPA:14 Subsidiary, except
pursuant to CPA:14’s regular redemption program; (D) any change in any method of accounting or
accounting practice or any Tax method, practice or election by CPA:14 or any CPA:14 Subsidiary that
would materially adversely affect its assets, liabilities or business, except insofar as may have
been required by a change in applicable Law or GAAP; (E) any CPA:14 Material Adverse Effect or (F)
any incurrence, assumption or guarantee by CPA:14 or any CPA:14 Subsidiary of any indebtedness for
borrowed money other than in the ordinary course of business consistent with past practices.

     (f) No Undisclosed Material Liabilities. Except as disclosed in the CPA:14 SEC
Documents, as set forth in Schedule 2.2(f) of the CPA:14 Disclosure Letter or as otherwise would
not reasonably be expected to have a CPA:14 Material Adverse Effect, there are no liabilities of
CPA:14 or any CPA:14 Subsidiary of a nature that would be required under GAAP to be set forth on
the financial statements of CPA:14 or the notes thereto, other than: (i) liabilities adequately
provided for on the balance sheet of CPA:14 dated as of December 31, 2005 (including the notes
thereto) as required by GAAP or (ii) liabilities incurred in the ordinary course of business
subsequent to December 31, 2005.

     (g) No Default. CPA:14 is not in default or violation (and no event has occurred
which, with notice or the lapse of time or both, would constitute a default or violation) of any
term, condition or provision of (i) the CPA:14 Charter or the CPA:14 Bylaws, (ii) any loan or
credit agreement, note, or any bond, mortgage or indenture, to which CPA:14 is a party or by which
CPA:14 or any of its properties or assets is bound, or (iii) any order, writ, injunction, decree,
statute, rule or regulation applicable to CPA:14, except in the case of (ii) and (iii) for defaults
or violations which, individually or in the aggregate, would not reasonably be expected to have a
CPA:14 Material Adverse Effect.

     (h) Compliance with Applicable Laws. Except for environmental matters, which are
addressed in Section 2.2(n), CPA:14 and the CPA:14 Subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities necessary for the lawful
conduct of their respective businesses (the “CPA:14 Permits”), except where the failure so
to hold such CPA:14 Permits, individually or in the aggregate, would not reasonably be expected to
have a CPA:14 Material Adverse Effect. CPA:14 and the CPA:14 Subsidiaries are in compliance with
the terms of the CPA:14 Permits, except where the failure to so comply, individually or in the
aggregate, would not reasonably be expected to have a CPA:14 Material Adverse Effect. Except as
disclosed in the CPA:14 SEC Documents, the businesses of CPA:14 and the CPA:14 Subsidiaries are not
being conducted in violation of any Law, except for violations which, individually or in the
aggregate, would not reasonably be expected to have a CPA:14 Material Adverse Effect. No
investigation or review by any Governmental Entity with respect to CPA:14 or any CPA:14 Subsidiary
is pending or, to CPA:14’s Knowledge, threatened, other than those

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the outcome of which,
individually or in the aggregate, would not reasonably be expected to have a CPA:14 Material
Adverse Effect.

     (i) Litigation. Except as disclosed in Schedule 2.2(i) of the CPA:14 Disclosure Letter
or the CPA:14 SEC Documents, there is no suit, action or proceeding pending or, to the Knowledge of
CPA:14, threatened against or affecting CPA:14 or any CPA:14 Subsidiary or any of their respective
properties or assets that, individually or in the aggregate, would reasonably be expected to have a
CPA:14 Material Adverse Effect.

     (j) Taxes. (i) Each of CPA:14 and the CPA:14 Subsidiaries has timely filed all
material Tax Returns (as defined herein) required to be filed by it (after giving effect to any
valid extension to file). Each such Tax Return is true, correct and complete in all material
respects. CPA:14 and each CPA:14 Subsidiary has paid (or CPA:14 has paid on its behalf), all
material Taxes required to be paid. All material Taxes which CPA:14 or the CPA:14 Subsidiaries are
required by Law to withhold or collect, including Taxes required to have been withheld in
connection with amounts paid or owing to any employee, independent contractor, creditor,
shareholder or other third party and sales, gross receipts and use Taxes, have been duly withheld
or collected and, to the extent required, have been paid over to the proper Governmental Entities
within the time period prescribed by Law. The most recent audited financial statements contained
in the CPA:14 SEC Documents filed with the SEC prior to the date of this Agreement reflect an
adequate reserve in accordance with GAAP for all material Taxes payable by CPA:14 and the CPA:14
Subsidiaries for all taxable periods and portions thereof through the date of such financial
statements. CPA:14 and each CPA:14 Subsidiary has established (and until the Closing Date shall
continue to establish and maintain) on its books and records reserves that are adequate for the
payment of all material Taxes not yet due and payable. Since December 31, 2005, CPA:14 has
incurred no liability for any material Taxes under Sections 857(b), 860(c) or 4981 of the Code, IRS
Notice 88-19, Treasury Regulation Section 1.337(d)-5, or Treasury Regulation Section 1.337(d)-6
including, without limitation, any material Tax arising from a prohibited transaction described in
Section 857(b)(6) of the Code, and neither CPA:14 nor any of the CPA:14 Subsidiaries has incurred
any material liability for Taxes other than in the ordinary course of business and other than
transfer or similar Taxes arising in connection with the sales of property. No event has occurred,
and no condition or circumstance exists, which presents a material risk that any material Tax
described in the preceding sentences will be imposed upon CPA:14 or any CPA:14 Subsidiary. Neither
CPA:14 nor any CPA:14 Subsidiary is the subject of any audit, examination, or other proceeding in
respect of Federal income Taxes; to the Knowledge of CPA:14, no audit, examination or other
proceeding in respect of Federal income Taxes involving CPA:14 or any CPA:14 Subsidiary is being
considered by any Tax authority; and no audit, examination or proceeding in respect of Federal
income Taxes involving CPA:14 or any CPA:14 Subsidiary has occurred since December 31, 2000. No
deficiencies for any Taxes have been asserted or assessed in writing (or to the Knowledge of CPA:14
or any CPA:14 Subsidiary, proposed) against CPA:14 or any of the CPA:14 Subsidiaries, including
claims by any taxing authority in a jurisdiction where CPA:14 or any CPA:14 Subsidiary does not
file Tax Returns but in which any of them is or may be subject to taxation, which individually or
in the aggregate would be material, and no requests for waivers of the time to assess any such
Taxes have been granted and remain in effect or are pending. There are no Liens for Taxes upon the
assets of CPA:14 or the CPA:14 Subsidiaries except for statutory Liens for Taxes not yet due or
payable and, for which appropriate reserves have been established on their respective financial
statements in accordance with GAAP.

          (ii) CPA:14 (A) for each taxable year beginning with its taxable year ended on December 31,
1998, has been subject to taxation as a REIT within the meaning of the Code and has satisfied the
requirements to qualify as a REIT for such years, (B) has operated, and intends to continue to
operate, consistent with the requirements for qualification and taxation as a REIT through the
Effective Time and (C) has not taken or omitted to take any action which could reasonably be
expected to result in

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the loss of its qualification as a REIT, and no such challenge is pending, or
to CPA:14’s Knowledge, threatened. Each CPA:14 Subsidiary which is a partnership, joint venture or
limited liability company has since its acquisition by CPA:14 (A) been classified for Federal
income Tax purposes as a partnership or treated as a disregarded entity and not as an association
taxable as a corporation, or a “publicly traded partnership” within the meaning of Section 7704(b)
of the Code, and (B) not owned any assets (including, without limitation, securities) that would
cause CPA:14 to violate Section 856(c)(4) of the Code. Each CPA:14 Subsidiary which is a
corporation, and each other issuer of securities in which CPA:14 holds securities (within the
meaning of Section 856(c) of the Code but excluding “straight debt” of issuers as described in
Section 856(c)(7) of the Code) having a value of more than 10 percent of the total value of the
outstanding securities of such issuer, has since its acquisition by CPA:14 been a REIT, a qualified
REIT subsidiary under Section 856(i) of the Code or a taxable REIT subsidiary under Section 856(l)
of the Code or otherwise qualified as a “real estate asset” within the meaning of Section
856(c)(5)(B) of the Code. Neither CPA:14 nor any CPA:14 Subsidiary holds any asset (x) the
disposition of which would be subject to rules similar to Section 1374 of the Code as announced in
IRS Notice 88-19 or Treasury Regulation Section 1.337(d)-5 or Treasury Regulation Section
1.337(d)-6 or (y) that is subject to a consent filed pursuant to Section 341(f) of the Code and the
regulations thereunder.

          (iii) As of the date of this Agreement, CPA:14 does not have any earnings and profits
attributable to CPA:14 or any other corporation in any non-REIT year within the meaning of Section
857 of the Code.

          (iv) None of CPA:14 or any of the CPA:14 Subsidiaries is (i) subject, directly or indirectly,
to any Tax Protection Agreement or (ii) in violation of or in default under any Tax Protection
Agreement.

          (v) As of the date hereof, CPA:14 is a “domestically-controlled qualified investment entity”
within the meaning of Section 897(h) of the Code.

          (vi) Neither CPA:14 nor any CPA:14 Subsidiary is a party to any Tax allocation or sharing
agreement or has changed any method of accounting for Tax purposes.

          (vii) CPA:14 does not have any liability for the Taxes of any person other than CPA:14 and the
CPA:14 Subsidiaries and the CPA:14 Subsidiaries do not have any liability for the Taxes of any
person other than CPA:14 and the CPA:14 Subsidiaries (A) under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local or foreign Law), (B) as a transferee or successor, (C) by
contract or (D) otherwise.

          (viii) Neither CPA:14 nor any CPA 12 Subsidiary (x) has requested, received or is subject to
any written ruling of a Governmental Entity related to Taxes or has entered into any written and
legally binding agreement with a Governmental Entity relating to Taxes or (y) has engaged in any
transaction of which it has made (or was required to make) disclosure to any Governmental Entity to
avoid the imposition of any penalties related to Taxes.

     (k) Pension and Benefit Plans. Except as set forth in the CPA:14 SEC Documents,
neither CPA:14 nor any CPA:14 Subsidiary maintains or has maintained any Employee Benefit Plans or
has any obligations or liabilities in respect of Employee Benefit Plans. CPA:14 has no employees.
None of the agreements to which CPA:14 or any of the CPA:14 Subsidiaries is a party, would,
individually or in the aggregate, constitute excess parachute payments (as defined in Section 280G
of the Code (without regard to subsection (b)(4) thereof)) or would exceed the amount deductible
pursuant to Section 162(m) of the Code.

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     (l) Information Supplied. None of the information supplied or to be supplied by
CPA:14 in writing for inclusion or incorporation by reference in the Form S-4 or the Joint Proxy
Statement/Prospectus will (a) in the case of the Form S-4, at the time it becomes effective,
contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading or (b) in the case of the Joint Proxy
Statement/Prospectus, at the time of the mailing thereof or at the time the CPA:14 Stockholder
Meeting is to be held, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein
not misleading. The Form S-4 and the Joint Proxy Statement/Prospectus will (with respect to
CPA:14, its officers, directors and the CPA:14 Subsidiaries) comply in all material respects with
the applicable requirements of the Securities Act and the Exchange Act; provided, that no
representation is made as to statements made or incorporated by reference by CPA:12.

     (m) Intangible Property. CPA:14 and the CPA:14 Subsidiaries own, possess or have
adequate rights to use all trademarks, trade names, patents, service marks, brand marks, brand
names, computer programs, databases, industrial designs and copyrights necessary for the operation
of the businesses of each of CPA:14 and the CPA:14 Subsidiaries (collectively, the “CPA:14
Intangible Property”), except where the failure to possess or have adequate rights to use such
properties, individually or in the aggregate, would not reasonably be expected to have a CPA:14
Material Adverse Effect. All of the CPA:14 Intangible Property is owned or licensed by CPA:14 or
the CPA:14 Subsidiaries free and clear of any and all Liens, except those that, individually or in
the aggregate, would not reasonably be expected to have a CPA:14 Material Adverse Effect, and
neither CPA:14 nor any such CPA:14 Subsidiary has forfeited or otherwise relinquished any CPA:14
Intangible Property which forfeiture has resulted in, individually or in the aggregate, or would
reasonably be expected to result in a CPA:14 Material Adverse Effect. To the Knowledge of CPA:14,
the use of CPA:14 Intangible Property by CPA:14 or the CPA:14 Subsidiaries does not in any material
respect, conflict with, infringe upon, violate or interfere with or constitute an appropriation of
any right, title, interest or goodwill, including, without limitation, any intellectual property
right, trademark, trade name, patent, service mark, brand mark, brand name, computer program,
database, industrial design, copyright or any pending application therefor, of any other Person,
and there have been no claims made, and neither CPA:14 nor any of the CPA:14 Subsidiaries has
received any notice of any claim or otherwise knows that any of the CPA:14 Intangible Property is
invalid or conflicts with the asserted rights of any other Person or has not been used or enforced
or has failed to have been used or enforced in a manner that would result in the abandonment,
cancellation or unenforceability of any of the CPA:14 Intangible Property, except for any such
conflict, infringement, violation, interference, claim, invalidity, abandonment, cancellation or
unenforceability that, individually or in the aggregate, would not reasonably be expected to have a
CPA:14 Material Adverse Effect.

     (n) Environmental Matters. Except as disclosed in Schedule 2.2(n) of the CPA:14
Disclosure Letter, the CPA:14 SEC Documents or in the environmental audits/reports listed therein
or except as would not reasonably be expected to have a CPA:14 Material Adverse Effect:

          (i) None of CPA:14 or the CPA:14 Subsidiaries has received written notice that any
administrative or compliance order has been issued that is still in effect, any complaint has been
filed that remains unresolved, any penalty has been assessed that has not been paid and any
investigation or review is pending or threatened by any Governmental Entity with respect to any
alleged failure by CPA:14 or any CPA:14 Subsidiary to have any permit required under any applicable
Environmental Law or with respect to any Release by CPA:14 or any CPA:14 Subsidiary of any
Hazardous Material in material violation of any Environmental Law.

          (ii) To the Knowledge of CPA:14, except in material compliance with applicable Environmental
Laws, (A) there are no asbestos-containing materials present on any property owned or

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operated by
CPA:14 or any CPA:14 Subsidiary, (B) there are no regulated levels of PCBs present on any property
owned or operated by CPA:14 or any CPA:14 Subsidiary, and (C) there are no underground storage
tanks, active or abandoned, used for the storage of Hazardous Materials currently present on any
property owned or operated by CPA:14 or any CPA:14 Subsidiary.

          (iii) None of CPA:14 or any CPA:14 Subsidiary has received written notice of a claim, that has
not been resolved, to the effect that it is liable to a third party, including a Governmental
Entity, as a result of a Release of a Hazardous Material into the environment in material violation
of any Environmental Law at any property currently or formerly owned or operated by CPA:14 or a
CPA:14 Subsidiary.

          (iv) None of CPA:14 or any CPA:14 Subsidiary has received written notice of (A) any Liens
arising under or pursuant to any applicable Environmental Law on any CPA:14 Property or (B) any
action taken which could subject any CPA:14 Property to such Liens. To the Knowledge of CPA:14, no
such action is in process. CPA:14 and the CPA:14 Subsidiaries currently do not have any duty under
any applicable Environmental Law to place any restriction relating to the presence of Hazardous
Material at any CPA:14 Property.

          (v) None of CPA:14 or the CPA:14 Subsidiaries has transported or arranged for the
transportation of any Hazardous Material to any location which, to the Knowledge of CPA:14, is the
subject of any action, suit or proceeding that could be reasonably expected to result in claims
against CPA:14 or the CPA:14 Subsidiaries related to such Hazardous Material for clean-up costs,
remedial work, damages to natural resources or personal injury claims, including but not limited to
claims under CERCLA and the rules and regulations promulgated thereunder.

          (vi) CPA:14 and the CPA:14 Subsidiaries have made notification of Releases of a Hazardous
Material where required by applicable Environmental Law, and no property now or, to the Knowledge
of CPA:14, previously owned or operated by CPA:14 or the CPA:14 Subsidiaries is listed or, to the
Knowledge of CPA:14, proposed for listing on the National Priorities List promulgated pursuant to
CERCLA or on any similar list of sites under any Environmental Law of any other Governmental Entity
where such listing requires active investigation or clean-up.

          (vii) CPA:14 and the CPA:14 Subsidiaries have not entered into any agreements to provide
indemnification to any third party purchaser pursuant to Environmental Laws in relation to any
property or facility previously owned or operated by CPA:14 and the CPA:14 Subsidiaries.

          (viii) None of CPA:14 or the CPA:14 Subsidiaries has in its possession or control any
environmental assessment or investigation reports prepared within the last four years that (A) have
not been provided to CPA:12 prior to the execution of this Agreement or (B) that disclose a
material environmental condition with respect to the CPA:14 Properties which is not being addressed
or remediated or has not been addressed or remediated or been made the subject of an environmental
insurance policy listed in Schedule 2.2(n) of the CPA:14 Disclosure Letter, except for such reports
that (1) contain information regarding the environmental condition of any such property that has
been provided to CPA:12 or (2) reflect the results of an asbestos survey and/or abatement work
performed in the ordinary course of renovation or demolition activities.

     (o) Properties.

          (i) (A) Except as listed in Schedule 2.2(o)(i) of the CPA:14 Disclosure Letter, CPA:14 or a
CPA:14 Subsidiary owns fee simple title to or has a valid leasehold interest in, or has an interest
in an entity that owns fee simple title to or has a valid leasehold interest in, each of the real

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properties reflected on the most recent balance sheet of CPA:14 included in the CPA:14 SEC
Documents and as identified in Schedule 2.2(o)(i) of the CPA:14 Disclosure Letter (each, a
“CPA:14 Property” and collectively, the “CPA:14 Properties”), which are all of the
real estate properties owned or leased by them, in each case free and clear of Liens except for (1)
debt and other matters identified on Schedule 2.2(o)(i) of the CPA:14 Disclosure Letter, (2)
inchoate mechanics’, workmen’s, repairmen’s and other inchoate Liens imposed for construction work
in progress or otherwise incurred in the ordinary course of business, (3) mechanics’, workmen’s and
repairmen’s Liens (other than inchoate Liens for work in progress) which have heretofore been
bonded or insured; (4) (x) all matters disclosed on existing title policies or (y) as would be
disclosed on current title reports, zoning reports or surveys and would not have a material adverse
effect on the value or use of the affected property (excluding outstanding indebtedness); (5) real
estate Taxes and special assessments not yet due and payable which are being contested in good
faith in the ordinary course of business and (6) Liens that would not cause a material adverse
effect on the value or use of the affected property;

               (B) except as would not reasonably be expected to have a material adverse effect on the value
or use of the affected property, the CPA:14 Properties are not subject to any rights of way,
written agreements, Laws, ordinances and regulations affecting building use or occupancy, or
reservations of an interest in title (collectively, “CPA:14 Property Restrictions”), except
for (1) CPA:14 Property Restrictions imposed or promulgated by Law with respect to real property,
including zoning regulations, which would not reasonably be expected to have a material adverse
effect on the value or use of the affected property, (2) leases, easement agreements and all
matters disclosed on existing title policies, title reports, zoning reports or surveys or as would
be disclosed on current title reports, title policies, zoning reports or surveys (excluding
outstanding indebtedness) and (3) real estate Taxes and special assessments;

               (C) except as would not reasonably be expected to have a material adverse effect on the value
or use of the affected property, none of CPA:14 or a CPA:14 Subsidiary has received written notice
to the effect that there are any (1) condemnation or rezoning proceedings that are pending or, to
the Knowledge of CPA:14 and the CPA:14 Subsidiaries threatened, with respect to any material
portion of any of the CPA:14 Properties or (2) zoning, building or similar Laws or orders that are
presently being violated or will be violated by the continued maintenance, operation or use of any
buildings or other improvements on any of the CPA:14 Properties or by the continued maintenance,
operation or use of the parking areas located thereon or appurtenant thereto or used in connection
therewith;

               (D) except as would not reasonably be expected to have a material adverse effect on the value
or use of the affected property, none of CPA:14 or any CPA:14 Subsidiary has received written
notice that it is currently in default or violation of any CPA:14 Property Restrictions; and

               (E) except for the owners of the CPA:14 Properties in which CPA:14, any CPA:14 Subsidiary or
any joint venture involving CPA:14 or the CPA:14 Subsidiaries has a leasehold interest, no Person
(other than CPA:14, a CPA:14 Subsidiary or any joint venture involving CPA:14 or the CPA:14
Subsidiaries) has any ownership interest in any of the CPA:14 Properties.

          (ii) Except as individually or in the aggregate, as would not reasonably be expected to have a
CPA:14 Material Adverse Effect, all properties currently under development or construction by
CPA:14 or the CPA:14 Subsidiaries and all properties currently under contract for acquisition,
development or commencement of construction as of the date of this Agreement by CPA:14 and the
CPA:14 Subsidiaries are listed as such in Schedule 2.2(o)(ii) of the CPA:14 Disclosure Letter.

          (iii) Schedule 2.2(o)(iii) of the CPA:14 Disclosure Letter sets forth the rent roll for each
of the CPA:14 Properties (the “CPA:14 Rent Roll”) as of June 1, 2006 including any leases
which

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have been executed for which the term has not yet commenced. Except as disclosed in Schedule
2.2(o)(iii) of the CPA:14 Disclosure Letter and for discrepancies that, either individually or in
the aggregate, would not reasonably be expected to have a CPA:14 Material Adverse Effect, (1) the
information set forth in the CPA:14 Rent Roll is true, correct and complete as of the date thereof;
(2) no brokerage fees, commissions or any similar payments are owed or payable by the lessor under
any of the leases listed on the CPA:14 Rent Roll (the “CPA:14 Leases”) to any third party
in connection with the existence or execution thereof, or in connection with any renewal, expansion
or extension of any CPA:14 Lease which has occurred prior to, or may occur after, the date hereof;
(3) to the Knowledge of CPA:14, all work to be performed by any party to any of the CPA:14 Leases
has been completed and fully paid for; (4) except in the ordinary course of business, no tenants
under the CPA:14 Leases are entitled to any free rent, abatement of rent or similar concession, nor
to CPA:14’s Knowledge, to any claim of any offset or defense against the payment of rent; and (5)
no person other than those identified on the CPA:14 Rent Roll (and those claiming by, through or
under them) is in occupancy of any portion of any CPA:14 Property.

          (iv) Schedule 2.2(o)(iv) of the CPA:14 Disclosure Letter contains a list, as of the date of
this Agreement, of (A) all unfunded capital improvements required to have been conducted by CPA:14
or any CPA:14 Subsidiary in excess of $750,000 in any instance, (B) all outstanding leasing
commissions in excess of $750,000 in any instance and (C) all committed capital expenditures in
excess of $750,000 in any instance, excluding capital expenditures related to development projects
of CPA:14 or any CPA:14 Subsidiary.

     (p) Insurance. Schedule 2.2(p) of the CPA:14 Disclosure Letter is a complete list as
of the date of this Agreement of insurance policies which CPA:14 or any CPA:14 Subsidiary maintains
with respect to its respective businesses or properties. CPA:14 has not been informed that any
such policies are not in full force and effect in all material respects, as of the date of this
Agreement. All premiums due and payable by CPA:14 or any CPA:14 Subsidiary thereof under each such
policy obtained by CPA:14 or any CPA:14 Subsidiary have been paid.

     (q) Opinion of Financial Advisor. The Board of Directors of CPA:14 has received the
opinions of Friedman, Billings, Ramsey & Co., Inc. dated as of the date of this Agreement, to the
effect that, as of such date, the Merger Consideration is fair from a financial point of view to
the holders of CPA:14 Common Stock, which opinion has been made available to CPA:12. CPA:14 has
been advised that Friedman, Billings, Ramsey & Co., Inc. will permit the inclusion of the opinion
in its entirety and, subject to prior review and consent by Friedman, Billings, Ramsey & Co., Inc.,
a reference to the opinion in the Form S-4 and the Joint Proxy Statement/Prospectus.

     (r) Vote Required. The affirmative vote of the holders of a majority of the CPA:14
Common Stock (the “CPA:14 Stockholder Approval”) is the only vote of holders of securities
of CPA:14 required to approve the Merger and the other transactions contemplated by the Transaction
Documents.

     (s) Brokers. Except for the fees and expenses payable to Friedman, Billings, Ramsey &
Co., Inc. (which fees have been disclosed to CPA:12), no broker, investment banker or other Person
is entitled to any broker’s, finder’s or other similar fee or commission in connection with the
transactions contemplated by the Transaction Documents based upon arrangements made by or on behalf
of CPA:14 or any CPA:14 Subsidiary. CPA:14 has previously provided CPA:12 with a true and complete
copy of the engagement letter with Friedman, Billings, Ramsey & Co., Inc. as in effect on the date
hereof, pursuant to which such fees and expenses are payable, and the amounts payable by CPA:14
pursuant to such letter shall not have been increased between the date of this Agreement and the
Closing Date.

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     (t) Investment Company Act of 1940. Neither CPA:14 nor any of the CPA:14 Subsidiaries
is, or at the Effective Time will be, required to be registered as an investment company under the
Investment Company Act of 1940, as amended.

     (u) Contracts.

          (i) Except as set forth in Schedule 2.2(u)(i) of the CPA:14 Disclosure Letter or in the CPA:14
SEC Documents, each CPA:14 Material Contract is valid, binding and enforceable and in full force
and effect with respect to CPA:14 and the CPA:14 Subsidiaries, and to the Knowledge of CPA:14 the
other parties thereto, except where such failure to be so valid, binding and enforceable and in
full force and effect would not, individually or in the aggregate, reasonably be expected to have a
CPA:14 Material Adverse Effect, and there are no defaults by CPA:14 or any CPA:14 Subsidiary, or to
the Knowledge of CPA:14 the other parties thereunder, except those defaults that would not,
individually or in the aggregate, reasonably be expected to have a CPA:14 Material Adverse Effect.
For purposes of this Agreement, “CPA:14 Material Contracts” shall mean (i) any capitalized
lease obligations and other indebtedness to any Person, other than individual items of indebtedness
in a principal amount less than $1,000,000, (ii) each material commitment, contractual obligation,
borrowing, capital expenditure or transaction entered into by CPA:14 or any CPA:14 Subsidiary which
may result in total payments by or liability of CPA:14 or any CPA:14 Subsidiary in excess of
$1,000,000, (iii) any other agreements filed or required to be filed as exhibits to the CPA:14 SEC
Documents pursuant to Item 601(b)(10) of Regulation S-K of Title 17, Part 229 of the Code of
Federal Regulations, (iv) any interest rate cap, interest rate collar, interest rate swap, currency
hedging transaction and any other agreement relating to a similar transaction to which CPA:14 or
any CPA:14 Subsidiary is a party or an obligor with respect thereto, and (v) any agreement,
commitment, instrument or obligation of a type described in Sections 2.2(u)(ii) through 2.2(u)(iv).

          (ii) The Merger and the other transactions contemplated by the Transaction Documents will not
trigger any due-on-sale provision on any mortgages, except as set forth in Schedule 2.2(u)(ii) of
the CPA:14 Disclosure Letter.

          (iii) Except for those agreements set forth in Schedule 2.2(u)(iii) of the CPA:14 Disclosure
Letter or agreements in which CPA:14 agrees not to sell a CPA:14 Property to a competitor of the
CPA:14 Property’s current tenant, there are no non-competition agreements or other contracts or
agreements that contains covenants that restrict CPA:14’s ability to conduct its business in any
location or present a material restriction on the conduct of the business of CPA:14 or the CPA:14
Subsidiaries.

          (iv) Except as set forth in Schedule 2.2(u)(iv) of the CPA:14 Disclosure Letter, there are no
indemnification agreements entered into by and between CPA:14 and any director or officer of CPA:14
or any of the CPA:14 Subsidiaries, other than in respect of independent directors as may be
required in connection with financing the CPA:14 Properties.

     (v) Related Party Transactions. Except as expressly described in the CPA:14 SEC
Documents or as set forth in Schedule 2.2(v) of the CPA:14 Disclosure Letter, there are no material
arrangements, agreements or contracts entered into by CPA:14 or any of the CPA:14 Subsidiaries, on
the one hand, and any Person who is an officer, director or Affiliate of CPA:14 or any CPA:14
Subsidiary, any relative of the foregoing or an entity of which any of the foregoing is an
Affiliate, on the other hand. Copies of any such documents have been previously provided to
CPA:12.

     (w) Transaction Financing. CPA:14 has, and shall have, sufficient funds to permit
CPA:14 to perform all of its obligations under this Agreement and to consummate all the
transactions contemplated hereby, including paying the cash portion of the Merger Consideration in
the Merger.

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ARTICLE III

COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER

     Section 3.1. Conduct of Business by CPA:12.

     (a) During the period from the date of this Agreement to the Effective Time, CPA:12 shall use
all commercially reasonable efforts to carry on its businesses in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted and in compliance in all material
respects with applicable Law and, to the extent consistent herewith, use commercially reasonable
efforts to preserve intact in all material respects its current business organization, goodwill,
ongoing businesses and CPA:12’s qualification as a REIT within the meaning of the Code. CPA:12
will promptly notify CPA:14 of any litigation involving CPA:12 having, to the Knowledge of CPA:12,
potential liability to CPA:12 or any of the CPA:12 Subsidiaries in excess of $50,000 or any
complaint, investigation or hearing, of which CPA:12 has Knowledge, by a Governmental Entity
involving CPA:12 or any of the CPA:12 Subsidiaries.

     (b) Without limiting the generality of the foregoing, during the period from the date of this
Agreement to the earlier of the termination of this Agreement or the Effective Time of the Merger,
except as otherwise contemplated by this Agreement or to the extent consented to by CPA:14, which
consent shall not be unreasonably withheld, conditioned or delayed, CPA:12 shall not engage in,
authorize or agree to any of the following:

          (i) (A) declare, set aside or pay any dividends on, or make any other distributions in respect
of, any of CPA:12 Common Stock or stock or other equity interests in any CPA:12 Subsidiary that is
not directly or indirectly wholly-owned by CPA:12, except (1) the authorization and payment of
regular quarterly dividends with respect to the CPA:12 Common Stock (not to exceed $.2087 per share
per quarter), provided that CPA:12 shall notify CPA:14 of the proposed record date for any such
distribution prior to such date, (2) the payment of the Special Distribution or (3) following the
CPA:12 Stockholder Meeting, any distribution (or an increase in a distribution) by CPA:12 that is
necessary for CPA:12 to maintain its REIT qualification, avoid the incurrence of any Taxes under
Section 857 of the Code, avoid the imposition of any excise Taxes under Section 4981 of the Code,
or avoid the need to make one or more extraordinary or disproportionately larger distributions to
meet any of the objectives in this clause (3), provided that CPA:12 shall provide CPA:14 with
evidence, reasonably satisfactory to CPA:14, that such distribution is necessary and CPA:12 shall
not be permitted to pay any such distribution in the event the Alternate Merger is to be effected,
(B) split, combine or reclassify any CPA:12 Common Stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of CPA:12 Common Stock or
(C) purchase, redeem or otherwise acquire any CPA:12 Common Stock or any options, warrants or
rights to acquire, or security convertible into, shares of CPA:12 Common Stock;

          (ii) issue, deliver, sell or grant any option or other material right in respect of, any
CPA:12 Common Stock, capital stock, any other voting or redeemable securities of CPA:12 or any
securities convertible into, or any rights, warrants or options to acquire, any such shares, voting
securities or convertible or redeemable securities, except (i) to CPA:12 or a wholly-owned CPA:12
Subsidiary, (ii) pursuant to CPA:12’s distribution reinvestment and share purchase plan or (iii)
pursuant to the advisory agreement between CPA:12 and W. P. Carey & Co. LLC and the acquisition
services agreement between CPA:12 and Carey Asset Management Corp.;

          (iii) amend the CPA:12 Charter or CPA:12 Bylaws, except as required by this Agreement or in
connection with the Sale of Assets, Special Distribution or the Alternate Merger;

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          (iv) merge, consolidate or enter into any other similar extraordinary corporate transaction
with any Person;

          (v) except for transactions in the ordinary course of business consistent with past practice,
(A) make any capital expenditures, (B) acquire, enter into any option to acquire, or exercise an
option or other right or election or enter into any other commitment or contractual obligation
(each, a “Commitment”) for the acquisition of any real property or other transaction
involving nonrefundable deposits; (C) commence construction of, or enter into any Commitment to
develop or construct, other real estate projects; (D) incur additional indebtedness (secured or
unsecured); or (E) make any loans, advances, capital contributions or investments in any other
Person;

          (vi) except for transactions in the ordinary course of business consistent with past practice,
the Sale of Assets, the Special Distribution and as set forth on Schedule 2.1(p)(iv) of the CPA:12
Disclosure Letter, (A) sell, mortgage, lease, subject to Lien or otherwise dispose of any of the
CPA:12 Properties; (B) pledge or otherwise encumber CPA:12 Common Stock; or (C) sell, lease,
mortgage, subject to Lien or otherwise dispose of any of its personal or intangible property;

          (vii) guarantee the indebtedness of another Person, enter into any “keep well” or other
agreement to maintain any financial statement condition of another Person or enter into any
arrangement having the economic effect of any of the foregoing other than in the ordinary course of
business consistent with past practice;

          (viii) (A) prepay, refinance or amend any existing indebtedness other than, in the case of
refinancings and amendments, on terms more favorable than the terms of the existing indebtedness
other than in the ordinary course of business consistent with past practice or (B) pay, discharge
or satisfy any claims, Liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise) other than the payment, discharge or satisfaction, in the ordinary course
of business consistent with past practice or in accordance with their terms, of Liabilities
reflected or reserved against in the balance sheet of CPA:12 dated as of December 31, 2005;

          (ix) make or rescind any express or deemed election relating to Taxes (unless CPA:12
reasonably determines after consultation with CPA:14 that such action is required by Law or
necessary to preserve CPA:12’s qualification as a REIT or any other CPA:12 Subsidiary which files
Tax Returns as a partnership for Federal Tax purposes, in which event CPA:12 shall make such
election in a timely manner); provided that nothing in this Agreement shall preclude CPA:12 from
designating dividends paid by it as “capital gain dividends” within the meaning of Section 857 of
the Code, with the prior written consent of CPA:14, which will not be unreasonably withheld;

          (x) (A) change in any material respect that is adverse to CPA:12 any of its methods,
principles or practices of accounting (including any method of accounting for Tax purposes) in
effect or (B) settle or compromise any claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes, except in the case of settlements or
compromises relating to Taxes on real property or sales Taxes in an amount not to exceed,
individually or in the aggregate, $100,000, or change any of its methods of reporting income or
deductions for Federal income Tax purposes from those employed in the preparation of its Federal
income Tax Return for the taxable year ended December 31, 2004, except as to clauses (A) and (B) as
may be required by the SEC, applicable Law or GAAP;

          (xi) adopt any employee benefit plan, incentive plan, severance plan, bonus plan, change in
control, retention, retirement, health, life, disability, compensation or special remuneration
plan, share option or similar plan, program, policy or arrangement, grant new share options, shares
of restricted shares, share appreciation rights or other equity-based awards, or enter into any
employment

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agreement, severance, change in control, termination agreement, retention agreement or
any similar agreement or arrangement;

          (xii) except as contemplated by this Agreement, the Special Dividend and the Sale of Assets,
enter into or amend or otherwise modify any material agreement or arrangement with persons that are
Affiliates or, as of the date of this Agreement, are officers or directors of CPA:12 or any CPA:12
Subsidiary;

          (xiii) except as required by this Agreement and as contemplated by the Sale of Assets and
Special Distribution, authorize, recommend, propose or announce an intention to adopt a plan of
complete or partial liquidation or dissolution of CPA:12;

          (xiv) except as otherwise permitted under this Agreement, amend or terminate, or waive
compliance with the terms of, or breaches under, any CPA:12 Material Contract or enter into a new
contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would
have been required to have been listed in Schedule 2.1(v)(i) of the CPA:12 Disclosure Letter which
after giving effect to the Merger would have a material adverse effect on CPA:14 and the CPA:14
Subsidiaries taken as a whole;

          (xv) enter into, assume or acquire any asset subject to any Tax Protection Agreement;

          (xvi) take any action that could reasonably be expected to prevent or impede the Merger from
qualifying as a reorganization under Section 368(a) of the Code (other than allowing CPA:12
stockholders to elect the consideration to be received in the Merger) pursuant to this Agreement
and the Joint Proxy Statement/Prospectus (as defined below); or

          (xvii) take any action inconsistent with any of the foregoing.

     Section 3.2. Conduct of Business by CPA:14.

     (a) During the period from the date of this Agreement to the Effective Time, CPA:14 shall use
all commercially reasonable efforts to carry on its businesses in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted and in compliance in all material
respects with applicable Law and, to the extent consistent herewith, use commercially reasonable
efforts to preserve intact in all material respects its current business organization, goodwill,
ongoing businesses and CPA:14’s qualification as a REIT within the meaning of the Code. CPA:14
will promptly notify CPA:12 of any litigation involving CPA:14 having, to the Knowledge of CPA:14,
potential liability to CPA:14 or any of the CPA:14 Subsidiaries in excess of $250,000 or any
complaint, investigation or hearing, of which CPA:14 has Knowledge, by a Governmental Entity
involving CPA:14 or any of the CPA:14 Subsidiaries.

     (b) Without limiting the generality of the foregoing, during the period from the date of this
Agreement to the earlier of the termination of this Agreement or the Effective Time of the Merger,
except as otherwise contemplated by this Agreement or to the extent consented to by CPA:12, which
consent shall not be unreasonably withheld, conditioned or delayed, CPA:14 shall not engage in,
authorize or agree to any of the following:

          (i) (A) declare, set aside or pay any dividends on, or make any other distributions in respect
of, any of CPA:14 Common Stock or stock or other equity interests in any CPA:14 Subsidiary that is
not directly or indirectly wholly-owned by CPA:14, except (1) the authorization and payment of
regular quarterly dividends with respect to the CPA:14 Common Stock (such dividends may be
increased

-31-

 

consistent with past practices), provided that CPA:14 shall notify CPA:12 of the proposed
record date for any such distribution prior to such date, (2) pursuant to any advisory agreements
or (3) any distribution (or an increase in a distribution) by CPA:14 that is necessary for CPA:14
to maintain REIT status, avoid the incurrence of any Taxes under Section 857 of the Code, avoid the
imposition of any excise Taxes under Section 4981 of the Code, or avoid the need to make one or
more extraordinary or disproportionately larger distributions to meet any of the objectives in this
clause (3), provided that CPA:14 shall provide CPA:12 with evidence, reasonably satisfactory to
CPA:12, that such distribution is necessary, (B) split, combine or reclassify any CPA:14 Common
Stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in
substitution for shares of CPA:14 Common Stock or (C) purchase, redeem or otherwise acquire any
CPA:14 Common Stock or any options, warrants or rights to acquire, or security convertible into,
shares of CPA:14 Common Stock;

          (ii) issue, deliver, sell or grant any option or other material right in respect of, any
CPA:14 Common Stock, capital stock, any other voting or redeemable securities of CPA:14 or any
securities convertible into, or any rights, warrants or options to acquire, any such shares, voting
securities or convertible or redeemable securities, except (i) to CPA:14 or a wholly-owned CPA:14
Subsidiary and (ii) pursuant to CPA:14’s distribution reinvestment and share purchase plan;

          (iii) amend the CPA:14 Charter or CPA:14 Bylaws, except as required by this Agreement or in
connection with the Alternate Merger;

          (iv) merge, consolidate or enter into any other similar extraordinary corporate transaction
with any Person;

          (v) except for transactions in the ordinary course of business consistent with past practice,
(A) make any capital expenditures, (B) acquire, enter into any option to acquire, or exercise an
Commitment for the acquisition of any real property or other transaction involving nonrefundable
deposits; (C) commence construction of, or enter into any Commitment to develop or construct, other
real estate projects; (D) incur additional indebtedness (secured or unsecured); or (E) make any
loans, advances, capital contributions or investments in any other Person;

          (vi) except for transactions made in the ordinary course of business consistent with past
practice, (A) sell, mortgage, lease, subject to Lien or otherwise dispose of any of the CPA:14
Properties; (B) pledge or otherwise encumber CPA:14 Common Stock; or (C) sell, lease, mortgage,
subject to Lien or otherwise dispose of any of its personal or intangible property;

          (vii) guarantee the indebtedness of another Person, enter into any “keep well” or other
agreement to maintain any financial statement condition of another Person or enter into any
arrangement having the economic effect of any of the foregoing other than in the ordinary course of
business consistent with past practice;

          (viii) (A) prepay, refinance or amend any existing indebtedness other than, in the case of
refinancings and amendments, on terms more favorable than the terms of the existing indebtedness
other than in the ordinary course of business consistent with past practice or (B) pay, discharge
or satisfy any claims, Liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise) other than the payment, discharge or satisfaction, in the ordinary course
of business consistent with past practice or in accordance with their terms, of Liabilities
reflected or reserved against in the balance sheet of CPA:14 dated as of December 31, 2005;

          (ix) make or rescind any express or deemed election relating to Taxes (unless CPA:14
reasonably determines after consultation with CPA:12 that such action is required by Law or
necessary to

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preserve CPA:14’s qualification as a REIT or any other CPA:14 Subsidiary which files
Tax Returns as a partnership for Federal Tax purposes, in which event CPA:14 shall make such
election in a timely manner); provided that nothing in this Agreement shall preclude CPA:14 from
designating dividends paid by it as “capital gain dividends” within the meaning of Section 857 of
the Code, with the prior written consent of CPA:12, which will not be unreasonably withheld;

          (x) (A) change in any material respect that is adverse to CPA:14 any of its methods,
principles or practices of accounting (including any method of accounting for Tax purposes) in
effect or (B) settle or compromise any claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes, except in the case of settlements or
compromises relating to Taxes on real property or sales Taxes in an amount not to exceed,
individually or in the aggregate, $100,000, or change any of its methods of reporting income or
deductions for Federal income Tax purposes from those employed in the preparation of its Federal
income Tax Return for the taxable year ended December 31, 2004, except as to clauses (A) and (B) as
may be required by the SEC, applicable Law or GAAP;

          (xi) adopt any employee benefit plan, incentive plan, severance plan, bonus plan, change in
control, retention, retirement, health, life, disability, compensation or special remuneration
plan, share option or similar plan, program, policy or arrangement, grant new share options, shares
of restricted shares, share appreciation rights or other equity-based awards, or enter into any
employment agreement, severance, change in control, termination agreement, retention agreement or
any similar agreement or arrangement;

          (xii) except as contemplated by this Agreement, enter into or amend or otherwise modify any
material agreement or arrangement with persons that are Affiliates or, as of the date of this
Agreement, are officers or directors of CPA:14 or any CPA:14 Subsidiary;

          (xiii) except as required by this Agreement, authorize, recommend, propose or announce an
intention to adopt a plan of complete or partial liquidation or dissolution of CPA:14;

          (xiv) except as otherwise permitted under this Agreement, amend or terminate, or waive
compliance with the terms of, or breaches under, any CPA:14 Material Contract or enter into a new
contract, agreement or arrangement that, if entered into prior to the date of this Agreement, would
have been required to have been listed in Schedule 2.2(u)(i) of the CPA:14 Disclosure Letter;

          (xv) enter into, assume or acquire any asset subject to any Tax Protection Agreement;

          (xvi) take any action that could reasonably be expected to prevent or impede the Merger from
qualifying as a reorganization under Section 368(a) of the Code pursuant to this Agreement and the
Joint Proxy Statement/Prospectus (as defined below); or

          (xvii) take any action inconsistent with any of the foregoing.

     Section 3.3. No Control of Other Party’s Business. Nothing contained in this Agreement
shall give CPA:12, directly or indirectly, the right to control or direct CPA:14’s or the CPA:14
Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement shall
give CPA:14, directly or indirectly, the right to control or direct CPA:12’s or the CPA:12
Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, each of CPA:12
and CPA:14 shall exercise, consistent with the terms and conditions of this Agreement, complete
control and supervision over its and its Subsidiaries’ respective operations.

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ARTICLE IV

ADDITIONAL COVENANTS

     Section 4.1. Preparation of the Form S-4 and the Joint Proxy Statement/Prospectus;
Stockholders Meetings.

     (a) As soon as practicable following the date of this Agreement, CPA:12 and CPA:14 shall
jointly prepare and file with the SEC mutually acceptable preliminary proxy materials and any
amendments or supplements thereof which shall constitute the Joint Proxy Statement/Prospectus
relating to the matters to be submitted to the CPA:12 Stockholders at the CPA:12 Stockholder
Meeting and the CPA:14 Stockholders at the CPA:14 Stockholder Meeting (such Joint Proxy
Statement/Prospectus, and any amendments or supplements thereto (the “Joint Proxy
Statement/Prospectus”) and CPA:14 shall prepare and file with the SEC the Registration
Statement on Form S-4, with respect to the issuance of CPA:14 Common Stock in the Merger (the
“Form S-4”) in which the Joint Proxy Statement/Prospectus will be included as a prospectus.
The Form S-4 and the Joint Proxy Statement/Prospectus shall comply in all material respects with
the applicable provisions of the Securities Act and the Exchange Act. The parties shall cooperate
fully with each other in the preparation of the Form S-4 and the Joint Proxy Statement/Prospectus,
and shall furnish each other with all information reasonably requested by the other for inclusion
therein or otherwise in respect thereof. Each of CPA:12 and CPA:14 shall use all reasonable best
efforts to have the Joint Proxy Statement/Prospectus cleared by the SEC and the Form S-4 declared
effective under the Securities Act as promptly as practicable after filing it with the SEC and to
keep the Form S-4 effective as long as necessary to consummate the Merger. The parties shall
promptly provide copies to each other, consult with each other and jointly prepare written
responses with respect to any written comments received from the SEC with respect to the Form S-4
and the Joint Proxy Statement/Prospectus and promptly advise the other party of any oral comments
received from the SEC. The parties shall cooperate and provide each other with a reasonable
opportunity to review and comment on any amendment or supplement to the Joint Proxy
Statement/Prospectus and Form S-4 prior to filing such with the SEC and will provide each other a
copy of all such filings made with the SEC. Notwithstanding any other provision herein to the
contrary, no amendment or supplement (including by incorporation be reference) to the Joint Proxy
Statement/Prospectus or Form S-4 shall be made without the approval of both parties, which approval
shall not be unreasonably withheld, conditioned or delayed. The parties shall use all reasonable
best efforts to cause the Joint Proxy Statement/Prospectus to be mailed to their respective
stockholders as promptly as practicable after the Form S-4 is declared effective under the
Securities Act. Each of CPA:12 and CPA:14 shall comply in all respects with the requirements of
the Exchange Act and the Securities Act applicable to the Joint Proxy Statement/Prospectus and the
solicitation of proxies for their respective meetings of stockholders. CPA:14 shall also take any
action required to be taken under any applicable state securities Laws in connection with the
issuance of the CPA:14 Common Stock in the Merger (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or to file a general consent to service of
process) and CPA:12 shall furnish all information concerning CPA:12 and the CPA:12 Stockholders as
may be reasonably requested by CPA:14 in connection with any such action.

     (b) CPA:12 shall, as soon as practicable following the date of this Agreement, establish a
record date for, duly call, give notice of, convene and hold the CPA:12 Stockholder Meeting solely
for the purposes of obtaining the CPA:12 Stockholder Approval and, subject to the provisions of
Section 4.4 and Article VI, shall, through its Board of Directors, recommend to the CPA:12
Stockholders the approval of this Agreement and the Merger. Subject to the foregoing, CPA:12 shall
use its reasonable best efforts to obtain the CPA:12 Stockholder Approval as promptly as
practicable.

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     (c) CPA:14 shall, as soon as practicable following the date of this Agreement, establish a
record date for, duly call, give notice of, convene and hold the CPA:14 Stockholder Meeting solely
for the purposes of obtaining the CPA:14 Stockholder Approval and shall, through its Board of
Directors, recommend to the CPA:14 Stockholders the approval of this Agreement and the Merger.
Subject to the foregoing, CPA:14 shall use its reasonable best efforts to obtain the CPA:14
Stockholder Approval as promptly as practicable.

     (d) The CPA:12 Stockholder Meeting and the CPA:14 Stockholder Meeting shall take place on the
same date to the extent practicable.

     (e) If at any time prior to the Effective Time any event with respect to CPA:14 (including its
officers, directors and CPA:14 Subsidiaries) shall occur that in the determination of CPA:14 is
required to be described in an amendment of, or a supplement to, the Joint Proxy
Statement/Prospectus or the Form S-4, CPA:14 shall notify CPA:12 thereof and such event shall be so
described. Any such amendment or supplement shall be promptly filed with the SEC and, as and to
the extent required by Law, disseminated to the stockholders of CPA:14, and such amendment or
supplement shall comply in all material respects with all provisions of applicable Law.

     (f) If at any time prior to the Effective Time any event with respect to the CPA:12 (including
its officers, directors and CPA:12 Subsidiaries) shall occur that in the determination of CPA:12 is
required to be described in an amendment of, or a supplement to, the Joint Proxy
Statement/Prospectus or the Form S-4, CPA:12 shall notify CPA:14 thereof and such event shall be so
described. Any such amendment or supplement shall be promptly filed with the SEC and, as and to
the extent required by Law, disseminated to the stockholders of CPA:12, and such amendment or
supplement shall comply in all material respects with all provisions of applicable Law.

     (g) The foregoing actions are subject to compliance with applicable Law and the other terms of
this Agreement.

     Section 4.2. Reasonable Best Efforts.

     (a) Upon the terms and subject to the conditions set forth in this Agreement and compliance
with applicable Law and the other terms of this Agreement, each of CPA:14 and CPA:12 agrees to use
its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be
done, and to assist and cooperate with the other in doing, all things necessary, proper or
advisable to fulfill all conditions applicable to such party pursuant to this Agreement and to
consummate and make effective, in the most expeditious manner practicable, the Merger and the other
transactions contemplated by the Transaction Documents, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings and the taking of all reasonable steps as may be
necessary to obtain an approval, waiver or exemption from any Governmental Entity, (ii) the
obtaining of all necessary consents, approvals, waivers or exemption from non-governmental third
parties, (iii) the execution and delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this Agreement and (iv) the
consummation of the Sale of Assets and Special Distribution. In addition, each of CPA:14 and
CPA:12 agrees to use their reasonable best efforts to defend any lawsuits or other legal
proceedings, whether judicial or administrative, challenging the Merger, this Agreement or the
transactions contemplated by the Transaction Documents, including seeking to have any stay,
temporary restraining order, injunction, or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated by the Transaction Documents
entered by any court or other Governmental Entity vacated or reversed. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the purpose of this
Agreement, the proper officers and directors of

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CPA:12 and CPA:14 shall take all such necessary
action. From the date of this Agreement through the Effective Time, CPA:12 shall timely file, or
cause to be filed, with the SEC all CPA:12 SEC Documents required to be so filed.

     (b) CPA:12 shall give prompt notice to CPA:14, and CPA:14 shall give prompt notice to CPA:12,
if (i) any representation or warranty made by it contained in this Agreement that is qualified as
to materiality becomes untrue or inaccurate in any respect or any such representation or warranty
that is not so qualified becomes untrue or inaccurate in any material respect or (ii) it fails to
comply with or satisfy in any material respect any covenant, condition or agreement to be complied
with or satisfied by it under this Agreement; provided that the delivery of any notice pursuant to
this Section shall not limit or otherwise affect the remedies available hereunder to the party
receiving such notice; and, provided further, that failure to give such notice shall not be treated
as a breach of covenant for the purposes of Sections 5.2(b) or 5.3(b), as the case may be.

     Section 4.3. Tax Treatment.

     (a) CPA:12 shall prepare or cause to be prepared and file or cause to be filed on a timely
basis all Tax Returns and amendments thereto required to be filed by CPA:12 or any of the CPA:12
Subsidiaries in a manner consistent with past practice (unless an alternative manner is required by
applicable Law) prior to the Closing Date (after electing all available extensions of time to file
such Tax Returns). Prior to filing any such Tax Returns, CPA:12 shall deliver draft copies
(together with supporting documentation, including Tax Return work papers) to CPA:14 for CPA:14’s
review and comment, and CPA:12 shall accept all reasonable comments of CPA:14 with respect to such
Tax Returns. CPA:12 shall pay all Taxes required to be paid by CPA:12 prior to the Effective Time.
CPA:14 shall have a reasonable period of time (but in no event less than 30 days) to review and
comment on such Tax Returns and amendments prior to filing. If the parties do not agree on the
draft Tax Returns or amendments, the parties shall hire a nationally recognized accounting firm
reasonably acceptable to CPA:12 and CPA:14 to prepare the contested Tax Returns or amendments.

     (b) CPA:12 will take all necessary actions, including but not limited to making sufficient
distributions prior to Closing, to assure that CPA:12 will qualify as a REIT for its Tax year
ending on the Closing Date (unless the Alternate Merger is used, in which case CPA:12 will take all
necessary actions prior to the Closing to assure that CPA:12 will qualify as a REIT through the
Closing Date but shall not be required to meet any REIT distribution requirement under this Section
4.3(b)). During the period from the date of this Agreement to the Effective Time, CPA:12 shall,
and shall cause each CPA:12 Subsidiary to, facilitate all reasonable requests of CPA:14 with
respect to the maintenance of CPA:12’s REIT qualification.

     (c) CPA:14 and CPA:12 shall report the Merger as a “reorganization” under Section 368(a) of
the Code, unless otherwise required by Law or administrative action, and shall comply with any
applicable Tax reporting requirements, including Treasury Regulation Section 1.368-3, as necessary;
provided, however, that if the provisions of Article X are applicable, Holdings, CPA:14 and CPA:12
shall report the Alternate Merger as (i) a contribution of the shares of CPA:12 Common Stock by the
CPA:12 Stockholders to Holdings under Section 351(a) of the Code and (ii) the merger of Acquisition
with and into CPA:14 as a “reorganization” under Section 368(a) of the Code, in each case, unless
otherwise required by Law or administrative actions.

     Section 4.4. No Solicitation of Transactions.

     (a) Subject to Section 6.1, none of CPA:12 or any CPA:12 Subsidiary shall, nor shall it
authorize or permit, directly or indirectly, any officer, director, investment
advisor, agent,
investment

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banker, financial advisor, attorney, accountant, broker, finder or other agent,
representative or Affiliate of CPA:12 or any CPA:12 Subsidiary to initiate, solicit, encourage or
facilitate (including by way of furnishing nonpublic information or assistance) any inquiries or
the making of any proposal or other action that constitutes, or may reasonably be expected to lead
to, any Competing Transaction (as defined herein), or enter into discussions or negotiate with any
Person in furtherance of such inquiries or to obtain a Competing Transaction. CPA:12 shall, and
shall cause the CPA:12 Subsidiaries to, take all actions reasonably necessary to cause their
respective officers, directors, investment advisors, investment bankers, financial advisors,
attorneys, accountants, brokers, finders and any other agents, representatives or Affiliates to,
immediately cease any discussions, negotiations or communications with any party or parties with
respect to any Competing Transaction. CPA:12 shall be responsible for (x) any failure on the part
of it, any of the CPA:12 Subsidiaries or any of their respective officers and directors to comply
with this Section 4.4(a) and (y) any material failure by their respective employees, agents,
investment bankers, financial advisors, attorneys, accountants, brokers, finders or other
representatives or Affiliates to comply with this Section 4.4(a). CPA:12 shall promptly request
each person that has heretofore executed a confidentiality agreement in connection with its
consideration of acquiring (whether by merger, acquisition, stock sale, asset sale or otherwise)
CPA:12 or any CPA:12 Subsidiary, if any, to return or destroy all confidential information
heretofore furnished to such person by or on behalf of CPA:12 or any CPA:12 Subsidiary.

     (b) CPA:12 shall notify CPA:14 in writing (as promptly as practicable but in any event within
24 hours of receipt) of the relevant details relating to all inquiries and proposals (including the
identity of the parties, price and other terms thereof) which it or any of the CPA:12 Subsidiaries
or any of their respective officers, directors, employees, agents, investment bankers, financial
advisors, attorneys, accountants, brokers, finders or other representatives or Affiliates may
receive after the date hereof relating to any of such matters and shall promptly inform CPA:14 in
writing with respect to any such inquiry or proposal that becomes reasonably likely to lead to a
proposal for a Competing Transaction (as defined herein), regardless of whether or not such
proposal is likely to lead to a Superior Competing Transaction.

     (c) For purposes of this Agreement, a “Competing Transaction” shall mean any of the
following (other than the transactions expressly provided for in this Agreement): (i) any merger,
consolidation, share exchange, business combination or similar transaction involving CPA:12 (or any
of the material CPA:12 Subsidiaries); (ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of 50% or more of the assets of CPA:12 and the CPA:12 Subsidiaries, taken as a
whole, in a single transaction or series of related transactions, excluding any bona fide financing
transactions which do not, individually or in the aggregate, have as a purpose or effect the sale
or transfer of control of such assets; or (iii) any tender offer or exchange offer for 50% or more
of the voting power in the election of directors exercisable by the holders of outstanding CPA:12
Common Stock (or any of the CPA:12 Subsidiaries).

     (d) For purposes of this Agreement, a “Superior Competing Transaction” means a bona
fide proposal for a Competing Transaction made by a third party which the Board of Directors of
CPA:12 determines (after taking into account any amendment of the terms of the Merger by CPA:14
and/or any proposal by CPA:14 to amend the terms of the Transaction Documents or the Merger), in
good faith and after consultation with its financial and legal advisors, (i) is on terms which are
more favorable from a financial point of view to the CPA:12 Stockholders than the Merger and the
other transactions contemplated by this Agreement, (ii) would result in such third party owning,
directly or indirectly, all or substantially all of the CPA:12 Common Stock then outstanding (or
all or substantially all of the equity of the surviving entity in a merger) or all or substantially
all of the assets of CPA:12 and the CPA:12 Subsidiaries taken as a whole, (iii) is not subject to
any material contingency, including any contingency relating to financing, unless the CPA:12 Board
of Directors affirmatively determines such contingency

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may likely be overcome or addressed or the
other party thereto has reasonably demonstrated in its written offer its ability to overcome or
address, including the receipt of government consents or approvals, (iv) is reasonably capable of
being consummated and (v) was not solicited by CPA:12, any CPA:12 Subsidiary or any of their
respective officers, directors, investment advisors, investment bankers, financial advisors,
attorneys, accountants, brokers, finders and any other agents, representatives or Affiliates in
breach of this Section 4.4.

     Section 4.5. Public Announcements. CPA:12 and CPA:14 shall consult with each other
before issuing any press release or otherwise making any public statements with respect to this
Agreement or any of the transactions contemplated by the Transaction Documents, except as otherwise
required by law in a manner which makes consultation impracticable.

     Section 4.6. Transfer and Gains Taxes. CPA:14 shall, with CPA:12’s good faith
cooperation and assistance, prepare, execute and file, or cause to be prepared, executed and filed,
all returns, questionnaires, applications or other documents regarding any real property transfer
or gains, sales, use, transfer, value added stock transfer and stamp Taxes, any transfer,
recording, registration and other fees and any similar Taxes which become payable in connection
with the transactions contemplated by this Agreement (together, with any related interest,
penalties or additions to Tax, “Transfer and Gains Taxes”). Except as provided in the Sale
Agreement, from and after the Effective Time, CPA:14 shall pay or cause to be paid all Transfer and
Gains Taxes without deductions withheld from any amounts payable to the holders of the CPA:12
Common Stock.

     Section 4.7. Indemnification; Directors’ and Officers’ Insurance.

     (a) It is understood and agreed that CPA:12 shall indemnify and hold harmless, and, after the
Effective Time, the Surviving Company and CPA:14 shall indemnify and hold harmless, each director
and officer of CPA:12 or any of the CPA:12 Subsidiaries (the “Indemnified Parties”), as and
to the same extent as such Indemnified Parties are indemnified by CPA:12 or the CPA:12 Subsidiaries
as of the date hereof. Any Indemnified Party wishing to claim indemnification under this Section
4.7, upon learning of any such claim, action, suit, demand, proceeding or investigation, shall
notify CPA:12 and, after the Effective Time, the Surviving Company and CPA:14, promptly thereof;
provided that the failure to so notify shall not affect the obligations of CPA:12, the Surviving
Company and CPA:14 except to the extent such failure to notify materially prejudices such party.

     (b) CPA:14 agrees that it shall maintain in full force and effect for a period of six years
from the Effective Time all rights to indemnification existing in favor of, and all limitations of
the personal liability of, the directors and officers of CPA:12 and the CPA:12 Subsidiaries
provided for in the CPA:12 Charter or CPA:12 Bylaws or any provision of the comparable charter or
organizational documents of any of the CPA:12 Subsidiaries, as in effect as of the date hereof,
with respect to matters occurring prior to the Effective Time, including the Merger; provided,
however, that all rights to indemnification in respect of any claims (each a “Claim”)
asserted or made within such period shall continue until the disposition of such Claim. Prior to
the Effective Time, CPA:14 shall purchase directors’ and officers’ liability insurance coverage for
CPA:12’s directors and officers, in a form reasonably acceptable to CPA:12, which shall provide
such directors and officers with runoff coverage for six years following the Effective Time of not
less than the existing coverage under, and have other terms not materially less favorable on the
whole to the insured persons than, the directors’ and officers’ liability insurance coverage
presently maintained by CPA:12.

     (c) This Section 4.7 is intended for the irrevocable benefit of, and to grant third party
rights to, the Indemnified Parties and shall be binding on all successors and assigns of CPA:14,
CPA:12 and the

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Surviving Company. Each of the Indemnified Parties shall be entitled to enforce the
covenants contained in this Section 4.7.

     (d) In the event that CPA:14 or the Surviving Company or any of its successors or assigns (i)
consolidates with or merges into any other person or entity and shall not be the continuing or
Surviving Company or entity of such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any person or entity, then, and in each such
case, proper provision shall be made so that the successors and assigns of CPA:14 and the Surviving
Company, as the case may be, assume the obligations set forth in this Section 4.7.

     Section 4.8. Purchases and Redemptions of CPA:12 Common Stock. During the period from
the date of this Agreement to the earlier of the termination of this Agreement or the Effective
Time of the Merger, each of CPA:14 and CPA:12 agrees that it will not purchase, redeem or otherwise
acquire any CPA:12 Common Stock or stock or other equity interests in any CPA:12 Subsidiary or any
options, warrants or rights to acquire, or security convertible into, shares of CPA:12 Common Stock
or stock or other equity interests in any CPA:12 Subsidiary.

     Section 4.9. Access; Confidentiality. To the extent applicable, CPA 12 and CPA 14
agree that upon reasonable notice, and except as may otherwise be required or restricted by
applicable Law, each shall (and shall cause its Subsidiaries to) afford the other’s officers,
employees, counsel, accountants and other authorized representatives reasonable access, during
normal business hours throughout the period prior to the Effective Time, to its executive officers,
to its properties, books, contracts and records and, during such period, each shall (and each shall
cause its Subsidiaries to) furnish promptly to the other all information concerning its business,
properties, personnel and litigation claims as may reasonably be requested but only to the extent
such access does not unreasonably interfere with the business or operations of such party; provided
that no investigation pursuant to this Section shall affect or be deemed to modify any
representation or warranty made in this Agreement; provided, further that the parties hereto shall
not be required to provide information (i) in breach of applicable Law or (ii) that is subject to
confidentiality obligations. Unless otherwise required by Law, the parties shall hold all
information of the other party which is confidential and is reasonably identified as such or should
reasonably be known to be confidential, in confidence until such time as such information otherwise
becomes publicly available through no wrongful act of the receiving party. In the event of
termination of this Agreement for any reason, each party promptly shall return to such other party
or destroy, providing reasonable evidence of such destruction, all such confidential information
obtained from any other party, and any copies made of (and other extrapolations from or work
product or analyses based on) such documents.

     Section 4.10. Sale Agreement. During the period from the date of this Agreement to
the earlier of the termination of this Agreement or the Effective Time of the Merger, CPA:12 agrees
that it will not amend or terminate the Sale Agreement without the prior written consent of CPA:14,
which consent shall not be unreasonably withheld or delayed.

ARTICLE V

CONDITIONS PRECEDENT

     Section 5.1. Conditions to Each Party’s Obligation to Effect the Merger. The
respective obligations of the parties to this Agreement to effect the Merger and to consummate the
other transactions contemplated by the Transaction Documents on the Closing Date are subject to the
satisfaction or waiver on or prior to the Closing Date of the following conditions:

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     (a) Stockholders’ Approvals. The CPA:12 Stockholder Approval and the CPA:14
Stockholder Approval shall have been obtained.

     (b) Registration Statement. The Form S-4 shall have become effective in accordance
with the provisions of the Securities Act. No stop order suspending the effectiveness of the Form
S-4 shall have been issued by the SEC and remain in effect and no proceeding to that effect shall
have been commenced or threatened. All necessary state securities or blue sky authorizations shall
have been received.

     (c) No Injunctions or Restraints. No temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger or any of the other transactions
or agreements contemplated by the Transaction Documents shall be in effect.

     (d) Other Approvals. All consents, approvals, permits and authorizations required to
be obtained from any Governmental Entity as indicated in Schedule 2.1(d)(iii) of the CPA:12
Disclosure Letter or Section 2.2(c)(iii) of the CPA:14 Disclosure Letter in connection with the
execution and delivery of this Agreement and the other Transaction Documents and the consummation
of the transactions contemplated thereby shall have been made or obtained (as the case may be).

     (e) Carey Asset Management Documents. Carey Asset Management Corp. shall have entered
into (i) the Indemnification Agreement with CPA:14, or if Article X is applicable, Holdings and
(ii) a letter agreement with CPA:14, or if Article X is applicable, Holdings, waiving any and all
(x) Acquisition Fees and Subordinated Acquisition Fees (as those terms are defined in the Advisory
Agreement) and (y) Subordinated Disposition Fees (as defined in the Advisory Agreement) which would
otherwise be payable, pursuant to the Amended and Restated Advisory Agreement dated September 30,
2005 between CPA:14 and Carey Asset Management Corp. (“Advisory Agreement”), by CPA:14 in
connection with the acquisition and/or subsequent disposition of the properties and assets acquired
from CPA:12 in the Merger.

     (f) Sale of Assets. The closing of the transactions contemplated by the Sale of
Assets shall have occurred.

     (g) Special Distribution. The Special Distribution shall have been declared, which
shall have a record date prior to the Closing Date.

     Section 5.2. Conditions to Obligations of CPA:14, Holdings, Acquisition and Merger
Sub. The obligations of CPA:14, Holdings, Acquisition and Merger Sub to effect the Merger and
to consummate the other transactions contemplated by the Transaction Documents on the Closing Date
are further subject to the following conditions, any one or more of which may be waived by CPA:14,
or if Article X is applicable, Holdings (it being understood that the rights of Holdings to the
benefit of this Section 5.2 shall apply only in the event that Article X is applicable):

     (a) Representations and Warranties. The representations and warranties of CPA:12 set
forth in this Agreement shall be true and correct on and as of the Closing Date, as though made on
and as of the Closing Date (except (x) for such changes resulting from actions permitted under
Section 3.1 and (y) to the extent any representation or warranty is expressly limited by its terms
to another date), except where the failure of such representations and warranties to be true and
correct (without giving effect to any materiality, CPA:12 Material Adverse Effect or any similar
qualification or limitation), in the aggregate, would not reasonably be likely to have a CPA:12
Material Adverse Effect, and CPA:14, or if Article X is

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applicable, Holdings, shall have received a
certificate signed on behalf of CPA:12 by the Chief Executive Officer and the Chief Financial
Officer of CPA:12 to such effect.

     (b) Performance of Covenants and Obligations of CPA:12. CPA:12 shall have performed
in all material respects all covenants and obligations required to be performed by it under this
Agreement at or prior to the Effective Time, and CPA:14, or if Article X is applicable, Holdings,
shall have received a certificate signed on behalf of CPA:12 by the Chief Executive Officer and the
Chief Financial Officer of CPA:12 to such effect.

     (c) Material Adverse Change. Since the date of this Agreement, there shall have
occurred no changes, events or circumstances which, individually or in the aggregate, constitute a
CPA:12 Material Adverse Effect. CPA:14, or if Article X is applicable, Holdings, shall have
received a certificate signed on behalf of CPA:12 by the Chief Executive Officer and the Chief
Financial Officer of CPA:12 to such effect.

     (d) Opinion Relating to REIT Qualification. CPA:14 shall have received an opinion,
dated as of the Closing Date, of Greenberg Traurig, LLP to the effect that, at all times since its
taxable year ended December 31, 2002, CPA:12 has been organized and operated in conformity with the
requirements for qualification and taxation as a REIT under the Code. For purposes of such
opinion, which shall be in a form customary for transactions of this nature, Greenberg Traurig, LLP
may rely on customary assumptions and representations of CPA:12 reasonably acceptable to CPA:14.

     (e) Consents. All necessary consents and waivers from third parties set forth in
Schedule 5.2(e) of the CPA:12 Disclosure Letter in connection with the consummation of the Merger
and the other transactions contemplated by the Transaction Documents shall have been obtained,
other than such consents and waivers from third parties, which, if not obtained, would not
reasonably be expected to have, individually or in the aggregate, a CPA:12 Material Adverse Effect.

     (f) Opinion Relating to the Merger. CPA:14 shall have received an opinion from
Clifford Chance US LLP, dated as of the Closing Date, to the effect that (i) the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code and (ii) each of
CPA:12 and CPA:14 will be parties to such reorganization within the meaning of Section 368(b) of
the Code. For purposes of the foregoing opinion, which shall be in a form customary for
transactions of this nature, Clifford Chance US LLP shall be entitled to rely upon customary
assumptions and representations of CPA:12 and CPA:14.

     Section 5.3. Conditions to Obligations of CPA:12. The obligations of CPA:12 to effect
the Merger and to consummate the other transactions contemplated by the Transaction Documents on
the Closing Date are further subject to the following conditions, any one or more of which may be
waived by CPA:12:

     (a) Representations and Warranties. The representations and warranties of CPA:14 set
forth in this Agreement shall be true and correct on and as of the Closing Date, as though made on
and as of the Closing Date (except (x) for such changes resulting from actions permitted under
Section 3.2 and (y) to the extent any representation or warranty is expressly limited by its terms
to another date), except where the failure of such representations and warranties to be true and
correct (without giving effect to any materiality, CPA:14 Material Adverse Effect or any similar
qualification or limitation), in the aggregate, would not reasonably be likely to have a CPA:14
Material Adverse Effect, and CPA:12 shall have received a certificate signed on behalf of CPA:14 by
the Chief Executive Officer and the Chief Financial Officer of CPA:14 to such effect.

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     (b) Performance of Covenants or Obligations of CPA:14. CPA:14 shall have performed in
all material respects all covenants and obligations required to be performed by it under this
Agreement at or prior to the Effective Time, and CPA:12 shall have received a certificate signed on
behalf of CPA:14 by the Chief Executive Officer and the Chief Financial Officer of CPA:14 to such
effect.

     (c) Material Adverse Change. Since the date of this Agreement, there shall have
occurred no change, events or circumstances which, individually or in the aggregate, constitute a
CPA:14 Material Adverse Effect. CPA:12 shall have received a certificate signed on behalf of CPA:14
by the Chief Executive Officer and Chief Financial Officer of CPA:14 to such effect.

     (d) Opinion Relating to REIT Qualification. CPA:12 shall have received an opinion,
dated as of the Closing Date, of Clifford Chance US LLP to the effect that, at all times since its
taxable year ended December 31, 2002, CPA:14 has been organized and operated in conformity with the
requirements for qualification and taxation as a REIT under the Code, and its proposed method of
operation as described in the Joint Proxy Statement/Prospectus and Form S-4 will enable CPA:14 to
meet the requirements for qualification and taxation as a REIT under the Code. For purposes of
such opinion, Clifford Chance US LLP may rely on customary assumptions and representations of
CPA:14 reasonably acceptable to CPA:12, and the opinion set forth in Section 5.2(d).

     (e) Consents. All necessary consents and waivers from third parties in connection
with the consummation of the Merger and the other transactions contemplated by the Transaction
Documents shall have been obtained, other than such consents and waivers from third parties, which,
if not obtained, would not reasonably be expected to have, individually or in the aggregate, a
CPA:14 Material Adverse Effect.

     (f) Opinion Relating to the Merger. CPA:12 shall have received an opinion of
Greenberg Traurig, LLP, dated as of the Closing Date, to the effect that (i) the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code and (ii) each of
CPA:12 and CPA:14 will be parties to such reorganization within the meaning of Section 368(b) of
the Code. For purposes of the foregoing opinion, which shall be in a form customary for
transactions of this nature, Greenberg Traurig, LLP shall be entitled to rely upon customary
assumptions and representations of CPA:12 and CPA:14.

ARTICLE VI

BOARD ACTIONS

     Section 6.1. Board Actions. Notwithstanding Section 4.4 or any other provision of
this Agreement to the contrary, to the extent the Board of Directors of CPA:12 determines that its
fiduciary duties under Law so require, as determined by such Board in good faith after consultation
with outside counsel, CPA:12 may:

     (a) disclose to the CPA:12 Stockholders any information required to be disclosed under
applicable Law;

     (b) to the extent applicable, comply with Rule 14e-2(a) or Rule 14(d)-9 promulgated under the
Exchange Act with respect to a Competing Transaction; provided, however, that neither CPA:12 nor
its Board of Directors shall be permitted to approve or recommend a Competing Transaction which is
not a Superior Competing Transaction;

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     (c) if it receives a proposal for a Competing Transaction (that was not solicited in violation
of Section 4.4), (x) furnish non-public information with respect to CPA:12 and the CPA:12
Subsidiaries to the Person who made such proposal (provided that CPA:12 (i) has previously or
concurrently furnished such information to CPA:14 and (ii) shall furnish such information pursuant
to a confidentiality agreement) and (y) contact such third party and its advisors solely for the
purpose of clarifying the proposal and any material contingencies and the capability of
consummation, so as to determine whether the proposal for a Competing Transaction is reasonably
likely to lead to a Superior Competing Transaction;

     (d) if its Board of Directors determines in good faith (after consulting with its outside
counsel and financial advisors) that a proposal for a Competing Transaction (which proposal was not
solicited in breach of Section 4.4) is reasonably likely to lead to a Superior Competing
Transaction, continue to furnish non-public information and participate in negotiations regarding
such proposal; provided, however, that not fewer than 24 hours prior to any determination by
CPA:12’s Board of Directors that the proposal for a Competing Transaction is reasonably likely to
lead to a Superior Competing Transaction, CPA:14 shall be notified orally and in writing of
CPA:12’s Board’s intention to take such action and CPA:12 shall negotiate in good faith with CPA:14
concerning any such new proposal by CPA:14 prior to the expiration of such 24-hour period; provided
further that CPA:12 shall promptly notify CPA:14 if the CPA:12 Board of Directors determines that a
Competing Transaction is not, and is unlikely to become, a Superior Competing Transaction; and

     (e) approve or recommend (and in connection therewith withdraw or modify its approval or
recommendation of this Agreement and the Merger) a Superior Competing Transaction or enter into an
agreement with respect to such Superior Competing Transaction.

ARTICLE VII

TERMINATION, AMENDMENT AND WAIVER

     Section 7.1. Termination. This Agreement may be terminated at any time prior to the
Effective Time of the Merger whether before or after the CPA:12 Stockholder Approval and the CPA:14
Stockholder Approval are obtained:

     (a) by mutual written consent duly authorized by the Boards of Directors of each of CPA:12 and
CPA:14;

     (b) by CPA:14, upon a breach of any representation, warranty, covenant or agreement on the
part of CPA:12 set forth in this Agreement, or if any representation or warranty of CPA:12 shall
have become untrue, in either case such that the conditions set forth in Section 5.2(a) or (b), as
the case may be, would be incapable of being satisfied by December 31, 2006 (the “Termination
Date”);

     (c) by CPA:12, upon a breach of any representation, warranty, covenant or agreement on the
part of CPA:14 set forth in this Agreement, or if any representation or warranty of CPA:14 shall
have become untrue, in either case such that the conditions set forth in Section 5.3(a) or (b), as
the case may be, would be incapable of being satisfied by the Termination Date;

     (d) by either CPA:14 or CPA:12, if any judgment, injunction, order, decree or action by any
Governmental Entity of competent authority preventing the consummation of the Merger shall have
become final and nonappealable after the parties have used reasonable best efforts to have such
judgment, injunction, order, decree or action removed, repealed or overturned;

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     (e) by either CPA:14 or CPA:12, if the Merger shall not have been consummated before the
Termination Date; provided, however, that a party that has materially breached a representation,
warranty or covenant of such party set forth in this Agreement shall not be entitled to exercise
its right to terminate under this Section 7.1(e); provided, that such date shall be automatically
extended until March 31, 2007, if either (x) a condition to Closing hereunder, which is not capable
of being satisfied as of the Termination Date, is reasonably likely to be satisfied by March 31,
2007 or (y) the Sale Agreement is extended until such time; provided, further, that either party
may terminate this Agreement after March 31, 2007;

     (f) by either CPA:14 or CPA:12, if the Merger shall not have been consummated before the
Termination Date; provided, however, that a party that has materially breached a representation,
warranty or covenant of such party set forth in this Agreement shall not be entitled to exercise
its right to terminate under this Section 7.1(e); provided, further, that such date shall be
automatically extended for 90 days if either (x) such time is necessary to obtain the consents and
approvals required under Section 5.1(d) or (y) the Sale Agreement is extended;

     (g) by CPA:14 or CPA:12 if, upon a vote at a duly held CPA:12 Stockholder Meeting or any
adjournment thereof, the CPA:12 Stockholder Approval shall not have been obtained, as contemplated
by Section 4.1;

     (h) by CPA:12, if the Board of Directors of CPA:12 or any committee thereof shall have
withdrawn its recommendation of the Merger or this Agreement in connection with, or approved or
recommended, a Superior Competing Transaction in accordance with the provisions of Section 6.1 and,
subject to the provisions of Section 7.6 has paid, or has agreed in writing to pay, the CPA:14
Break-Up Expenses in accordance with Section 7.2 of this Agreement;

     (i) by CPA:14, if (i) prior to the CPA:12 Stockholder Meeting the Board of Directors of CPA:12
or any committee thereof shall have withdrawn or modified in any manner adverse to CPA:14 its
approval or recommendation of the Merger or this Agreement in connection with, or approved or
recommended, any Superior Competing Transaction or (ii) CPA:12 shall have entered into any
agreement with respect to any Superior Competing Transaction; or

     (j) by CPA:14 or CPA:12 if, upon a vote at a duly held CPA:14 Stockholder Meeting or any
adjournment thereof, the CPA:14 Stockholder Approval shall not have been obtained, as contemplated
by Section 4.1.

     The right of any party hereto to terminate this Agreement pursuant to this Section 7.1 shall
remain operative and in full force and effect regardless of any investigation made by or on behalf
of any party hereto, any Affiliate of any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement. A terminating party shall
provide written notice of termination to the other parties specifying with particularity the reason
for such termination. If more than one provision in this Section 7.1 is available to a terminating
party in connection with a termination, a terminating party may rely on any and all available
provisions in this Section 7.1 for any such termination.

     Section 7.2. Expenses.

     (a) Except as otherwise specified in this Section 7.2 or agreed in writing by the parties, all
out-of-pocket costs and expenses incurred in connection with this Agreement, the Merger and the
other transactions contemplated hereby shall be paid by the party incurring such cost or expense;
provided that

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CPA:12 and CPA:14 shall each bear one-half of the costs of filing, printing and
mailing the Joint Proxy Statement/Prospectus and the Form S-4.

     (b) CPA:12 agrees that if this Agreement shall be terminated pursuant to Section 7.1(b), (g)
or (h), then CPA:12 will pay to CPA:14, or as directed by CPA:14, an amount equal to the CPA:14
Break-Up Expenses; provided, that, such amount shall, subject to the provisions of Section 7.6, be
paid promptly, but in no event later than two business days after such termination. For purposes
of this Agreement, the “CPA:14 Break-Up Expenses” shall be an amount equal to CPA:14’s
out-of-pocket expenses incurred in connection with this Agreement and the other transactions
contemplated hereby (including, without limitation, all attorneys’, accountants’ and investment
bankers’ fees and expenses) but in no event in an amount greater than $2.76 million.

     (c) CPA:14 agrees that if this Agreement shall be terminated pursuant to Section 7.1(c), then
CPA:14 will pay to CPA:12, or as directed by CPA:12, an amount equal to CPA:12’s out-of-pocket
expenses incurred in connection with this Agreement and the other transactions contemplated hereby
(including, without limitation, all attorneys’, accountants’ and investment bankers’ fees and
expenses) but in no event in an amount greater than $1.76 million.

     (d) The foregoing provisions of this Section 7.2 have been agreed to by each of the parties
hereto in order to induce the other parties to enter into this Agreement and to consummate the
Merger and the other transactions contemplated by this Agreement, it being agreed and acknowledged
by each of them that the execution of this Agreement by them constitutes full and reasonable
consideration for such provisions.

     (e) In the event that either CPA:14 or CPA:12 is required to file suit to seek all or a
portion of the amounts payable under this Section 7.2, and such party prevails in such litigation,
such party shall be entitled to all expenses, including reasonable attorneys’ fees and expenses,
which it has incurred in enforcing its rights under this Section 7.2.

     Section 7.3. Effect of Termination. In the event of termination of this Agreement by
either CPA:12 or CPA:14 as provided in Section 7.1, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of CPA:14 or CPA:12, other than the
penultimate sentence of Section 4.2, Section 4.7, Section 7.2, this Section 7.3 and Article VIII
and except to the extent that such termination results from a willful breach by a party of any of
its representations, warranties, covenants or agreements set forth in this Agreement or a failure
or refusal by such party to consummate the transactions contemplated hereby when such party was
obligated to do so in accordance with the terms hereof.

     Section 7.4. Amendment. This Agreement may be amended by the parties in writing by
action of their respective Boards of Directors at any time before or after the CPA:12 Stockholder
Approval is obtained and prior to the filing of the Articles of Merger for the Merger with the
State Department of Assessments and Taxation of Maryland; provided, however, that, after the CPA:12
Stockholder Approval is obtained, no such amendment, modification or supplement shall alter the
amount or change the form of the Merger Consideration to be delivered to the CPA:12 Stockholders or
alter or change any of the terms or conditions of this Agreement if such alteration or change would
adversely affect the CPA:12 Stockholders.

     Section 7.5. Extension; Waiver. At any time prior to the Effective Time, each of
CPA:12 and CPA:14 may (a) extend the time for the performance of any of the obligations or other
acts of the other party, (b) waive any inaccuracies in the representations and warranties of the
other party contained in this Agreement or in any document delivered pursuant to this Agreement or
(c) subject to the provisions of

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Section 7.4, waive compliance with any of the agreements or
conditions of the other party contained in this Agreement. Any agreement on the part of a party to
any such extension or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of those rights.

     Section 7.6. Payment of Expenses.

     (a) In the event that CPA:12 is obligated to pay CPA:14 the CPA:14 Break-Up Expenses pursuant
to Section 7.2(b) (the “Expense Amount”), CPA:12 shall pay to CPA:14 from the applicable
CPA:14 Break Up Expenses deposited into escrow in accordance with the next sentence, an amount
equal to the lesser of (i) the Expense Amount and (ii) the sum of (A) the maximum amount that can
be paid to CPA:14 without causing CPA:14 to fail to meet the requirements of Code Sections
856(c)(2) and (3) for the year in which the Expense Amount would otherwise be payable, for this
purpose treating such amount as income that does not qualify for purposes of Code Sections
856(c)(2) and (c)(3), as determined by CPA:14’s independent certified public accountants, plus (B)
in the event CPA:14 receives either (1) a letter from CPA:14’s counsel indicating that CPA:14 has
received a ruling from the IRS described in Section 7.6(b) or (2) an opinion from CPA:14’s counsel
as described in Section 7.6(b), an amount equal to the Expense Amount less the amount payable under
clause (A) above. To the extent the entire Expense Amount is not paid to CPA:14 in the year in
which such amount would otherwise be payable as a result of the restrictions set forth in this
Section 7.6(a), the Expense Amount shall be carried forward to the succeeding year and shall be
payable (as described above) in such succeeding year by applying the same formula and by deeming
such Expense Amount as payable in such succeeding year. To the extent the full Expense Amount has
not been paid in the initial and succeeding year, the amount shall similarly be carried forward for
each of the next three taxable years. To the extent that the entire Expense Amounts has not been
paid in the initial year, the succeeding year and the three following years, the Expense Amount
shall be forfeited by CPA:14. To secure CPA:14’s obligation to pay these amounts, CPA:12 shall
deposit into escrow an amount in cash equal to the Expense Amount with an escrow agent selected by
CPA:12 and on such terms (subject to Section 8.3(b)) as shall be mutually agreed upon by CPA:12,
CPA:14 and the escrow agent. The payment or deposit into escrow of the Expense Amount pursuant to
this Section 7.6(a) shall be made at the time CPA:12 would otherwise be obligated to pay CPA:14
pursuant to Section 7.2.

     (b) The escrow agreement shall provide that the Expense Amount in escrow or any portion
thereof shall not be released to CPA:14 unless the escrow agent receives any of the following: (i)
a letter from CPA:14’s independent certified public accountants indicating the maximum amount that
can be paid by the escrow agent to CPA:14 without causing the Payee to fail to meet the
requirements of Code Sections 856(c)(2) and (3) determined as if the payment of such amount did not
constitute income that qualifies for purposes of Code Sections 856(c)(2) and (3) (“Qualifying
Income”) or a subsequent letter from CPA:14’s accountants revising that amount, in which case
the escrow agent shall release such amount to CPA:14, or (ii) a letter from CPA:14’s counsel
indicating that CPA:14 received a ruling from the IRS holding that the receipt by CPA:14 of the
Expense Amount would either constitute Qualifying Income or would be excluded from gross income for
purposes of Code Sections 856(c)(2) and (3) (or alternatively, CPA:14’s counsel has rendered a
legal opinion to the effect that the receipt by CPA:14 of the Expense Amount would either
constitute Qualifying Income or would be excluded from gross income for purposes of Code Sections
856(c)(2) and (3)), in which case the escrow agent shall release the remainder of the Expense
Amount to CPA:14. CPA:12 agrees to amend this Section 7.6 at the request of CPA:14 in order to (A)
maximize the portion of the Expense Amount that may be distributed to CPA:12 hereunder without
causing CPA:12 to fail to meet the requirements of Code Sections 856(c)(2) and (3), (B) improve the
likelihood of CPA:14 securing a ruling described in this Section 7.6(b), or (C) assist CPA:14 in
obtaining a legal opinion from its counsel as described in this Section 7.6(b). The escrow

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agreement shall also provide that any portion of the Expense Amount not paid to CPA:14 in the
initial year and the four succeeding years shall be released by the escrow agent to CPA:12. CPA:12
shall not be a party to such escrow agreement and shall not bear any cost of or have liability
resulting from the escrow agreement.

ARTICLE VIII

GENERAL PROVISIONS

     Section 8.1. Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time. This Section 8.1 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the Effective Time.

     Section 8.2. Notices. All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given if delivered personally, sent by
overnight courier (providing proof of delivery) to the parties or sent by facsimile (providing
confirmation of transmission) at the following addresses or facsimile numbers (or at such other
address or facsimile number for a party as shall be specified by like notice):

     (a) if to CPA:12, to:

Corporate Property Associates 12, Incorporated

50 Rockefeller Plaza

New York, New York 10020

Attn: Chairman of the Audit Committee and General Counsel

Fax: (212) 492-8922

with a copy to:

Greenberg Traurig, LLP

MetLife Building

200 Park Avenue

New York, New York 10166

Attn: Judith Fryer, Esq.

Fax: (212) 801-6400

     (b) if to CPA:14, Holdings, Merger Sub or Acquisition, to:

c/o Corporate Property Associates 14, Incorporated

50 Rockefeller Plaza

New York, New York 10020

Attn: Chairman of the Audit Committee and General Counsel

with a copy to:

Clifford Chance US LLP

31 West 52nd Street

New York, New York 10019

Attn: Kathleen L. Werner, Esq.

Fax: (212) 878-8375

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     Section 8.3. Interpretation. When a reference is made in this Agreement to a Section,
such reference shall be to a Section of this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,”
“includes” or “including” is used in this Agreement, they shall be deemed to be followed by the
words “without limitation.”

     Section 8.4. Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other parties.

     Section 8.5. Entire Agreement; No Third-Party Beneficiaries. This Agreement and the
other agreements entered into in connection with the transactions (i) constitute the entire
agreement and supersede all prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter of this Agreement and, (ii) except for the provisions of
Article I and Sections 4.7 and 4.2 are not intended to confer upon any Person other than the
parties hereto any rights or remedies.

     Section 8.6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES THEREOF, EXCEPT TO THE EXTENT THAT THE MERGERS AND OTHER TRANSACTIONS CONTEMPLATED
HEREBY ARE REQUIRED TO BE GOVERNED BY THE MGCL.

     Section 8.7. Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned or delegated, in whole or in part, by operation
of Law or otherwise by any of the parties without the prior written consent of the other parties.
This Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties
and their respective successors and assigns.

     Section 8.8. Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the United States located
in the State of Maryland or in any Maryland State court, this being in addition to any other remedy
to which they are entitled at Law or in equity. In addition, each of the parties hereto (i)
consents to submit itself (without making such submission exclusive) to the personal jurisdiction
of any Federal court located in the State of Maryland or any Maryland State court in the event any
dispute arises out of this Agreement or any of the transactions contemplated by this Agreement and
(ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court.

     Section 8.9. Exhibits; Disclosure Letters. All Exhibits referred to herein, in the
CPA:12 Disclosure Letter and in the CPA:14 Disclosure Letter are intended to be and hereby are
specifically made a part of this Agreement.

ARTICLE IX

CERTAIN DEFINITIONS

     Section 9.1. Certain Definitions.

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     “Affiliate” of any Person means another Person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common control with, such first
Person.

     “Employee Benefit Plans” means all “employee benefit plans,” as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended, pension plans and all
other employee compensation and benefit arrangements or payroll practices, including, without
limitation, severance pay, sick leave, vacation pay, salary continuation for disability, consulting
or other compensation agreements, retirement, deferred compensation, bonus (including, without
limitation, any retention bonus plan), long-term incentive, stock option, stock purchase,
hospitalization, medical insurance, life insurance and scholarship programs.

     “CPA:12 Subsidiary” means each Subsidiary (as defined herein) of CPA:12, other than
Subsidiaries of CPA:12 with no assets that are in the process of being dissolved.

     “CPA:14 Subsidiary” means each Subsidiary (as defined herein) of CPA:14.

     “IRS” means the United States Internal Revenue Service.

     “Knowledge” (A) where used herein with respect to CPA:12 and any CPA:12 Subsidiary
shall mean the actual (and not constructive or imputed) knowledge of the persons named in Schedule
9.1 of the CPA:12 Disclosure Letter and (B) where used herein with respect to CPA:14 and any CPA:14
Subsidiary shall mean the actual (and not constructive or imputed) knowledge of the persons named
in Schedule 9.1 of the CPA:14 Disclosure Letter.

     “Law” means any statute, law, common law, regulation, rule, order, decree, code,
judgment, ordinance or any other applicable requirement of any Governmental Entity applicable to
CPA:14 or CPA:12 or any of their respective Subsidiaries.

     “Person” means an individual, corporation, partnership, limited liability company,
joint venture, association, trust, unincorporated organization or other entity.

     “Subsidiary” of any Person means any corporation, partnership, limited liability
company, joint venture or other legal entity of which such Person (either directly or through or
together with another Subsidiary of such Person) owns either (A) a general partner, managing member
or other similar interest or (B) 50% or more of the voting stock, value of or other equity
interests (voting or non-voting) of such corporation, partnership, limited liability company, joint
venture or other legal entity.

     “Tax” or “Taxes” shall mean any Federal, state, local and foreign income,
gross receipts, license, withholding, property, recording, stamp, transfer, sales, use, abandoned
property, escheat, franchise, employment, payroll, excise, environmental and other taxes, tariffs
or governmental charges of any nature whatsoever, together with penalties, interest or additions
thereto.

     “Tax Protection Agreement” shall mean any agreement, oral or written, (A) that has as
one of its purposes to permit a Person to take the position that such Person could defer taxable
income that otherwise might have been recognized upon a transfer of property to any CPA:12
Subsidiary that is treated as a partnership for U.S. federal income Tax purposes, and that (i)
prohibits or restricts in any manner the disposition of any assets of CPA:12 or any CPA:12
Subsidiary, (ii) requires that CPA:12 or any CPA:12 Subsidiary maintain, put in place, or replace
indebtedness, whether or not secured by one or more of the CPA:12 Properties, or (iii) requires
that CPA:12 or any CPA:12 Subsidiary offer to any Person at any time the opportunity to guarantee
or otherwise assume, directly or indirectly (including, without limitation, through a “deficit
restoration obligation,” guarantee (including, without limitation, a

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“bottom” guarantee),
indemnification agreement or other similar arrangement), the risk of loss for Federal income Tax
purposes for indebtedness or other liabilities of CPA:12 or any CPA:12 Subsidiary, (B) that
specifies or relates to a method of taking into account book-Tax disparities under Section 704(c)
of the Code with respect to one or more assets of CPA:12 or a CPA:12 Subsidiary, or (C) that
requires a particular method for allocating one or more liabilities of CPA:12 or any CPA:12
Subsidiary under Section 752 of the Code.

     “Tax Return” shall mean any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or attachment thereto,
and including any amendment thereof.

     “Voting Debt” shall mean bonds, debentures, notes or other indebtedness having the
right to vote (or convertible into, or exchangeable for, securities having the right to vote) on
any matters on which holders of equity interests in CPA:12, any CPA:12 Subsidiary or CPA:14, as
applicable, may vote.

ARTICLE X

ALTERNATE MERGER

     Section 10.1. Introduction. The provisions of this Article X shall apply if and only
if the Reorganization Opinions are not delivered at Closing. If the Reorganization Opinions are
delivered at Closing, the provisions of this Article X are null and void and neither of Holdings
nor Acquisition shall have any rights or obligations under this Agreement.

     Section 10.2. Alternative Merger and Consideration.

     (a) In lieu of the merger of CPA:12 with and into CPA:14 whereby CPA:14 becomes the surviving
company, at the Effective Time, Merger Sub shall be merged with and into CPA:12, whereby the
separate corporate existence of Merger Sub shall cease and CPA:12 shall continue as the surviving
company (and upon the applicability of this Article X, all references in this Agreement to the
“Surviving Company” shall mean CPA:12) in accordance with the Laws of the State of
Maryland. At the Effective Time, in lieu of receiving CPA:14 Common Stock pursuant to Section 1.5,
the CPA:12 Stockholders who elect to receive common stock or who are required to receive common
stock pursuant to Section 1.5(a) shall receive that number of shares of Holdings common stock,
$.001 par value (“Holdings Common Stock”) equal to the product of (A) the number of shares
of CPA:12 Common Stock owned by such CPA:12 Stockholder and (B) the Common Stock Exchange Ratio.
Each issued and outstanding share of common stock of Merger Sub shall be converted into and become
one fully paid and nonassessable share of common stock of the Surviving Company. Immediately after
the Effective Time, CPA:12 as the surviving corporation shall issue one fully paid and
nonassessable share of common stock of CPA:12 as the surviving corporation to Holdings for each
share of Holdings Common Stock issued to the CPA-12 Stockholders in the Alternate Merger.

     (b) In addition, at the Effective Time, Acquisition shall be merged with and into CPA:14,
whereby the separate corporate existence of Acquisition shall cease and CPA:14 shall continue as
the surviving company in accordance with the Laws of the State of Maryland. At the Effective Time
and without any further action on the part of CPA:14, Acquisition, Holdings or any stockholder of
CPA:14, each share of CPA:14 Common Stock outstanding immediately prior to the Effective Time shall
be cancelled and, in exchange for cancellation of such share, the rights attaching to such share
shall be converted into one share of Holdings Common Stock. Each issued and outstanding share of
common stock of Acquisition shall be converted into and become one fully paid and nonassessable
share of

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common stock of CPA:14 as the surviving corporation. Immediately after the Effective
Time, CPA:14 as the surviving corporation shall issue one fully paid and nonassessable share of
common stock of CPA:14 as the surviving corporation to Holdings for each share of Holding Common
Stock issued to the CPA:14 Stockholders in the Alternate Merger.

     Section 10.3. Transfer Taxes. Holdings shall pay any stamp Tax or documentary Tax
assessed upon or with respect to the issuance of common stock to be issued in accordance with
Section 10.2.

     Section 10.4. Representations and Warranties of Holdings, Acquisition and Merger Sub.
Holdings, Merger Sub and Acquisition jointly and severally represent and warrant to CPA:12 as
follows:

     (a) Organization and Standing. Each of Holdings, Acquisition and Merger Sub is a
corporation duly organized, validly existing and in good standing under the Laws of the State of
Maryland, and has the full corporate power and authority to own, operate and lease its assets, to
carry on its business as currently conducted, to execute and deliver this Agreement and to carry
out the transactions contemplated hereby. There is no state, country or territory wherein the
absence of licensing or qualification as a foreign corporation by Holdings, Acquisition or Merger
Sub would have a material adverse effect on any of them. Holdings, Acquisition and Merger Sub were
incorporated on June 28, 2006 and have not had any business operations to the date hereof. Holdings
will use reasonable best efforts to assure that Holdings will qualify as a REIT following the
Closing.

     (b) Subsidiaries. Holdings does not have any Subsidiaries or any equity investment or
other interest in, nor has it made advances or loans to, any corporation, association, partnership,
joint venture or other entity, except for Acquisition. Acquisition does not have any Subsidiaries
or any equity investment or other interest in, nor has it made advances or loans to, any
corporation, association, partnership, joint venture or other entity. Merger Sub does not have any
Subsidiaries or any equity investment or other interest in, nor has it made advances or loans to,
any corporation, association, partnership, joint venture or other entity.

     (c) Charter and Bylaws.

          (i) Holdings, Acquisition and Merger Sub have furnished to CPA:12 and CPA:14 a true and
complete copy of each of their charter and bylaws, as currently in effect.

          (ii) Immediately prior to the Effective Time, the charter of Holdings shall be identical to
the CPA:14 Charter; provided, however, that Article I shall read in its entirety: “The name of the
Corporation is CPI Holdings Incorporated.” Immediately prior to the Effective Time, the Bylaws of
Holdings shall be identical to the CPA:14 Bylaws.

     (d) Directors and Officers. Immediately prior to the Effective Time, the directors of
Holdings shall be identical to the directors of CPA:14.

     (e) Capitalization.

          (i) The authorized capital stock of Holdings consists of 120,000,000 shares of Holdings Common
Stock, all of which at the Effective Time will have been duly authorized and validly issued, fully
paid, non-assessable and outstanding, of which no shares are issued and outstanding as of the date
of this Agreement. No shares of capital stock of Holdings have been reserved for any purpose,
except pursuant to this Agreement. There are no outstanding securities convertible into or
exchangeable for the capital stock of Holdings and no outstanding options, rights (preemptive or
otherwise), or warrants to purchase or to subscribe for any shares of such stock or other
securities of Holdings. There are no

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outstanding agreements affecting or relating to the voting,
issuance, purchase, redemption, repurchase, transfer or registration for sale under the Securities
Act of the Holdings Common Stock or any other securities of Holdings, except as contemplated
hereunder. The Holdings Common Stock being issued on the Closing Date have been duly authorized by
all necessary corporate action on the part of Holdings. The Holdings Common Stock, when issued,
will be validly issued, fully paid and nonassessable.

          (ii) As of the date of this Agreement, the authorized shares of common stock of Acquisition
consist of 10,006,000 shares of common stock (the “Acquisition Common Stock”). All
outstanding shares of Acquisition are duly authorized, validly issued, fully paid and nonassessable
and not subject to, or issued in violation of, any preemptive right, purchase option, call option,
right of first refusal, subscription or any other similar right. There are (i) no other shares of
capital stock or voting securities of Acquisition, (ii) no securities of Acquisition convertible
into or exchangeable for shares of capital stock or voting securities of Acquisition and (iii) no
options or other rights to acquire from Acquisition, and no obligations of Acquisition to issue,
any capital stock, voting securities or securities convertible into or exchangeable for capital
stock or voting securities of Acquisition. Acquisition has not conducted any business prior to the
date hereof and has no, and prior to the Effective Time will have no, assets, liabilities or
obligations of any nature other than those incident to its formation and pursuant to this Agreement
and the Alternate Merger and the other transactions contemplated by this Agreement.

          (iii) As of the date of this Agreement, the authorized shares of common stock of Merger Sub
consist of 10,006,000 shares of common stock (the “Merger Sub Common Stock”). All
outstanding shares of Merger Sub Common Stock are duly authorized, validly issued, fully paid and
nonassessable and not subject to, or issued in violation of, any preemptive right, purchase option,
call option, right of first refusal, subscription or any other similar right. There are (i) no
other shares of capital stock or voting securities of Merger Sub, (ii) no securities of Merger Sub
convertible into or exchangeable for shares of capital stock or voting securities of Merger Sub and
(iii) no options or other rights to acquire from Merger Sub, and no obligations of Merger Sub to
issue, any capital stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of Merger Sub. Merger Sub has not conducted any business prior
to the date hereof and has no, and prior to the Effective Time will have no, assets, liabilities or
obligations of any nature other than those incident to its formation and pursuant to this Agreement
and the Alternate Merger and the other transactions contemplated by this Agreement.

     Section 10.5. Guaranty of Obligations of Holdings by CPA:14. CPA:14 hereby guarantees
to CPA:12, as a primary obligor, payment and performance by Holdings of its obligations under this
Agreement, including its obligation to issue Holdings Common Stock to the CPA:12 Stockholders and
the stockholders of CPA:14 (including without limitation, all amendments hereof), subject to the
terms, conditions and limitations hereof. CPA:14 hereby waives suretyship defenses, demand,
payment, protest and notice of dishonor or nonperformance of any such obligations, and CPA:12 shall
not be required to make any demand on Holdings for performance of any of its obligations under this
Agreement, nor to exhaust any legal, contractual or equitable remedies against Holdings, prior to
proceeding against CPA:14.

     Section 10.6. Further Action. If CPA:14 determines any further action is necessary or
desirable to carry out the purposes of the Alternate Merger, the officers and directors of CPA:14
shall be fully authorized (in the name of Holdings and otherwise) to take such action.

     Section 10.7. Conditions Precedent. The respective obligations of the parties to this
Agreement to effect the Alternate Merger and to consummate the other transactions contemplated by
the Transaction Documents on the Closing Date are subject to the satisfaction or waiver on or prior
to the

-52-

 

Closing Date of the conditions set forth in Article V and, in addition, Section 10.7(d);
provided, however, that:

     (a) the first sentence of Section 5.3(f) shall be deleted and replaced with the following:
“CPA:12 shall have received an opinion of Greenberg Traurig, LLP, dated as of the Closing Date, to
the effect that the Alternate Merger should qualify under Section 351(a) of the Code as a transfer
of shares of CPA:12 Common Stock by the CPA:12 Stockholders in exchange for Holdings Common Stock
and cash (and should not be treated to such CPA:12 Stockholders as a transfer described in Section
351(e) of the Code)”;

     (b) the first sentence of Section 5.2(f) shall be deleted and replaced with the following:
“CPA:14 shall have received an opinion of Clifford Chance US LLP, dated as of the Closing Date, to
the effect that (i) the merger of Acquisition with and into CPA:14 and the issuance of Holdings
Common Stock to the CPA:14 Stockholders in exchange for their shares of CPA:14 Common Stock will
qualify as a reorganization within the meaning of Section 368(a) of the Code and (ii) each of
Holdings, Acquisition and CPA:14 will be a party to such reorganization within the meaning of
Section 368(b) of the Code”;

     (c) the first sentence of Section 5.3(d) shall be deleted and replaced with the following:
“CPA:12 shall have received an opinion, dated as of the Closing Date, of Clifford Chance US LLP to
the effect that, (i) at all times since its taxable year ended December 31, 2002, CPA:14 has been
organized and operated in conformity with the requirements for qualification and taxation as a REIT
under the Code, and its proposed method of operation as described in the Joint Proxy
Statement/Prospectus and Form S-4 will enable CPA:14 to meet the requirements for qualification and
taxation as a REIT under the Code and (ii) commencing with its taxable year ending December 31,
2006, Holdings has been organized in conformity with the requirements for qualification and
taxation as a REIT under the Code, and its proposed method of operation, as described in the Joint
Proxy Statement/Prospectus and Form S-4 will enable it to met the requirements for qualification
and taxation as a REIT under the Code”; and

     (d) Merger Sub and Acquisition shall each have issued 6,000 shares of common stock as
described in Section 10.8.

     Section 10.8. Additional Covenant. In addition to the covenants set forth in Article
IV, as promptly as practicable following the date the parties determine to effect the Alternate
Merger but not less than 2 days prior to the Closing Date, Merger Sub shall issue 6,000 shares of
Merger Sub Common Stock to 120 separate persons and Acquisition shall issue 6,000 shares of
Acquisition Common Stock to 120 separate persons (which may be the same persons who purchase the
Merger Sub Common Stock).

     Section 10.9. Dissenters Rights.

     (a) Notwithstanding any provision of this Agreement to the contrary, to the extent that the
right to demand payment of fair value of the CPA:12 Common Stock in connection with the Alternate
Merger is available under the MGCL, Dissenting Shares held by a Dissenting Stockholder shall not be
converted into the Merger Consideration but shall become the right to receive such consideration as
may be determined to be due to such Dissenting Stockholder pursuant to the MGCL; provided, however,
that each share of CPA:12 Common Stock outstanding immediately prior to the Effective Time and held
by a Dissenting Stockholder who, after the Effective Time, withdraws his demand or fails to perfect
or otherwise loses his right to receive payment of fair value, pursuant to the MGCL, shall be
deemed to be converted as of the Effective Time into the right to receive the Merger Consideration,
in the form of Holdings Common Stock, without interest.

-53-

 

     (b) Notwithstanding any provision of this Agreement to the contrary, to the extent that the
right to demand payment of fair value of the CPA:14 Common Stock in connection with the Alternate
Merger is available under the MGCL, any outstanding shares of CPA:14 held by a record holder or
beneficial owner of shares of CPA:14 Common Stock who is entitled to demand and receive payment of
the fair value of such holder’s shares pursuant to Section 3-202 of the MGCL and who does not vote
for the Merger and complies with all provisions of the MGCL (including all provisions of Section
3-203 of the MGCL) concerning the right of holders of shares of CPA:14 Common Stock to object to
the Merger and obtain fair value for their shares shall not be converted into the Merger
Consideration but shall become the right to receive such consideration as may be determined to be
due to such CPA:14 Stockholder pursuant to the MGCL; provided, however, that each share of CPA:14
Common Stock outstanding immediately prior to the Effective Time and held by a CPA:14 Stockholder
who, after the Effective Time, withdraws his demand or fails to perfect or otherwise loses his
right to receive payment of fair value, pursuant to the MGCL, shall be deemed to be converted as of
the Effective Time into the right to receive the Merger Consideration, in the form of Holdings
Common Stock, without interest.

     (c) CPA:12 shall give CPA:14 (i) prompt notice of any demands for payment of fair value
pursuant to the applicable provisions of the MGCL received by CPA:12, attempted withdrawals of such
demands, and any other instruments served pursuant to the MGCL and received by CPA:12 relating to
rights of appraisal and (ii) the opportunity to participate in and direct the conduct of all
negotiations and proceedings with respect to demands for payment of fair value under the MGCL.
CPA:12 shall not, except with the prior written consent of CPA:14, make any payment with respect to
any such demands for payment of fair value, or settle, or offer to settle, or otherwise negotiate
any such demands for payment of fair value. CPA:14 will be responsible for any payment with
respect to any such demands for payment of fair value from CPA:14 Stockholders who comply with the
provisions in this Section.

[Signatures begin on the next page.]

-54-

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
respective officers thereunto duly authorized, all as of the date first written above.

	 	 	 	 	 
	 	CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
	 
	 	By:	/s/  Trevor
Bond	 
	 	 	Name:	Trevor Bond	 
	 	 	Title:	Director	 
	 
 
	 	CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
	 
	 	By:	/s/  Elizabeth
P. Munson	 
	 	 	Name:	Elizabeth P. Munson	 
	 	 	Title:	Special Committee Chairperson	 
	 
 
	 	CPA:12 MERGER SUB INC.
	 
	 	By:	/s/  Gordon
F. DuGan	 
	 	 	Name:	Gordon F. DuGan	 
	 	 	Title:	Director and CEO	 
	 
 
	 	CPA:14 ACQUISITION INC.
	 
	 	By:	/s/  Gordon
F. DuGan	 
	 	 	Name:	Gordon F. DuGan	 
	 	 	Title:	Director and CEO	 
	 
 
	 	CPI HOLDINGS INCORPORATED
	 
	 	By:	/s/  Gordon
F. DuGan	 
	 	 	Name:	Gordon F. DuGan	 
	 	 	Title:	Director and CEO	 

A-1

 

ANNEX A

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Appraised Value	 	FMV Debt	 	 
	Tenant / Guarantor	 	12/31/05	 	Balance 3/31/06	 	Equity
	 
	Assets maturing in the next 6 years or under-LLC
	 	 	 	 	 	 	 	 	 	 	 	 
	Asset Pool
	 	 	 	 	 	 	 	 	 	 	 	 
	Vacant Land (San Leandro, CA)
	 	$	1,492,000	 	 	$	—	 	 	$	1,492,000	 
	Plantation Products Inc. (NK
L&G/Garden Cos)
	 	 	6,230,000	 	 	 	—	 	 	 	6,230,000	 
	Milford Manufacturing (PAGG)
	 	 	4,500,000	 	 	 	(2,406,926	)	 	 	2,093,074	 
	The Retail Dist Group
	 	 	2,880,160	 	 	 	(2,827,622	)	 	 	52,538	 
	Wal-Mart
	 	 	5,970,000	 	 	 	—	 	 	 	5,970,000	 
	Medica
	 	 	20,917,820	 	 	 	(13,104,487	)	 	 	7,813,333	 
	Pharmaco (Applied BioScience)
	 	 	17,940,000	 	 	 	—	 	 	 	17,940,000	 
	Brown/Career Education
	 	 	16,890,000	 	 	 	(7,131,518	)	 	 	9,758,482	 
	Remec (Spectrian)
	 	 	7,080,000	 	 	 	—	 	 	 	7,080,000	 
	Carrefour II
	 	 	37,315,593	 	 	 	(29,592,980	)	 	 	7,722,613	 
	Sports and Fitness (Austin)
	 	 	9,290,000	 	 	 	(3,044,552	)	 	 	6,245,448	 
	Etec I & II (Applied Materials)
	 	 	62,996,880	 	 	 	(20,637,392	)	 	 	42,359,488	 
	Balanced Care
	 	 	5,740,000	 	 	 	—	 	 	 	5,740,000	 
	 
	WPC Subtotal
	 	$	199,242,453	 	 	$	(78,745,476	)	 	$	120,496,977	 
	 
	Assets maturing between 7 to 19 years — CPA: 14
	 	 	 	 	 	 	 	 	 	 	 	 
	Asset Pool
	 	 	 	 	 	 	 	 	 	 	 	 
	McLane Foodservice
	 	 	17,848,720	 	 	 	(8,204,328	)	 	 	9,644,392	 
	Best Buy
	 	 	35,672,866	 	 	 	(10,010,327	)	 	 	25,662,539	 
	Truserve
	 	 	22,203,270	 	 	 	(10,822,702	)	 	 	11,380,568	 
	Vermont Teddy Bear
	 	 	7,800,000	 	 	 	(2,462,405	)	 	 	5,337,595	 
	Westell
	 	 	18,180,000	 	 	 	(10,288,568	)	 	 	7,891,432	 
	Celadon Trucking Services, Inc
	 	 	12,590,000	 	 	 	(1,929,842	)	 	 	10,660,158	 
	Gensia
	 	 	21,775,225	 	 	 	(2,007,306	)	 	 	19,767,919	 
	Randall
	 	 	9,220,000	 	 	 	(5,160,051	)	 	 	4,059,949	 
	Telos
	 	 	20,340,000	 	 	 	—	 	 	 	20,340,000	 
	Garden Ridge
	 	 	7,150,000	 	 	 	(4,674,937	)	 	 	2,475,063	 
	Del Monte
	 	 	15,693,300	 	 	 	(5,583,886	)	 	 	10,109,414	 
	Sports and Fitness (Houston)
	 	 	8,950,000	 	 	 	(4,019,445	)	 	 	4,930,555	 
	Bon-Ton
	 	 	22,260,000	 	 	 	(5,262,204	)	 	 	16,997,796	 
	Childtime
	 	 	18,160,000	 	 	 	(6,363,176	)	 	 	11,796,824	 
	Compass/Sandwich
	 	 	3,820,000	 	 	 	(1,540,547	)	 	 	2,279,453	 
	Perry Graphics
	 	 	24,650,000	 	 	 	(9,409,437	)	 	 	15,240,563	 
	Advanced Micro Devices
	 	 	34,713,860	 	 	 	(20,798,523	)	 	 	13,915,337	 
	Pacific Logistics (TX Freezer)
	 	 	14,080,000	 	 	 	(3,778,928	)	 	 	10,301,072	 
	Intesys
	 	 	16,266,700	 	 	 	(6,379,881	)	 	 	9,886,819	 
	CompuCom
	 	 	14,910,042	 	 	 	(6,691,161	)	 	 	8,218,881	 
	Sunland Distribution
	 	 	11,390,000	 	 	 	(5,027,592	)	 	 	6,362,408	 
	First Aid/Nutramix
	 	 	8,660,000	 	 	 	—	 	 	 	8,660,000	 
	Silgan
	 	 	20,410,000	 	 	 	(6,694,295	)	 	 	13,715,705	 
	Galyan’s (IL, VA)
	 	 	34,590,000	 	 	 	(15,589,803	)	 	 	19,000,197	 
	Rave Reviews
	 	 	12,120,000	 	 	 	(4,071,796	)	 	 	8,048,204	 
	Upper Deck
	 	 	20,134,800	 	 	 	(6,184,151	)	 	 	13,950,649	 
	Special Devices
	 	 	17,855,300	 	 	 	(10,452,785	)	 	 	7,402,515	 
	Jen-Coat
	 	 	17,160,000	 	 	 	(6,738,443	)	 	 	10,421,557	 
	Orbseal
	 	 	14,520,000	 	 	 	(5,849,184	)	 	 	8,670,816	 
	Wellbridge (1)
	 	 	21,642,090	 	 	 	(15,735,000	)	 	 	5,907,090	 
	ShopRite (Big V)
	 	 	11,653,650	 	 	 	(4,182,238	)	 	 	7,471,412	 
	 
	CPA:14 Subtotal
	 	$	536,419,823	 	 	$	(205,912,940	)	 	$	330,506,883	 
	 
	Grand Total
	 	$	735,662,276	 	 	$	(284,658,416	)	 	$	451,003,860	 
	 

 

			
	1)	 	The appraised value and debt balance are adjusted for the restructuring of Wellbridge.

A-1EX-10.2

 

EXHIBIT 10.2

AGREEMENT FOR SALE AND PURCHASE

     THIS AGREEMENT FOR SALE AND PURCHASE (“Agreement”) made and entered into by and among
Corporate Property Associates 12 Incorporated, a Maryland corporation (“CPA:12”), and the
entities listed on Schedule 1 attached hereto and incorporated herein (individually, a
“Seller”, and together, the “Sellers”), each of whose address for purposes of this
Agreement is c/o Corporate Property Associates 12 Incorporated, 50 Rockefeller Plaza, New York
City, NY 10020, CAREY ASSET MANAGEMENT CORP., a Delaware corporation (“CAM”), and W.P. CAREY & CO.
LLC, a Delaware limited liability company, (the “Buyer”) on behalf of single purpose
entities to be formed for the purpose of acquiring the Properties (as defined below) and assuming
the Assumable Loans (as defined below) (collectively, the “SPV Purchasers” and
individually, a “SPV Purchaser”) whose address is 50 Rockefeller Plaza, New York City, NY
10020.

WITNESSETH:

     1. Subject to the terms and conditions hereinafter set forth, and for good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto agree that Sellers shall
sell and CPA:12 shall cause Sellers to sell, their respective interests in, and Buyer shall buy,
assume and accept the properties, or the interest of the Sellers in and to the entities which own
the properties, as such properties are described on Exhibits “A-1” through “A-13” and on
Schedule 1 attached hereto and incorporated herein (singularly, a “Land”, and collectively,
the “Lands”), together with (i) all buildings and other improvements situated on the Lands
(singularly, a “Building”, and collectively, the “Buildings”), (ii) all right,
title and interest of Sellers in and to all easements, rights of way, reservations, privileges,
appurtenances, and other estates pertaining to the Lands and the Buildings, (iii) all right, title
and interest of Sellers, if any, in and to the fixtures, machinery, equipment, supplies and other
articles of personal property attached or appurtenant to the Lands or the Buildings owned by
Sellers and not by Tenants (collectively, the “Personal Property”), (iv) all right, title
and interest of Sellers, if any, in and to the trade name(s) of the Buildings and all other names,
designations, logos, service marks and the appurtenant goodwill used in connection with the
Properties (except for names and logos registered as CPA and CPA:12), (v) all right, title and
interest of Sellers, if any, in and to all strips and gores, all alleys adjoining the Lands to the
center line thereof, and all right, title and interest of Sellers, if any, in and to any award made
or to be made in lieu thereof and in and to any unpaid award for any taking by condemnation or any
damages to the Lands or the Buildings by reason of a change of grade of any street, road or avenue,
(vi) all right, title and interest of Sellers, if any, in and to the leases for the respective
Lands and Buildings, together with any security deposits, letters of credit, guaranties, and/or
together with any warrants delivered in connection with any of the leases, (vii) all right, title
and interest of Sellers, if any, in, to and under those purchase orders, equipment leases, and
managements, service, advertising, franchise and license agreements and other contracts and
agreements relating to the ownership and use of the applicable Land and Building and Personal
Property (collectively, the “Service Agreements”), (viii) all right, title and interest of
Sellers, if any, in, to and under all guaranties, warranties and agreements (express or implied)
from contractors, subcontractors, vendors and suppliers, if any, regarding their performance,
quality of workmanship and quality of materials supplied in connection with the construction,
manufacture, development, installation and operation of any and all Buildings and Personal Property
(collectively, the “Warranties”), (ix) to the extent transferable, certificates, licenses,
permits, authorizations, consents, authorizations, approvals and variances, if any, by any
governmental or quasi-governmental authority, including, without limitation, a letter or
certificate regarding the zoning of each of the Lands from the applicable local office(s)
(collectively, the “Permits”), (x) all right, title and interest of
the Sellers in and to any intercompany debt (“Intercompany Debt”) from the
shareholders of any Seller to such Sellers and (xi) all liabilities and obligations relating to the
Land and items

 

 

described in clauses (i) — (xi) (the Lands, the Buildings and all of the foregoing
items listed in clauses (i) — (xi) above being hereinafter sometimes singularly referred to as a
“Property”, and collectively referred to as the “Properties”). The transaction
contemplated by this Agreement contemplates the sale and purchase of all, but not less than all, of
the Properties. Each Seller executes this Agreement for the sole purpose of agreeing to the
provisions of this Agreement as the same relate to the Property owned by such Seller as indicated
on the applicable Exhibit “A-1 through A-13”. The rights, obligations, representations,
warranties and liabilities of each Seller pertain only to such Seller and to the Property owned by
said Seller as indicated on the applicable Exhibit “A-1 through A-13”.

     2. PURCHASE PRICE.

          (a) The aggregate purchase price (“Purchase Price”) for the Properties is One Hundred
Ninety-Nine Million, Two Hundred Forty-Two Thousand, Four Hundred Fifty-Three and No/100 Dollars
[($199,242,453.00)], which shall be allocated among the Properties in accordance with the
allocation schedule set forth on Exhibit “B” attached hereto and incorporated herein. The
Purchase Price shall be payable (i) in cash in the amounts set forth in the Cash Purchase Price
column opposite the applicable Property on Exhibit B attached hereto and incorporated herein
(“Cash Purchase Price”) and (ii) by the assumption of the loans encumbering the applicable
Property identified on Exhibit “C” attached hereto and incorporated herein (“Assumable
Loans”); provided, that the amounts set forth on Exhibit B shall be binding on Buyer for
purposes of the Cash Purchase Price payable at Closing (as defined below) under this Section 2; and
provided further, that promptly following the Closing, Buyer and CPA:14 (as successor to CPA:12)
shall adjust the Purchase Price to reflect the actual outstanding loan balances of all the
Assumable Loans on the Closing Date, and to the extent that the outstanding loan balances on the
Closing Date are less than those balances reflected on Exhibit B, CPA:14 (as successor to CPA:12)
shall promptly make payment to Buyer of such difference. The obligation of Buyer and CPA:14 (as
successor to CPA:12) shall survive the Closing and the Merger.

     (b) Buyer shall be obligated to assume the Assumable Loans and to obtain any required
approvals from the lenders thereof and to pay, in addition to the Purchase Price, any assumption
fees, transfer fees and/or other costs and expenses incurred in connection with the assumption of
each Assumable Loan; if an Assumable Loan is not permitted to be assumed, Buyer shall pay the Loan
in full, and in addition to the Purchase Price, any applicable prepayment penalty or other fee or
costs payable in connection with, or associated with, the prepayment of such loan. Buyer and
Seller shall exercise good faith reasonable efforts to obtain the lenders’ approval.

     (c) The Cash Purchase Price shall be payable by wire transfer of immediately available funds
at the Closing (as hereinafter defined). Buyers and Sellers further agree that Sellers may
continue to market and sell any or all of the Properties prior to the Closing, and if any of the
Properties are sold and closed prior to the Closing (any such Property, a “Transferred
Property”), such Transferred Property shall be released from the terms hereof, and the Purchase
Price hereunder shall be reduced by the amount of the Purchase Price allocated to such Transferred
Property as set forth on Exhibit “B”.

     3. PURCHASE PRICE PAYMENT.

          (a) CPA:12 or Sellers may direct that the Cash Purchase Price be paid by confirmed federal
wire transfer of immediately available funds to CPA:12 or to Sellers, and Buyer agrees to make such
payment as directed.

2

 

          (b) It is understood that CPA:12 will designate a paying agent (“Paying Agent”) to
receive and distribute the Additional Consideration to CPA:12’s stockholders on behalf of CPA:12,
and will notify Buyer of the identity of such Paying Agent as soon as practicable.

     4. PROPERTY CONVEYED “AS-IS, WHERE-IS”. Buyer hereby acknowledges that through a
wholly-owned subsidiary it has been managing the Properties for the Sellers and is intimately
familiar with the Properties and all portions thereof, and the titles thereto, encumbrances
thereon, physical condition thereof and of all improvements thereon, leases affecting portions
thereof, tenants and occupants thereof, Service Agreements and operations (including all costs,
expenses and revenues from the ownership of each Property). As a result thereof, Buyer agrees as
follows:

     EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 10 HEREOF, NO SELLER IS MAKING AND HAS NOT AT ANY
TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE PROPERTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS
AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER’S
WARRANTY OF TITLE TO BE SET FORTH IN THE DEED), ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL
CONDITION, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, GOVERNMENTAL
REGULATIONS, THE TRUTH, ACCURACY OR COMPLETENESS OF THE ITEMS OR ANY OTHER INFORMATION PROVIDED BY
OR ON BEHALF OF SUCH SELLER TO BUYER OR ANY OTHER MATTER OR THING REGARDING ANY OF THE PROPERTIES.
UPON CLOSING, EACH SELLER SHALL SELL AND CONVEY TO BUYER, AND BUYER SHALL ACCEPT THE RESPECTIVE
PROPERTIES “AS IS, WHERE IS, WITH ALL FAULTS.” BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON
EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF ANY SELLER WITH RESPECT TO ANY OF
THE PROPERTIES EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN. BUYER HAS PREVIOUSLY CONDUCTED SUCH
INVESTIGATIONS OF THE PROPERTIES, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL
CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE
PROPERTIES AND WILL RELY SOLELY UPON SAME. UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE
MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL
CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER’S INVESTIGATIONS. BUYER, UPON CLOSING, HEREBY
WAIVES, RELINQUISHES AND RELEASES SELLERS, AND EACH OF THEM, FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT [I.E., NEGLIGENCE AND STRICT
LIABILITY]), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT
COSTS) (COLLECTIVELY, “CLAIMS”) OF ANY KIND AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN,
WHICH BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLERS, AND EACH OF THEM, AT ANY TIME BY REASON
OF OR ARISING OUT OF ANY CONSTRUCTION DEFECTS, PHYSICAL AND ENVIRONMENTAL CONDITIONS, THE VIOLATION
OF ANY APPLICABLE LAWS AND ANY AND ALL OTHER MATTERS REGARDING THE PROPERTIES, OR ANY OF THEM.

     5. BUYER AND SELLER CONTINGENCY.

          (a) The obligation of Buyer hereunder to close is subject to satisfaction, as evidenced by a
written confirmation thereof from Corporate Property Associates 14,

3

 

Incorporated, a Maryland
corporation (“CPA14”), of all conditions precedent to the merger (the “Merger”) of
CPA:12 with and into CPA:14 (or, if applicable, in accordance with the provisions for an “Alternate
Merger” as set forth and defined in that certain Agreement and Plan of Merger dated June 29, 2006
(“Merger Agreement”) by and among CPA:12, CPA:14, CPA 14 Acquisition, Inc., CPA 12 Merger Sub Inc.
and CPA Holdings Incorporated), other than the closing of the transactions contemplated by this
Agreement and other than those which by their nature, are satisfied at closing of the Merger. It
is understood, however, that the delivery of certain documents to effectuate the actual Merger of
CPA:12 with and into CPA:14 (or, if applicable, in accordance with the provisions for an Alternate
Merger under the Merger Agreement)shall not occur until subsequent to the closing of the
transactions contemplated hereby and is not a contingency to this transaction.

          (b) The obligation of CPA:12 to close and to cause each Seller hereunder to close and the
obligation of each Seller hereunder to close, is subject to satisfaction, as evidenced by a written
confirmation thereof from CPA:14 of all conditions precedent to the Merger of CPA:12 with and into
CPA:14 (or, if applicable, or in accordance with the provisions for the Alternate Merger under the
Merger Agreement), other than the closing of the transactions contemplated by this Agreement and
other than those which by their nature, are satisfied at closing of the Merger. It is understood,
however, that the delivery of certain documents to effectuate the actual Merger of CPA:12 with and
into CPA:14 (or, if applicable, in accordance with the provisions for the Alternate Merger under
the Merger Agreement) shall not occur until subsequent to the closing of the transactions
contemplated hereby and is not a contingency to this transaction.

     6. ADDITIONAL CONSIDERATION.

          (a) As an additional material inducement to the Sellers to enter into this Agreement, Buyer
covenants and agrees that if (i) an SPV Purchaser or its affiliates enters into a definitive
agreement within six (6) months after the Closing Date hereunder to sell any of the Properties or
its respective interests in any of the Properties and does thereafter sell, convey or transfer said
Property or its interest in said Property in accordance with the terms of said definitive agreement
(whether or not the closing of such subsequent sale occurs within said six (6) months after the
Closing Date), or (ii) if an SPV Purchaser or its affiliates otherwise sells and closes on the
conveyance of a Property or other transfer of its interest in and to a Property within six (6)
months after the Closing Date, then, in either such event, such SPV Purchaser or its affiliates
will promptly pay to the Paying Agent following receipt of the Net Proceeds (as hereinafter
defined) and completion of the process specified in Section 6(d) or (e), as applicable, an amount
equal to eighty-five percent (85%) of the positive difference, if any, between (a) the Total Cost
paid to Seller hereunder for the purchase of such Property or interest therein by such SPV
Purchaser [“Total Cost” shall mean the sum of the Purchase Price allocated thereto per
Exhibit “B” attached hereto, less the Assumable Loan, if any, applicable to said Property
and outstanding on the Closing Date and less all third party costs and legal fees incurred by such
SPV Purchaser in connection with such purchase (including the portion of the costs and expenses to
close the purchase of the Property, or interests therein, by the applicable SPV Purchaser
reasonably allocated by the Buyer to such Property)] and (b) the Net Proceeds received by such SPV
Purchaser from the sale and closing of such Property or interest therein (for purposes
hereof, Net Proceeds will be equal to the purchase price paid to Buyer or SPV Purchaser or its
affiliates for such Property or interest therein, less (i) any loan(s) assumed by said purchaser of
the Property, (ii) all third party costs and legal fees incurred by Buyer to close such sale (but
excluding any fees paid or payable to Buyer in respect of such sale), (iii) the cost for any
improvements made to the Property during Buyer’s ownership and (iv) the cost of any prepayment
premium or to purchase any defeasance collateral). Sellers hereby acknowledge that Buyers shall
have sole and unlimited discretion to determine the purchase price and terms and provisions
relating to sale, of any of the Properties or interest of Sellers therein and shall have no

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obligation to market or sell any Property). Notwithstanding the foregoing, the amount retained by
the Buyer or its affiliates as a fee, incentive or similar payment or benefit in respect of such
sale, shall not exceed the fee that would have been payable to CAM under the Acquisition Services
Agreement (as hereinafter defined) by CPA: 12 had CPA: 12 sold the applicable Property directly to
the third party buyer as of immediately prior to the termination of the Acquisition Services
Agreement.

          (b) The Buyer and Seller acknowledge that the right to receive additional consideration
pursuant to subparagraph (a) above is, (i) not intended in any way to constitute a security of
Buyer, (ii) an integral part of the consideration for the sale of the Properties hereunder and is
not an investment or ownership interest in Buyer, (iii) a contract right, and (iv) once distributed
to stockholders of CPA:12, not transferable under any circumstances (including by merger), except
with respect to a trust or a natural person by operation of the laws of descent and inheritance or
similar such transfer. Sellers hereby further agree that upon payment of any Additional
Consideration payable by Buyer to the Paying Agent designated by CPA:12, Buyer is released from any
further liability or obligation with respect to the sold Property and from any obligation for the
proper distribution of such Additional Consideration by the Paying Agent.

          (c) CPA:12 shall designate on or prior to the Closing a person who shall serve as the CPA:12
shareholders’ representative for purposes of the determination of the Additional Consideration (the
“Designee”) and shall provide written notice of the name and address of the Designee on or
prior to the Closing. The Designee shall be entitled to act on behalf of such shareholders and
Buyer shall be entitled to rely upon the actions, communications and agreements of the Designee
with respect to the Additional Consideration. CPA:12 may replace the Designee with not less than
three (3) Business Days advance written notice to Buyer.

          (d) Buyer’s determination of any Additional Consideration shall be forwarded to the Designee
no later than ten (10) business days after the determination by Buyer of such Additional
Consideration. Buyer shall provide the Designee with detailed back-up documentation underlying the
determination and with access to the data it used to determine the Additional Consideration upon
request, including reasonable access to the employees of Buyer who calculated the Additional
Consideration and contributed to such calculation. Designee shall review the calculation of the
Additional Consideration within fifteen (15) business days after delivery thereof and notify Buyer
in writing of any disagreement with such calculation. If within such fifteen (15) business days
following delivery Designee does not object in writing thereto, then Buyer’s determination of the
Additional Consideration shall be conclusive.

          (e) If Designee so objects in writing to Buyer’s computation, then Buyer and Designee shall
negotiate in good faith and attempt to resolve their disagreement. Should such negotiation not
result in an agreement within twenty (20) business days of receipt by Buyer of Designee’s
objection, then the matter shall be submitted to arbitration by an independent accounting firm.
All fees and expenses relating to appointment of an independent accounting firm and the work, if
any, to be performed by such independent accounting firm will allocated 50% to Buyer and 50% to
CPA:14, as successor to CPA:12; provided that the accounting firm shall be instructed to
make a determination to equitably allocate such costs to Buyer or to CPA:14, as successor to CPA:12
if the firm determines there is a compelling equitable reason to
do so instead of allocating the costs equally, and in such case the costs shall be so
allocated. The independent accounting firm shall deliver to Buyer and Designee a written
determination (such determination to include a worksheet setting forth all material calculations
used in arriving at such determination and to be based solely on information provided to the
independent accounting firm by Buyer and Designee, or their respective affiliates) of the disputed
items within thirty (30) days of receipt of the disputed items, which determination shall be final,
binding and conclusive on the parties in the absence of manifest error.

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          (f) Promptly following agreement on or determination of the final, binding and conclusive
calculation of the Additional Consideration, Buyer shall pay such Additional Consideration to the
Designee or as directed by Designee as soon as practicable.

          (g) Unless there is a clear commercial reason or justification for doing so, other than to
avoid having to pay excess gain as Additional Consideration hereunder, Buyer agrees not to (and
agrees to use its reasonable best efforts to cause other parties under Buyer’s control, or acting
on Buyer’s behalf not to) delay the signing of a transaction that would be taken into account in
determining the Additional Consideration if such transaction was consummated.

     7. TITLE COMMITMENTS AND POLICIES. Buyer may order an update of title in order for
Fidelity National Title Insurance Company (“Title Company”) to issue title commitments
(collectively, “Commitments”) for the Properties, together with copies of all documents
shown as title exceptions in the Commitments (“Title Documents”). Buyer acknowledges that
it is familiar with the title to the Properties and except for any mortgage/deed of trust (other
than first priority mortgages/deeds of trusts securing the Assumable Loans), judgment or other
monetary lien created or caused by Sellers (collectively, “Liens”), which Sellers shall
satisfy at Closing, Sellers shall have no obligation to eliminate or cure any other title
exceptions, and Buyer will proceed to Closing subject to all other matters affecting the title to
the Properties.

     8. TIME OF CLOSING. The Closing (“Closing”) shall occur immediately following
satisfaction of the respective Buyer’s and Seller’s Contingency set forth in Section 5 above and
prior to closings of the merger of CPA:12 with and into CPA:14 (or, if applicable, pursuant to the
Alternate Merger under the Merger Agreement), at a time and location mutually agreed to by Sellers
and Buyer (“Closing Date”).

     9. POSSESSION. Possession of the Properties shall be delivered as of the Closing Date
subject to all leases and matters of record or apparent from an inspection of the Property or as
may be shown on a survey.

     10. REPRESENTATIONS AND COVENANTS OF SELLERS. Each Seller expressly covenants,
represents and warrants to Buyer as to itself and as to each Property in which such Seller has an
interest, as follows:

          A. Such Seller is the fee simple owner of such Property.

          B. Such Seller is a duly formed and validly existing entity in good standing under the laws of
its state of organization and is qualified to do business in the state(s) in which it is legally
required to be so qualified.

          C. Such Seller has full right, power and authority to execute, deliver and perform its
obligations under this Agreement and has taken or will take all necessary action and obtained all
necessary consents to authorize the execution, delivery and performance of this Agreement and all
documentation required to effectuate the full intent and purposes of this Agreement, and this
Agreement is enforceable against such Seller.

          D. There is no legal action pending, or to the knowledge of such Seller, threatened against
such Seller, which relates and materially adversely affects such Property or otherwise materially
adversely affects such Seller’s ability to perform such Seller’s obligations hereunder.

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          E. No petition in bankruptcy (voluntary or otherwise), assignment for the benefit of
creditors, or petition seeking reorganization or arrangement or other action under federal or state
bankruptcy laws is pending against or contemplated by such Seller.

          F. Such Seller is not a foreign person within the meaning of Section 1445(f) of the Internal
Revenue Code of 1986, as amended.

          G. Such Seller has at all times been in compliance with and will continue to be in compliance
through the Closing Date with (a) the Patriot Act, Pub. L. No. 107-56, the Bank Secrecy Act, 31
U.S.C. § 5311 et seq., the Money Laundering Control Act of 1986, and laws relating to the
prevention and detection of money laundering in 18 U.S.C. §§ 1956 and 1957; (b) the Export
Administration Act (50 U.S.C. §§ 2401-2420), the International Emergency Economic Powers Act (50
U.S.C. § 1701, et seq.), the Arms Export Control Act (22 U.S.C. §§ 2778-2994), the Trading With The
Enemy Act (50 U.S.C. app. §§ 1-44), and 13 U.S.C. Chapter 9 and (c) the Foreign Asset Control
Regulations contained in 31 C.F.R., Subtitle B, Chapter V.

     All representations and warranties of each Seller set forth in this Agreement and the
conditions and circumstances contained herein shall be effective, valid, true and correct on the
Closing Date and the representations and warranties of each Seller shall survive the Closing for a
period of six (6) months.

     11. REPRESENTATIONS AND COVENANTS OF BUYER. Buyer expressly covenants,
represents and warrants to Sellers, as follows:

          A. Buyer is a duly formed and validly existing limited liability company in good standing
under the laws of the State of Delaware.

          B. Buyer has full right, power and authority to execute, deliver and perform its obligations
under this Agreement and has taken all necessary action and obtained all necessary consents to
authorize the execution, delivery and performance of this Agreement and all documentation required
to effectuate the full intent and purposes of this Agreement, and this Agreement is enforceable
against Buyer.

          C. There is no legal action pending or to Buyer’s knowledge threatened against Buyer which
would materially affect the ability of Buyer to carry out the transactions contemplated by this
Agreement.

          D. No petition in bankruptcy (voluntary or otherwise), assignment for the benefit of
creditors, or petition seeking reorganization or arrangement or other action under federal or state
bankruptcy laws is pending against or contemplated by Buyer.

          E. Buyer has at all times been in compliance with and will continue to be in compliance
through the Closing Date with (a) the Patriot Act, Pub. L. No. 107-56, the Bank Secrecy Act, 31
U.S.C. § 5311 et seq., the Money Laundering Control Act of 1986, and laws relating to the
prevention and detection of money laundering in 18 U.S.C. §§ 1956 and 1957; (b) the Export
Administration Act (50 U.S.C. §§ 2401-2420), the International Emergency Economic Powers Act (50
U.S.C. § 1701, et seq.), the Arms Export Control Act (22 U.S.C. §§ 2778-2994), the Trading With The
Enemy Act (50 U.S.C. app. §§ 1-44), and 13 U.S.C. Chapter 9; (c) the Foreign Asset Control
Regulations contained in 31 C.F.R., Subtitle B, Chapter V; and (d) any other civil or criminal
federal or state laws, regulations, or orders of similar import.

          F. Buyer has, and shall have, sufficient resources available to consummate all the
transactions contemplated hereby, including paying the Purchase Price to Sellers in cash.

7

 

     All representations and warranties of Buyer set forth in this Agreement and the conditions and
circumstances contained herein shall be effective, valid, true and correct on the Closing Date and
the representations and warranties of Buyer shall survive the Closing for a period of six (6)
months.

     12. CONVEYANCE. Except as otherwise set forth in Section 14 below, Sellers shall
convey title to the Properties to Buyer by Special or Limited Warranty Deeds (collectively,
“Deeds”) subject only to: (i) zoning and/or restrictions and prohibitions imposed by
governmental authorities to which Buyer has not objected; (ii) covenants, conditions, restrictions,
easements and other matters of record or apparent from an inspection of the Properties or a survey
of the Properties, (iii) the Assumable Loans and the documents evidencing or securing the Assumable
Loans; and (iv) taxes and assessments which are a lien, but not yet due and payable.

     13. DOCUMENTS FOR CLOSING. At Closing, Sellers shall deposit in escrow with Fidelity
National Title Insurance Company (the “Escrow Agent”), the following executed documents
(the “Transfer Documents”):

          (1) Special/Limited Warranty Deeds for each Property;

          (2) Bills of Sale for each Property;

          (3) FIRPTA Affidavits for each Seller;

          (4) Counterparts of the Assignment and Assumption of Leases for each Property;

          (5) Counterparts of the Assignment and Assumption of Service Agreements for each Property;

          (6) Security Deposits/Letters of Credit released or amended, together with any warrants held
under or in connection with any lease;

          (7) Counterparts of the Assignment and Assumption of Intercompany Debt Documents for such
applicable Property;

          (8) A resolution from the Board of directors of CPA:12 authorizing the sale of each Property;
and

          (9) Such other documents as Buyer shall reasonably request to evidence the purchase and
transfer of the Properties.

     At Closing, Buyer shall deposit in escrow with the Escrow Agent, the following executed
documents:

          (1) Counterparts of the Assignment of and Assumption of Leases;

          (2) Counterparts of the Assignment and Assumption of Contracts; and

          (3) Counterpart of the Assignment and Assumption of the Intercompany Debt Documents for such
applicable Property.

     14. TRANSFER OF INTERESTS IN LIEU OF CONVEYANCE OF PROPERTY TITLE.

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     (a) In lieu of the Transfer Documents to convey title in and to the Properties referenced in
Section 13 above, transfer of one or more of the Properties may be implemented and effectuated
through a merger of the applicable Seller with and into the applicable SPV Purchaser or SPV
Purchasers and/or through a transfer and conveyance of membership, shareholder and/or partnership
interests of the member, shareholder and/or partner of the applicable Seller or Sellers to the
applicable SPV Purchaser or SPV Purchasers (or to another entity or entities affiliated with the
Buyer and/or applicable SPV Purchaser designated in writing by the Buyer and/or applicable SPV
Purchaser).

     (b) Buyer may designate, upon written notice to the applicable Seller, which transactions will
be implemented through a merger transaction and/or a transfer and conveyance of such membership,
partnership or shareholder interest, and such Seller will cooperate with Buyer to effectuate such
merger(s) and/or transfers of interests.

     (c) With respect to such merger or transfer of an interest transaction, the applicable Seller
shall provide one or more of the documents specified in Section 13, modified as applicable, to
reflect the structure of the transfer.

     15. EXPENSES.

          A. Buyer shall pay the following costs:

               (1) The escrow fee;

               (2) The cost of recording the Transfer Documents and/or to effectuate the mergers and/or
transfers of interest contemplated under Section 14 above;

               (3) Loan assumption fees; and

               (4) Any transfer or conveyance tax charged on or for the recording of the Transfer Documents
and any tax charged in connection with any merger and/or the transfer of interests consummated
pursuant to Section 14 above.

          B. Sellers shall pay any costs to be borne by Sellers and specifically provided for in this
Agreement and the cost of the Paying Agent and the Designee.

     16. PRORATION OF TAXES (REAL AND PERSONAL); UTILITIES; CONTRACTS. Escrow Agent shall
prorate all taxes and assessments as of the date of Closing according to the calendar year, using
the last available County Treasurer’s/local taxing body’s tax duplicate or tax bills for the
purpose of closing the transaction. When the actual amount of such taxes becomes known, Sellers and
Buyer shall adjust the actual tax proration between themselves. To the extent utilities are in the
name of any Seller, Sellers and Buyer shall work together to notify utility companies and vendors
of the Closing and transfer all utilities as of the Closing Date. Sellers shall provide Buyer with
a letter of authorization in customary form to assist with this process. Sellers shall be entitled
to a refund of all utility deposits and shall pay all utilities up to and including the Closing.
Buyer shall be responsible for all utilities and Service Agreements assumed by Buyer from and after
the Proration Date (as hereinafter defined). Buyer and Sellers agree that the proration provided
for in this section shall take place promptly following the Merger and shall not be reflected on
the Settlement statement(s) to be delivered at Closing and shall not affect the Cash Purchase Price
payable by Buyer at Closing; the obligation of Buyers and Sellers hereunder shall survive the
Closing and the Merger.

     17. PRORATION OF RENTS AND INTEREST ON ASSUMABLE LOANS AND ON THE INTERCOMPANY DEBT.
Sellers shall pay or cause to be paid to Buyer, in cash at

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Closing, the amount of any security
deposits relating to the Properties (and/or deliver to Buyer at Closing any applicable letters of
credit held by such Sellers in lieu of security deposits) and prepaid rents paid to Sellers by
tenants as of the Proration Date. The prorations shall be computed on a monthly basis based upon
the actual number of days in the calendar month. No proration shall be made for rents delinquent
as of the Closing Date (“Delinquent Rents”). Any Rents collected after Closing shall first
be applied to current rent and then to Delinquent Rents. In addition, interest occurring under the
Assumable Loans and on the Intercompany Debt shall be prorated the Proration Date. Buyer and
Sellers agree that the proration provided for in this section shall take place promptly following
the Merger and shall not be reflected on the Settlement statement(s) to be delivered at Closing and
shall not affect the Cash Purchase Price payable by Buyer at Closing; the obligation of Buyers and
Sellers hereunder shall survive the Closing and the Merger.

     18. PRORATION DATE. Taxes and assessments, insurance, assumed interest, rents, and
other expenses and revenue of the Properties shall be prorated through 11:59 P.M. on the day prior
to Closing (“Proration Date”).

     19. TERMINATION OF ACQUISITION SERVICES AGREEMENT AND AMENDED AND RESTATED ADVISORY
AGREEMENT; WAIVER AND DISCHARGE.. CPA:12 and CAM hereby agree to and do terminate that certain
Acquisition Services Agreement (“Acquisition Services Agreement”), dated as of June 28,
2000, between the Seller and CAM, as amended, effective concurrently with the Closing hereunder,
and CPA:12 and Buyer agree to and do terminate that certain Amended and Restated Advisory Agreement
(“Advisory Agreement”) dated as of February 17, 2005, by and between CPA:12 and Buyer,
effective concurrently with the Closing. In connection with such mutual termination of the
Acquisition Services Agreement, (A) CPA:12 (or its successors) agrees to pay CAM at Closing in full
(i) the “Termination Fee” as defined in the Acquisition Services Agreement and (ii) the
“Subordinated Disposition Fees” as defined in the Acquisition Services Agreement, and (B) CAM
and its affiliates hereby waive any right to collect any other fees under such agreement from
CPA:12 or its successors and assigns, including CPA:14, and agree that as of the Closing and upon
such payment of the sums under (A) above, all of CPA:12’s obligations under such agreement will
have been fully and completely discharged. In connection with the mutual termination of the
Advisory Agreement, (X) CPA:12 (or its successors) shall pay in full at Closing all amounts payable
under Section 20(a) of the Advisory Agreement and (Y) Buyer and its affiliates waive any right to
collect any other fees under such agreement from CPA:12 or its successors and assigns, including
CPA:14, and agree that as of the Closing and upon payment of the sums under (X) above, all of
CPA:12’s obligation under such agreement will have been fully and completely discharged. This
section may be enforced by the successors and assigns of CPA:12 and purchasers of a substantial
portion of its assets.

     20. COMMUNICATIONS. All notices, demands, requests, consents,
approvals, waivers or other communications shall be in writing and shall be
deemed to be delivered (i) when mailed, upon receipt or refusal thereof, (ii)
when delivered by a nationally recognized overnight courier service, upon
confirmation of delivery by the courier service or refusal thereof or (iii)
when sent by confirmed telecopy, upon receipt, and addressed to the parties as
follows:

If to Sellers, to the applicable Seller or Sellers

addressed as follows:

[Name of Seller]

c/o Corporate Property Associates 12 Incorporated

50 Rockefeller Plaza

New York City, NY 10020

Attn: Director, Asset Management

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Fax Number: 212-492-8922

with a copy to:

Clifford Chance US, LLP

31 West 52nd Street

New York, NY 10019-6131

Attn: Kathleen L. Werner, Esq.

Fax Number: 212-878 8375

And to:

Greenberg, Traurig, LLP

200 Park Avenue

New York, NY 10166

Attn: Ivan J. Presant, Esq.

Fax Number: 212-801-6400

If to Buyer, to the address as follows:

W.P. Carey & Co. LLC

50 Rockefeller Plaza

New York City, NY 10020

Attn: Director, Asset Management

Fax Number: 212-492-8922

with a copy to:

Reed Smith, LLP

599 Lexington, Avenue_

New York, NY 10022-7650

Attn: Ruth S. Perfido, Esq.

Fax Number: 212 521-5450

     21. EFFECTIVE DATE OF AGREEMENT. The effective date (“Effective Date”) of
this Agreement shall be the last date that this Agreement is executed either by Sellers or by
Buyer.

     22. ATTORNEY’S FEES AND COSTS. Subject to the terms of Section 6 hereinabove, in
connection with any litigation arising out of this Agreement, each party shall pay its own legal
fees and costs incurred in connection with such litigation, appellate proceedings and post-judgment
proceedings.

     23. BROKERAGE. Buyer and Sellers each represent and warrant to the other that neither
has had any dealings with any person, firm, broker or finder in connection with the negotiations of
this Agreement and/or the consummation of the purchase and sale contemplated hereby, and no broker
or person, firm or entity is entitled to any commission or finder’s fee in connection with this
Agreement or this transaction. Buyer and Sellers do each hereby indemnify, defend, protect and
hold the other harmless from and against any costs, expenses or liability for compensation,
commission or charges which may be claimed by any broker, finder or other similar party by reason
of any actions of the indemnifying party.

11

 

     24. CONDEMNATION AND CASUALTY

          A. CONDEMNATION. Buyer hereby agrees to assume the risk during the term of this Agreement
for any threatened or commenced condemnation or eminent domain. Sellers shall promptly notify
Buyer of any threatened or commenced condemnation or eminent domain proceedings affecting any
Property. In the event that all or any portion of a Property shall be taken in condemnation or by
conveyance in lieu thereof or under the right of eminent domain or formal proceedings have been
initiated therefor after the Effective Date and before the Closing Date, Buyer, nonetheless, shall
be obligated to proceed to close the transaction contemplated herein pursuant to the terms hereof,
in which event the applicable Seller or Sellers shall deliver to Buyer or the applicable SPV
Purchaser at the Closing any proceeds actually received by such Sellers attributable to such
Property from such condemnation or eminent domain proceeding or conveyance in lieu thereof and
assign to Buyer or the applicable SPV Purchaser such Sellers’ rights to any such proceeds not yet
received by such Sellers, and there shall be no reduction in the allocated portion of the Purchase
Price for such Property.

          B. CASUALTY. Buyer hereby agrees to assume the risk during the term of this Agreement for
any casualty or damage affecting any Property. Sellers shall promptly notify Buyer of any casualty
affecting any Property. In the event that all or any portion of a Property shall be damaged or
destroyed by fire or other casualty after the Effective Date and before the Closing Date, Buyer,
nonetheless, shall be obligated to close the transaction contemplated herein according to the terms
hereof, notwithstanding such casualty loss, and Sellers shall either (i) deliver to Buyer or the
applicable SPV Purchaser at the Closing any insurance proceeds actually received by Sellers
attributable to the Property from such casualty, or (ii) assign to Buyer or the applicable SPV
Purchaser all of Sellers’ right, title, and interest in any claim under any applicable insurance
policies in respect of such casualty, together with payment to Buyer of an amount equal to the
deductible(s), if any, applicable to such loss under the insurance policy(ies), and there shall be
no reduction in the allocated portion of the Purchase Price for such Property.

     25. DEFAULT.

          A. SELLERS’ DEFAULT; BUYER’S SOLE REMEDIES. If, after written demand, any Seller fails to
consummate this Agreement in accordance with its terms (other than by reason of (i) Buyer’s breach
of any of its representations or warranties contained in this Agreement; (ii) Buyer’s continuing
default of any of its material covenants hereunder after ten (10) days’ prior written notice of
such default; (iii) a termination of this Agreement by Sellers or Buyer pursuant to a right to do
so expressly provided for in this Agreement; or (iv) the failure of the satisfaction of any
condition or contingency herein), Buyer may either (1) terminate this Agreement by written notice
to Sellers, in which event all further rights and obligations of the parties hereunder will
terminate or (2) pursue specific performance of this Agreement, provided, however, that such action
in equity for specific performance is commenced by Buyer duly and properly filing and serving a
complaint within sixty (60) days after a default by Seller. Notwithstanding anything to the
contrary in this Agreement, the Buyer may not terminate this Agreement or refuse to close the
transactions contemplated hereby unless the breach of a representation, warranty or covenant by a
Seller has a material adverse effect on the Properties, taken as a whole. In the event of any
Seller’s continuing default after Closing in any of its representations, warranties or covenants in
this Agreement which survive Closing or
any documents delivered by any Seller at Closing, and such default continues for more than thirty
(30) days after written notice of such default from Buyer, Buyer shall be entitled to pursue its
remedies available at law or in equity.

          B. BUYER’S DEFAULT; SELLERS’ SOLE REMEDIES. If after written demand, Buyer fails to
consummate this Agreement in accordance with its terms (other than by reason of (i) Sellers’ breach
of any of its representations or warranties contained in this

12

 

Agreement; (ii) Sellers’ continuing
default of any of its material covenants after ten (10) days’ prior written notice of such default;
(iii) a termination of this Agreement by Sellers or Buyer pursuant to a right to do so expressly
provided for in this Agreement; or (iv) the failure of the satisfaction of any condition or
contingency herein), Sellers may either terminate this Agreement, in which event all further rights
and obligations of the parties hereunder will terminate, or Seller may also pursue specific
performance of this Agreement. Notwithstanding anything to the contrary in this Agreement, the
Sellers may not terminate this Agreement or refuse to close the transactions contemplated hereby
unless the breach of a representation, warranty or covenant by the Buyer has a material adverse
effect on the Properties, taken as a whole. Buyer acknowledges that monetary damages are not
sufficient to adequately compensate Sellers for a default by Buyer hereunder. In the event of
Buyer’s continuing default after Closing in any of its representations, warranties or covenants in
this Agreement which survive Closing or any documents delivered by Buyer at Closing, and such
default continues for more than thirty (30) days after written notice of such default from Sellers,
Sellers shall be entitled to pursue any remedies available at law or in equity.

          C. NO DEFAULT; MUTUAL TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:

               (a) by mutual written consent of each of Buyer and Sellers, but conditioned upon the consent
of CPA: 14 to such termination, which consent of CPA:14 is not to be unreasonably withheld, delayed
or conditioned;

               (b) by Sellers, upon a breach of any representation, warranty, covenant or agreement on the
part of Buyer set forth in this Agreement that has a material adverse effect on the Properties,
taken as a whole;

               (c) by Buyer, upon a breach of any representation, warranty, covenant or agreement on the part
of Sellers set forth in this Agreement that has a material adverse effect on the Properties, taken
as a whole;

               (d) by either Buyer or Seller, if any judgment, injunction, order, decree or action by any
governmental entity of competent authority preventing the consummation of the transactions
contemplated hereby shall have become final and non-appealable after the parties have used
reasonable best efforts to have such judgment, injunction, order, decree or action removed,
repealed or overturned;

               (e) by either Buyer or Seller, if the agreement and plan of merger referred to in Section 5
hereof is terminated prior to the Closing hereunder pursuant to its terms; and

               (f) by either Buyer or Seller, if the Closing shall not have occurred before December 31, 2006
(subject to automatic extension until March 31, 2007 if a condition to Closing hereunder, which is
not satisfied as of December 31, 2006 is reasonably likely to be satisfied by March 31, 2007).
Provided, if the Merger Agreement has been extended, this
Agreement will be similarly extended until March 31, 2007. Either party may terminate this
Agreement after March 31, 2007.

     26. TIME. Any time period provided for herein which shall end on Saturday, Sunday or
state or national legal holiday shall extend to 5:00 P.M. Eastern Time of the next business day.

     27. PERSONS BOUND. The benefits and obligations of the covenants herein shall inure
to and bind the respective successors and assigns of the parties hereto. Whenever used, the

13

 

singular number shall include the plural, the plural the singular and the use of any gender shall
include all genders.

     28. FINAL AGREEMENT. This Agreement represents the final agreement of the parties and
no agreements or representations, unless incorporated into this Agreement, shall be binding on any
of the parties.

     29. GOVERNING LAW. This Agreement shall be governed and construed in all respects
with the laws of the State of New York.

     30. EXECUTION AND COUNTERPARTS; FACSIMILES. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same agreement. This Agreement shall not bind Sellers or Buyer as an offer or an
agreement unless signed by the person or party sought to be bound. Facsimile transmissions and
other copies of executed documents shall serve the same purpose as originals in connection with the
terms of this Agreement and any notices required to be or given hereunder may be delivered by
facsimile transmission in the manner provided in Section 20. The transmittal of an unexecuted
draft of this document for purposes of review shall not be considered an offer to enter into an
agreement.

     31. AMENDMENT. This Agreement may not be modified or amended, except by an agreement
in writing signed by Sellers and Buyer. The parties may waive any of the conditions contained
herein or any of the obligations of the other party hereunder, but any such waiver shall be
effective only if in writing and signed by the party waiving such conditions or obligations.

     32. REASONABLE BEST EFFORTS. Upon the terms and subject to the conditions set forth
in this Agreement and compliance with applicable law and the other terms of this agreement, each of
the Sellers and the Buyer agrees to use its reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, and to assist and cooperate with the other in doing,
all things necessary, proper or advisable to fulfill all conditions applicable to such party
pursuant to this Agreement and to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from governmental entities and the
making of all necessary registrations and filings and the taking of all reasonable steps as maybe
necessary to
obtain an approval, waiver or exemption from any governmental entity, (ii) the obtaining of
all necessary consents, approvals, waivers or exemption from non-governmental third parties; and
(iii) the execution and delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this Agreement. Nothing
herein however, shall require any of the Sellers or the Buyer to increase any of its respective
liabilities or obligations hereunder.

     33. EQUITABLE ASSIGNMENT. To the extent the deliverables contemplated by Section 13
are third party consents or waivers which are required to be obtained under applicable law or the
terms of a governing agreement in order to effect the transactions hereunder with respect to an
applicable Property, but such consents or waivers have not been obtained at Closing, if the parties
are otherwise required to close under the terms of Section 5, then the parties shall close the
transactions hereunder but with respect to such outstanding deliverables, the parties shall
continue to seek to obtain such consent or waiver, and until such time as it is obtained, the
parties shall not transfer the Property in breach of the applicable restrictions and instead shall
enter into an equitable arrangement providing the purchasers the benefits and risks of ownership
with respect to the Property for which the consent or waiver has not been obtained.

     34. CAM COOPERATION. CAM agrees to use reasonable best efforts to deliver the
documents referenced in Section 5.1(e) of the Merger Agreement.

14

 

(signature blocks on the following pages)

15

 

	 	 	 	 	 	 	 	 	 
	 

	 	BUYER:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	W.P. CAREY & CO. LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Carey Management LLC,

managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/  T. E. Zacharias	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	  Managing Director	 	 
	 

	 	 	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	 	 	SELLERS:	 	 
	 
	 	 	 	 	 	 
	 	 	CORPORATE PROPERTY ASSOCIATES 12	 	 
	 	 	INCORPORATED,	 	 
	 	 	a Maryland corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Elizabeth P.
Munson	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	  Director	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	 	 	BUILD (CA) QRS 12-24, INC.,	 	 
	 	 	a California corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:	 	  GORDON  F. DUGAN	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	  Director and CEO	 	 
	 

	 	 

	 	 

	 	 	 	 	 	 	 	 	 
	 	 	BUD Limited Liability Company,	 	 
	 	 	a Tennessee limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	SEEDS (TN) QRS 12-9, Inc.,	 	 
	 	 	 	 	a Tennessee corporation, managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Print Name:	 	  GORDON F. DUGAN	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	  Director and CEO	 	 
	 

	 	 	 	 

	 	 

SIGNATURE PAGE TO CPA:12 AGREEMENT OF SALE

 

 

	 	 	 	 	 	 	 
	 	 	GGAP (MA) QRS 12-31, INC.,	 	 
	 	 	a Massachusetts corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:	 	  GORDON F. DUGAN	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	  Director and CEO	 	 
	 

	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	AFD (MN) LLC,	 	 
	 	 	a Delaware limited liability company	 	 

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	FAST (DE) QRS 14-22, Inc.,	 	 
	 	 	 	 	a Delaware corporation, managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Print Name:	 	  GORDON F. DUGAN	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	  Director and CEO	 	 
	 

	 	 	 	 
	 	 

	 	 	 	 	 	 	 
	 	 	WALS (IN) QR 12-5, INC.,	 	 
	 	 	an Indiana corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:	 	  GORDON F. DUGAN	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	  Director and CEO	 	 
	 

	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	ABI (TX) QRS 12-11, Inc.,	 	 
	 	 	a Texas corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:	 	  GORDON F. DUGAN	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	  Director and CEO	 	 
	 

	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	BRI (MN) QRS 12-52, Inc.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:	 	  GORDON F. DUGAN	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	  Director and CEO	 	 
	 

	 	 
	 	 

SIGNATURE PAGE TO CPA:12 AGREEMENT OF SALE -2

 

 

	 	 	 	 	 	 	 
	 	 	SPEC (CA) QRS 12-20, Inc.,	 	 
	 	 	a California corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:	 	  GORDON F. DUGAN	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	  Director and CEO	 	 
	 

	 	 

	 	 

	 	 	 	 	 	 	 	 	 
	 	 	24 HR-TX (TX) LIMITED PARTNERSHIP,	 	 
	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	24 HR-TX GP (TX)QRS 12-66, Inc.,	 	 
	 	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Print Name:	 	  GORDON F. DUGAN	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	  Director and CEO	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	 	 	Corporate Property Associates 12 Incorporated,	 	 
	 	 	a Maryland corporation,	 	 
	 	 	in its capacity as a member of	 	 
	 	 	ET LLC d/b/a ET QRS LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 

	 	 
	 

	 	Print Name:	 	  GORDON F. DUGAN	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	  Director and CEO	 	 
	 

	 	 

	 	 
	 	 	CARE (PA) QRS 12-43, Inc.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Gordon F. DuGan	 	 
	 

	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:	 	  GORDON F. DUGAN	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	  Director and CEO	 	 
	 

	 	 

	 	 

SIGNATURE PAGE TO CPA:12 AGREEMENT OF SALE -3

 

 

	 	 	 	 	 	 	 
	 	 	Corporate Property Associates 12 Incorporated,
	 	 	a Maryland corporation,
	 	 	in its capacity as a shareholder of
	 	 	MAPI INVEST Sprl,
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Gordon F. DuGan	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Print Name:	 	  GORDON F. DUGAN
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	  Director and CEO	 	 
	 	 	 	 

	 	 	 	 	 	 	 
	 	 	For purposes of Sections 19 and 34 only:
	 
	 	 	 	 	 	 
	 	 	CAREY ASSET MANAGEMENT CORP.,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	  /s/  T. E. Zacharias	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Print Name:	 	  THOMAS E. ZACHARIAS
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	  Managing Director	 	 
	 	 	 	 

SIGNATURE PAGE TO CPA:12 AGREEMENT OF SALE — 4

 

 

SCHEDULE I

	 	 	 	 	 
	 	 	Sellers	 	Properties Location
	1.

	 	Build (CA) QRS 12-24, Inc., a California
corporation
	 	San Leandro, CA
	 
	 	 	 	 
	2.

	 	BUD Limited Liability Company, a Tennessee limited

liability company
	 	Chattanooga, TN
	 
	 	 	 	 
	3.

	 	GGAP (MA) QRS 12-31, Inc., a Massachusetts
corporation
	 	Milford, MA
	 
	 	 	 	 
	4.

	 	AFD (MN) LLC, a Delaware limited liability company
	 	Grand Rapids, MI
	 
	 	 	 	 
	5.

	 	WALS (IN) QRS 12-5, Inc., an Indiana corporation
	 	Greenfield, IN
	 
	 	 	 	 
	6.

	 	ABI (TX) QRS 12-11, Inc., a Texas corporation
	 	Austin, TX (4 Lots)
	 
	 	 	 	 
	7.

	 	BRI (MN) QRS 12-52, Inc., a Delaware corporation
	 	Mendota Heights, MN
	 
	 	 	 	 
	8.

	 	SPEC (CA) QRS 12-20, Inc., a California corporation
	 	Sunnyvale, CA
	 
	 	 	 	 
	9.

	 	24 HR-TX (TX) Limited Partnership, a Delaware
limited partnership
	 	Austin, TX (SPA)
	 
	 	 	 	 
	10.

	 	ET LLC, a Delaware limited liability company,

d/b/a ET QRS LLC*
	 	Hayward, CA
	 
	 	 	 	 
	11.

	 	CARE (PA) QRS 12-43, Inc., a Delaware corporation
	 	Mechanicsburg, PA
	 
	 	 	 	 
	12.

	 	CARLOG *
	 	France (8 properties)
	 
	 	 	 	 
	13.

	 	SCI MAP INVEST *
	 	France (6 properties)

 

			
	*	 	Transfer will be of interest of CPA:12 in listed entity or in a parent corporation of the listed
entity.

SCHEDULE 1 TO CPA:12 AGREEMENT OF SALE

 

 

EXHIBITS “A-1 through A-13”

LEGAL DESCRIPTIONS

EXHIBITS A1 — A13 of SCHEDULE 1 TO CPA:12 AGREEMENT OF SALE

 

 

EXHIBIT “B”

ALLOCATION OF PURCHASE PRICE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Assumable Loan
	 	 	 	 	 	 	 	 	Cash	 	Balances as of
	Property	 	Purchase Price	 	Purchase Price	 	March 31, 2006
	1.
	 	San Leandro, CA	 	$	1,492,000	 	 	$	1,492,000	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2.
	 	Chattanooga, TN	 	$	6,230,000	 	 	$	6,230,000	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3.
	 	Milford, MA	 	$	4,500,000	 	 	$	2,093,074	 	 	$	2,406,926	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4.
	 	Grand Rapids, MI	 	$	2,880,160	 	 	$	52,538	 	 	$	2,827,622	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5.
	 	Greenfield, IN	 	$	5,970,000	 	 	$	5,970,000	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6.
	 	Austin, TX / Pharmco	 	$	17,940,000	 	 	$	17,940,000	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7.
	 	Mendota Heights, MN	 	$	16,890,000	 	 	$	9,758,482	 	 	$	7,131,518	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	8.
	 	Sunnyvale, CA	 	$	7,080,000	 	 	$	7,080,000	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	9.
	 	Austin, TX /	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	24 Hour Fitness	 	$	9,290,000	 	 	$	6,245,448	 	 	$	3,044,552	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	10.
	 	Hayward, CA	 	$	62,996,800	*	 	$	42,359,488	 	 	$	20,637,392	*
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	11.
	 	Mechanicsburg, PA	 	$	5,740,000	 	 	$	5,740,000	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	12.
	 	Carrefour II	 	$	37,315,593	*	 	$	7,722,613	 	 	$	29,592,980	*
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	13.
	 	Medica	 	$	20,917,820	*	 	$	7,813,333	 	 	$	13,104,487	*
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total	 	$	199,242,453	 	 	$	120,496,977	 	 	$	78,745,476	 

 

			
	*	 	Purchase Prices and Loan balances reflect the percentage of CPA:12’s interest in the entity
that is the Owner of the Property and the Borrower on the Assumable Loan (or of the parent
corporation of the Owner and the Borrower in the Carrefour II and Medica transactions).

EXHIBIT B TO CPA:12 AGREEMENT OF SALE

 

 

EXHIBIT “C”

LIST OF ASSUMABLE LOANS

	 	 	 	 	 	 	 
	Property	 	Lender	 	Initial Principal Amount
	1.
	 	Milford, MA	 	First Allmerica Financial Life	 	$3,200,000
	 
	 	 	 	Insurance Company	 	 
	 
	 	 	 	 	 	 
	2.
	 	Grand Rapids, MI	 	Column Financial, Inc.	 	$15,100,000 (encumbers other
	 
	 	 	 	 	 	property in Burlington
	 
	 	 	 	 	 	NJ)
	 
	 	 	 	 	 	 
	3.
	 	Mendota Heights, MN	 	Secore Financial Corporation	 	$7,385,836.00
	 
	 	 	 	MSMC Loan 00-08174	 	 
	 
	 	 	 	 	 	 
	4.
	 	Austin, TX / 24 Hour Fitness	 	P&M Commercial Funding, Inc.	 	$3,282,993.88
	 
	 	 	 	c/o Midland Loan Services, Inc.	 	 
	 
	 	 	 	 	 	 
	5.
	 	Hayward, CA	 	Teachers Insurance and Annuity	 	Series A - $15,000,000
	 
	 	 	 	Association of America	 	Series B - $30,000,000
	 
	 	 	 	 	 	 
	6.
	 	Carrefour II	 	AAReal Bank AG	 	$103,098,473
	 
	 	 	 	 	 	 
	7.
	 	Medica / French Properties	 	Crédit Foncier de France	 	$34,013,940

EXHIBIT C TO CPA:12 AGREEMENT OF SALE

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