Document:

exv10w47

			
	Exhibit 10.47

PROMISSORY NOTE (SECURED)
	 	

	 	 	 
	$1,540,000.00

	 	Loan No. 02-62113672

Date: August 31, 2009

	1.	 	PROMISE TO PAY. For value received, the undersigned, COLE CB ABILENE TX, LLC, a
Delaware limited liability company (“Borrower”), promises to pay to the order of WELLS FARGO
BANK, NATIONAL ASSOCIATION (“Lender”), having an address at 5938 Priestly Drive, Suite 200,
Carlsbad, California 92008, or at such other place as may be designated in writing by Lender,
the principal sum of ONE MILLION FIVE HUNDRED FORTY THOUSAND AND 00/100THS DOLLARS
($1,540,000.00) (“Loan”), with interest thereon as specified herein. All sums owing hereunder
are payable in lawful money of the United States of America, in immediately available funds,
without offset, deduction or counterclaim of any kind.
	 
	2.	 	SECURED BY SECURITY INSTRUMENT. This Note is secured by, among other things, those
certain deeds of trust, mortgages, and deeds to secure debt of even date herewith more
particularly described on Exhibit C attached hereto and made a part hereof
(collectively, the “Security Instrument”) given by Borrower and affiliates of Borrower
encumbering certain real property described in the Security Instrument (collectively, the
“Property”), as more particularly described therein, in each case given for the benefit of
Lender.
	 
	3.	 	DEFINITIONS. For the purposes of this Note, the following terms shall have the
following meanings:
	 
	 	 	“30/360 Basis” means on the basis of a 360-day year consisting of twelve (12) months
of thirty (30) days each.
	 
	 	 	“Account Funds” shall have the meaning as set forth in the Cash Management Agreement.
	 
	 	 	“Actual/360 Basis” means on the basis of a 360-day year and charged on the basis of
actual days elapsed for any whole or partial month in which interest is being calculated.
	 
	 	 	“Affiliate” means, as to any specified Person, (a) any Person that directly or
indirectly through one or more intermediaries controls or is controlled by or is under common
control with such Person, (b) any Person owning or controlling fifty percent (50%) or more of
the outstanding voting securities of or other ownership interests in such Person, (c) any
officer, director, partner, employee or member (direct or indirect and no matter how remote)
of such Person, (d) if such Person is an individual, any entity for which such Person directly
or indirectly acts as an officer, director, partner, owner employee or member, (e) any entity
in which such Person (together with the members of his family if the Person in question is an
individual) owns, directly or indirectly through one or more intermediaries an interest in any
class of stock (or other beneficial interest in such entity) of fifty percent (50%) or more,
(f) any family member by blood, marriage or otherwise of such Person, (g) with respect to any
Obligor, any other Obligor, or (h) with respect to any Obligor, any direct or indirect owner
of an interest in Borrower. The term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management

 

 

	 	 	and policies of a Person, whether through ownership of voting securities or other ownership
interests, by contract or otherwise.
	 
	 	 	“Amortization Period” means twenty-five (25) years.
	 
	 	 	“Adjusted LIBO Rate” means the rate of interest equal to the LIBO Rate divided by one
(1.00) minus the Reserve Percentage:

	 	 	 	 	 	 	 	 	 
	 

	 	Adjusted LIBO Rate
	 	=
	 	LIBO Rate
 

	 	 
	 

	 	 	 	 	 	(1 – Reserve Percentage)	 	 

“Balloon Payments” shall mean, with respect to Lease Guarantor, the total principal
amount at maturity of all debt obligations that matured during the twelve (12) month period
ending on the date of determination.

“Business Day” means any day other than a Saturday, Sunday, legal holiday or other day
on which commercial banks in New York are authorized or required by law to close. All
references in this Note to a “day” or a “date” shall be to a calendar day unless specifically
referenced as a Business Day.

“Cash Management Agreement” shall have the meaning set forth in Section 3.2 of
Exhibit A to this Note.

“Cash Sweep Election” has that meaning given to that term in Section 3.1 of
Exhibit A to this Note.

“Code” means the Internal Revenue Code of 1986, as amended to date and as further
amended from time to time, or any successor statutes thereto, together with applicable
regulations issued pursuant thereto in temporary or final form.

“Collateral” shall have the meaning stated in the Security Instrument.

“Default” shall have the meaning stated in the Security Instrument.

“Default Rate” means the lesser of (a) a fixed annual rate equal to four percent (4%)
plus the Note Rate and (b) the maximum rate of interest permitted by applicable law.

“Disbursement Date” means the date upon which the Loan proceeds are funded by Lender
into escrow in connection with the closing of the Loan.

“Due Date” means the last day of each Interest Period and the Maturity Date.

“EBITDA” means for the twelve (12) month period ending on the date of determination,
the sum of Lease Guarantor’s net income (loss) for such period plus, in each case to the
extent previously deducted in calculating net income (loss): (i) income taxes, (ii) principal
and interest payments on all of its debt obligations (including any borrowings under short
term credit facilities), (iii) all non-cash charges including depreciation and amortization,
and (iv) Non-Recurring Items.

“EBITDAR” means the sum of the Lease Guarantor’s EBITDA and Lease Guarantor’s total
land and building rent for the twelve (12) month period ending on the date of determination.

 

 

“FCCR” means a Lease Guarantor’s fixed charge coverage ratio and is calculated by
dividing (i) EBITDAR, by (ii) Fixed Charges.

“First Due Date” means September 8, 2009.

“First Monthly Payment Amount Due Date” means October 6, 2009.

“Fixed Charges” means with respect to Lease Guarantor, for the twelve (12) month
period ending on the date of determination, capital lease payments, interest expense,
principal payments under debt obligations excluding Balloon Payments, and land and building
rent.

“Guarantor” means Cole REIT III Operating Partnership, LP, a Delaware limited
partnership.

“Impounds” shall have the meaning set forth in the Cash Management Agreement.

“Interest Period” means either (i) for the first payment, the period commencing on the
Disbursement Date and ending on the sixth (6th) calendar day of the next succeeding
calendar month, provided, however, if such calendar day is not a Business Day, then such
Interest Period shall end on the next succeeding Business Day after such sixth
(6th) calendar day, or (ii) for all other payments, the period commencing on the
sixth (6th) calendar day of the applicable calendar month, provided, however, if
such calendar day is not a Business Day, then such Interest Period shall commence on the next
succeeding Business Day after such sixth (6th) calendar day, and ending on the
sixth (6th) calendar day of the next succeeding calendar month, provided, however,
if such calendar day is not a Business Day, then such Interest Period shall end on the next
succeeding Business Day after such sixth (6th) calendar day; provided, further,
that no Interest Period shall extend beyond the Maturity Date. For each Interest Period, no
interest shall accrue on the last day of such Interest Period.

“Lease Adjusted Leverage” means with respect to Lease Guarantor under the Lease (as
such term is defined in the Security Instrument), as of any applicable date, the sum of (a)
eight (8) times Lease Guarantor ‘s total land and building rent for the twelve (12) month
period ending on the date of determination, and (b) the total current balance of Lease
Guarantor’s total debt obligations (including any borrowings under short term credit
facilities) on such date, divided by EBITDAR.

“Lease Guarantor” means Cracker Barrel Old Country Store, Inc., a Tennessee
corporation.

“Lease Guaranty” means that certain Guaranty Agreement dated as of June 30, 2009 by
Lease Guarantor in favor of Borrower.

“LIBO Breakage Fee” means a fee payable by Borrower to Lender if and upon (i) any
Default by Borrower and acceleration of the Loan by Lender, or (ii) any payment of or upon the
Loan is made on any day that is not the last day of the Interest Period applicable thereto
(regardless of the source of that prepayment and whether voluntary, by acceleration or
otherwise), which shall be equal to the amount of any losses, expenses and liabilities
(including, without limitation, any loss (including interest paid) in connection with the
re-deployment of the Loan funds or such payment, as applicable) that Lender may sustain as a
result of that payment. For purposes of calculating amounts payable to Lender in this regard,
Lender shall be deemed to have actually funded the Loan through the purchase of a deposit
bearing interest at the applicable LIBO Rate in an amount equal to the amount of the Loan and
having a maturity and repricing characteristics comparable to the applicable Interest Period;
provided, however, that Lender may fund the Loan in any manner it sees

 

 

fit, and the foregoing assumption shall be utilized only for the calculation of amounts
payable under this subsection.

“LIBO Rate” means, for any Interest Period, the rate of interest, rounded upward to
the nearest whole multiple of one-sixteenth of one percent (0.0625%), quoted by Lender as the
London Inter-Bank Offered Rate for deposits in U.S. Dollars for interest periods equal to such
Interest Period at approximately 9:00 a.m. California time two (2) Business Days prior to the
commencement of such Interest Period.

“Loan Documents” means the documents identified as such in Exhibit B.

“Maturity Date” means August 29, 2012.

“Minimum Account Balance” shall have the meaning as set forth in the Cash Management
Agreement.

“Monthly Payment Amount” means the sum of the Principal Amount and the monthly
interest payment calculated by Lender on the sixth (6th) calendar day of each month
(or the next succeeding Business Day after such sixth (6th) calendar day if such
calendar day is not a Business Day) by Lender based on the Note Rate in effect on such date.

“Non-Recurring Items” shall mean with respect to Lease Guarantor, items of the sum
(whether positive or negative) of revenue minus expenses that, in the judgment of the Lender,
are unusual in nature and occur infrequently and are not representative of the ongoing/future
earnings or expenses of Lease Guarantor.

“Note Rate” means a floating rate of 3.75% plus the Adjusted LIBO Rate, charged on an
Actual/360 Basis. The floating Note Rate shall be initially determined on the Disbursement
Date and shall be reset on the first day of each Interest Period thereafter.

“Obligor” means any of Borrower, Guarantor and any other Person in any manner
obligated to Lender under the Loan Documents and/or granting any security for the Loan or for
the obligations of Guarantor.

“Person” means any individual, sole proprietorship, corporation, general partnership,
limited partnership, limited liability company or partnership, joint venture, association,
joint-stock company, bank, trust, land trust, estate, association, joint stock company,
unincorporated organization, any federal, state, county or municipal government (or any agency
or political subdivision thereof), endowment fund or any other form of entity.

“Principal Amount” means an amount calculated by Lender using the existing outstanding
principal balance as of the first day of each Interest Period and the Note Rate then in effect
over the then remaining portion of the Amortization Period after taking into account the
expired portion of the Amortization Period as of the date of determination; provided, however,
that in the event that Borrower enters into a Swap Agreement (as defined in the Security
Instrument), all monthly principal payment amounts shall be set forth on Schedule I attached
hereto.

“Rating Agencies” means Fitch, Inc., Moody’s Investors Service, Inc., Standard &
Poor’s Rating Services and any other nationally-recognized statistical rating organization
that, in connection with the securitization of the Loan by a REMIC maintains a rating, on the
date of a transfer of the Property

 

 

pursuant to Section 4 of Exhibit A to this Note or a Property Substitution
pursuant to Section 5 of Exhibit A of this Note, of the securities issued by
the REMIC.

“Regulatory Costs” means, collectively, all future, supplemental, emergency or other
changes in Reserve Percentages, assessment rates imposed by the FDIC, or similar requirements
or costs imposed by any domestic or foreign governmental authority and related in any manner
to the LIBO Rate, provided said amounts are actually paid by (or on behalf of) Lender.

“Reserve Percentage” means at any time the percentage announced within Lender as the
reserve percentage under Regulation D for loans and obligations making reference to an
Adjusted LIBO Rate. The Reserve Percentage shall be based on Regulation D or other
regulations from time to time in effect concerning reserves for Eurocurrency Liabilities as
defined in Regulation D from related institutions as though Lender were in a net borrowing
position, as promulgated by the Board of Governors of the Federal Reserve System, or its
successor.

“Taxes” means, collectively, all withholdings, interest equalization taxes, stamp
taxes or other taxes (except income taxes (and branch profit taxes and franchise taxes imposed
on Lender in lieu of income taxes)) imposed by any domestic or foreign governmental authority
and related in any manner to the LIBO Rate, provided said amounts are actually paid by (or on
behalf of) Lender.

“Tenant” means CBOCS TEXAS, LLC, a Tennessee limited liability company.

“Trigger Event” has that meaning given to that term in Section 3.1 of Exhibit
A to this Note.

	4.	 	INTEREST; PAYMENTS.

	 	4.1	 	Interest Accrual. Interest on the outstanding principal balance of this
Note shall accrue from the Disbursement Date at the Note Rate calculated on an
Actual/360 Basis.
	 
	 	4.2	 	Payments. Monthly payments, each in the applicable Monthly Payment Amount,
shall commence on the First Monthly Payment Amount Due Date and continue on each Due Date
thereafter. In addition, if the Disbursement Date is not the sixth(6th)
calendar day of a month (or the next succeeding Business Day after such sixth
(6th) calendar day if such calendar day is not a Business Day), an
interest-only payment shall be due on the First Due Date. Borrower acknowledges that the
applicable Monthly Payment Amount is determined on an Actual/360 Basis. On the Maturity
Date, all unpaid principal and accrued but unpaid interest shall be due and owing in
full. All interest shall be paid in arrears. Except as otherwise specifically provided
in this Note or the other Loan Documents, all payments and deposits due under this Note
or the other Loan Documents shall be made to Lender not later than 12:00 noon, California
time, on the day on which such payment or deposit is due. Any funds received by Lender
after such time shall, for all purposes, be deemed to have been received on the next
succeeding Business Day.
	 
	 	4.3	 	Acknowledgments. Borrower acknowledges that interest calculated on an
Actual/360 Basis exceeds interest calculated on a 30/360 Basis and, therefore: (a) a
greater portion of each monthly installment of principal and interest will be applied to
interest using the Actual/360 Basis than would be the case if interest accrued on a
30/360 Basis; and (b) the unpaid principal balance of this Note on the Maturity Date
will be greater using the Actual/360 Basis than would be the case if interest accrued on
a 30/360 Basis.

 

 

	 	4.4	 	Application of Payments. In the absence of a specific determination by
Lender to the contrary, all payments paid by Borrower to Lender in connection with the
obligations of Borrower under this Note and under the other Loan Documents shall be
applied in the following order of priority: (a) to amounts, other than principal and
interest, due to Lender pursuant to this Note or the other Loan Documents; (b) to
accrued but unpaid interest on this Note; and (c) to the unpaid principal balance of
this Note. Borrower irrevocably waives the right to direct the application of any
payments at any time received by Lender from or on behalf of Borrower, and Borrower
agrees that Lender shall have the continuing exclusive right to apply any such payments
to the then due and owing obligations of Borrower in such order of priority as Lender
may deem advisable.
	 
	 	4.5.	 	Taxes, Regulatory Costs and Reserve Percentages. Upon Lender’s demand,
Borrower shall pay to Lender, in addition to all other amounts which may be or become due
and payable under this Note and the other Loan Documents, any and all Taxes and
Regulatory Costs allocable to the Loan based on Lender’s reasonable good faith
computation. Further, at Lender’s option, the Adjusted LIBO Rate shall be automatically
adjusted by adjusting the Reserve Percentage, as determined by Lender in its prudent
banking judgment, from the date of imposition (or subsequent date selected by Lender) of
any such Regulatory Costs. Lender shall give Borrower notice of any Taxes and Regulatory
Costs as soon as practicable after their occurrence, but Borrower shall be liable for all
Taxes and Regulatory Costs allocable to the Loan based on Lender’s reasonable good faith
computation regardless of whether or when notice is so given.
	 
	 	4.6.	 	Purchase, Sale and Matching of Funds. Borrower understands, agrees and
acknowledges the following: (a) Lender has no obligation to purchase, sell, and/or match
funds in connection with the use of an Adjusted LIBO Rate as a basis for calculating the
Note Rate; (b) an Adjusted LIBO Rate is used merely as a reference in determining the
Note Rate; and (c) Borrower has accepted an Adjusted LIBO Rate as a reasonable and fair
basis for calculating the Note Rate. Borrower further agrees to pay the Taxes and
Regulatory Costs, if any, allocable to the Loan based on Lender’s reasonable good faith
computation, whether or not Lender elects to purchase, sell and/or match funds.
	 
	 	4.7	 	LIBO Breakage Fee. If and upon (i) any Default by Borrower and
acceleration of the Loan by Lender, or (ii) any payment of or upon the Loan is made on
any day that is not the last day of the Interest Period applicable thereto (regardless of
the source of that prepayment and whether voluntary, by acceleration or otherwise),
Borrower shall pay a LIBO Breakage Fee in addition to all other sums payable by Borrower
at that time.
	 
	 	4.8	 	Interest Rate Protection. On or before the closing of the Loan, Borrower
shall enter into an interest rate protection agreement (the “Interest Rate Protection
Agreement”), in form and substance acceptable to Lender, with Lender or a financial
institution acceptable to Lender, to fix or cap the interest rate, for the term of the
Loan, at an interest rate that results in a Debt Service Coverage Ratio of no less than
2.00 to 1.00. The “Debt Service Coverage Ratio” shall be calculated by dividing the
monthly cash flow for the Property by the Monthly Payment Amount for the corresponding
period. For the purposes hereof, “cash flow” shall be defined as net income of Borrower
after provision for approved operating expenses, increased by the amount of depreciation,
amortization and other non-cash charges, if any. In the event that Borrower enters into
an Interest Rate Protection Agreement with a financial institution other than Lender, (i)
such agreement shall not be secured, either directly or indirectly, by the Property
(including Borrower’s equity interest in the Property), and (ii) a default under the Loan
shall not be considered a default under the Interest Rate Protection

 

 

	 	 	 	Agreement. In the event that Borrower enters into an Interest Rate Protection
Agreement with Lender, (i) such agreement shall be secured by the Property, and (ii) it
shall be an Event of Default under the Loan if any event of default occurs under such
Interest Rate Protection Agreement where Borrower (or its affiliate) is the defaulting
party.

	5.	 	LATE CHARGE; DEFAULT RATE.

	 	5.1	 	Late Charge. If all or any portion of any payment or deposit required
hereunder (other than the payment due on the Maturity Date) is not paid or deposited on
or before the fourth day following the day on which the payment is due Borrower shall pay
a late or collection charge, as liquidated damages, equal to five percent (5%) of the
amount of such unpaid payment. If all or any portion of the payment due on the Maturity
Date is paid after the Maturity Date and on a date which is not the sixth
(6th) calendar day of a month (or the next succeeding Business Day after such
sixth (6th) calendar day if such calendar day is not a Business Day), Borrower
shall pay a late or collection charge, as liquidated damages, equal to the interest which
would have accrued on such amount during the period commencing on the date payment of
such amount is actually made and ending on the last day of the calendar month in which
payment of such amount is actually made. Borrower acknowledges that Lender will incur
additional expenses as a result of any late payments or deposits hereunder, which
expenses would be impracticable to quantify, and that Borrower’s payments under this
Section 5.1 are a reasonable estimate of such expenses. Commencing upon a Default and
continuing until such Default shall have been cured by Borrower, all sums owing on this
Note shall bear interest until paid in full at the Default Rate.

	6.	 	MAXIMUM RATE PERMITTED BY LAW. Neither this Note nor the other Loan Documents shall
be construed to require the payment or permit the collection of any interest or any late
payment charge in excess of the maximum rate permitted by law. If any such excess interest or
late payment charge is provided for under this Note or any of the other Loan Documents or if
this Note or any of the other Loan Documents shall be adjudicated to provide for such excess,
Borrower shall not be obligated to pay such excess notwithstanding any other provision of the
Loan Documents. If Lender shall collect amounts which are deemed to constitute interest and
which would increase the effective interest rate to a rate in excess of the maximum rate
permitted by law, all such amounts deemed to constitute interest in excess of the maximum
legal rate shall, upon such determination, at the option of Lender, be returned to Borrower or
credited against the outstanding principal balance of this Note.
	 
	7.	 	[INTENTIONALLY OMITTED].
	 
	8.	 	MISCELLANEOUS. The date of this Note and the other Loan Documents is for reference
purposes only. The effective date of delivery and transfer to Lender of the security under the
Security Instrument and the other Loan Documents and of Borrower’s and Lender’s obligations
under this Note and the other Loan Documents shall be the date the Security Instrument is
recorded in the real estate records of the county where the Property is located. If this Note
is executed by more than one person or entity as Borrower, the obligations of each such person
or entity shall be joint and several. No person or entity shall be a mere accommodation maker,
but each shall be primarily and directly liable hereunder. Except as otherwise provided in any
other Loan Document, Borrower hereby waives presentment, demand, notice of dishonor, notice of
default or delinquency, notice of intent to accelerate, notice of acceleration, notice of
nonpayment, notice of costs, expenses or losses and interest thereon, and notice of interest
on interest and late charges. Time is of the essence with respect to every provision of this
Note and the other Loan Documents. This Note shall be governed by, and construed in
accordance with, the laws of the State of New York, except

 

 

	 	 	to the extent preempted by Federal laws. This Note may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed an original and all of
which taken together shall be deemed to be one and the same Note. The terms, covenants and
conditions contained herein shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto. The foregoing sentence shall not be construed to
permit Borrower to assign the Loan except as otherwise permitted in the Loan Documents.
“Business Day” shall mean any day other than a Saturday, Sunday, legal holiday or other day on
which commercial banks in New York are authorized or required by law to close. All references
in this Note to a “day” or a “date” shall be to a calendar day unless specifically referenced
as a Business Day. All references in this Note to a “month,” “quarter” or “year” shall be to
a calendar month, quarter or year respectively unless specifically referenced otherwise. The
additional terms and conditions contained in Exhibits A, B and C. attached hereto are
incorporated herein by this reference.
	 
	9.	 	PREPAYMENT—STEPPED. Borrower acknowledges that any prepayment of this Note will
cause Lender to lose its interest rate yield on this Note and will possibly require that
Lender reinvest any such prepayment amount in loans of a lesser interest rate yield
(including, without limitation, in debt obligations other than first mortgage loans on
commercial properties). As a consequence, Borrower agrees as follows, as an integral part of
the consideration for Lender’s making the Loan:

	 	9.1	 	Voluntary Prepayment. Any voluntary prepayment of this Note: (a) is
permitted in full only and not in part; and (b) may only be made after Borrower’s
delivery to Lender of not less than 30 nor more than 90 days prior written notice of
Borrower’s intent to prepay.
	 
	 	9.2	 	Prepayment Charge.

	 	(a)	 	Prepayment Charge-Stepped. This Note may be prepaid in
full (and not in part, except for partial prepayments resulting from Lender’s
application of any insurance proceeds or condemnation awards to the outstanding
principal balance of the Loan) only upon payment of a prepayment charge in the
amount of:

	 	(1)	 	3.0% of the principal amount prepaid if prepaid
during the term beginning on the Disbursement Date and continuing to,
but not including, the date that is one year after the First Due Date;
	 
	 	(2)	 	2.0% of the principal amount prepaid if prepaid
on or after the date that is one year after the First Due Date and
before the date that is two years after the First Due Date; and
	 
	 	(3)	 	1.0% of the principal amount prepaid if prepaid
on or after the date that is two years after the First Due Date and
before the date that is three months before the Maturity Date.

Notwithstanding the foregoing, no prepayment charge shall be due in the
event that Borrower refinances the Loan with Lender. There shall be no
other right of prepayment.

	 	(b)	 	Additional Charge. If this Note is prepaid on any day
other than a Due Date, whether such prepayment is voluntary, involuntary or
upon full acceleration of the principal amount of this Note by Lender following
a Default, Borrower shall pay to Lender on the prepayment date (in addition to
the prepayment charge

 

 

	 	 	 	described in Section 9.2(a) above, if then applicable, and all other sums
then due and owing to Lender under this Note and the other Loan Documents),
a LIBO Breakage Fee, and any termination fees pertaining to the Interest
Rate Protection Agreement, together with an additional prepayment charge
equal to the interest which would otherwise have accrued on the amount
prepaid (had such prepayment not occurred) during the period from and
including the prepayment date to and including the last day of the calendar
month in which the prepayment occurred.
	 
	 	(c)	 	Exclusion. Notwithstanding the foregoing, no
prepayment charge of any kind shall apply in respect to any prepayment
resulting from Lender’s application of any insurance proceeds or condemnation
awards to the outstanding principal balance of the Loan. Notwithstanding the
foregoing, Borrower shall not be liable for the foregoing prepayment charge if
the outstanding principal amount of the Loan is prepaid with proceeds of a new
loan made by Lender to Borrower.
	 
	 	(d)	 	Effect of Prepayment. No partial prepayment of this
Note shall change any Due Date or the method of calculation of the Monthly
Payment Amount, unless Lender otherwise agrees in writing.
	 
	 	(e)	 	Waiver. Borrower waives any right to prepay this Note
except under the terms and conditions set forth in this Section 9 and agrees
that if this Note is prepaid, Borrower shall pay the prepayment charge set
forth above (to the extent applicable). Borrower hereby acknowledges that: (a)
the inclusion of this waiver of prepayment rights and agreement to pay the
prepayment charge (to the extent applicable) for the right to prepay this Note
was separately negotiated with Lender; (b) the economic value of the various
elements of this waiver and agreement was discussed; and (c) the consideration
given by Borrower for the Loan was adjusted to reflect the specific waiver and
agreement negotiated between Borrower and Lender and contained herein.

Borrower’s
Initials /s/ TJW

	10.	 	INTENTIONALLY OMITTED.
	 
	11.	 	COMMERCIAL LOAN. Borrower warrants that the Loan evidenced by this Note is being
made solely to acquire or carry on a business or commercial enterprise, and/or Borrower is a
business or commercial organization. Borrower further warrants that all of the proceeds of
this Note shall be used for commercial purposes and stipulates that the Loan evidenced by this
Note shall be construed for all purposes as a commercial loan, and is made for other than
personal, family or household purposes.
	 
	12.	 	WAIVER OF JURY TRIAL. TO THE EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW,
LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, THIS NOTE OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF LENDER OR

 

 

BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN TO BORROWER.

	13.	 	FINAL EXPRESSION/NO ORAL AGREEMENTS. READ THIS DOCUMENT CAREFULLY. THE WRITTEN NOTE
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
	 
	 	 	THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Signature Page Follows]

 

 

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

	 	 	 	 	 
	 	

BORROWER:

COLE CB ABILENE TX, LLC,

a Delaware limited liability company

By: Cole REIT Advisors III, LLC,

a Delaware limited liability company,

its manager

 	 
	 	By:  	/s/ Todd J. Weiss
 	 
	 	 	Name:  	Todd J. Weiss 	 
	 	 	Title:  	Vice Presidentexv10w48

Exhibit 10.48

The indebtedness secured by this Instrument matures less than three years from the date of this
Instrument and is exempt from Georgia Intangibles Tax in accordance with O.C.G.A Section 48-6-61.

STATE OF GEORGIA

COUNTY OF JACKSON

This instrument was prepared by:

Monique Olivier, Esq.

Pepler Mastromonaco LLP

100 First Street, 25th Floor

San Francisco, CA 94105

Recording requested by

and when recorded return to:

	 
	WELLS FARGO BANK, N.A.

Commercial Mortgage Origination

5938 Priestly Drive, Suite 200

Carlsbad, California 92008

	Attention: CMO Loan Admin.

	Loan No.: 02-62113532

	Unit No.: 588

 

DEED TO SECURE DEBT AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT

Dated as of August 31, 2009

from

COLE CB BRASELTON GA, LLC, a Delaware limited liability company,

as Grantor

to

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Grantee

 

 

DEED TO SECURE DEBT AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT

     THIS DEED TO SECURE DEBT AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT
(“Security Deed”), dated as of August 31, 2009 (the “Effective Date”), is executed
by COLE CB BRASELTON GA, LLC, a Delaware limited liability company (“Grantor”), with an
office at c/o Cole REIT III Operating Partnership, LP, 2555 E. Camelback Road, Suite 400, Phoenix,
Arizona 85016, for the benefit of WELLS FARGO BANK, NATIONAL ASSOCIATION, with a mailing address
at 5938 Priestly Drive, Suite 200, Carlsbad, California 92008 (“Grantee”).

RECITALS

	A.	 	Grantor as “Borrower” proposes to borrow from Grantee, and Grantee proposes to lend to
Grantor, the total principal sum of ONE MILLION THREE HUNDRED SEVENTY THOUSAND AND 00/100THS
DOLLARS ($1,370,000.00) (the “Loan”). The Loan is evidenced by that certain Secured
Promissory Note of even date herewith, in the principal sum of the Loan, executed by Grantor
to Grantee (the “Note”).

	B.	 	The loan documents include this Security Deed, the Note and the other documents described in
the Note as Loan Documents (“Loan Documents”).

ARTICLE 1 SECURITY DEED

	1.1.	 	GRANT. For the purposes of and upon the terms and conditions of this Security Deed,
Grantor has absolutely and irrevocably granted, bargained, aliened, conveyed and confirmed and
by these presents does hereby grant, bargain, alien, convey and confirm unto Grantee, with
right of entry and possession, with power of sale, all estate, right, title and interest which
Grantor now has or may hereafter acquire in, to, under, or derived from the following
described real property, in fee simple: (a) that real property (“Land”) located in
Braselton, county of Jackson, Georgia, and more particularly described on Exhibit A
attached hereto and incorporated herein by this reference; (b) all buildings, improvements and
fixtures now or hereafter located on the Land; and (c) all additions, accretions, rents,
issues, profits, royalties, appurtenances, easements, water, water rights, water stock,
minerals, oil rights, gas rights, air rights and other rights now or hereafter appurtenant or
related to the Land. All of the foregoing property is hereinafter collectively defined as the
“Property.” The listing of specific rights or property shall not be interpreted as a
limitation of general terms.

      TO HAVE AND TO HOLD the Property with all and singular the rights, members and appurtenances
thereto appertaining, to the only proper use, benefit and behoof of Grantee, IN FEE SIMPLE; and
Grantor will warrant and forever defend Grantor’s right and title to the Property unto Grantee
against the claims of all persons whomsoever, except as may be otherwise expressly stated herein.

      This conveyance is made under the existing Code of the State of Georgia governing loan or
security deeds and is to be construed as a deed passing legal title to the Property to Grantee, and
not as a

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mortgage, and is given to secure payment of the indebtedness secured by this Security Deed.
Upon payment of the indebtedness secured hereby, this Security Deed shall be canceled and
surrendered by Grantee. Any reference herein to the “lien of this Security Deed” or words of
similar import shall be deemed to mean the conveyance of a security title and security interest
created by this Security Deed and not a reference to the creation of a mortgage lien. The
indebtedness secured hereby, together with interest thereon, is evidenced by the Note made by
Grantor to the order of Grantee, in the principal amount of the Loan.

ARTICLE 2 OBLIGATIONS SECURED

	2.1.	 	OBLIGATIONS SECURED. Grantor makes the foregoing grant and assignment and those set
forth in Articles 3 and 4 hereof and elsewhere herein for the purpose of securing the
following obligations (“Secured Obligations”):

	 	a.	 	Full and punctual payment to Grantee of all sums at any time owing under the
Note;
	 
	 	b.	 	Payment and performance of all covenants and obligations of Grantor under this
Security Deed including, without limitation, indemnification obligations and advances
made to protect the Property;
	 
	 	c.	 	Payment and performance of all additional covenants and obligations of Grantor
under the Loan Documents;
	 
	 	d.	 	Payment and performance of all future advances and other obligations that the
then record owner of all or part of the Property may agree to pay and/or perform
(whether as principal, surety or guarantor) for the benefit of Grantee, when the
obligation is evidenced by a writing which recites that it is secured by this Security
Deed;
	 
	 	e.	 	Payment and performance under any swap, derivative, foreign exchange or hedge
transaction or arrangement or similar transaction or arrangement howsoever described or
defined at any time entered into between Grantor and Grantee in connection with the
Note (“Swap Agreement”);
	 
	 	f.	 	All interest and charges on all obligations secured hereby including, without
limitation, prepayment charges, late charges and loan fees;
	 
	 	g.	 	All modifications, extensions and renewals of any of the obligations secured
hereby, however evidenced, including, without limitation: (i) modifications of the
required principal payment dates or interest payment dates or both, as the case may be,
deferring or accelerating payment dates wholly or partly; and (ii) modifications,
extensions or renewals at a different rate of interest whether or not any such
modification, extension or renewal is evidenced by a new or additional promissory note
or notes; and
	 
	 	h.	 	Payment and performance of any other obligations which are defined as
“Secured Obligations” in the Note.

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	2.2.	 	OBLIGATIONS. The term “obligations” is used herein in its broadest and most
comprehensive sense and shall be deemed to include, without limitation, all interest and
charges, prepayment charges, late charges and loan fees at any time accruing or assessed on
any of the Secured Obligations pursuant to the terms of the Loan Documents.
	 
	2.3.	 	INCORPORATION. All terms and conditions of the documents which evidence any of the
Secured Obligations are incorporated herein by this reference. All persons who may have or
acquire an interest in the Property shall be deemed to have notice of the terms of the Secured
Obligations and to have notice that the rate of interest on one or more Secured Obligation may
vary from time to time.
	 
	2.4.	 	PROTECTIVE ADVANCES. During the continuance of a Default, Grantee shall have the
right, but not the obligation, to make protective advances with respect to the Property for
the payment of taxes, assessments, insurance premiums or costs incurred for the protection of
the Property, and such protective advances, together with interest thereon at the Default Rate
from the date of each such advance until it is repaid in full, shall be secured by this
Security Deed to the fullest extent and with the highest priority contemplated by applicable
law.
	 
	2.5.	 	MATURITY DATE. The Maturity Date of the Note is August 29, 2012.
	 
	2.6.	 	CANCELLATION. Should the Secured Obligations be paid according to the tenor and
effect thereof when the same shall become due and payable, then this Security Deed shall be
cancelled and surrendered by Grantee.

ARTICLE 3 ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

	3.1.	 	ASSIGNMENT. Grantor absolutely and irrevocably assigns to Grantee all of Grantor’s
right, title and interest in, to and under: (a) all present and future leases of the Property
or any portion thereof (including without limitation all usufructs and estates in land), all
licenses and agreements relating to the management, leasing or operation of the Property or
any portion thereof, and all other agreements of any kind relating to the use or occupancy of
the Property or any portion thereof, whether such leases, licenses and agreements are now
existing or entered into after the date hereof, including, without limitation, that certain
Lease Agreement dated as of June 30, 2009, between Grantor, as landlord and CBOCS, INC., a
Tennessee corporation, as tenant (the “Existing Tenant”) covering the Property (as
amended, the “Existing Lease”); all such leases, licenses and agreements to which
Grantor is a party, including, without limitation, the Existing Lease, as same have been or
may be amended from time to time, are hereinafter collectively referred to as the
“Leases” and, individually, as a “Lease”) and (b) all rents, issues, deposits
and profits of the Property, including, without limitation, all amounts payable and all rights
and benefits accruing to Grantor under the Leases (“Payments”). The term
“Leases” shall also include all guarantees of and security for the Tenants’
performance thereunder, and all amendments, extensions, renewals or modifications thereto
which are permitted hereunder. The terms “Tenant” and “Tenants” shall refer
to any and all current and future tenants, including, without limitation, the Existing Tenant,
under any and all Leases affecting the Property. This is a present and absolute assignment,
not an assignment for security purposes only, and Grantee’s

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right to the Leases and Payments is not contingent upon, and may be exercised without
possession of, the Property.

	3.2.	 	GRANT OF LICENSE. Grantee confers upon Grantor a revocable license
(“License”) to collect and retain the Payments as they become due and payable, until
the occurrence of a Default (as hereinafter defined). Upon a Default, the License shall be
automatically revoked and Grantee may collect and apply the Payments pursuant to the terms
hereof without notice and without taking possession of the Property. All Payments thereafter
collected by Grantor shall be held by Grantor as trustee under a constructive trust for the
benefit of Grantee. Grantor hereby irrevocably authorizes and directs the Tenants under the
Leases to rely upon and comply with any notice or demand by Grantee for the payment to Grantee
of any rental or other sums which may at any time become due under the Leases, or for the
performance of any of the Tenants’ undertakings under the Leases, and the Tenants shall have
no right or duty to inquire as to whether any Default has actually occurred or is then
existing. Grantor hereby relieves the Tenants from any liability to Grantor by reason of
relying upon and complying with any such notice or demand by Grantee. Grantee may apply, in
its sole discretion, any Payments so collected by Grantee against any Secured Obligation or
any other obligation of Grantor or any other person or entity, under any document or
instrument related to or executed in connection with the Loan Documents, whether existing on
the date hereof or hereafter arising. Collection of any Payments by Grantee shall not cure or
waive any Default or notice of Default or invalidate any acts done pursuant to such notice.
If and when no Default exists, the License shall be deemed to be re-conferred upon Grantor by
Grantee, without any further act or deed, until the occurrence of another Default.

	3.3.	 	COVENANTS —LEASES.

	 	a.	 	Affirmative Covenants. Grantor shall, at Grantor’s sole cost and
expense:

	 	(i)	 	perform all obligations of the landlord under the Leases and
use reasonable efforts to enforce performance by the Tenants of all obligations
of the Tenants under the Leases;
	 
	 	(ii)	 	use reasonable efforts to keep the Property leased at all times
to Tenants which Grantor reasonably and in good faith believes are creditworthy
at rents not less than the fair market rental value (including, but not limited
to, free or discounted rents to the extent the market so requires);
	 
	 	(iii)	 	promptly upon Grantee’s request, deliver to Grantee a copy of
each requested Lease and all amendments thereto and waivers thereof; and
	 
	 	(iv)	 	promptly upon Grantee’s request, execute and record any
additional assignments of landlord’s interest under any Lease to Grantee and
specific subordinations of any Lease to this Security Deed, in form and
substance satisfactory to Grantee.

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	 	b.	 	Negative Covenants. Unless consented to in writing by Grantee (in its
sole and absolute discretion) or otherwise permitted under any other provision of the
Loan Documents or under any Lease, Grantor shall not:

	 	(i)	 	enter into any Lease which (aa) is not on commercially
reasonable terms and conditions similar to those found in similarly situated
commercial or retail properties, as applicable; (bb) does not contain
subordination, attornment and other grantee protective provisions, including a
provision requiring the Tenant to execute and deliver to the landlord an
estoppel certificate in form and substance reasonably satisfactory to the
landlord promptly upon the landlord’s request; (cc) does not contain
environmental compliance and reporting provisions reasonably satisfactory to
Grantee and its counsel; or (dd) allows the Tenant to assign or sublet the
premises, except in accordance with and subject to the terms set forth in such
Lease;
	 
	 	(ii)	 	grant any Tenant under any of the Leases any option, right of
first refusal or other right to purchase all or any portion of the Property
under any circumstances;
	 
	 	(iii)	 	grant any Tenant under any of the Leases any right to prepay
rent more than one (1) month in advance;
	 
	 	(iv)	 	except upon Grantee’s request, execute any assignment of
landlord’s interest in any of the Leases; or
	 
	 	(v)	 	collect rent or other sums due under any of the Leases in
advance, other than to collect rent one (1) month in advance of the time when
it becomes due.
	 
	 	(vi)	 	reduce any rent or other sums due from the Tenant under any
Lease;
	 
	 	(vii)	 	terminate or modify or amend any Lease or any guaranty
executed by any guarantor in connection therewith;
	 
	 	(viii)	 	allow the Tenant to assign or sublet its Lease, except in accordance with and
subject to the terms of its Lease;
	 
	 	(ix)	 	release or discharge the Tenant or any guarantor under any
Lease from any material obligation thereunder; or
	 
	 	(x)	 	subordinate or agree to subordinate any Lease to any other deed
of trust, deed to secure debt or mortgage (other than this Security Deed) and
any other Security Deed (as such term is defined in the Loan Documents).

Any such attempted action in violation of the provisions of this Section shall be
null and void.

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	 	c.	 	Lease Default. Grantor shall, at Grantor’s sole cost and expense, give
Grantee prompt written notice of any Lease Default (defined below). The term
“Lease Default” shall mean there shall exist (i) any “Event of Default” as
defined in any Lease, or (ii) any default under a Lease by Grantor after the expiration
of any applicable notice or cure period, in respect of a covenant, misrepresentation,
violation or other occurrence that Grantee, in its reasonable discretion, determines to
be a material covenant, misrepresentation, violation or occurrence under such Lease.
	 
	 	d.	 	Approval of Existing Lease. It is understood that Grantor’s execution
and delivery of this Security Deed, together with Grantee’s disbursement of the
proceeds of the Loan, shall constitute Grantee’s written consent to the terms of the
Existing Lease, approval of the Tenant and an acknowledgment that the Existing Lease
complies with the provisions of this Section and the other provisions of this Security
Deed. As of the date of this Security Deed, the Property is subject to the Existing
Lease which has been approved by Grantee and is the only Lease affecting the Property.

	3.4.	 	ESTOPPEL CERTIFICATES. Within thirty (30) days after request by Grantee, but not
more than two (2) times in any twelve (12) month period, Grantor shall deliver to Grantee and
to any party designated by Grantee, estoppel certificates relating to the Leases executed by
Grantor and by Tenant, in form and substance as executed by Existing Tenant on or about the
date of this Security Deed; provided, however, if Tenant shall fail or refuse to so execute
and deliver any such estoppel certificate upon request, Grantor shall use reasonable efforts
to cause such Tenant to execute and deliver such estoppel certificate, but such Tenant’s
continued failure or refusal to do so, despite Grantor’s reasonable efforts, shall not
constitute a default by Grantor under this Section.
	 
	3.5.	 	RIGHT OF SUBORDINATION. Grantee may at any time and from time to time by specific
written instrument intended for the purpose unilaterally subordinate the conveyance of
security title to the Property to any Lease, without joinder or consent of, or notice to,
Grantor, any Tenant or any other person. Notice is hereby given to each Tenant under a Lease
of such right to subordinate. No subordination referred to in this Section shall constitute a
subordination to any lien or other encumbrance, whenever arising, or improve the right of any
junior lienholder. Nothing herein shall be construed as subordinating this Security Deed to
any Lease.

ARTICLE 4 SECURITY AGREEMENT

	4.1.	 	SECURITY INTEREST. Grantor grants and assigns to Grantee a security interest to
secure payment and performance of all of the Secured Obligations, in Grantor’s right, title
and interest in and to all of the following described personal property in which Grantor now
or at any time hereafter has any interest (“Collateral”):
	 
	 	 	All goods, building and other materials, supplies, work in process, equipment, machinery,
fixtures, furniture, furnishings, signs and other personal property, wherever situated,
which are or are to be incorporated into, used in connection with or appropriated for use on
the Property; all rents, issues, deposits and profits of the Property (to the extent, if
any, they are not subject to the Absolute Assignment of Rents and Leases); all inventory,
accounts, cash receipts, deposit

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accounts, impounds, accounts receivable, contract rights, general intangibles, software,
chattel paper, instruments, documents, promissory notes, drafts, letters of credit, letter
of credit rights, supporting obligations, insurance policies, insurance and condemnation
awards and proceeds, any other rights to the payment of money, trade names, trademarks and
service marks arising from or related to the Property or any business now or hereafter
conducted thereon by Grantor; all permits, consents, approvals, licenses, authorizations and
other rights granted by, given by or obtained from, any governmental entity with respect to
the ownership and use of the Property; all deposits or other security now or hereafter made
with or given to utility companies by Grantor with respect to the Property; all advance
payments of insurance premiums made by Grantor with respect to the Property; all plans,
drawings and specifications relating to the Property; all loan funds held by Grantee,
whether or not disbursed; all funds deposited with Grantee pursuant to any Loan Document,
all reserves, deferred payments, deposits, accounts, refunds, cost savings and payments of
any kind related to the Property or any portion thereof, including, without limitation, all
“Impounds” as defined herein; together with all replacements and proceeds of, and additions
and accessions to, any of the foregoing, and all books, records and files relating to any of
the foregoing.

As to all of the above-described personal property, this Security Deed is acknowledged and
agreed to be a security agreement under the Georgia Uniform Commercial Code, as amended or
recodified from time to time (the “UCC”). For purposes of the foregoing (i) Grantor
is the “debtor” and its address is as set forth on page 1 of this Security Deed,
(ii) the Grantee is the “secured party” and its address is as set forth on page 1 of
this Security Deed and (iii) the name of the record owner of the Property is Grantor.

	4.2.	 	COVENANTS. Grantor agrees: (a) to execute and deliver such documents as Grantee
deems necessary to create, perfect and continue the security interests contemplated hereby;
(b) not to change its name, and as applicable, its chief executive offices, its principal
residence or the jurisdiction in which it is organized without giving Grantee at least thirty
(30) days’ prior written notice thereof; and (c) to cooperate with Grantee in perfecting all
security interests granted herein and in obtaining such agreements from third parties as
Grantee deems reasonably necessary, proper or convenient in connection with the preservation,
perfection or enforcement of any of Grantee’s rights hereunder.
	 
	4.3.	 	RIGHTS OF GRANTEE. In addition to Grantee’s rights as a “Secured Party” under the
UCC, Grantee may, but shall not be obligated to, at any time without notice and at the expense
of Grantor: (a) give notice to any person of Grantee’s rights hereunder and enforce such
rights at law or in equity; (b) insure, protect, defend and preserve the Collateral or any
rights or interests of Grantee therein; and (c) inspect the Collateral (and during the term of
any Lease, subject to any specific restrictions or prohibitions under such Lease).
Notwithstanding the above, in no event shall Grantee be deemed to have accepted any property
other than cash in satisfaction of any obligation of Grantor to Grantee unless Grantee shall
make an express written election of said remedy under the UCC or other applicable law.
	 
	4.4.	 	RIGHTS OF GRANTEE UPON DEFAULT. Upon the occurrence and continuation of a Default,
then in addition to all of Grantee’s rights as a “Secured Party” under the UCC or otherwise at
law:

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	 	a.	 	Disposition of Collateral. Grantee may: (i) upon written notice,
require Grantor to assemble the Collateral and make it available to Grantee at a place
designated by Grantee; (ii) without prior notice, enter upon the Property (and during
the term of any Lease affecting the Property, subject to any specific restrictions or
prohibitions under any such lease) or other place where any of the Collateral may be
located and take possession of, collect, sell, lease, license and otherwise dispose of
the Collateral, and store the same at locations acceptable to Grantee at Grantor’s
expense; or (iii) sell, assign and deliver the Collateral at any place or in any lawful
manner and bid and become purchaser at any such sales; and
	 
	 	b.	 	Other Rights. Grantee may, for the account of Grantor and at Grantor’s
expense: (i) operate, use, consume, sell, lease, license or otherwise dispose of the
Collateral as Grantee deems appropriate for the purpose of performing any or all of the
Secured Obligations; (ii) enter into any agreement, compromise or settlement including
insurance claims, which Grantee may deem desirable or proper with respect to the
Collateral; and (iii) endorse and deliver evidences of title for, and receive, enforce
and collect by legal action or otherwise, all indebtedness and obligations now or
hereafter owing to Grantor in connection with or on account of the Collateral.

Grantor acknowledges and agrees that a disposition of the Collateral in accordance with
Grantee’s rights and remedies as heretofore provided is a disposition thereof in a
commercially reasonable manner and that five (5) Business Days’ prior notice of such
disposition is commercially reasonable notice. Grantee shall have no obligation to process
or prepare the Collateral for sale or other disposition. In disposing of the Collateral,
Grantee may disclaim all warranties of title, possession, quiet enjoyment and the like. Any
proceeds of any sale or other disposition of the Collateral may be applied by Grantee first
to the reasonable expenses incurred by Grantee in connection therewith, including, without
limitations, reasonable attorneys’ fees (as defined in Section 8.2) and disbursements, and
then to the payment of the Secured Obligations, in such order of application as Grantee may
from time to time elect.

	4.5.	 	POWER OF ATTORNEY. Grantor hereby irrevocably appoints Grantee as Grantor’s
attorney-in-fact (such agency being coupled with an interest), and as such attorney-in-fact,
Grantee may, without the obligation to do so, in Grantee’s name or in the name of Grantor,
prepare, execute, file and record financing statements, continuation statements, applications
for registration and like papers necessary to create, perfect or preserve any of Grantee’s
security interests and rights in or to the Collateral, and take any other action required of
Grantor; provided, however, that Grantee as such attorney-in-fact shall be accountable only
for such funds as are actually received by Grantee.

ARTICLE 5 REPRESENTATIONS AND WARRANTIES

	5.1.	 	REPRESENTATIONS AND WARRANTIES. Grantor represents and warrants to Grantee that, to
Grantor’s current actual knowledge, the following statements are true and correct as of the
Effective Date:

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	 	a.	 	Legal Status. Grantor is duly formed and validly existing and in good
standing under the laws of the state(s) in which Grantor is organized. Grantor is
qualified or licensed to do business in all jurisdictions in which such qualification
or licensing is required.
	 
	 	b.	 	Permits. Grantor possesses all permits, franchises and licenses and
all rights to all trademarks, trade names, patents and fictitious names, if any,
necessary to enable Grantor to conduct the business(es) in which Grantor is now engaged
in compliance with applicable law.
	 
	 	c.	 	Authorization and Validity. The execution and delivery of the Loan
Documents have been duly authorized and the Loan Documents constitute valid and binding
obligations of Grantor, enforceable in accordance with their respective terms, except
as such enforcement may be limited by bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors’ rights, or by the application of rules of
equity.
	 
	 	d.	 	Violations. The execution, delivery and performance by Grantor of each
of the Loan Documents does not violate any provision of any law or regulation, or
result in any breach or default under any contract, obligation, indenture or other
instrument to which Grantor is a party or by which Grantor is bound.
	 
	 	e.	 	Litigation. Except as otherwise disclosed in that certain Disclosure
Agreement Regarding Representations, Covenants and Warranties of even date herewith,
executed by Grantor for the benefit of Grantee (the “Disclosure Agreement”),
there are no pending or threatened actions, claims, investigations, suits or
proceedings before any governmental authority, court or administrative agency which may
adversely affect the financial condition or operations of Grantor.
	 
	 	f.	 	Financial Statements. The Financial Statements (as such term is
defined in that certain Borrower’s Certification of even date herewith, executed by
Grantor in favor of Grantee) of the sole member of Grantor and guarantor, Cole REIT III
Operating Partnership, LP, a Delaware limited partnership (“Guarantor”),
previously delivered by Grantor to Grantee: (i) are materially complete and correct;
(ii) present fairly the financial condition of such party; and (iii) have been prepared
in accordance with generally accepted accounting principles (“GAAP”). Since
the date of such Financial Statements, there has been no material adverse change in
such financial condition, nor have any assets or properties reflected on such financial
statements been sold, transferred, assigned, mortgaged, pledged or encumbered, except
as disclosed in the Disclosure Agreement.
	 
	 	g.	 	Reports. All reports, documents, instruments and information delivered
by Grantor to Grantee or otherwise prepared by, for or at the direction of Grantor and
delivered to Grantee in connection with the Loan: (i) are correct and sufficiently
complete to give Grantee accurate knowledge of their subject matter; and (ii) do not
contain any misrepresentation of a material fact or omission of a material fact which
omission makes the provided information misleading.

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	 	h.	 	Income Taxes. There are no pending assessments or adjustments of
Grantor’s income tax payable with respect to any year.
	 
	 	i.	 	Subordination. There is no agreement or instrument to which Grantor is
a party or by which Grantor is bound that would require the subordination in right of
payment of any of Grantor’s obligations under the Note to an obligation owed to another
party.
	 
	 	j.	 	Title. Grantor lawfully holds and possesses fee simple title to the
Property, without limitation on the right to encumber same. This Security Deed is a
first conveyance of title to the Property as security prior and superior to all other
liens and encumbrances on the Property except: (i) liens for real estate taxes and
assessments that are either not yet due and payable or due, but not yet delinquent;
(ii) senior exceptions previously approved by Grantee and shown in the title insurance
policy insuring the conveyance of security title to the Property; and (iii) other
matters, if any, as disclosed in the Disclosure Agreement.
	 
	 	k.	 	Mechanics’ Liens. Except as disclosed in the Disclosure Agreement,
there are no mechanics’ or similar liens or claims which have been filed for work,
labor or material affecting the Property which are or may be prior to or equal to the
conveyance of security title to the Property. Except as disclosed in the Disclosure
Agreement, there are no rights outstanding that under law could give rise to any liens
affecting the Property which are or may be prior to or equal to the conveyance of
security title to the Property.
	 
	 	l.	 	Encroachments. Except as shown in the survey for the Property issued
in connection with the closing of the Loan and previously delivered to Grantee, none of
the buildings or other improvements which were included for the purpose of determining
the appraised value of the Property lies outside of the boundaries or building
restriction lines of the Property and no buildings or other improvements located on
adjoining properties encroach upon the Property.
	 
	 	m.	 	Leases. The Existing Lease is in full force and effect and is
enforceable in accordance with its terms. No material breach or default by any party,
or event which would constitute a material breach or default by any party after notice
or the passage of time, or both, exists under the Existing Lease. None of the
landlord’s interests under any of the Leases, including, but not limited to, rents,
additional rents, charges, issues or profits, has been transferred or assigned other
than to Grantee. No rent or other payment under the Existing Lease has been paid by
the Existing Tenant for more than one (1) month in advance.
	 
	 	n.	 	Collateral. Grantor has good title to the existing Collateral, if any,
free and clear of all liens and encumbrances, except those, if any, disclosed in the
Disclosure Agreement. Grantor’s chief executive office (or principal residence, if
applicable) is located at the address shown on page one of this Security Deed. Grantor
is an organization organized solely under the laws of the State of Delaware. All
organizational documents of Grantor delivered to Grantee are complete and accurate in
every material respect. Grantor’s legal name is exactly as shown on page one of this
Security Deed.

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	 	o.	 	Condition of Property. Except as set forth in the Environmental
Reports (as such term is defined in the Disclosure Agreement), or the Property
Condition Reports (as such term is defined in the (Disclosure Agreement), or as
otherwise set forth in the Disclosure Agreement, the Property is in good condition and
repair and is free from any damage that would materially and adversely affect the value
of the Property as security for the Loan or the intended use of the Property.
	 
	 	p.	 	Hazardous Materials. Except as shown in the Environmental Reports, or
as otherwise set forth in the Disclosure Agreement, or as otherwise permitted in
Section 6.2.a. below, the Property is not and has not been a site for the use,
generation, manufacture, storage, treatment, release, threatened release, discharge,
disposal, transportation or presence of Hazardous Materials (as hereinafter defined).
	 
	 	q.	 	Hazardous Materials Laws. Except as shown in the Environmental
Reports, the Property complies with all Hazardous Materials Laws (as hereinafter
defined), except for any noncompliance that would not materially and adversely affect
the value of the Property as security for the Loan or the intended use of the Property.
	 
	 	r.	 	Hazardous Materials Claims. Except as shown in the Environmental
Reports, there are no pending or threatened Hazardous Materials Claims (as hereinafter
defined) that would materially and adversely affect the value of the Property as
security for the Loan or the intended use of the Property.
	 
	 	s.	 	Wetlands. Except as shown in the Environmental Reports or on any
survey of the Property issued in connection with the closing of the Loan that has been
delivered to Grantee, no part of the Property consists of or is classified as wetlands,
tidelands or swamp and overflow lands.
	 
	 	t.	 	Compliance With Laws. Except as reflected in the Environmental
Reports, or as otherwise set forth in the Disclosure Agreement, all federal, state and
local laws, rules and regulations applicable to the Property, including, without
limitation, all zoning and building requirements and all requirements of the Americans
With Disabilities Act of 1990, as amended from time to time (42 U.S.C. Section 12101 et
seq.) have been satisfied or complied with in all material respects and any non
compliance will not materially and adversely affect the value of the Property as
security for the Loan or the intended use of the Property.
	 
	 	u.	 	Property Taxes and Other Liabilities. All taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, and ground rents,
if any, which previously became due and owing in respect of the Property have been paid
or arrangements, acceptable to Grantee, have been made for their payment
contemporaneously with the execution of this Security Deed.
	 
	 	v.	 	Condemnation. There is no proceeding pending or overtly threatened for
the total or partial condemnation of the Property.

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	 	w.	 	Homestead. There is no homestead or other exemption available to
Grantor which would materially interfere with the right to sell the Property or the
right to foreclose this Security Deed.
	 
	 	x.	 	Solvency. None of the transactions contemplated by the Loan will be or
have been made with an actual intent to hinder, delay or defraud any present or future
creditors of Grantor, and Grantor, on the Effective Date, will have received fair and
reasonably equivalent value in good faith for the grant of the liens or security
interests effected by the Loan Documents. On the Effective Date, Grantor will be
solvent and will not be rendered insolvent by the transactions contemplated by the Loan
Documents. Grantor is able to pay its debts as they become due.
	 
	 	y.	 	Separate Tax Parcel(s). Except as may be set forth in the title
insurance policy issued to Grantee with respect to the Property, and/or any
endorsements issued in connection therewith, the Property is assessed for real estate
tax purposes as one or more wholly independent tax parcels, separate from any other
real property, and no other real property is assessed and taxed together with the
Property or any portion thereof.
	 
	 	z.	 	Utilities; Water; Sewer. The Property is served by public or private
utilities (including water and sewer systems) required and adequate for the current or
contemplated use thereof.
	 
	 	aa.	 	ERISA Matters. Grantor is not an employee benefit plan as defined in
Section 3.(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), which is subject to Title I of ERISA, nor a plan as defined in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (each of the
foregoing hereinafter referred to individually and collectively as a “Plan”).
Grantor’s assets do not constitute “plan assets” of any plan within the meaning of
Department of Labor Regulation Section 2510.3-101. Grantor will not transfer or convey
the Property to a Plan or to a person or entity whose assets constitute such “plan
assets”, and Grantor will not be reconstituted as a Plan or as an entity whose assets
constitute “plan assets”. No Lease is with a Plan or an entity whose assets constitute
such “plan assets,” and Grantor will not enter into any Lease with a Plan or an entity
whose assets constitute such “plan assets.” With respect to the Loan, Grantor is
acting on Grantor’s own behalf and not on account of or for the benefit of any Plan.
	 
	 	bb.	 	Purpose of Borrowings; Margin Regulations; Investment Company Act.

	 	(i)	 	Grantor does not intend to use all or any portion of the
proceeds of the Loan to purchase or carry any securities, including, without
limitation, margin stock. None of the proceeds of the Loan will be used,
directly or indirectly, for the purposes of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
stock or other security or for any other purpose which might cause any
borrowing to be considered a “purpose credit” within the meaning of Regulations
U, T or X of the Board of Governors of the Federal Reserve System, as amended.
Grantor intends to and agrees to use the proceeds

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	 	 	 	of the Loan solely for the lawful, proper business or commercial purposes
set forth in its application for the Loan and any disbursement direction
letter furnished by Grantor to Grantee in connection with the Loan.
	 
	 	(ii)	 	Grantor is not engaged, principally or as one of its important
activities, in the business of purchasing or carrying margin stock, or
extending credit for the purpose of purchasing or carrying margin stock.
	 
	 	(iii)	 	Neither Grantor nor any entity controlling Grantor is or is
required to be registered as an “investment company” under the Investment
Company Act of 1940.

	 	bb.	 	Disclosure. Grantor has disclosed to Grantee all agreements,
instruments and corporate or other restrictions to which it is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a material adverse effect on Grantor’s ability to perform its
obligations under the Loan Documents. No report, financial statement, certificate or
other information furnished (whether in writing or orally) by or on behalf of Grantor
to Grantee in connection with the transactions contemplated hereby and the negotiation
of this Security Deed or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, Grantor represents only that such
information was prepared in good faith based upon assumptions believed to be reasonable
at the time.
	 
	 	cc.	 	No Further Disposition. Other than with respect to the lien granted
herein to Grantee and, to the extent of the encumbrances on the Property that have been
permitted by Grantee, Grantor has not entered into any agreement or understanding or
taken, permitted or suffered to exist any action (including the filing of a financing
statement, agreement, pledge, deed to secure debt, deed of trust or mortgage, notice or
registration) or event (whether by operation of law or otherwise) for the purpose of,
or that may have the effect of, directly or indirectly, granting or permitting any lien
on or disposing of any Collateral, any interest therein or rights pertaining thereto.
	 
	 	dd.	 	Brokers and Financial Advisors. Except as previously disclosed to
Grantee in writing, no brokers or finders were used in connection with the financing
contemplated hereby and Grantor hereby agrees to indemnify and hold Grantee harmless
from and against any and all liabilities, costs and expenses (including reasonable
attorney’s fees and court costs) suffered or incurred by Grantee as a result of or
arising out of any of the transactions contemplated hereby. The provisions of this
section shall survive the expiration and termination of this Security Deed and the
payment of the Secured Obligations.
	 
	 	ee.	 	Compliance with OFAC Rules and Regulations. Neither Grantor nor, to
Grantor’s knowledge, any Affiliate of any Grantor (i) is a Sanctioned Person, (ii) has
any assets in

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	 	 	 	Sanctioned Countries, or (iii) derives any operating income from investments in, or
transactions with Sanctioned Persons or Sanctioned Countries. No part of the
proceeds of any borrowing hereunder will be used directly or indirectly to fund any
operations in, finance any investments or activities in or make any payments to, a
Sanctioned Person or a Sanctioned Country.
	 
	 	 	 	For purposes of this Section 5.1(ee) only, “Affiliate” of any entity means any other
entity directly or indirectly controlling, controlled by or under common control
with such entity. An entity shall be deemed to control another entity if the
controlling entity is the “beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of 10% or more of any class of voting securities
(or other ownership interests) of the controlled entity or possesses, directly or
indirectly, the power to direct or cause the direction of the management or policies
of the controlled entity, whether through ownership of voting securities, by
contract or otherwise. For all other provisions of this Security Deed, “Affiliate”
shall have the meaning given to such term in the Note.
	 
	 	 	 	For purposes of this Security Deed, “Sanctioned Country” shall mean a country
subject to a sanctions program identified on the list maintained by U.S. Department
of the Treasury’s Office of Foreign Assets Control (“OFAC”) and available at
http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml, or as
otherwise published from time to time.
	 
	 	 	 	For purposes of this Security Deed, “Sanctioned Person” shall mean (i) a person
named on the list of “Specially Designated Nationals and Blocked Persons” maintained
by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.shtml, or as
otherwise published from time to time, or (ii) (A) an agency of the government of a
Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a
person resident in a Sanctioned Country, to the extent subject to a sanctions
program administered by OFAC.

	 	ff.	 	Foreign Assets Control Regulations, Etc. Grantor is not an “enemy” or
an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy
Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended. Grantor
is not is in violation of (a) the Trading with the Enemy Act, as amended, (b) any of
the foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto or (c) the USA Patriot Act of 2001, Pub. L. No. 107-56 (the
“Patriot Act”). Grantor (i) is not a blocked person described in Section 1 of
the Anti-Terrorism Order or (ii) to the best of its knowledge, does not engage in any
dealings or transactions, and is not otherwise associated, with any such blocked
person.

     As used in this Section 5.1, to “Grantor’s current actual knowledge” shall mean
to the current actual knowledge of Todd J. Weiss and Raymond Silliere.

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	5.2.	 	REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING ENTITY STATUS.
	 
	 	 	In connection with the Loan, Grantor hereby represents, warrants and covenants to Grantee as
follows with respect to Grantor:

	 	a.	 	such entity was organized solely for the purpose of (i) owning and holding the
Property or any property subsequently substituted therefor in compliance with the Loan
Documents; acting as landlord, lessor, or similar designation; and executing and
performing any documents executed or to be executed by such entity as required by
Grantee in connection with the Loan and (ii) engaging in any lawful act or activity and
exercising any powers permitted to limited liability companies organized under the laws
of the State of Delaware that are related or incidental to and necessary, convenient or
advisable for the accomplishment of (i) above;
	 
	 	b.	 	such entity has not engaged in, and will not engage in, any business other than
the actions required or permitted to be performed under this Section or the other Loan
Documents;
	 
	 	c.	 	such entity has not had, and will not have, any assets other than the Property
(and personal property incidental to the ownership and operation of the Property);
	 
	 	d.	 	such entity, to the fullest extent permitted by law, has not engaged in, and
will not engage in, seek or consent to any dissolution, winding up, liquidation,
consolidation, merger, asset sale, or other transfer of ownership interest other than
such activities as are expressly permitted pursuant to any provisions of the Loan
Documents;
	 
	 	e.	 	such entity, to the fullest extent permitted by law, has not engaged in, and
will not engage in, seek or consent to any dissolution or liquidation or consolidation
or merging of itself with or into any other entity, or conveying or transferring of its
properties and assets substantially as an entirety or transferring of any of its
beneficial interests to any entity other than as expressly permitted by the Loan
Documents, or voluntarily commencing of a case with respect to itself, as debtor, under
the Federal Bankruptcy Code or any similar federal or state statute without the
unanimous consent of its Member;
	 
	 	f.	 	except as permitted under the Loan Documents or unless required by Applicable
Law, such entity shall not make any material amendment to Sections 4, 8, 10, 14, 17 or
27 of its Limited Liability Company Agreement or its Certificate of Formation without
first obtaining approval of the grantee holding the Loan Documents encumbering any
portion of the Property;
	 
	 	g.	 	such entity shall not incur, create or assume any indebtedness other than as
expressly permitted under the Loan Documents;
	 
	 	h.	 	such entity has not failed to correct, and will not fail to correct, any known
misunderstanding regarding the separate identity of such entity;

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	 	i.	 	such entity has maintained, and will maintain, its bank accounts, books and
records separate from any other person or entity;
	 
	 	j.	 	such entity has not commingled, and will not commingle, its assets with those
of any other entity, except as permitted by the Loan Documents;
	 
	 	k.	 	such entity has conducted and will continue to conduct its business in its own
name and strictly comply with all organizational formalities to maintain its separate
existence;
	 
	 	l.	 	such entity has maintained, and will maintain, separate financial statements;
	 
	 	m.	 	such entity has maintained, and will maintain, its assets in such a manner that
it is not costly or difficult to segregate, identify or ascertain such assets;
	 
	 	n.	 	such entity has prepared, and will prepare, separate tax returns from those of
any person to the extent required by applicable law and pay any taxes required to be
paid by applicable law;
	 
	 	o.	 	 such entity has paid, and will pay, its own liabilities and expenses out of and
to the extent of its own funds;
	 
	 	p.	 	such entity as of the date of this Security Deed has not guaranteed, and will
not guarantee any obligation of any person, including any Affiliate of such entity or
hold out its credit or assets as being available to satisfy the obligations of any
other entity, other than as permitted by the Loan Documents;
	 
	 	q.	 	such entity has not acquired, and will not acquire, any securities of its
members;
	 
	 	r.	 	such entity has allocated, and will allocate fairly and reasonably, any common
employee or overhead shared with Affiliates and each such entity has used, and will
use, separate invoices and checks;
	 
	 	s.	 	such entity has identified and will identify itself in all communications, and
has caused and will cause its agents to indicate such capacity when acting on behalf of
such entity;
	 
	 	t.	 	such entity has not pledged, and will not pledge, its assets for the benefit of
any other person or entity, except as permitted by the Loan Documents;
	 
	 	u.	 	such entity has held itself, and will hold itself, out to creditors, the public
and all other persons, as a legal entity separate from its members and any other
person;
	 
	 	v.	 	such entity has not made, and will not make or permit to remain outstanding any
loan or advance to, or own or acquire any stock or securities of, any person, except
that such entity may invest in those investments permitted under the Loan Documents and
may make any advance required or expressly permitted to be made pursuant to any
provisions

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	 		 	of such entity’s organizational documents and permit the same to remain outstanding
in accordance with such provisions;

	 	w.	 	such entity has maintained, and will maintain, an arm’s-length relationship
with its Affiliates;
	 
	 	x.	 	such entity has paid, and will pay, the salaries of its own employees, if any,
out of its own funds and has maintained and will maintain a sufficient number of
employees in light of its contemplated business purpose;
	 
	 	y.	 	such entity has maintained, and will maintain, adequate capital in light of its
contemplated business purpose, transactions and liabilities;
	 
	 	z.	 	such entity has not and will not form, acquire or hold any subsidiary (whether
corporate, partnership, limited liability company or other);
	 
	 	aa.	 	such entity has not and will not permit any Affiliate to guarantee or pay its
obligations (other than limited guarantees and indemnities set forth in the Loan
Documents);
	 
	 	bb.	 	if such entity is a limited liability company, its operating agreement contains
the provisions set forth in this Section 5.2 and such entity shall conduct its
business and operations in strict compliance with the terms contained therein.

ARTICLE 6 RIGHTS AND DUTIES OF THE PARTIES

	6.1.	 	MAINTENANCE AND PRESERVATION OF THE PROPERTY. Grantor shall (or shall cause a
Tenant, in accordance with the Lease to): (a) keep the Property in good condition and repair;
(b) complete or restore promptly and in workmanlike manner the Property or any part thereof
which may be damaged or destroyed; (c) comply or cause the Property to comply with, (i) all
laws, ordinances, regulations and standards, (ii) all covenants, conditions, restrictions and
equitable servitudes, whether public or private, of every kind and character and (iii) all
requirements of insurance companies and any bureau or agency which establishes standards of
insurability, in each case to avoid a Material Adverse Effect (as defined in Section
6.3 below), which laws, covenants or requirements affect the Property and pertain to acts
committed or conditions existing thereon, including, without limitation, any work of
alteration, improvement or demolition as such laws, covenants or requirements mandate; (d)
operate and manage the Property at all times in a professional manner and do all other acts
which from the character or use of the Property may be reasonably necessary to maintain and
preserve its value; (e) promptly after execution, deliver to Grantee a copy of any management
agreement concerning the Property and all amendments thereto and waivers thereof; and (f)
execute and acknowledge all further documents, instruments and other papers as Grantee deems
reasonably necessary or appropriate to preserve, continue, perfect and enjoy the benefits of
this Security Deed and perform Grantor’s obligations, including, without limitation,
statements of the amount secured hereby then owing and statements of no offset. In addition,
Grantor shall not (except as may be permitted under any Lease): (A) remove or demolish all or
any material part of the Property, except in connection with any remedial or other action
required to comply with applicable Hazardous Materials Laws,

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	 	 	provided that any Property removed shall be removed in accordance with any applicable laws
and such Property be replaced with property of equal or greater value; (B) alter either (i)
the exterior of the Property in a manner which materially and adversely affects the value of
the Property or (ii) the roof or other structural elements of the Property in a manner which
requires a building permit, except for tenant improvements required or permitted under the
Leases; (C) initiate or acquiesce in any change in any zoning or other land classification
which affects the Property; (D) materially alter the type of occupancy or use of all or any
part of the Property; or (E) commit or permit waste of the Property.

	6.2.	 	HAZARDOUS MATERIALS. Without limiting any other provision of this Security Deed,
Grantor agrees as follows:

	 	a.	 	Prohibited Activities. Grantor shall not cause or permit the Property
to be used as a site for the use, generation, manufacture, storage, treatment, release,
discharge, disposal, transportation or presence of any of the following (collectively,
“Hazardous Materials”) which are either in violation of Hazardous Materials
Laws (defined below) or which exist in quantities in excess of what is permitted under
Hazardous Materials Laws: oil or other petroleum products; flammable explosives;
asbestos; urea formaldehyde insulation; radioactive materials; hazardous wastes;
fungus, mold, mildew, spores or other biological or microbial agents the presence of
which may affect human health, impair occupancy or materially affect the value or
utility of the Property; toxic or contaminated substances or similar materials,
including, without limitation, any substances which are “hazardous substances,”
“hazardous wastes,” “hazardous materials” or “toxic substances” under the Hazardous
Materials Laws (defined below) and/or other applicable environmental laws, ordinances
or regulations.
	 
	 	 	 	Notwithstanding the foregoing, (i) Grantor may store, maintain and use on the
Property janitorial and maintenance supplies, paint and other Hazardous Materials of
a type and in a quantity readily available for purchase by the general public and
normally stored, maintained and used by owners and managers of properties of a type
similar to the Property; (ii) Tenants of the Property may store, maintain and use on
the Property (and, if any Tenant is a retail business, hold in inventory and sell in
the ordinary course of such Tenant’s business) Hazardous Materials of a type and
quantity readily available for purchase by the general public and normally stored,
maintained and used (and, if Tenant is a retail business, sold) by tenants in
similar lines of business on properties similar to the Property; and (iii) any
person undertaking an investigation or remediation of Hazardous Materials in, on at
or under the Property may temporarily maintain, store and/or handle such Hazardous
Materials at the Property, provided, such person is fully authorized by applicable
law to handle such materials, such Hazardous Materials are reasonably necessary to
the investigation or remediation, and such Hazardous Materials are brought upon the
Property and are upon completion of such investigation or remediation promptly
removed, in accordance with applicable Hazardous Materials Laws.
	 
	 	b.	 	Hazardous Materials Laws. Grantor shall comply and cause the Property
to comply with all federal, state and local laws, ordinances and regulations relating
to Hazardous

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	 	 	 	Materials (“Hazardous Materials Laws”), including, without limitation: the
Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource
Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq.;
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (including the Superfund Amendments and Reauthorization Act of 1986,
“CERCLA”), 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act,
as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act,
as amended, 29 U.S.C. Section 651; the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and
Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 300f et seq.; and all comparable state and local laws,
laws of other jurisdictions or orders and regulations.
	 
	 	c.	 	Notices. Except as set forth in the Environmental Reports, Grantor
shall promptly notify Grantee in writing of: (i) its acquiring actual knowledge of any
Hazardous Materials on, under or about the Property (other than Hazardous Materials
permitted under Section 6.2.a); (ii) any knowledge by Grantor that the Property
does not comply with any Hazardous Materials Laws; (iii) any claims or actions
(“Hazardous Materials Claims”) pending or threatened against Grantor, or, to
Grantor’s knowledge, the Property by any governmental entity or agency or any other
person or entity relating to Hazardous Materials or pursuant to the Hazardous Materials
Laws; and (iv) its acquiring actual knowledge of any occurrence or condition on any
real property adjoining or in the vicinity of the Property that could cause the
Property or any part thereof to become contaminated by or with Hazardous Materials;
provided that said discovery, non-compliance or claim would materially and adversely
affect the value of the Property as security for the Loan or the intended use of the
Property.
	 
	 	d.	 	Remedial Action. In response to the presence of any Hazardous
Materials on, under or about the Property, Grantor shall, in accordance with Hazardous
Materials Laws, take or cause to be taken, at Grantor’s sole expense, all remedial
action required by any Hazardous Materials Laws or any judgment, consent decree,
settlement or compromise in respect to any Hazardous Materials Claims.
	 
	 	e.	 	Inspection By Grantee. Upon reasonable prior notice to Grantor (and
with respect to any Lease, subject to any restrictions or prohibitions set forth in
such Lease), Grantee, its employees and agents, may from time to time (whether before
or after the commencement of a non-judicial or judicial foreclosure proceeding), enter
and inspect the Property for the purpose of determining the existence, location, nature
and magnitude of any past or present release or threatened release of any Hazardous
Materials into, onto, beneath or from the Property.
	 
	 	f.	 	Monitoring. Upon notice to Grantor or Grantor’s acquiring actual
knowledge that the Property has violated Hazardous Materials Laws, Grantor shall comply
or cause any Tenant to comply with the terms and conditions regarding remediation and
monitoring as

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	 	 	 	set forth in the Environmental Liabilities Agreement of even date herewith, executed
by Grantor in favor of Grantee.
	 
	 	g.	 	Underground Storage Tanks. Grantor shall not install or permit to be
installed any asbestos-containing materials at the Property. Grantor shall remedy or
cause the remedy of all violations of Hazardous Materials Laws with respect to any
asbestos or any existing underground or above ground storage tanks (“Storage
Tanks”) including, but not limited to, removal of Storage Tanks in the manner and
as required by applicable Hazardous Materials Laws. If required by applicable
Hazardous Materials Laws, to Grantor’s actual knowledge, Grantor or its predecessor in
interest has registered all Storage Tanks which are now located on the Property and has
paid all fees assessed by the applicable authority in connection with such tanks (and
Grantor will so register and pay said fees, or cause any Tenant to so register and pay
said fees, with respect to any Storage Tanks hereafter located on the Property), as
required by Hazardous Materials Laws. To the extent any such Storage Tanks have not
been registered, Grantor will hereafter promptly register such Storage Tanks and pay
any fees assessed by the applicable authority in connection therewith, as required by
Hazardous Materials Laws or cause any Tenant to so register and pay said fees. Grantor
will comply, or cause compliance, with the above mentioned laws, the Federal Solid
Waste Disposal Act, and 40 C.F.R. Part 280, as supplemented and amended, including
without limitation, requirements for financial assurance, tank replacement and
monitoring.

	6.3.	 	COMPLIANCE WITH LAWS. Grantor shall comply, or cause compliance (in each case to
avoid a Material Adverse Effect), with all federal, state and local laws, rules and
regulations applicable to the Property, including, without limitation, all zoning and building
requirements and all requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
Section 12101 et seq.), as amended from time to time. Grantor shall possess and maintain or
cause Grantor’s Tenant to possess and maintain in full force and effect at all times, in each
case to avoid a Material Adverse Effect: (a) all certificates of occupancy and other
licenses, permits and authorizations required by applicable law for the existing use of the
Property and (b) all permits, franchises and licenses and all rights to all trademarks, trade
names, patents and fictitious names, if any, required by applicable law for Grantor to conduct
the business(es) in which Grantor is now engaged. The term “Material Adverse Effect”
means (a) a material and adverse effect on (i) the value of the Property as security for the
Loan or (ii) the intended use of the Property, (b) resulting in fines in excess of $5,000.00,
(c) resulting in penalties or sanctions that could impair the business, operations,
properties, assets or condition (financial or otherwise) of Grantor’s Tenant when considered
with respect to the Property, (d) material impairment of the ability of Grantor’s Tenant to
perform its obligations under its Lease, (e) material impairment of the landlord’s rights
under any Lease, or (f) imposition of liens upon the Property. In determining whether any
individual event would result in a Material Adverse Effect, notwithstanding that such event
does not of itself have such effect, a Material Adverse Effect shall be deemed to have
occurred if the cumulative effect of such event and all other then occurring events and
existing conditions would result in a Material Adverse Effect.
	 
	6.4.	 	LITIGATION. Grantor shall promptly notify Grantee in writing of any litigation
pending or threatened against Grantor claiming damages in excess of $250,000.00 and of all
pending or

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	 	 	threatened litigation against Grantor if the aggregate damage claims against Grantor exceed
$500,000.00.
	 
	6.5.	 	MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Grantor shall not: (a) merge or
consolidate with any other entity; (b) make any substantial change in the nature of Grantor’s
business or structure; (c) acquire all or substantially all of the assets of any other entity;
or (d) sell, lease, assign, transfer or otherwise dispose of a material part of Grantor’s
assets, except in the ordinary course of Grantor’s business or in accordance with the terms of
the Note.
	 
	6.6.	 	ACCOUNTING RECORDS. Grantor shall maintain adequate books and records in accordance
with the same accounting standard used by Grantor to prepare the financial statements
delivered to and approved by Grantee in connection with the making of the Loan or other
accounting standards approved by Grantee. Grantor shall permit any representative of Grantee,
at any reasonable time and from time to time, to inspect, audit and examine such books and
records and make copies of same. Unless a Default exists, any such inspection beyond one (1)
time a year shall be at Grantee’s expense.
	 
	6.7.	 	COSTS, EXPENSES AND ATTORNEYS’ FEES. Grantor shall pay to Grantee the full amount of
all costs and expenses, including, without limitation, reasonable attorneys’ fees and
expenses, incurred by Grantee in connection with: (a) appraisals and inspections of the
Property or Collateral required by Grantee as a result of (i) a Transfer or proposed Transfer
(as defined below), or (ii) a Default; (b) appraisals and inspections of the Property or
Collateral required by applicable law, including, without limitation, federal or state
regulatory reporting requirements; and (c) any acts performed by Grantee at Grantor’s request
or wholly or partially for the benefit of Grantor (including, without limitation, the
preparation or review of amendments, assumptions, waivers, releases, reconveyances, estoppel
certificates or statements of amounts owing under any Secured Obligation). In connection with
appraisals and inspections, Grantor specifically (but not by way of limitation) acknowledges
that: (aa) a formal written appraisal of the Property by a state certified or licensed
appraiser may be required by federal regulatory reporting requirements on an annual or more
frequent basis; and (bb) Grantee may require inspection of the Property by an independent
supervising architect, a cost engineering specialist, or both. Grantor shall pay all
indebtedness arising under this Section immediately upon demand by Grantee together with late
charges thereon as set forth in the Note if not paid by Grantor on or before the fourth (4th)
day after the demand for payment is made by Grantee.
	 
	6.8.	 	LIENS, ENCUMBRANCES AND CHARGES. Grantor shall promptly discharge (or cause to be
discharged) by bonding or otherwise any lien, charge or other encumbrance which attaches to
the Property in violation of Section 6.15. Subject to Grantor’s right to contest such
matters under this Security Deed or Tenant’s right to contest such matters under any Lease or
as expressly permitted in the Loan Documents, Grantor shall pay when due or cause to be paid
when due all obligations secured by or reducible to liens and encumbrances which shall now or
hereafter encumber or appear to encumber all or any part of the Property or any interest
therein, whether senior or subordinate hereto, including, without limitation, all claims for
work or labor performed, or materials or supplies furnished, in connection with any work of
demolition, alteration, repair, improvement or construction of or upon the Property, except
such as Grantor may in good faith contest or as to which a bona fide dispute may arise
(provided provision is

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	 	 	made to the satisfaction of Grantee for eventual payment thereof in the event that Grantor
is obligated to make such payment and that any recorded claim of lien, charge or other
encumbrance against the Property is promptly discharged by bonding or otherwise). So long
as it complies with the provisions of this Section 6.8 and any other relevant
provisions of a Lease, a Tenant under a Lease shall have the right to perform Grantor’s
obligations under this Section 6.8.
	 
	6.9.	 	TAXES AND OTHER LIABILITIES. Subject to Grantor’s rights to contest such taxes and
assessments under Section 8.3 of this Security Deed or Tenant’s right to contest such
matters under any Lease or as expressly permitted in the other Loan Documents, Grantor shall
pay and discharge or cause to be paid and discharged when due any and all indebtedness,
obligations, assessments and taxes, both real and personal and including federal and state
income taxes and state and local property taxes and assessments. Upon request of Grantee,
Grantor shall promptly provide to Grantee copies of all tax and assessment notices pertaining
to the Property. Grantor hereby authorizes Grantee to obtain, at Grantor’s expense, a tax
service contract which shall provide tax information on the Property to Grantee for the term
of the Loan and any extensions or renewals of the Loan.
	 
	6.10.	 	INSURANCE COVERAGE. Grantor shall comply with the terms and provisions of that
certain Agreement Regarding Required Insurance dated as of the date hereof by and between
Grantor and Grantee.
	 
	6.11. 	 	CONDEMNATION AND INSURANCE PROCEEDS.

	 	a.	 	Assignment of Claims. Grantor absolutely and irrevocably assigns to
Grantee all of the following rights, claims and amounts (collectively,
“Claims”), all of which shall be paid to Grantee except as otherwise provided
in any Lease: (i) all awards of damages and all other compensation to which Grantor is
entitled directly or indirectly by reason of a condemnation or proposed condemnation
for public or private use affecting all or any part of, or any interest in, the
Property; (ii) all other claims and awards to which Grantor is entitled for damages to
or decrease in value of all or any part of, or any interest in, the Property; (iii) all
proceeds of any insurance policies payable to Grantor by reason of loss sustained to
all or any part of the Property; and (iv) all interest which may accrue on any of the
foregoing; any such awards, proceeds, interest and other sums of the Claims herein
collectively called, “Proceeds.” Grantor shall give Grantee prompt written
notice upon learning of the occurrence of any casualty affecting, or the institution of
any proceedings for eminent domain or for the condemnation of, the Property or any
portion thereof. So long as no Default has occurred and is continuing at the time; (i)
Grantor shall have the right to adjust, compromise and settle any Claim or group of
related Claims of $100,000.00 or less without the participation or consent of Grantee
and (ii) Grantee shall have the right to participate in and consent to any adjustment,
compromise or settlement of any Claim or group of related Claims exceeding $100,000.00.
If a Default has occurred and is continuing at the time, Grantor hereby irrevocably
empowers Grantee, in the name of Grantor, as Grantor’s true and lawful attorney in
fact, to commence, appear in, defend, prosecute, adjust, compromise and settle all
Claims; provided, however, Grantee shall not be responsible for any failure to
undertake any or all of such actions

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	 	 	 	regardless of the cause of the failure. All Proceeds shall, in all cases, be
payable to Grantee, except as otherwise provided in any Lease.
	 
	 	b.	 	Application of Proceeds; No Default. So long as no Default has
occurred and is continuing at the time of Grantee’s receipt of the Proceeds and no
Default occurs thereafter, the following provisions shall apply (subject to the rights
of Tenant under any Lease):

	 	(i)	 	Condemnation. If the Proceeds are the result of Claims
described in clauses 6.11.a.(i) or (ii) above, or interest accrued thereon,
Grantee shall apply the Proceeds in the following order of priority: First, to
Grantee’s expenses in settling, prosecuting or defending the Claims; Second, to
the repair or restoration of the portion of the Property, if any, not
condemned or proposed for condemnation and not otherwise the subject of a claim
or award; and Third, to the Secured Obligations in any order without
suspending, extending or reducing any obligation of Grantor to make installment
payments.
	 
	 	(ii)	 	Casualty and Other Insurance. If the Proceeds are the
result of Claims described in clause 6.11.a.(iii) above or interest accrued
thereon, Grantee shall apply the Proceeds in the following order of priority:
First, to Grantee ‘s expenses in settling, prosecuting or defending the Claims;
Second, to the repair or restoration of the Property; and Third, (aa) if the
repair or restoration of the Property has been completed and all costs incurred
in connection with the repair or restoration have been paid in full, to Grantor
or (bb) in all other circumstances, to the Secured Obligations in any order
without suspending, extending or reducing any obligation of Grantor to make
installment payments.
	 
	 	(iii)	 	Restoration. Notwithstanding the foregoing
Sections 6.11.b.(i) and (ii), but subject to the rights of Tenant under
any Lease, Grantee shall have no obligation to make any Proceeds available for
the repair or restoration of all or any portion of the Property unless and
until all the following conditions have been satisfied: (aa) delivery to
Grantee of the Proceeds plus any additional amount which is needed to pay all
costs of the repair or restoration (including, without limitation, taxes,
financing charges, insurance and rent during the repair period); (bb)
establishment of an arrangement for lien releases and disbursement of funds
acceptable to Grantee; (cc) delivery to Grantee in form and content acceptable
to Grantee of all of the following: (1) plans and specifications for the work;
(2) a contract for the work, signed by a contractor acceptable to Grantee; (3)
a cost breakdown for the work; (4) if reasonably required by Grantee, a payment
and performance bond for the work; (5) evidence of the continuation of all
Leases unless consented to in writing by Grantee; (6) evidence that, upon
completion of the work, the size, capacity, value, and income coverage ratios
for the Property will be at least as great as those which existed immediately
before the damage or condemnation occurred; (7) evidence that the work can
reasonably be completed on or before that date which is six (6) months prior to
the Maturity Date; and (8) evidence of the satisfaction of any additional
conditions that Grantee may

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	 	 	 	reasonably establish to protect Grantee’s security. Grantor acknowledges
that the specific conditions described above are reasonable.

	 	c.	 	Application of Proceeds; Default. If a Default has occurred and is
continuing at the time of Grantee’s receipt of the Proceeds or if a Default occurs at
any time thereafter, Grantee may, at Grantee’s absolute discretion and regardless of
any impairment of security or lack of impairment of security, but subject to applicable
law governing use of the Proceeds, if any, and the rights of Tenant under any Lease,
apply all or any of the Proceeds to Grantee’s expenses in settling, prosecuting or
defending the Claims and then apply the balance to the Secured Obligations in any order
without suspending, extending or reducing any obligation of Grantor to make installment
payments, and may release all or any part of the Proceeds to Grantor upon any
conditions Grantee chooses.

	6.12.	 	IMPOUNDS. Any impounds payable by Grantor under the Loan Documents
(“Impounds”) shall be deposited into one or more segregated or commingled accounts
maintained by Grantee or its servicing agent. Except as otherwise provided in the Loan
Documents, such account(s) shall not bear interest. Grantee shall not be a trustee, special
depository or other fiduciary for Grantor with respect to such account. If no Default exists,
Grantee shall apply all Impounds in accordance with the Loan Documents. If a Default exists,
Grantee may apply any or all Impounds to any Secured Obligation or to cure such Default,
whereupon Grantor shall promptly restore all Impounds so applied and cure all Defaults not
cured by such application. The obligations of Grantor hereunder shall not be diminished by
Grantor’s deposits of Impounds, except to the extent that such obligations are actually
satisfied by Grantee’s application of such Impounds. Upon any assignment of this Security
Deed, Grantee may assign all Impounds in its possession to Grantee’s assignee, whereupon
Grantee shall be released from all liability with respect to such Impounds. Within sixty (60)
days following full repayment of the Secured Obligations (other than as a consequence of
foreclosure or conveyance in lieu of foreclosure) or at such earlier time as Grantee may
elect, Grantee shall pay to Grantor all Impounds in its possession, and no other party shall
have any right or claim thereto. Grantor shall deliver to Grantee, promptly upon receipt, all
bills for taxes and insurance for which Grantee has required Impounds.
	 
	6.13.	 	DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Grantor shall protect, preserve
and defend the Property and title to and right of possession of the Property, the security of
this Security Deed and the rights and powers of Grantee hereunder at Grantor’s sole expense
against all adverse claims, whether the claim: (a) is against a possessory or non-possessory
interest; (b) arose prior or subsequent to the Effective Date; or (c) is senior or junior to
Grantor’s or Grantee’s rights. Grantor shall give Grantee prompt notice in writing upon
learning of the assertion of any claim, of the filing of any action or proceeding, of the
occurrence of any damage to the Property and of any condemnation offer or action.
	 
	6.14.	 	RIGHT OF INSPECTION. Subject to any restrictions or prohibitions set forth in any
Lease, Grantee and its independent contractors, agents and employees may enter the Property
from time to time at any reasonable time and upon five (5) Business Days’ prior notice for the
purpose of inspecting the Property and ascertaining Grantor’s compliance with the terms of
this Security Deed. Grantee shall use reasonable efforts to assure that Grantee’s entry upon
and inspection of

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	 	 	 	the Property shall not materially and
unreasonably interfere with the business or
operations of Grantor or Grantor’s Tenants on the
Property.

	6.15.	 	DUE ON SALE/ENCUMBRANCE.

	 	a.	 	Definitions. The following terms shall have the meanings indicated:
	 
	 	 	 	“Restricted Party” shall mean each of (i) Grantor, (ii) any entity obligated
under any guaranty or indemnity made in favor of Grantee in connection with the Loan
and (iii) any shareholder, partner, member or any direct owner of Grantor or any
entity obligated under item (ii) hereinabove.
	 
	 	 	 	“Transfer” shall mean any sale, installment sale, exchange, mortgage,
pledge, hypothecation, assignment, encumbrance or other transfer, conveyance or
disposition, whether voluntarily, involuntarily or by operation of law or otherwise.
	 
	 	b.	 	Property Transfers.

	 	(i)	 	Prohibited Property Transfers. Without the prior
written consent of Grantee, Grantor shall not cause or permit any Transfer of
all or any part of the Property or the Collateral (collectively, a
“Prohibited Property Transfer”), including, without limitation, the
Transfer of all or any part of Grantor’s right, title and interest in and to
the Property, any Leases or any Payments.
	 
	 	(ii)	 	Permitted Property Transfers. Notwithstanding the
foregoing, none of the following Transfers shall be deemed to be a Prohibited
Property Transfer: (A) a Transfer which is expressly permitted under the Note;
(B) a Lease which is permitted under Article 3; and (C) the sale of
inventory in the ordinary course of the business at the Property.

	 	c.	 	Equity Transfers.

	 	(i)	 	Prohibited Equity Transfers. Without the prior written
consent of Grantee, Grantor shall not cause or permit any Transfer of any
interest in a Restricted Party (collectively, a “Prohibited Equity
Transfer”), including without limitation, (A) if a Restricted Party is a
corporation (other than Cole Credit Property Trust III, Inc.), any merger,
consolidation or other Transfer of more than 10% of such corporation’s stock or
the creation or issuance of new stock in one or a series of transactions
resulting in total capital stock then issued and outstanding which is more than
110% of the total immediately prior to such issuance; (B) if a Restricted Party
is a limited partnership, limited liability partnership, general partnership or
joint venture, any merger or consolidation or the change, removal, resignation
or addition of a general partner or the Transfer of the partnership interest of
any general partner or any profits or proceeds relating to such partnership
interests; (C) if a Restricted Party is a limited liability company, any merger
or consolidation or the change, removal, resignation or

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	 	 	 	addition of a managing member (or if no managing member, any member) or any
profits or proceeds relating to such limited liability company interest, or
the Transfer of a non-managing limited liability company interest or the
creation or issuance of new non-managing limited liability company
interests; or (D) if a Restricted Party is a trust, any merger,
consolidation or other Transfer of any legal or beneficial interest in such
Restricted Party or the creation or issuance of new legal or beneficial
interests. Notwithstanding the foregoing, in no event shall a Transfer or
proposed Transfer of any direct or indirect legal or beneficial interest in
Grantor (whether by a Restricted Party or a non Restricted Party) be done in
a manner that would violate the Patriot Act. Notwithstanding the foregoing,
with respect to the direct and indirect interests in Cole Credit Property
Trust III, Inc., Grantor shall be permitted to rely exclusively on the
implementation by its U.S. broker-dealer network of the normal and customary
investor screening practices mandated by applicable law and NASD regulations
in satisfaction of the covenant set forth in the preceding sentence.
	 
	 	(ii)	 	Permitted Equity Transfers. Notwithstanding the
foregoing, however, (i) limited partnership interests in Grantor or in any
general partner or member of Grantor shall be freely transferable without the
consent of Grantee, (ii) any involuntary transfer caused by the death of
Grantor or any general partner, shareholder, joint venturer, manager, member or
beneficial owner of a trust shall not be a Default under this Security Deed so
long as Grantor is reconstituted, if required, following such death and so long
as those persons responsible for the management of the Property and Grantor
remain unchanged as a result of such death or any replacement management is
approved by Grantee, (iii) gifts for estate planning purposes of any
individual’s interests in Grantor or in any of Grantor’s general partners,
managing members or joint venturers to the spouse or any lineal descendant of
such individual, or to a trust for the benefit of any one or more of such
individual, spouse, or lineal descendant, shall not be a Default under this
Security Deed so long as Grantor is reconstituted, if required, following such
gift and so long as those persons responsible for the management of the
Property and Grantor remain unchanged following such gift or any replacement
management is approved by Grantee and (iv) membership interests in Grantor and
interests in any member of Grantor or in any partner of any member of Grantor
may be transferred without the consent of Grantee so long as, after any such
transfer, Christopher H. Cole or Cole Credit Property Trust III, Inc., or any
of their wholly owned affiliates or subsidiaries, “controls” the affairs of
Grantor, where the term “control” means the power to direct the management and
policies of Grantor, provided, that in all of the foregoing cases shall such
transfer be done in a manner that would not violate the Patriot Act, subject to
the provisions of the last sentence of Section 6.15.c.(i). In the
event of a transfer by Cole REIT III Operating Partnership, LP of its interests
in Grantor pursuant to the terms hereof, Grantor agrees to contemporaneously
furnish to Grantee a new limited guaranty of the Loan (in form and substance as
executed at closing of the Loan) by a new guarantor satisfactory to Grantee in
Grantee’s sole and absolute discretion. Grantor shall provide Grantee with
copies of the applicable transfer

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	 	 	 	documents or governing instruments in each of the foregoing instances in the
preceding sentence within fifteen (15) days of the effective date of any
such transfer or change.
	 
	 	(iii)	 	Entity Status. Nothing contained in this Section
6.15.c. shall be construed to permit any Transfer which would result in a
breach of any representation, warranty or covenant of Grantor under Section
5.2 above.

	 	d.	 	Certificates of Ownership. Grantor shall deliver to Grantee, at any
time and from time to time, not more than five (5) days after Grantee’s written request
therefor, a certificate, in form acceptable to Grantee, signed and dated by Grantor,
listing the names of all persons and entities holding direct or indirect legal or
beneficial interests in the Property or any Restricted Party and the type and amount of
each such interest, except for the ownership of Cole Credit Property Trust III, Inc., a
Maryland corporation, for which a certificate shall not be required.

	6.16.	 	EXCULPATION. Grantee shall not directly or indirectly be liable to Grantor or any
other person as a consequence of: (a) the exercise of the rights, remedies or powers granted
to Grantee in this Security Deed; (b) the failure or refusal of Grantee to perform or
discharge any obligation or liability of Grantor under any agreement related to the Property
or under this Security Deed; or (c) any loss sustained by Grantor or any third party resulting
from Grantee’s failure to lease the Property after a Default (hereafter defined) or from any
other act or omission of Grantee in managing the Property after a Default unless the loss is
caused by the willful misconduct, bad faith or gross negligence of Grantee and no such
liability shall be asserted or enforced against Grantee, all such liability being expressly
waived and released by Grantor.
	 
	6.17.	 	INDEMNITY. Without in any way limiting any other indemnity contained in this
Security Deed, Grantor agrees to defend, indemnify and hold harmless the Grantee Group
(hereinafter defined) from and against any claim, loss, damage, cost, expense or liability
directly or indirectly arising out of: (a) the making of the Loan, except for violations of
banking laws or regulations by the Grantee Group; (b) this Security Deed, including, without
limitation, all recording costs, taxes, documentary stamp taxes, intangible taxes, and costs
of title insurance endorsements; (c) the execution of this Security Deed or the performance of
any act required or permitted hereunder or by law; (d) any failure of Grantor to perform
Grantor’s obligations under this Security Deed or the other Loan Documents; (e) any alleged
obligation or under-taking on the Grantee Group’s part to perform or discharge any of the
representations, warranties, conditions, covenants or other obligations contained in any other
document related to the Property; (f) any act or omission by Grantor or any contractor, agent,
employee or representative of Grantor with respect to the Property; or (g) any claim, loss,
damage, cost, expense or liability directly or indirectly arising out of: (i) the use,
generation, manufacture, storage, treatment, release, threatened release, discharge, disposal,
transportation or presence of any Hazardous Materials which are found in, on, under or about
the Property (including, without limitation, underground contamination); or (ii) the breach of
any covenant, representation or warranty of Grantor under Sections 5.1.p., 5.1.q., 5.1.r.,
or 6.2 above. This indemnity shall include, without limitation: (aa) all actual damages
(including, without limitation, any third party tort claims or governmental claims, fines or
penalties against the Grantee Group); (bb) all court costs and reasonable attorneys’ fees

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	 	 	(including, without limitation, expert witness fees) paid or incurred by the Grantee Group;
and (cc) the costs, whether foreseeable or unforeseeable, of any investigation, repair,
cleanup or detoxification of the Property which is required by any governmental entity or is
otherwise necessary to render the Property in compliance with all laws and regulations
pertaining to Hazardous Materials. The foregoing to the contrary notwithstanding, this
indemnity shall not include any claim, loss, damage, cost, expense or liability directly or
indirectly arising out of the gross negligence or willful misconduct of any member of the
Grantee Group, or any claim, loss, damage, cost, expense or liability incurred by the
Grantee Group arising from any act or incident on the Property occurring after the full
reconveyance and release of the conveyance of security title to the Property, or with
respect to the matters set forth in clause (g), any claim, loss, damage, cost, expense or
liability incurred by the Grantee Group resulting from the introduction and initial release
of Hazardous Materials on the Property occurring after the transfer of title to the Property
at a foreclosure sale under this Security Deed, either pursuant to judicial decree or the
power of sale, or by deed in lieu of such foreclosure, or after any Member of the Grantee
Group takes actual possession of the Property prior to such transfer of title to the
Property (and not, for example, through the appointment of a receiver). “Grantee
Group,” as used herein, shall mean (1) Grantee (including, without limitation, any
participant in the Loan and any of their respective successors or assigns, whether by sale,
a secondary market transaction, or otherwise), (2) any entity controlling, controlled by or
under common control with Grantee, (3) the directors, officers, employees and agents of
Grantee and such other entities, and (4) the successors, heirs and assigns of the entities
and persons described in foregoing clauses (1) through (3). Grantor shall pay immediately
upon Grantee’s demand any amounts owing under this indemnity together with interest from the
date the indebtedness arises until paid at the rate of interest applicable to the principal
balance of the Note as specified therein. Grantor agrees to use legal counsel reasonably
acceptable to the Grantee Group in any action or proceeding arising under this indemnity.
THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE SATISFACTION AND RELEASE OF THIS SECURITY
DEED, BUT GRANTOR’S LIABILITY UNDER THIS INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF THE
SECTION IN THE NOTE ENTITLED “BORROWER’S LIABILITY.” GRANTOR HEREBY AGREES THAT, IN THE
EVENT THAT IT IS DETERMINED THAT ADDITIONAL DOCUMENTARY STAMP TAX OR INTANGIBLE TAX IS DUE
HEREON OR ANY MORTGAGE OR DEED TO SECURE DEBT OR PROMISSORY NOTE EXECUTED IN CONNECTION
HEREWITH (INCLUDING, WITHOUT LIMITATION, THE NOTE), GRANTOR SHALL INDEMNIFY AND HOLD
HARMLESS GRANTEE FOR ALL SUCH DOCUMENTARY STAMP TAX AND/OR INTANGIBLE TAX, INCLUDING ALL
PENALTIES AND INTEREST ASSESSED OR CHARGED IN CONNECTION THEREWITH. GRANTOR SHALL PAY SAME
WITHIN TEN (10) DAYS AFTER DEMAND OF PAYMENT FROM GRANTEE AND THE PAYMENT OF SUCH SUMS SHALL
BE SECURED BY THIS SECURITY DEED AND SUCH SUMS, IF NOT PAID WITHIN SUCH TEN (10) DAY PERIOD,
SHALL BEAR INTEREST AT THE DEFAULT RATE (AS DEFINED IN THE NOTE) UNTIL PAID IN FULL.

	6.18.	 	RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without notice to or
the consent, approval or agreement of any persons or entities having any interest at any time
in the Property or in any manner obligated under the Secured Obligations (“Interested
Parties”), Grantee may, from time to time: (a) fully or partially release any person or
entity from liability for the payment or performance of any Secured Obligation; (b) agree with

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	 	Grantor to extend the maturity of any Secured Obligation; (c) make any agreement with
Grantor increasing the amount or otherwise altering the terms of any Secured Obligation; (d)
accept additional security for any Secured Obligation; or (e) release all or any portion of
the Property, Collateral and other security for any Secured Obligation. Except as expressly
set forth in any documents relating to the foregoing actions, none of the foregoing actions
shall release or reduce the personal liability of any of said Interested Parties, or release
or impair the priority of the conveyance of security title to the Property.

	6.19.	 	SALE OR PARTICIPATION OF LOAN. Grantee may at any time sell, assign, participate or
securitize all or any portion of Grantee’s rights and obligations under the Loan Documents,
and that any such sale, assignment, participation or securitization may be to one or more
financial institutions or other entities, to private investors, or into the public securities
market, in Grantee’s sole discretion. Grantor further agrees that Grantee may disseminate to
any such actual or potential purchaser(s), assignee(s) or participant(s) (and to any
investment banking firms, rating agencies, accounting firms, law firms and other third party
advisory firms and investors involved with the Loan and the Loan Documents or the applicable
sale, assignment, participation or securitization) all documents and financial and other
information heretofore or hereafter provided to or known to Grantee with respect to: (a) the
Property and its operation; (b) any party connected with the Loan (including, without
limitation, Grantor, any partner or member of Grantor, any constituent partner or member of
Grantor, any guarantor and any non-borrower). In the event of any such sale, assignment,
participation or securitization, Grantee and the other parties to the same shall share in the
rights and obligations of Grantee set forth in the Loan Documents as and to the extent they
shall agree among themselves. In connection with any such sale, assignment, participation or
securitization, Grantor further agrees that the Loan Documents shall be sufficient evidence of
the obligations of Grantor to each purchaser, assignee or participant, and Grantor shall,
within fifteen (15) days after request by Grantee; (c) deliver to Grantee such information and
documents relating to Grantor, the Property and its operation and any party connected with the
Loan as Grantee or any rating agency may request; (d) deliver to Grantee an estoppel
certificate for the benefit of Grantee and any other party designated by Grantee verifying the
status and terms of the Loan, in form and content satisfactory to Grantee; (e) enter into such
amendments to the Loan Documents as may be reasonably requested (including, without
limitation, to restructure all or any part of the Loan into two or more promissory notes in
whatever proportion Grantee determines) in order to facilitate any such sale, assignment,
participation or securitization without impairing Grantor’s rights or increasing Grantor’s
obligations (and without requiring a secondary borrower or grantor); (f) if, as a condition to
the closing of the Loan, Grantor was required to be a special-purpose bankruptcy-remote
entity, enter into such amendments to the organizational documents of Grantor as any rating
agency may request to preserve or enhance Grantor’s special-purpose bankruptcy-remote status;
and (g) if, as a condition to the closing of the Loan, Grantor was required to provide Grantee
with any nonconsolidation opinions, provide Grantee with such amendments and restatements of
such opinions as any rating agency may request. The preparation and delivery of the foregoing
items shall be at Grantor’s sole cost and expense, except for items that are not prepared
and/or provided regularly pursuant to the terms of the Loan Documents, and provided further
that Grantor obtains Grantee’s consent to the cost of any extraordinary item to be paid by
Grantee prior to incurring such expense. The indemnity obligations of Grantor under the Loan
Documents shall also apply with respect to any purchaser, assignee or participant.

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	6.20.	 	RECONVEYANCE. Upon payment in full of the Secured Obligations (including, without
limitation, repayment in full of all principal, interest and other amounts owing under the
Note), and all obligations, if any, of Grantee for future advances have been terminated, then,
and in that event only, Grantee shall release, without warranty, this Security Deed by
reconveying title to the Property or that portion thereof then held hereunder to Grantor. The
recitals of any facts in any release shall be conclusively deemed true. To the extent
permitted by law, the release may describe the grantee as “the person or persons legally
entitled thereto.” Grantee shall have no duty to determine the rights of persons claiming to
be rightful grantees of any release. When the Property has been fully released, the last such
release shall operate as a reassignment of all future rents, issues and profits of the
Property to the person or persons legally entitled thereto. Notwithstanding anything to the
contrary contained in this Section 6.20, the release of the Property shall not affect
(i) any other Secured Obligations under the Loan Documents, (ii) the Environmental Liabilities
Agreement executed by Grantor of even date herewith, or (iii) any guaranty now or hereafter
executed with respect to the Loan (collectively or severally as the context thereof may
suggest or require).
	 
	6.21.	 	SUBROGATION. Grantee shall be subrogated to the lien of all encumbrances, whether
released of record or not, paid in whole or in part by Grantee pursuant to this Security Deed
or by the proceeds of any loan secured by this Security Deed.

ARTICLE 7 DEFAULT

	7.1.	 	DEFAULT. For all purposes hereof, “Default” shall mean either an
“Optional Default” (as defined below) or an “Automatic Default” (as defined
below).

	 	a.	 	Optional Default. An “Optional Default” shall occur, at
Grantee’s option, upon the occurrence of any of the following events:

	 	(i)	 	Monetary. Grantor shall fail to (aa) pay when due any
sums which by their express terms require payment upon the expiration of a
specified notice and cure period or sums which are payable on the Maturity
Date, or (bb) pay any other sums payable under the Note, this Security Deed or
any of the other Loan Documents which failure remains uncured for five (5) days
after written notice thereof shall have been given to Grantor by Grantee,
excluding with respect to (aa) or (bb) any monthly payment of principal or
interest due under the Note which is an Automatic Default as set forth in
Section 7.1.b.(i) of this Security Deed.
	 
	 	(ii)	 	Failure to Perform. Grantor shall fail to observe,
perform or discharge any of Grantor’s obligations, covenants, conditions or
agreements, other than Grantor’s payment obligations, under the Note, this
Security Deed or any of the other Loan Documents (including, without
limitation, any of the other security deeds, mortgages and deeds of trust
executed as part of the Loan Documents and securing the Note), and (aa) such
failure shall remain uncured for thirty (30) days after written notice thereof
shall have been given to Grantor by Grantee or (bb) if such failure is of such
a nature that it cannot be cured within such thirty (30) day

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	 	 	 	period, Grantor shall fail to commence to cure such failure within such
thirty (30) day period or shall fail to diligently prosecute such curative
action thereafter.
	 
	 	(iii)	 	Representations and Warranties. Any representation,
warranty, certificate or other statement (financial or otherwise) made or
furnished by or on behalf of Grantor, or a guarantor, if any, to Grantee or in
connection with any of the Loan Documents, or as an inducement to Grantee to
make the Loan, shall be false, incorrect, incomplete or misleading in any
material respect when made or furnished.
	 
	 	(iv)	 	Seizure; Attachment. The seizure of any material
portion (as reasonably determined by Grantee) of the Property; or the
sequestration or attachment of, or levy or execution upon any of the Property,
the Collateral or any other collateral provided by Grantor under any of the
Loan Documents, or any material portion of the other assets of Grantor, other
than a condemnation, which sequestration, attachment, levy or execution is not
released or dismissed within sixty (60) days after its occurrence; or the sale
of any assets effected pursuant to any of the foregoing (other than pursuant to
a condemnation).
	 
	 	(v)	 	Uninsured Casualty. The occurrence of an uninsured
casualty with respect to any material portion (as reasonably determined by
Grantee) of the Property unless: (aa) no other Default has occurred and is
continuing at the time of such casualty or occurs thereafter; (bb) Grantor
promptly notifies Grantee of the occurrence of such casualty; (cc) Tenant is
restoring the Property pursuant to the terms of the Lease or is consummating a
substitution pursuant to the terms of the Lease; and (dd) if Tenant is not
restoring the Property pursuant to the terms of the Lease and an Event of
Default exists under the Lease by virtue of such failure to restore, Grantor
shall within forty five (45) days thereafter, deliver to Grantee immediately
available funds in an amount sufficient, in Grantee’s reasonable opinion, to
pay all costs of the repair or restoration (including, without limitation,
taxes, financing charges, insurance and rent during the repair period). So
long as no Default has occurred and is continuing at the time of Grantee’s
receipt of such funds and no Default occurs thereafter, but subject to the
rights of Tenant under any Lease, Grantee shall make such funds available for
the repair or restoration of the Property. Notwithstanding the foregoing, but
subject to the rights of Tenant under any Lease, Grantee shall have no
obligation to make funds available for repair or restoration of the Property
unless and until all the conditions set forth in clauses (bb) and (cc) of
Section 6.11.b.(iii) of this Security Deed have been satisfied.
Grantor acknowledges that the specific conditions described above are
reasonable.
	 
	 	(vi)	 	Lease. With respect to a Lease, Grantor defaults under
Section 3.3.b. of this Security Deed or a Lease Default occurs under
any Lease, and such default or Lease Default remains uncured for thirty (30)
days after written notice thereof shall have been given by Grantee to Grantor.

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	 	b.	 	Automatic Default. An “Automatic Default” shall occur
automatically upon the occurrence of any of the following events:

	 	(i)	 	Monetary. Grantor shall fail to pay when due any
monthly payment of principal and interest due under the Note and no funds are
in the Restricted Account (as defined in the Cash Management Agreement) to make
such payment when due; provided, that, no Automatic Default shall be deemed to
have occurred if Grantor’s failure to pay results solely from Grantee’s failure
to timely initiate an ACH debit.
	 
	 	(ii)	 	Voluntary Bankruptcy, Insolvency, Dissolution. (aa)
Grantor’s filing a petition for relief under the Bankruptcy Reform Act of 1978,
as amended or recodified (“Bankruptcy Code”), or under any other
present or future state or federal law regarding bankruptcy, reorganization or
other relief to debtors (collectively, “Debtor Relief Law”); or (bb)
Grantor’s filing any pleading in any involuntary proceeding under the
Bankruptcy Code or other Debtor Relief Law which admits to the petition’s
material allegations regarding Grantor’s insolvency; or (cc) Grantor’s making a
general assignment for the benefit of creditors; or (dd) Grantor’s applying
for, or the appointment of, a receiver, trustee, custodian or liquidator of
Grantor or any of its property; or (ee) the filing by or on behalf of Grantor
of a voluntary petition seeking the liquidation or dissolution of Grantor or
the commencement of any other procedure by or on behalf of Grantor to liquidate
or dissolve Grantor.
	 
	 	(iii)	 	Involuntary Bankruptcy. Grantor’s failure to effect a
full dismissal of any involuntary petition under the Bankruptcy Code or other
Debtor Relief Law, or any other procedure to liquidate or dissolve Grantor,
that is filed against Grantor or in any way restrains or limits Grantor or
Grantee regarding the Loan or the Property, prior to the earlier of the entry
of any order granting relief sought in the involuntary petition or ninety (90)
days after the date of filing of the petition.
	 
	 	(iv)	 	Partners, Guarantors. The occurrence of an event
specified in Sections (ii) or (iii) as to Grantor, any general partner or any
member of Grantor, as applicable, or any guarantor obligated to Grantee under
the Loan Documents.

	7.2.	 	ACCELERATION. Upon the occurrence of an Optional Default, Grantee may, at its
option, declare all sums owing to Grantee under the Note and the other Loan Documents
immediately due and payable. Upon the occurrence of an Automatic Default, all sums owing to
Grantee under the Note and the other Loan Documents shall automatically become immediately due
and payable.
	 
	7.3.	 	RIGHTS AND REMEDIES. In addition to the rights and remedies in Section 7.2
above, at any time after a Default, Grantee shall have all of the following rights and
remedies:

	 	a.	 	Entry on Property. Subject to the rights of Tenant under any Lease,
Grantee shall have the right to enter upon the Property from time to time, with or
without notice, and without

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	 	 	 	releasing Grantor from any Secured Obligation, and without becoming a grantee in
possession, and do such other acts and things as Grantee deems necessary or
desirable in order to inspect, investigate, assess and protect the security hereof
or to cure any Default;
	 
	 	b.	 	Appointment of Receiver. Grantee shall have the right to apply to a
court of competent jurisdiction for and obtain appointment of a receiver, trustee,
liquidator or conservator of the Property, with or without notice of hearing, for any
purpose, including, without limitation, to enforce Grantee’s rights to collect Payments
and to enter on and inspect the Property for Hazardous Materials, as a matter of strict
right and without regard to: (i) the adequacy of the security for the repayment of the
Secured Obligations; (ii) the existence of a declaration that the Secured Obligations
are immediately due and payable; (iii) the filing of a notice of default; or (iv) the
solvency of Grantor, or any guarantor or other person or entity in any manner obligated
to Grantee under the Loan Documents;
	 
	 	c.	 	Judicial Foreclosure; Injunction. To commence and maintain an action
or actions in any court of competent jurisdiction to foreclose this Security Deed as a
mortgage (or otherwise judicially foreclose this Security Deed in any manner allowed by
law) or to obtain specific enforcement of the covenants of Grantor hereunder, and
Grantor agrees that such covenants shall be specifically enforceable by injunction or
any other appropriate equitable remedy and that for the purposes of any suit brought
under this subparagraph, Grantor waives the defense of laches and any applicable
statute of limitations;
	 
	 	d.	 	Nonjudicial Foreclosure. To sell the Property or any part of the
Property at one or more public sale or sales at the usual place for conducting sales in
the county in which the Land or any part of the Land is situated, to the highest bidder
for cash, in order to pay the Secured Obligations, and all expenses of sale and of all
proceedings in connection therewith, including reasonable attorneys’ fees, after
advertising the time, place and terms of sale once a week for four (4) weeks
immediately preceding such sale (but without regard to the number of days) in a
newspaper in which sheriff’s sales are advertised in said county, all other notice
being hereby waived by Grantor. At any such public sale, Grantee may execute and
deliver to the purchaser a conveyance of the Property or any part of the Property in
fee simple, with full warranties of title, and to this end Grantor hereby constitutes
and appoints Grantee the agent and attorney-in-fact of Grantor to make such sale and
conveyance, and thereby to divest Grantor of all right, title and equity that Grantor
may have in and to the Property and to vest the same in the purchaser or purchasers at
such sale or sales, and all the acts and doings of said agent and attorney-in-fact are
hereby ratified and confirmed, and any recitals in said conveyance or conveyances as to
facts essential to a valid sale shall be binding upon Grantor. The aforesaid power of
sale and agency hereby granted are coupled with an interest and are irrevocable by
death or otherwise, and shall not be exhausted by one exercise thereof but may be
exercised until full payment of all of the Secured Obligations. In the event of any
sale under this Security Deed by virtue of the exercise of the powers herein granted,
or pursuant to any order in any judicial proceeding or otherwise, the Property may be
sold as an entirety or in separate parcels and in such manner or order as Grantee in
its discretion may elect, and if Grantee so elects, Grantee may sell the personal
property covered by

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	 	 	this Security Deed concurrently with the real property covered hereby or at one or
more separate sales in any manner permitted by the UCC, and one or more exercises of
the powers herein granted shall not extinguish nor exhaust such powers, until the
entire Property is sold or the Secured Obligations are paid in full. Grantee may,
at its option, sell the Property subject to the rights of any tenants of the
Property, and the failure to make any such tenants parties to any foreclosure
proceedings and to foreclose their rights will not be asserted by Grantor to be a
defense to any proceedings instituted by Grantee to collect the Secured Obligations.
If the Secured Obligations are now or hereafter further secured by any chattel
mortgages, pledges, contracts of guaranty, assignments of lease or other security
instruments, Grantee may at its option exhaust the remedies granted under any of
said security either concurrently or independently, and in such order as Grantee may
determine in its discretion. Upon any foreclosure sale, Grantee may bid for and
purchase the Property and shall be entitled to apply all or any part of the Secured
Obligations as a credit to the purchase price. In the event of any such foreclosure
sale by Grantee, Grantor shall be deemed a tenant holding over and shall forthwith
deliver possession to the purchaser or purchasers at such sale or be summarily
dispossessed according to provisions of law applicable to tenants holding over. In
case Grantee shall have proceeded to enforce any right, power or remedy under this
Security Deed by foreclosure, entry or otherwise or in the event Grantee commences
advertising of the intended exercise of the sale under power provided hereunder, and
such proceeding or advertisement shall have been withdrawn, discontinued or
abandoned for any reason, then in every such case (i) Grantor and Grantee shall be
restored to the former positions and rights; (ii) all rights, powers and remedies of
Grantee shall continue as if no such proceeding had been taken; (iii) each and every
default declared or occurring prior or subsequent to such withdrawal, discontinuance
or abandonment shall be deemed to be a continuing default; and (iv) neither this
Security Deed, nor the Note, nor the Secured Obligations, nor any other Loan
Document shall be or shall be deemed to have been reinstated or otherwise affected
by such withdrawal, discontinuance or abandonment; and Grantor hereby expressly
waives the benefit of any statute or rule of law now provided, or which may
hereafter be provided, which would produce a result contrary to or in conflict with
this sentence. Grantee may also exercise its power of sale hereunder in any other
manner prescribed or allowed by law.
	 
	 	 	Upon sale of the Property at any judicial or nonjudicial foreclosure, Grantee may
credit bid (as determined by Grantee in its sole and absolute discretion) all or any
portion of the Secured Obligations. In determining such credit bid, Grantee may,
but is not obligated to, take into account all or any of the following: (i)
appraisals of the Property as such appraisals may be discounted or adjusted by
Grantee in its sole and absolute underwriting discretion; (ii) expenses and costs
incurred by Grantee with respect to the Property prior to foreclosure; (iii)
expenses and costs which Grantee anticipates will be incurred with respect to the
Property after foreclosure, but prior to resale, including, without limitation,
costs of structural reports and other due diligence, costs to carry the Property
prior to resale, costs of resale (e.g. commissions, reasonable attorneys’ fees, and
taxes), costs of any Hazardous Materials clean-up and monitoring, costs of deferred
maintenance, repair, refurbishment and retrofit, costs of defending or settling
litigation affecting the Property, and lost opportunity costs (if any), including
the time value of money during any

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	 	 	anticipated holding period by Grantee; (iv) declining trends in real property values
generally and with respect to properties similar to the Property; (v) anticipated
discounts upon resale of the Property as a distressed or foreclosed property; (vi)
the fact of additional collateral (if any), for the Secured Obligations; and (vii)
such other factors or matters that Grantee (in its sole and absolute discretion)
deems appropriate. In regard to the above, Grantor acknowledges and agrees that:
(i) Grantee is not required to use any or all of the foregoing factors to determine
the amount of its credit bid; (ii) this paragraph does not impose upon Grantee any
additional obligations that are not imposed by law at the time the credit bid is
made; (iii) the amount of Grantee’s credit bid need not have any relation to any
loan-to-value ratios specified in the Loan Documents or previously discussed between
Grantor and Grantee; and (iv) Grantee’s credit bid may be (at Grantee’s sole and
absolute discretion) higher or lower than any appraised value of the Property;

	 	e.	 	Multiple Foreclosures. Grantee shall have the right to resort to and
realize upon the Property and Collateral and any other security now or later held by
Grantee concurrently or successively and in one or several consolidated or independent
judicial actions or lawfully taken non-judicial proceedings, or both, and to apply the
proceeds received upon the Secured Obligations all in such order and manner as Grantee
determines in its sole discretion;
	 
	 	f.	 	Rights to Collateral. To exercise all rights Grantee may have with
respect to the Collateral under this Security Deed, the UCC or otherwise at law; and
	 
	 	g.	 	Other Rights. To exercise such other rights as Grantee may have at law
or in equity or pursuant to the terms and conditions of this Security Deed or any of
the other Loan Documents.

	 	 	In connection with any sale or sales hereunder, Grantee may elect to treat any of the
Property which consists of a right in action or which is property that can be severed from
the Property (including, without limitation, any improvements forming a part thereof)
without causing structural damage thereto as if the same were personal property or a
fixture, as the case may be, and dispose of the same in accordance with applicable law,
separate and apart from the sale of the Property. Any sale of Collateral hereunder shall be
conducted in any manner permitted by the UCC.

	7.4.	 	APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is effected,
Grantee shall apply the proceeds of such sale in the following order of priority: First, to
the costs, fees and expenses of exercising the power of sale, including, without limitation,
the payment of reasonable attorneys’ fees; Second, to the payment of the Secured Obligations
which are secured by this Security Deed, in such order as Grantee shall determine in its sole
discretion; and Third, to Grantor or Grantor’s successor in interest, or in the event the
Property has been sold or transferred to another, to the vested owner of record at the time of
judicial or nonjudicial foreclosure sale or to such other persons as may be entitled thereto
by law.

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	7.5.	 	WAIVER OF MARSHALING RIGHTS. Grantor, for itself and for all parties claiming
through or under Grantor, and for all parties who may acquire a lien on or interest in the
Property or the Collateral, waives all rights to a sale in inverse order of alienation or to
have the Property, the Collateral or any other security for any Secured Obligation, marshaled
upon any foreclosure of this Security Deed or on a foreclosure of any other security for any
of the Secured Obligations.
	 
	7.6.	 	NO CURE OR WAIVER. Neither Grantee’s nor any receiver’s entry upon and taking
possession of all or any part of the Property, nor any collection of rents, issues, profits,
insurance proceeds, condemnation proceeds or damages, other security or proceeds of other
security, or other sums, nor the application of any collected sum to any Secured Obligation,
nor the exercise of any other right or remedy by Grantee or any receiver shall cure or waive
any Default or notice of default under this Security Deed, or nullify the effect of any notice
of default or sale (unless all Secured Obligations then due have been paid or performed and
Grantor has cured all other Defaults hereunder), or impair the status of the security, or
prejudice Grantee in the exercise of any right or remedy, or be construed as an affirmation by
Grantee of any tenancy, lease or option or a subordination of the conveyance of security title
to the Property.
	 
	7.7.	 	PAYMENT OF COSTS, EXPENSES AND ATTORNEYS’ FEES. Grantor agrees to pay to Grantee
immediately and upon demand all costs and expenses incurred by Grantee in the enforcement of
the terms and conditions of this Security Deed (including, without limitation, trustee’s fees,
court costs and reasonable attorneys’ fees, whether incurred in litigation or not) with
interest from the date of expenditure until said sums have been paid at the rate of interest
applicable to the principal balance of the Note as specified therein.
	 
	7.8.	 	POWER TO FILE NOTICES AND CURE DEFAULTS. Grantor hereby irrevocably appoints Grantee
and its successors and assigns, as its attorney-in-fact, which agency is coupled with an
interest, to perform any obligation of Grantor hereunder upon the occurrence of an event, act
or omission which, with notice or passage of time or both, would constitute a Default,
provided, however, that: (a) Grantee as such attorney-in-fact shall only be
accountable for such funds as are actually received by Grantee; and (b) Grantee shall not be
liable to Grantor or any other person or entity for any failure to act under this Section.
	 
	7.9.	 	REMEDIES CUMULATIVE. All rights and remedies of Grantee under this Security Deed and
the other Loan Documents are cumulative and are in addition to all rights and remedies
provided by applicable law. Grantee may enforce any one or more remedies or rights under the
Loan Documents either successively or concurrently.

ARTICLE 8 MISCELLANEOUS PROVISIONS

	8.1. 	 	CONSENTS AND APPROVAL. Wherever Grantee’s consent, approval, acceptance or
satisfaction is required under any provision of this Security Deed or any of the other Loan
Documents, such consent, approval, acceptance or satisfaction shall not be unreasonably
withheld, conditioned or delayed by Grantee unless such provision expressly provides
otherwise.
	 
	8.2.	 	ATTORNEYS’ FEES. If any legal action, suit or proceeding is commenced between Grantor
and Grantee regarding their respective rights and obligations under any Loan Document, the

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	 	 	prevailing party shall be entitled to recover, in addition to damages or other relief, costs
and expenses, reasonable attorneys’ fees and court costs (including, without limitation,
expert witness fees). Whenever reference is made to the payment of “reasonable attorneys’
fees” or words of similar import in this Security Deed or any other Loan Document, the same
shall mean and refer to the payment of actual attorneys’ fees incurred based upon the
attorney’s normal hourly rate and the number of hours worked, and not the statutory
attorneys’ fees defined in O.C.G.A. Section 13-1-11(a)(2). Grantor shall not be liable
under any circumstances for any additional legal fees or expenses under O.C.G.A Section
13-1-11(a)(2), and to the extent Grantee or such other party may be permitted to charge or
receive additional legal fees or expenses under O.C.G.A. Section 13-1-11(a)(2), Grantee and
such other party hereby waive such right.

	8.3.	 	PERMITTED CONTESTS. After prior written notice to Grantee, Grantor may contest, by
appropriate legal or other proceedings conducted in good faith and with due diligence, the
amount, validity or application, in whole or in part, of any lien, levy, tax or assessment, or
any lien of any laborer, mechanic, materialman, supplier or vendor, or the application to
Grantor or the Property of any law or the validity thereof (each a “Contested
Matter”), the assertion or imposition of which, or the failure to pay when due, would
constitute a Default; provided that (a) Grantor pursues the contest diligently, in a manner
which Grantee determines is not prejudicial to Grantee, and does not impair the conveyance of
security title to the Property; (b) the Property, or any part hereof or estate or interest
therein, shall not be in any danger of being sold, forfeited or lost by reason of such
proceedings; (c) in the case of the contest of any law or other legal requirement, Grantee
shall not be in any danger of any civil or criminal liability; and (d) if required by Grantee,
Grantor deposits with Grantee any funds or other forms of assurance (including a bond or
letter of credit) satisfactory to Grantee to protect Grantee from the consequences of the
contest being unsuccessful. Grantor’s right to contest pursuant to the terms of this
provision shall in no way relieve Grantor of its obligations under the Loan or to make
payments to Grantee as and when due. The Tenant under any Lease shall also have the right to
contest any Contested Matter in accordance with the terms of such Lease.
	 
	8.4.	 	GRANTOR AND GRANTEE DEFINED. The term “Grantor” includes both the original Grantor
and any subsequent owner or owners of any of the Property, and the term “Grantee” includes the
original Grantee and any future owner or holder, including assignees, pledges and
participants, of the Note or any interest therein.
	 
	8.5.	 	DISCLAIMERS.

	 	a.	 	Relationship. The relationship of Grantor and Grantee under this
Security Deed and the other Loan Documents is, and shall at all times remain, solely
that of borrower and lender, and Grantee neither undertakes nor assumes any
responsibility or duty to Grantor or to any third party with respect to the Property.
Notwithstanding any other provisions of this Security Deed and the other Loan
Documents: (i) Grantee is not, and shall not be construed to be, a partner, joint
venturer, member, alter ego, manager, controlling person or other business associate or
participant of any kind of Grantor, and Grantee does not intend to ever assume such
status; and (ii) Grantee shall not be deemed responsible for or a participant in any
acts, omissions or decisions of Grantor.

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	 	b.	 	No Liability. Grantee shall not be directly or indirectly liable or
responsible for any loss, claim, cause of action, liability, indebtedness, damage or
injury of any kind or character to any person or property arising from any construction
on, or occupancy or use of, the Property, whether caused by or arising from: (i) any
defect in any building, structure, grading, fill, landscaping or other improvements
thereon or in any on-site or off-site improvement or other facility therein or thereon;
(ii) any act or omission of Grantor or any of Grantor’s agents, employees, independent
contractors, licensees or invitees; (iii) any accident in or on the Property or any
fire, flood or other casualty or hazard thereon; (iv) the failure of Grantor or any of
Grantor’s licensees, employees, invitees, agents, independent contractors or other
representatives to maintain the Property in a safe condition; or (v) any nuisance made
or suffered on any part of the Property.

	8.6.	 	SEVERABILITY. If any term of any Loan Document, or the application thereof to any
person or circumstances, shall, to any extent, be invalid or unenforceable, the remainder of
the Loan Document, or the application of such term to persons or circumstances other than
those as to which it is invalid or unenforceable, shall not be affected thereby, and each term
of the Loan Document shall be valid and enforceable to the fullest extent permitted by law.
	 
	8.7.	 	JOINT AND SEVERAL LIABILITY. If more than one person has executed this Security Deed
as “Grantor,” the obligations of all such persons hereunder shall be joint and several.
	 
	8.8.	 	SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this Security Deed
as a “Grantor” agrees that any money judgment which Grantee obtains pursuant to the terms of
this Security Deed or any other obligation of that married person secured by this Security
Deed may be collected by execution upon any separate property or community property of that
person.
	 
	8.9.	 	INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly incorporate by
reference the entire agreement of the parties with respect to the matters contemplated therein
and supersede all prior negotiations or agreements, written or oral. The Loan Documents shall
not be modified, except by written instrument executed by all parties. Any reference in any
of the Loan Documents to the Property or Collateral shall include all or any part of the
Property or Collateral. Any reference to the Loan Documents includes any amendments, renewals
or extensions now or hereafter approved by Grantee in writing. When the identity of the
parties or other circumstances make it appropriate, the masculine gender includes the feminine
and/or neuter, and the singular number includes the plural.
	 
	8.10.	 	CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Note.
	 
	8.11.	 	SUCCESSORS IN INTEREST. The terms, covenants, and conditions contained herein and
in the other Loan Documents shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties. The foregoing sentence shall not be construed to
permit Grantor to assign the Loan, except as otherwise permitted under the Note or the other
Loan Documents.

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	8.12.	 	GOVERNING LAW. This Security Deed was accepted by Grantee in the state of New York,
which state the parties agree has a substantial relationship to the parties and to the
underlying transaction embodied hereby. Accordingly, in all respects, including, without
limiting the generality of the foregoing, matters of construction, validity, enforceability
and performance, this Security Deed, the Note and the other Loan Documents and the obligations
arising hereunder and thereunder shall be governed by, and construed in accordance with, the
laws of the state of New York applicable to contracts made and performed in such state and any
applicable law of the United States of America, except that at all times the provisions for
enforcement of Grantee’s STATUTORY POWER OF SALE (if any) and all other remedies granted
hereunder and the creation, perfection and enforcement of the liens and security interests
created pursuant hereto and pursuant to the other Loan Documents in any Collateral which is
located in the state where the Property is located shall be governed by and construed
according to the law of the state where the Property is located, except to the extent that
under the UCC perfection may be governed by the laws of a different jurisdiction. Except as
provided in the immediately preceding sentence, Grantor hereby unconditionally and irrevocably
waives, to the fullest extent permitted by law, any claim to assert that the law of any
jurisdiction other than New York governs this Security Deed, the Note and other Loan
Documents.
	 
	8.13.	 	CONSENT TO JURISDICTION. Grantor irrevocably submits to the jurisdiction of: (a)
any state or federal court sitting in the state of New York over any suit, action, or
proceeding, brought by Grantor against Grantee, arising out of or relating to this Security
Deed, the Note or the Loan; (b) any state or federal court sitting in the state where the
Property is located or the state in which Grantor’s principal place of business is located
over any suit, action or proceeding, brought by Grantee against Grantor, arising out of or
relating to this Security Deed, the Note or the Loan; and (c) any state court sitting in the
county of the state where the Property is located over any suit, action, or proceeding,
brought by Grantee to exercise any available STATUTORY POWER OF SALE under this Security Deed
or any action brought by Grantee to enforce its rights with respect to the Collateral.
Grantor irrevocably waives, to the fullest extent permitted by law, any objection that Grantor
may now or hereafter have to the laying of venue of any such suit, action, or proceeding
brought in any such court and any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
	 
	8.14.	 	EXHIBITS. Exhibit A is incorporated into this Security Deed by this
reference as if fully set forth herein.
	 
	8.15.	 	ADDRESSES; REQUEST FOR NOTICE. All notices and other communications that are
required or permitted to be given to a party under this Security Deed or the other Loan
Documents shall be in writing, refer to the Loan number, and shall be sent to such party,
either by personal delivery, by overnight delivery service, by certified first class mail,
return receipt requested, or by facsimile transmission to the addressee or facsimile number
below. All such notices and communications shall be effective upon receipt of such delivery
or facsimile transmission. The addresses of the parties are set forth on page 1 of this
Security Deed and the facsimile numbers for the parties are as follows:
	 
	 	 	Grantee:

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	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION

FAX No.: (760) 918-2727
	 
	 	 	Grantor:
	 
	 	 	COLE CB BRASELTON GA, LLC

FAX No.: (602) 778-8780
	 
	 	 	Grantor’s principal place of business is at the address set forth on page 1 of this
Security Deed.
	 
	 	 	Any Grantor whose address is set forth on page 1 of this Security Deed hereby
requests that a copy of notice of default and notice of sale be delivered to it at that
address. Failure to insert an address shall constitute a designation of Grantor’s last
known address as the address for such notice. Any party shall have the right to change its
address for notice hereunder to any other location within the continental United States by
giving thirty (30) days notice to the other parties in the manner set forth above.

	8.16.	 	COUNTERPARTS. This Security Deed may be executed in any number of counterparts,
each of which, when executed and delivered, will be deemed an original and all of which taken
together, will be deemed to be one and the same instrument.
	 
	8.17.	 	WAIVER OF JURY TRIAL. GRANTEE AND GRANTOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SECURITY DEED OR ANY OTHER
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF GRANTEE OR GRANTOR. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
GRANTEE TO ENTER INTO THIS SECURITY DEED.
	 
	8.18.	 	NON-WAIVER. By accepting payment of any amount secured hereby after its due date or
late performance of any other Secured Obligation, Grantee shall not waive its right against
any person obligated directly or indirectly hereunder or on any Secured Obligation, either to
require prompt payment or performance when due of all other sums and obligations so secured or
to declare default for failure to make such prompt payment or performance. No exercise of any
right or remedy by Grantee hereunder shall constitute a waiver of any other right or remedy
herein contained or provided by law. No failure by Grantee to exercise any right or remedy
hereunder arising upon any Default shall be construed to prejudice Grantee’s rights or
remedies upon the occurrence of any other or subsequent Default. No delay by Grantee in
exercising any such right or remedy shall be construed to preclude Grantee from the exercise
thereof at any time while that Default is continuing. No notice to nor demand on Grantor
shall of itself entitle Grantor to any other or further notice or demand in similar or other
circumstances.
	 
	8.19.	 	FURTHER ASSURANCES. Grantor shall, upon demand by Grantee, execute, acknowledge (if
appropriate) and deliver any and all documents and instruments and do or cause to be done all

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	 	 	further acts reasonably necessary or appropriate to effectuate the purposes of the Loan
Documents and to perfect any assignments contained therein.

	8.20.	 	RELATIONSHIP OF ARTICLES. The rights, remedies and interests of Grantee under this
Security Deed established by Article 1 and the security agreement established by
Article 4 are independent and cumulative, and there shall be no merger of any
conveyance of security title to the Property with any security interest created by the
security agreement. Grantee may elect to exercise or enforce any of its rights, remedies or
interests under either or both this Security Deed or the security agreement as Grantee may
from time to time deem appropriate. The absolute assignment of rents and leases established by
Article 3 is similarly independent of and separate from this Security Deed and the
security agreement.
	 
	8.21.	 	MERGER. No merger shall occur as a result of Grantee’s acquiring any other estate
in, or any other lien on, the Property unless Grantee consents to a merger in writing.
	 
	8.22.	 	CROSS-DEFAULT; CROSS-COLLATERALIZATION. The Note is secured by, among other things,
this Security Deed and those certain other Mortgages, Deeds of Trust, and/or Deeds to Secure
Debt of even date herewith, executed by the mortgagor, trustor or grantor, as the case may be,
in favor of Grantee and covering certain real property and improvements and personal property
thereon as described therein and located as described on Schedule I hereof (the
“Other Mortgages”). The existence of a Default under this Security Deed (after the
expiration of any applicable notice and cure periods) shall be deemed and shall constitute an
Automatic Default under the Other Mortgages (without any further notice and cure by Grantee to
Grantor which is hereby specifically waived by Grantor for all purposes), and a Default under
any of the Other Mortgages (after the expiration of any applicable notice and cure periods),
shall be deemed and shall constitute an Automatic Default under this Security Deed and the
remaining Other Mortgages (without any further notice and cure by Grantee to Grantor which is
hereby specifically waived by Grantor for all purposes).
	 
	8.23.	 	SPECIAL GEORGIA STATE PROVISIONS.

	 	a.	 	Conflict. If any conflict or inconsistency exists or arises between
this Section 8.23 and the preceding Articles of this Security Deed, or the
terms of any other Loan Documents, except as specifically provided to the contrary in
this Section 8.23, the terms of this Section 8.23 shall govern and
control this Security Deed or the other Loan Documents.
	 
	 	b.	 	Waiver of Grantor’s Rights. BY EXECUTION OF THIS SECURITY DEED,
GRANTOR EXPRESSLY: (A) ACKNOWLEDGES THE RIGHT OF GRANTEE TO ACCELERATE THE DEBT
EVIDENCED BY THE NOTE AND THE POWER OF ATTORNEY GIVEN HEREIN TO GRANTEE TO SELL THE
PROPERTY BY NONJUDICIAL FORECLOSURE UPON DEFAULT BY GRANTOR WITHOUT ANY JUDICIAL
HEARING AND WITHOUT ANY NOTICE OTHER THAN SUCH NOTICE (IF ANY) AS IS SPECIFICALLY
REQUIRED TO BE GIVEN UNDER THE PROVISIONS OF THIS SECURITY DEED; (B) WAIVES ANY AND ALL
RIGHTS WHICH GRANTOR MAY HAVE UNDER THE CONSTITUTION OF THE UNITED STATES (INCLUDING,
WITHOUT LIMITATION, THE FIFTH AND FOURTEENTH

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	 	 	 	AMENDMENTS THEREOF), THE VARIOUS PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL
STATES, OR BY REASON OF ANY OTHER APPLICABLE LAW, (1) TO NOTICE AND TO JUDICIAL
HEARING PRIOR TO THE EXERCISE BY GRANTEE OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO
GRANTEE, EXCEPT SUCH NOTICE (IF ANY) AS IS SPECIFICALLY REQUIRED TO BE PROVIDED IN
THIS SECURITY DEED AND (2) CONCERNING THE APPLICATION, RIGHTS OR BENEFITS OF ANY
STATUTE OF LIMITATION OR ANY MORATORIUM, REINSTATEMENT, MARSHALING, FORBEARANCE,
APPRAISEMENT, VALUATION, STAY, EXTENSION, HOMESTEAD EXEMPTION OR REDEMPTION LAWS;
(C) ACKNOWLEDGES THAT GRANTOR HAS READ THIS SECURITY DEED AND ANY AND ALL QUESTIONS
REGARDING THE LEGAL EFFECT OF THIS SECURITY DEED AND ITS PROVISIONS HAVE BEEN
EXPLAINED FULLY TO GRANTOR AND GRANTOR HAS CONSULTED WITH COUNSEL OF GRANTOR’S
CHOICE PRIOR TO EXECUTING THIS SECURITY DEED; AND (D) ACKNOWLEDGES THAT ALL WAIVERS
OF THE AFORESAID RIGHTS OF GRANTOR HAVE BEEN MADE KNOWINGLY, INTENTIONALLY AND
WILLINGLY BY GRANTOR AS PART OF A BARGAINED FOR LOAN TRANSACTION AND THAT THIS
SECURITY DEED IS VALID AND ENFORCEABLE BY GRANTEE AGAINST GRANTOR IN ACCORDANCE WITH
ALL THE TERMS AND CONDITIONS HEREOF.

Debtor’s
Initials : /s/ TJW

	8.24.	 	USA PATRIOT ACT NOTIFICATION. Grantee hereby notifies Grantor that, pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record information that
identifies Grantor, which information includes the name and address of Grantor and other
information that will allow Grantee to identify Grantor in accordance with the Patriot Act.

[Signature Page Follows]

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     IN WITNESS WHEREOF, Grantor has executed this instrument under seal as of the day and year
first above written.

	 	 	 	 	 
	 	Grantor:

	 
	 
	 	
COLE CB BRASELTON GA, LLC,

a Delaware limited liability company

By: Cole REIT Advisors III, LLC,

a Delaware limited liability company,

its manager

 	 
	 	By:  	/s/ Todd J. Weiss
 	 
	 	 	Name:  	Todd J. Weiss 	 
	 	 	Title:  	Vice President 	 
	 

Signed, sealed and delivered in the presence of :

	 	 	 
	/s/ Jennifer Jacobson
 

	 	 
	Witness
	 	 
	 
	 	 
	/s/ Mary D. Bates
 

	 	 
	Notary Public
	 	 
	My commission expires: 9/3/2012
	 	 

[NOTARY SEAL]

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	STATE OF

	 	ARIZONA
	 
	COUNTY OF

	 	MARICOPA

The foregoing instrument was acknowledged before me on August 28, 2009, by TODD J. WEISS,
the Vice President of Cole REIT Advisors III, LLC, a Delaware limited liability company,
the manager of Cole CB BRASELTON GA, LLC, a Delaware limited liability company, on behalf
of said limited liability company.

	 	 	 	 	 
	 	 	 
	 	                                               /s/ Mary D. Bates
 	 
	[Notary Seal] 	Notary Public, State of ARIZONA 	 
	 	Printed Name: Mary D. Bates

My Commission Expires: September 3, 2012	 
	 

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Loan No. 02-62113532

EXHIBIT A

DESCRIPTION OF LAND

Unit No.: 588

Property Address: 301 Exchange Way, Braselton, Georgia

Description of Land. The Land referred to in this Security Deed is situated in the County of
Jackson, State of Georgia and is described as follows:

PARCEL 1

All that tract or parcel of land lying and being
in the 1765 G.M.D., Town of Braselton, Jackson County,
Georgia and being more particularly described as follows:

Beginning at a concrete monument found at the Westerly end of
a mitered right of way corner located at the intersection of the Westerly
right of way line of Georgia 53, 100 foot right of way and the Northerly right of way
line of Interstate 85, right of way varies; thence along the Northerly right of way line of
Interstate 85 South 71°41’51” West 243.88 feet to a concrete monument found; thence continue along the
Northerly right of way line of Interstate 85 South 61°48’51” West 145.26 feet to an iron pin set;
thence leaving the Northerly right of way line of Interstate 85 North 15°09’11” West 331.31 feet to
an iron pin set; thence North 75°06’13” East 438.20 feet to an iron pin found on the Westerly right of
way line of Georgia 53; thence along the Westerly right of way line of Georgia 53 South 15°34’24” East
236.51 feet to an iron pin set at the Northeasterly end of said mitered right of way corner; thence along
said mitered right of way comer South 34°38’02” West 72.07 feet to the point of beginning.

Containing 2.97 acres

Parcel No. 118 043A

PARCEL 2

Together with those beneficial rights that constitute rights in real property as
described in that certain Declaration of Easements for Georgia Distribution Center between
Madison Ventures, Ltd. and Cracker Barrel Old Country Store, Inc. dated May 16, 2005 and recorded
May 17, 2005 in Deed Book 38W, page 566, aforesaid records.

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SCHEDULE I

LIST OF OTHER MORTGAGES AND CROSS-COLLATERALIZED PROPERTIES

	1.	 	That certain Deed to Secure Debt and Absolute Assignment of Rents and Leases and Security
Agreement made by COLE CB Braselton GA, LLC, a Delaware limited liability company, as
borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering property
located at 301 Exchange Way, Braselton, Georgia.
	 
	2.	 	That certain Deed to Secure Debt and Absolute Assignment of Rents and Leases and Security
Agreement made by COLE CB Bremen GA, LLC, a Delaware limited liability company, as borrower,
in favor of Wells Fargo Bank, National Association, as lender, encumbering property located at
106 Price Creek Road, Bremen, Georgia.
	 
	3.	 	That certain Deed to Secure Debt and Absolute Assignment of Rents and Leases and Security
Agreement made by COLE CB Columbus GA, LLC, a Delaware limited liability company, as borrower,
in favor of Wells Fargo Bank, National Association, as lender, encumbering property located at
1500 Bradley Park Drive, Columbus, Georgia.
	 
	4.	 	That certain Deed of Trust and Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) made by COLE CB Greensboro NC, LLC, a Delaware limited liability company,
as borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering
property located at 3701 Elmsley Court, Greensboro, North Carolina.
	 
	5.	 	That certain Deed of Trust and Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) made by COLE CB Mebane NC, LLC, a Delaware limited liability company, as
borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering property
located at 135 Spring Forrest Drive, Mebane, North Carolina.
	 
	6.	 	That certain Deed of Trust and Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) made by COLE CB Rocky Mount, LLC, a Delaware limited liability company,
as borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering
property located at 238 Enterprise Drive, Rocky Mount, North Carolina.
	 
	7.	 	That certain Mortgage and Absolute Assignment of Rents and Leases and Security Agreement (and
Fixture Filing) made by COLE CB Fort Mill SC, LLC, a Delaware limited liability company, as
borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering property
located at 295 Carowinds Boulevard, Fort Mill, South Carolina.
	 
	8.	 	That certain Mortgage and Absolute Assignment of Rents and Leases and Security Agreement (and
Fixture Filing) made by COLE CB Piedmont SC, LLC, a Delaware limited liability company, as
borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering property
located at 591 Highway 183, Piedmont, South Carolina.

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	9.	 	That certain Deed of Trust and Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) made by COLE CB Abilene TX, LLC, a Delaware limited liability company, as
borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering property
located at 1602 Highway 351, Abilene, Texas.
	 
	10.	 	That certain Deed of Trust and Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) made by COLE CB San Antonio TX, LLC, a Delaware limited liability
company, as borrower, in favor of Wells Fargo Bank, National Association, as lender,
encumbering property located at 123 SW Loop 410, San Antonio, Texas.
	 
	11.	 	That certain Deed of Trust and Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) made by COLE CB Sherman TX, LLC, a Delaware limited liability company, as
borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering property
located at 3501 N US Highway 75, Sherman, Texas.
	 
	12.	 	That certain Deed of Trust, Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) made by COLE CB Bristol VA, LLC, a Delaware limited liability company, as
borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering property
located at 125 Village Circle, Bristol, Virginia.
	 
	13.	 	That certain Deed of Trust, Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) made by COLE CB Emporia VA, LLC, a Delaware limited liability company, as
borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering property
located at 103 Sader Lane, Emporia, Virginia.
	 
	14.	 	That certain Deed of Trust, Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) made by COLE CB Waynesboro VA, LLC, a Delaware limited liability company,
as borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering
property located at 101 Appletree Lane, Waynesboro, Virginia.
	 
	15.	 	That certain Deed of Trust, Absolute Assignment of Rents and Leases and Security Agreement
(and Fixture Filing) made by COLE CB Woodstock VA, LLC, a Delaware limited liability company,
as borrower, in favor of Wells Fargo Bank, National Association, as lender, encumbering
property located at 451 West Reservoir Road, Woodstock, Virginia.

DEED TO SECURE DEBT (GEORGIA)

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Loan No. 02-62113532/Store No. 588

 

 

DEED TO SECURE DEBT (GEORGIA)

Wells Fargo/Cole Properties/Cracker Barrel

Loan No. 02-62113573/Store No. 523

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