Document:

exv10w65

Exhibit 10.65

LOAN AGREEMENT

Dated as of December 15, 2010

By and among

THE ENTITIES SET FORTH ON SCHEDULE I

ATTACHED HERETO,

collectively, as Borrower

and

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Lender

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 — DEFINITIONS; PRINCIPLES OF CONSTRUCTION
	 	 	1	 
	 
	 	 	 	 
	Section 1.1 Definitions
	 	 	1	 
	Section 1.2 Principles of Construction
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 2 — GENERAL TERMS
	 	 	29	 
	 
	 	 	 	 
	Section 2.1 Loan Commitment; Disbursement to Borrower
	 	 	29	 
	2.1.1 Agreement to Lend and Borrow
	 	 	29	 
	2.1.2 Single Disbursement to Borrower
	 	 	29	 
	2.1.3 The Note, Mortgage and Loan Documents
	 	 	29	 
	2.1.4 Use of Proceeds
	 	 	29	 
	Section 2.2 Interest Rate
	 	 	29	 
	2.2.1 Interest Rate
	 	 	29	 
	2.2.2 Interest Calculation
	 	 	29	 
	2.2.3 Default Rate
	 	 	30	 
	2.2.4 Usury Savings
	 	 	30	 
	Section 2.3 Loan Payment
	 	 	32	 
	2.3.1 Monthly Debt Service Payments
	 	 	32	 
	2.3.2 Payments Generally
	 	 	32	 
	2.3.3 Payment on Maturity Date
	 	 	32	 
	2.3.4 Late Payment Charge
	 	 	32	 
	2.3.5 Method and Place of Payment
	 	 	33	 
	Section 2.4 Prepayments
	 	 	33	 
	2.4.1 Voluntary Prepayments
	 	 	33	 
	2.4.2 Mandatory Prepayments
	 	 	33	 
	2.4.3 Prepayments After Default
	 	 	34	 
	Section 2.5 Intentionally omitted
	 	 	34	 
	Section 2.6 Release of Property
	 	 	34	 
	2.6.1 Release of Property
	 	 	34	 
	2.6.2 Release of Individual Property
	 	 	34	 
	Section 2.7 Lockbox Account/Cash Management
	 	 	36	 

-i-

 

	 	 	 	 	 
	 	 	Page	 
	2.7.1 Lockbox Account
	 	 	36	 
	2.7.2 Cash Management Account
	 	 	37	 
	2.7.3 Payments Received under the Cash Management Agreement
	 	 	38	 
	 
	 	 	 	 
	ARTICLE 3 — CONDITIONS PRECEDENT
	 	 	38	 
	 
	 	 	 	 
	Section 3.1 Conditions Precedent to Closing
	 	 	38	 
	 
	 	 	 	 
	ARTICLE 4 — REPRESENTATIONS AND WARRANTIES
	 	 	38	 
	 
	 	 	 	 
	Section 4.1 Borrower Representations
	 	 	38	 
	4.1.1 Organization
	 	 	38	 
	4.1.2 Proceedings
	 	 	38	 
	4.1.3 No Conflicts
	 	 	39	 
	4.1.4 Litigation
	 	 	39	 
	4.1.5 Agreements
	 	 	39	 
	4.1.6 Title
	 	 	40	 
	4.1.7 Solvency
	 	 	40	 
	4.1.8 Full and Accurate Disclosure
	 	 	40	 
	4.1.9 No Plan Assets
	 	 	41	 
	4.1.10 Compliance
	 	 	41	 
	4.1.11 Financial Information
	 	 	41	 
	4.1.12 Condemnation
	 	 	41	 
	4.1.13 Federal Reserve Regulations
	 	 	41	 
	4.1.14 Utilities and Public Access
	 	 	42	 
	4.1.15 Not a Foreign Person
	 	 	42	 
	4.1.16 Separate Lots
	 	 	42	 
	4.1.17 Assessments
	 	 	42	 
	4.1.18 Enforceability
	 	 	42	 
	4.1.19 No Prior Assignment
	 	 	42	 
	4.1.20 Insurance
	 	 	42	 
	4.1.21 Use of Property
	 	 	43	 
	4.1.22 Certificate of Occupancy; Licenses
	 	 	43	 
	4.1.23 Flood Zone
	 	 	43	 
	4.1.24 Physical Condition
	 	 	43	 
	4.1.25 Boundaries
	 	 	43	 

-ii-

 

	 	 	 	 	 
	 	 	Page	 
	4.1.26 Leases
	 	 	43	 
	4.1.27 Survey
	 	 	44	 
	4.1.28 Inventory
	 	 	44	 
	4.1.29 Filing and Recording Taxes
	 	 	44	 
	4.1.30 Special Purpose Entity/Separateness
	 	 	44	 
	4.1.31 Management Agreement
	 	 	45	 
	4.1.32 Illegal Activity
	 	 	45	 
	4.1.33 No Change in Facts or Circumstances; Disclosure
	 	 	45	 
	4.1.34 Investment Company Act
	 	 	45	 
	4.1.35 Embargoed Person
	 	 	46	 
	4.1.36 Principal Place of Business; State of Organization
	 	 	46	 
	4.1.37 Environmental Representations and Warranties
	 	 	46	 
	4.1.38 Cash Management Account
	 	 	47	 
	4.1.39 True Lease. Borrower hereby represents and warrants to
Lender that each Lease reflects the intent of Borrower and Tenant
that it is a true lease and not a financing
arrangement
	 	 	47	 
	Section 4.2 Survival of Representations
	 	 	47	 
	 
	 	 	 	 
	ARTICLE 5 — BORROWER COVENANTS
	 	 	48	 
	 
	 	 	 	 
	Section 5.1 Affirmative Covenants
	 	 	48	 
	5.1.1 Existence; Compliance with Legal Requirements
	 	 	48	 
	5.1.2 Taxes and Other Charges
	 	 	49	 
	5.1.3 Litigation
	 	 	50	 
	5.1.4 Access to Property
	 	 	50	 
	5.1.5 Notice of Default
	 	 	50	 
	5.1.6 Cooperate in Legal Proceedings
	 	 	50	 
	5.1.7 Perform Loan Documents
	 	 	50	 
	5.1.8 Award and Insurance Benefits
	 	 	50	 
	5.1.9 Further Assurances
	 	 	50	 
	5.1.10 Principal Place of Business, State of Organization
	 	 	51	 
	5.1.11 Financial Reporting
	 	 	51	 
	5.1.12 Business and Operations
	 	 	53	 
	5.1.13 Title to the Property
	 	 	53	 
	5.1.14 Costs of Enforcement
	 	 	53	 

-iii-

 

	 	 	 	 	 
	 	 	Page	 
	5.1.15 Estoppel Statement
	 	 	54	 
	5.1.16 Loan Proceeds
	 	 	54	 
	5.1.17 Performance by Borrower
	 	 	54	 
	5.1.18 Confirmation of Representations
	 	 	54	 
	5.1.19 Environmental Covenants
	 	 	54	 
	5.1.20 Leasing Matters
	 	 	56	 
	5.1.21 Alterations
	 	 	57	 
	5.1.22 Operation of Property
	 	 	58	 
	5.1.23 Embargoed Person
	 	 	58	 
	5.1.24 Supplemental Mortgage Affidavits
	 	 	59	 
	5.1.25 True Lease. Each Borrower shall reflect its applicable
Lease in all
applicable books, records and reports
(including, without limitation, income tax filings) in a
manner consistent with “true lease” treatment rather than “financing” treatment
	 	 	59	 
	5.1.26 Denver Shortfall Payment. Each other Individual Borrower
and Guarantor
agree to pay any shortfall between (i) the Denver Purchase
Option Price and (ii) all amounts due
under Section 2.6.2 hereof in connection with the exercise
of the Denver Purchase Option, including
the Adjusted Release Amount for the Denver Individual
Property and any applicable Yield Maintenance
Premium (if such payment is made prior to the Permitted
Par Prepayment Date) (the “Denver Shortfall
Payment”)
	 	 	59	 
	5.1.27 Tenant Reports
	 	 	59	 
	Section 5.2 Negative Covenants
	 	 	60	 
	5.2.1 Operation of Property
	 	 	60	 
	5.2.2 Liens
	 	 	61	 
	5.2.3 Dissolution
	 	 	61	 
	5.2.4 Change In Business
	 	 	61	 
	5.2.5 Debt Cancellation
	 	 	61	 
	5.2.6 Zoning
	 	 	61	 
	5.2.7 No Joint Assessment
	 	 	61	 
	5.2.8 Intentionally Omitted
	 	 	62	 
	5.2.9 ERISA
	 	 	62	 
	5.2.10 Transfers
	 	 	62	 
	 
	 	 	 	 
	ARTICLE 6 — INSURANCE; CASUALTY; CONDEMNATION;
	 	 	67	 
	 
	 	 	 	 
	Section 6.1 Insurance
	 	 	67	 
	Section 6.2 Casualty
	 	 	71	 

-iv-

 

	 	 	 	 	 
	 	 	Page	 
	Section 6.3 Condemnation
	 	 	72	 
	Section 6.4 Restoration
	 	 	72	 
	 
	 	 	 	 
	ARTICLE 7 — RESERVE FUNDS
	 	 	77	 
	 
	 	 	 	 
	Section 7.1 Required Repairs
	 	 	77	 
	7.1.1 Deposits
	 	 	77	 
	7.1.2 Release of Required Repair Funds
	 	 	78	 
	Section 7.2 Tax and Insurance Escrow Fund
	 	 	78	 
	Section 7.3 Intentionally Omitted
	 	 	79	 
	Section 7.4 Intentionally Omitted
	 	 	79	 
	Section 7.5 Excess Cash Flow Reserve Fund
	 	 	79	 
	7.5.1 Deposits to Excess Cash Flow Reserve Fund
	 	 	79	 
	7.5.2 Release of Excess Cash Flow Reserve Funds
	 	 	79	 
	Section 7.6 Reserve Funds, Generally
	 	 	80	 
	 
	 	 	 	 
	ARTICLE 8 — DEFAULTS
	 	 	81	 
	 
	 	 	 	 
	Section 8.1 Event of Default
	 	 	81	 
	Section 8.2 Remedies
	 	 	84	 
	Section 8.3 Remedies Cumulative; Waivers
	 	 	85	 
	 
	 	 	 	 
	ARTICLE 9 — SPECIAL PROVISIONS
	 	 	85	 
	 
	 	 	 	 
	Section 9.1 Securitization
	 	 	85	 
	9.1.1 Sale of Notes and Securitization
	 	 	85	 
	9.1.2 Securitization Costs
	 	 	86	 
	Section 9.2 Uncross of Properties
	 	 	87	 
	Section 9.3 Exculpation
	 	 	88	 
	Section 9.4 Matters Concerning Manager
	 	 	91	 
	Section 9.5 Servicer
	 	 	91	 
	Section 9.6 Aggregate Cap on Costs
	 	 	92	 
	 
	 	 	 	 
	ARTICLE
10 — MISCELLANEOUS
	 	 	92	 
	 
	 	 	 	 
	Section 10.1 Survival
	 	 	92	 
	Section 10.2 Lender’s Discretion
	 	 	92	 
	Section 10.3 Governing Law
	 	 	92	 
	Section 10.4 Modification, Waiver in Writing
	 	 	94	 

-v-

 

	 	 	 	 	 
	 	 	Page	 
	Section 10.5 Delay Not a Waiver
	 	 	94	 
	Section 10.6 Notices
	 	 	94	 
	Section 10.7 Trial by Jury
	 	 	95	 
	Section 10.8 Headings
	 	 	96	 
	Section 10.9 Severability
	 	 	96	 
	Section 10.10 Preferences
	 	 	96	 
	Section 10.11 Waiver of Notice
	 	 	96	 
	Section 10.12 Remedies of Borrower
	 	 	96	 
	Section 10.13 Expenses; Indemnity
	 	 	97	 
	Section 10.14 Schedules Incorporated
	 	 	98	 
	Section 10.15 Offsets, Counterclaims and Defenses
	 	 	98	 
	Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries
	 	 	98	 
	Section 10.17 Publicity
	 	 	99	 
	Section 10.18 Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets
	 	 	99	 
	Section 10.19 Waiver of Counterclaim
	 	 	100	 
	Section 10.20 Conflict; Construction of Documents; Reliance
	 	 	100	 
	Section 10.21 Brokers and Financial Advisors
	 	 	100	 
	Section 10.22 Prior Agreements
	 	 	100	 
	Section 10.23 Joint and Several Liability
	 	 	100	 
	Section 10.24 Certain Additional Rights of Lender (VCOC)
	 	 	101	 
	1. Albertsons — Abilene
	 	 	 	 
	4450 Buffalo Gap Road
	 	 	 	 
	Abilene, Texas
	 	 	 	 
	2. Albertson — Albuquerque
	 	 	 	 
	11825 Lomas Blvd. Northeast
	 	 	 	 
	Albuquerque, New Mexico
	 	 	 	 
	3. Albertsons — Baton Rouge
	 	 	 	 
	9650 Airline Highway
	 	 	 	 
	Baton Rouge, Louisiana
	 	 	 	 
	4. Albertsons — Bossier City
	 	 	 	 
	3121 East Texas Street
	 	 	 	 
	Bossier City, Louisiana
	 	 	 	 
	5. Albertsons — Clovis
	 	 	 	 

-vi-

 

	 	 	 	 	 
	 	 	Page	 
	1905 North Prince Street
	 	 	 	 
	Clovis, New Mexico
	 	 	 	 
	6. Albertsons — El Paso
	 	 	 	 
	9111 Dyer Street
	 	 	 	 
	El Paso, Texas
	 	 	 	 
	7. Albertsons — Midland
	 	 	 	 
	4706 North Midkiff Road
	 	 	 	 
	Midland, Texas
	 	 	 	 
	8. Albertsons — Odessa
	 	 	 	 
	2751 North County Road West
	 	 	 	 
	Odessa, Texas
	 	 	 	 
	9. Albertsons — Silver City
	 	 	 	 
	1956 US Highway 180 East
	 	 	 	 
	Silver City, New Mexico
	 	 	 	 

SCHEDULES

	 	 	 	 	 

	Schedule I

	 	—
	 	List of Borrowers and Organizational Identification Nos.
	 
	 	 	 	 
	Schedule II

	 	—
	 	Rent Roll
	 
	 	 	 	 
	Schedule III

	 	—
	 	Required Repairs — Deadlines for Completion
	 
	 	 	 	 
	Schedule IV

	 	—
	 	Organizational Chart of Borrower
	 
	 	 	 	 
	Schedule V

	 	—
	 	Release Amounts
	 
	 	 	 	 
	Schedule VI

	 	—
	 	O&M Programs
	 
	 	 	 	 
	Schedule VII

	 	—
	 	Minor Required Repairs

-vii-

 

LOAN AGREEMENT

     THIS LOAN AGREEMENT, dated as of December 15, 2010 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Agreement”), between JPMORGAN CHASE
BANK, NATIONAL ASSOCIATION, a banking association chartered under the laws of the United States of
America, having an address at 383 Madison Avenue, New York, New York 10179 (“Lender”) and THE
ENTITIES SET FORTH ON SCHEDULE I ATTACHED HERETO, each having an address at 2555 East Camelback
Road, Ste. 400, Phoenix, Arizona 85016 (each, an “Individual Borrower” and, collectively,
“Borrower”).

W I T N E S S E T H:

     WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from Lender; and

     WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with the
terms of this Agreement and the other Loan Documents (as hereinafter defined).

     NOW THEREFORE, in consideration of the making of the Loan by Lender and the covenants,
agreements, representations and warranties set forth in this Agreement, the parties hereto hereby
covenant, agree, represent and warrant as follows:

ARTICLE 1 — DEFINITIONS; PRINCIPLES OF CONSTRUCTION.

Section 1.1
Definitions. For all purposes of this Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:

     “Accrual Period” shall mean the period commencing on and including the first (1st) day of each
calendar month during the term of the Loan and ending on and including the final calendar date of
such calendar month; however, the initial Accrual Period shall commence on and include the Closing
Date and shall end on and include the final calendar date of the calendar month in which the
Closing Date occurs.

     “Accrued Interest” shall have the meaning set forth in Section 2.3.1(b).

     “actual knowledge” shall mean, with respect to Borrower, the conscious awareness of facts or
other information by Borrower after inquiry reasonable for an institutional owner of properties
similar to the Properties.

     “Additional Insolvency Opinion” shall mean any subsequent Insolvency Opinion.

     “Adjusted Interest Rate” shall mean a fixed rate per annum equal to three percentage points
(3.00%) plus the greater of (i) the Initial Interest Rate or (ii) the Seven Year Swap Yield on the
date that is one month before the Anticipated Repayment Date plus two and eighty-five hundredths
percentage points (2.85%); provided, however, in no event shall the Adjusted Interest Rate exceed
the Initial Interest Rate plus five percentage points (5.00%)

 

 

     “Adjusted Release Amount” shall mean, for each Individual Property, the sum of (a) the Release
Amount for such Individual Property and (b) (i) zero percent (0%) with respect to the first
Thirteen Million Three Hundred Two Thousand Five Hundred and No/100 Dollars ($13,302,500.00) of
Release Amounts for Individual Properties released in accordance with the terms hereof, and (ii)
fifteen percent (15%) of all Release Amounts over Thirteen Million Three Hundred Two Thousand Five
Hundred and No/100 Dollars ($13,302,500.00) for Individual Properties released in accordance with
the terms hereof.

     “Affected Property” shall have the meaning set forth in Section 9.2(a) hereof.

     “Affiliate” shall mean, as to any Person, any other Person that, directly or indirectly, is in
Control of, is Controlled by or is under common Control with such Person or is a director or
officer of such Person or of an Affiliate of such Person.

     “Affiliated Manager” shall mean any Manager that is an Affiliate of Borrower or Guarantor.

     “Agent” shall mean Wells Fargo Bank, N.A., or any successor Eligible Institution acting as
Agent under the Cash Management Agreement.

     “Albertson’s” shall mean Albertson’s LLC, a Delaware limited liability company.

     “Albertson’s Lease” shall mean, individually or collectively, as the context requires, each
Lease between an Individual Borrower and Albertson’s.

     “Allocated Loan Amount” shall have the meaning set forth in Section 9.2 hereof.

     “Amortizing Period” shall mean any Accrual Period for which Borrower is obligated to pay the
Monthly Debt Service Payment Amount pursuant to Section 2.3.1 hereof.

     “Anticipated Repayment Date” shall mean January 1, 2018.

     “Applicable Interest Rate” shall mean (i) prior to the Anticipated Repayment Date, the Initial
Interest Rate and (ii) on and after the Anticipated Repayment Date, the Adjusted Interest Rate.

     “Assignment of Management Agreement” shall mean that certain Assignment of Management
Agreement and Subordination of Management Fees, dated as of the date hereof, among Lender, Borrower
and Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

     “Award” shall mean any compensation paid or payable to Borrower by any Governmental Authority
in connection with a Condemnation in respect of all or any part of any Individual Property.

     “Bankruptcy Action” shall mean with respect to any Person (a) such Person filing a voluntary
petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (b)
the filing of an involuntary petition against such Person under the

2

 

Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (c) such Person
filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition
filed against it, by any other Person under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (d) such Person consenting to or acquiescing in or joining in an
application for the appointment of a custodian, receiver, trustee, or examiner for such Person or
any portion of any Individual Property; (e) such Person making an assignment for the benefit of
creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to pay
its debts as they become due.

     “Bankruptcy Code” shall mean Title 11 of the United States Code, 11 U.S.C. §101, et
seq., as the same may be amended from time to time, and any successor statute or statutes
and all rules and regulations from time to time promulgated thereunder, and any comparable foreign
laws relating to bankruptcy, insolvency or creditors’ rights or any other Federal or state
bankruptcy or insolvency law.

     “Basic Carrying Costs” shall mean, with respect to an Individual Property, the sum of the
following costs associated with such Individual Property for the relevant Fiscal Year or payment
period: (a) Taxes, (b) Other Charges and (c) Insurance Premiums.

     “Borrower” shall have the meaning set forth in the introductory paragraph hereto, together
with its successors and permitted assigns.

     “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which
national banks in New York, New York, or the place of business of the trustee under a
Securitization (or, if no Securitization has occurred, Lender), or any Servicer or the financial
institution that maintains any collection account for or on behalf of any Servicer or any Reserve
Funds or the New York Stock Exchange or the Federal Reserve Bank of New York is not open for
business.

     “Capital Expenditures” shall mean, for any period, the amount expended for items capitalized
under GAAP (or another basis of accounting acceptable to Lender and consistently applied)
(including expenditures for building improvements or major repairs, leasing commissions and tenant
improvements).

     “Cash Management Account” shall have the meaning set forth in Section 2.7.2 hereof.

     “Cash Management Agreement” shall mean that certain Cash Management Agreement, dated as of the
date hereof, by and among Borrower, Lender, Manager and Agent, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

     “Cash Sweep Event” shall mean the occurrence of: (a) an Event of Default (a “Default
Trigger”); (b) any Bankruptcy Action of Borrower (a “Borrower Trigger”); (c) any Bankruptcy Action
of Manager (a “Property Manager Trigger”); (d) a DSCR Trigger; (e) any Bankruptcy Action of
Albertson’s (an “Albertson’s Trigger”); or (f) the Payment Date that is one month prior to the
Anticipated Repayment Date if the Loan has not been repaid if full (an “ARD Trigger”).

3

 

     “Cash Sweep Event Cure” shall mean (a) if the Cash Sweep Event is caused solely by the
occurrence of a DSCR Trigger, the achievement of a DSCR Trigger Cure, (b) if the Cash Sweep Event
is caused by a Default Trigger, the acceptance by Lender of a cure of such Event of Default (which
cure Lender is not obligated to accept and may reject or accept in its sole and absolute
discretion, unless required by law) provided Lender has not accelerated the Loan, moved for the
appointment of a receiver or commenced foreclosure proceedings, (c) if the Cash Sweep Event is
caused by a Property Manager Trigger, if Borrower replaces the Manager with a Qualified Manager
under a Replacement Management Agreement or the applicable Bankruptcy Action of Manager has been
dismissed without adverse consequence to the Loan or the Properties as determined by Lender in its
reasonable discretion; or (d) if the Cash Sweep Event is caused solely by the occurrence of an
Albertson’s Trigger, either (i) the irrevocable assumption of all of the Leases by Albertson’s and
Albertson’s or a subtenant acceptable to Lender being in occupancy and paying full, unabated
post-petition rent without offset or credit as evidenced by an estoppel letter acceptable to
Lender, or (ii) the assignment and assumption by an assignee acceptable to Lender of all of the
Leases pursuant to the bankruptcy court proceedings, with such assignee being in occupancy and
paying full, unabated post-petition rent without offset or credit as evidenced by an estoppel
letter acceptable to Lender; provided, however, that, such Cash Sweep Event Cure
set forth in this definition shall be subject to the following conditions, (i) no Event of Default
(other than the Event of Default that has been cured pursuant to clause (b) above) shall have
occurred and be continuing under this Agreement or any of the other Loan Documents, (ii) a Cash
Sweep Event Cure may occur no more than a total of five (5) times in the aggregate during the term
of the Loan, and (iii) Borrower shall have paid all of Lender’s reasonable expenses incurred in
connection with such Cash Sweep Event Cure including, reasonable attorney’s fees and expenses. In
no event shall Borrower have a right to cure a Cash Sweep Event that is caused by the occurrence of
a Borrower Trigger or an ARD Trigger.

     “Cash Sweep Period” shall mean each period commencing on the occurrence of a Cash Sweep Event
and continuing until the earlier of (a) the Payment Date next occurring following the related Cash
Sweep Event Cure (or, if such day is not a Business Day, the immediately preceding Business Day),
or (b) payment in full of all principal and interest on the Loan and all other amounts payable
under the Loan Documents in accordance with the terms and provisions of the Loan Documents.

     “Casualty” shall have the meaning set forth in Section 6.2 hereof.

     “Casualty Consultant” shall have the meaning set forth in Section 6.4(b)(iii) hereof.

     “Casualty Retainage” shall have the meaning set forth in Section 6.4(b)(iv) hereof.

     “Closing Date” shall mean the date of the funding of the Loan.

     “Code” shall mean the Internal Revenue Code of 1986, as amended, as it may be further amended
from time to time, and any successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form.

     “Collective Group” shall have the meaning set forth in Section 10.23 hereof.

4

 

     “Condemnation” shall mean a temporary or permanent taking by any Governmental Authority as the
result or in lieu or in anticipation of the exercise of the right of condemnation or eminent
domain, of all or any part of any Individual Property, or any interest therein or right accruing
thereto, including any right of access thereto or any change of grade affecting such Individual
Property or any part thereof.

     “Condemnation Proceeds” shall have the meaning set forth in Section 6.4(b).

     “Contribution Agreement” shall mean that certain Contribution Agreement, dated as of the date
hereof, by and among each Individual Borrower, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

     “Control” shall mean the possession, directly or indirectly, of the power to direct or cause
the direction of management, policies or activities of a Person, whether through ownership of
voting securities, by contract or otherwise. “Controlled” and “Controlling” shall have correlative
meanings.

     “Debt” shall mean the outstanding principal amount set forth in, and evidenced by, this
Agreement and the Note together with all interest accrued and unpaid thereon and all other sums
(including any Yield Maintenance Premium and any Yield Maintenance Default Premium) due to Lender
in respect of the Loan under the Note, this Agreement, the Mortgage or any other Loan Document.

     “Debt Service” shall mean, with respect to any particular period of time, the scheduled
principal and interest payments due under this Agreement and the Note.

     “Debt Service Coverage Ratio” shall mean a ratio for the applicable period in which:

     (a) the numerator is the Net Operating Income (excluding interest on credit accounts and
using annualized operating expenses for any recurring expenses not paid monthly (e.g., Taxes and
Insurance Premiums)) for such period as set forth in the statements required hereunder, without
deduction for (i) actual property management fees incurred in connection with the operation of the
applicable Individual Property, or (ii) amounts paid to the Reserve Funds, less (A) property
management fees equal to the greater of (1) assumed property management fees of 3% of Gross Income
from Operations and (2) the actual property management fees incurred, and (B) underwritten annual
replacement reserve fund contributions equal to $0.20 per square foot of gross leasable area at
the Property, and (C) underwritten annual rollover reserve fund contributions equal to $0.42 per
square foot of gross leasable area at the Property; and

     (b) the denominator is the aggregate amount of Debt Service for such period, assuming for
purposes of this calculation that the Debt Service for each Accrual Period is equal to the Monthly
Debt Service Payment Amount.

     “Default” shall mean the occurrence of any event hereunder or under any other Loan Document
which, but for the giving of notice or passage of time, or both, would be an Event of Default.

5

 

     “Default Rate” shall mean, with respect to the Loan, a rate per annum equal to the lesser of
(a) the Maximum Legal Rate or (b) four percent (4%) above the Applicable Interest Rate.

     “Denver Individual Borrower” shall mean Cole AB Denver CO, LLC, a Delaware limited liability
company.

     “Denver Individual Property” shall mean the Individual Property owned by the Denver Individual
Borrower.

     “Denver Purchase Option” shall mean the right of Weingarten/Miller/Lowry Joint Venture, a
Texas joint venture, and any permitted successor in interest (collectively, “Weingarten”), to
purchase fee simple title to the Denver Individual Property upon the happening of certain
occurrences and pursuant to the terms of that certain Agreement for Right to Purchase dated as of
July 3, 2001, between Weingarten and Denver Individual Borrower, successor in interest to
Albertson’s, Inc., a Delaware corporation.

     “Denver Purchase Option Price” shall mean the actual purchase price paid by Weingarten to the
Denver Individual Borrower in connection with Weingarten’s exercise of the Denver Purchase Option.

     “Denver Shortfall Payment” shall have the meaning set forth in Section 5.1.26 hereof.

     “Disclosure Documents” shall have the meaning set forth in Section 9.1.1(b) hereof.

     “DSCR Trigger” shall mean, that as of the date of determination, the Debt Service Coverage
Ratio based on the trailing three (3) calendar month period immediately preceding the date of such
determination is less than 1.20 to 1.00.

     “DSCR Trigger Cure” shall mean, that for two consecutive calendar quarters, with the
applicable determination date being the first day of a calendar quarter (i.e., January 1, April 1,
July 1, or October 1), Borrower shall have satisfied the following: as of each date of
determination, the Debt Service Coverage Ratio based on the trailing three (3) month period
immediately preceding the date of such determination is not less than 1.45 to 1.00.

     “Eligible Account” shall mean a separate and identifiable account from all other funds held by
the holding institution that is either (a) an account or accounts maintained with a federal or
state-chartered depository institution or trust company which complies with the definition of
Eligible Institution or (b) a segregated trust account or accounts maintained with a federal or
state chartered depository institution or trust company acting in its fiduciary capacity which, in
the case of a state chartered depository institution or trust company, is subject to regulations
substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus
of at least $50,000,000.00 and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or
other instrument.

     “Eligible Institution” shall mean JPMorgan Chase Bank, National Association, or a depository
institution or trust company insured by the Federal Deposit Insurance Corporation, the short term
unsecured debt obligations or commercial paper of which are rated at least “A-1+”

6

 

by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of accounts in which funds are held
for thirty (30) days or less (or, in the case of accounts in which funds are held for more than
thirty (30) days, the long-term unsecured debt obligations of which are rated at least “AA-” by
Fitch and S&P and “Aa3” by Moody’s).

     “Embargoed Person” shall mean any person, entity or government subject to trade restrictions
under U.S. law, including, but not limited to, The USA PATRIOT Act (including the anti-terrorism
provisions thereof), the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701, et seq.,
The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder including those related to Specially Designated Nationals and Specially
Designated Global Terrorists, with the result that the investment in Borrower, Principal or
Guarantor, as applicable (whether directly or indirectly) by such person, entity or government, is
prohibited by law or the Loan made by the Lender is in violation of law.

     “Environmental Indemnity” shall mean that certain Environmental Indemnity Agreement, dated as
of the date hereof, executed by Borrower and Guarantor in connection with the Loan for the benefit
of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

     “Environmental Law” means any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law, relating to protection of human
health or the environment, relating to Hazardous Substances, relating to liability for or costs of
Remediation or prevention of Releases of Hazardous Substances or relating to liability for or costs
of other actual or threatened danger to human health or the environment. Environmental Law
includes, but is not limited to, the following statutes, as amended, any successor thereto, and any
regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including but
not limited to Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the
Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act;
the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental
Policy Act; and the River and Harbors Appropriation Act. Environmental Law also includes, but is
not limited to, any present and future federal, state and local laws, statutes, ordinances, rules,
regulations and the like, as well as common law: conditioning transfer of property upon a negative
declaration or other approval of a governmental authority of the environmental condition of the
Properties; requiring notification or disclosure of Releases of Hazardous Substances or other
environmental condition of the Properties to any governmental authority or other Person, whether or
not in connection with transfer of title to or interest in property; imposing conditions or
requirements in connection with permits or other authorization for lawful activity; relating to
nuisance, trespass or other causes of action related to the Properties; or relating to wrongful
death, personal injury, or property or other damage in connection with any physical condition or
use of the Properties.

     “Environmental Liens” shall have the meaning set forth in Section 5.1.19 hereof.

7

 

     “Environmental Report” shall have the meaning set forth in Section 4.1.37 hereof.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.

     “Event of Default” shall have the meaning set forth in Section 8.1(a) hereof.

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

     “Excess Cash Flow Reserve Account” shall have the meaning set forth in Section 7.5.1
hereof.

     “Excess Cash Flow Reserve Fund” shall have the meaning set forth in Section 7.5.1
hereof.

     “Fiscal Year” shall mean each twelve (12) month period commencing on January 1 and ending on
December 31 during each year of the term of the Loan.

     “Fitch” shall mean Fitch, Inc.

     “GAAP” shall mean generally accepted accounting principles in the United States of America as
of the date of the applicable financial report.

     “Governmental Authority” shall mean any court, board, agency, commission, office or other
authority of any nature whatsoever for any governmental unit (foreign, federal, state, county,
district, municipal, city or otherwise) whether now or hereafter in existence.

     “Gross Income from Operations” shall mean, during any period, all recurring income as reported
on the financial statements delivered by Borrower in accordance with this Agreement, computed in
accordance with GAAP (or another basis of accounting acceptable to Lender and consistently
applied), derived from the ownership and operation of any Individual Property from whatever source
during such period, including, but not limited to, (i) Rents from Tenants that are in
occupancy, open for business and paying full contractual rent without right of offset or credit,
(ii) utility charges, (iii) escalations, (iv) forfeited security deposits, (v) interest on credit
accounts, (vi) service fees or charges, (vii) license fees, (viii) parking fees, (ix) rent
concessions or credits, (x) income from vending machines, (xi) business interruption or other loss
of income or rental insurance proceeds, (xii) other required pass-throughs or reimbursements,
(xiii) easement proceeds, (xiv) interest on Reserve Accounts, if any, and (xv) Rents and
reimbursements from “dark” locations provided that such Rents and reimbursements shall not exceed
ten percent (10%) of the total Rent and reimbursements for all of the Properties, but excluding (i)
Rents from month-to-month Tenants, Tenants during a free-rent period, or Tenants that are included
in any Bankruptcy Action, (ii) sales, use and occupancy or other taxes on receipts required to be
accounted for by Borrower to any Governmental Authority, (iii) refunds and uncollectible accounts,
(iv) sales of furniture, fixtures and equipment, (v) Insurance Proceeds (other than business
interruption or other loss of income or rental insurance), (vi) Awards, (vii) unforfeited security
deposits, (viii) utility and other similar deposits, (ix) any disbursements to Borrower from the
Reserve Funds, if any, and (x) Rents and reimbursements

8

 

from “dark” locations in excess of ten percent (10%) of the total Rent and reimbursements for
all of the Properties. Gross income shall not be diminished as a result of the Mortgage or the
creation of any intervening estate or interest in such Individual Property or any part thereof.

     “Guarantor” shall mean Cole REIT III Operating Partnership, LP.

     “Guaranty” shall mean that certain Guaranty Agreement, dated as of the date hereof, executed
and delivered by Guarantor in connection with the Loan to and for the benefit of Lender, as the
same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

     “Hazardous Substances” include but are not limited to any and all substances (whether solid,
liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous
substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present or future Environmental Laws or that may have a negative impact
on human health or the environment, including but not limited to petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive
materials, flammables, explosives, mold, mycotoxins, microbial matter and airborne pathogens
(naturally occurring or otherwise), but excluding substances of kinds and in amounts ordinarily and
customarily used or stored in similar properties for the purpose of cleaning or other maintenance
or operations and otherwise in compliance with all Environmental Laws.

     “Identified Affiliate” shall mean each of the following:

Cole Capital Partners, LLC, an Arizona limited liability company;

Cole Capital Advisors, Inc., an Arizona Corporation;

Series C, LLC, an Arizona limited liability company;

Series D, LLC, an Arizona limited liability company;

Cole Credit Property Trust, Inc., a Maryland corporation;

Cole Credit Property Trust II, Inc., a Maryland corporation;

Cole Holdings Corporation, an Arizona corporation; and

Any entity wholly-owned, either directly or indirectly, by one or more of the foregoing.

     “Improvements” shall have the meaning set forth in the granting clause of the Mortgage with
respect to the applicable Individual Property.

     “Indebtedness” of a Person, at a particular date, shall mean the sum (without duplication) at
such date of (a) all indebtedness or liability of such Person (including, without limitation,
amounts for borrowed money and indebtedness in the form of mezzanine debt or preferred equity); (b)
obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations
for the deferred purchase price of property or services (including trade obligations); (d)
obligations under letters of credit; (e) obligations under acceptance facilities; (f) all
guaranties, endorsements (other than for collection or deposit in the ordinary course of business)
and other contingent obligations to purchase, to provide funds for payment, to supply funds, to
invest in any Person or entity, or otherwise to assure a creditor against loss;

9

 

and (g) obligations secured by any Liens, whether or not the obligations have been assumed
(other than the Permitted Encumbrances).

     “Indemnified Liabilities” shall have the meaning set forth in Section 10.13(b) hereof.

     “Indemnified Parties” shall mean Lender and any Affiliate of Lender that has filed any
registration statement relating to the Securitization or has acted as the sponsor or depositor in
connection with the Securitization, any Affiliate of Lender that acts as an underwriter, placement
agent or initial purchaser of Securities issued in the Securitization, any other co underwriters,
co placement agents or co initial purchasers of Securities issued in the Securitization, and each
of their respective officers, directors, partners, employees, representatives, agents and
Affiliates and each Person or entity who Controls any such Person within the meaning of Section 15
of the Securities Act of 1933 as amended or Section 20 of the Security Exchange Act of 1934 as
amended, any Person who is or will have been involved in the origination of the Loan, any Person
who is or will have been involved in the servicing of the Loan secured hereby, any Person in whose
name the encumbrance created by the Mortgage is or will have been recorded, any Person who may hold
or acquire or will have held a full or partial interest in the Loan secured hereby (including, but
not limited to, investors or prospective investors in the Securities, as well as custodians,
trustees and other fiduciaries who hold or have held a full or partial interest in the Loan secured
hereby for the benefit of third parties) as well as the respective directors, officers,
shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors,
affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing
(including, but not limited to, any other Person who holds or acquires or will have held a
participation or other full or partial interest in the Loan, whether during the term of the Loan or
as a part of or following a foreclosure of the Loan and including, but not limited to any
successors by merger, consolidation or acquisition of all or a substantial portion of Lender’s
assets and business).

     “Independent Director” shall mean a natural Person who (a) is not at the time of initial
appointment, or at any time while serving in such capacity, and is not, and has never been, and
will not while serving as Independent Director be: (i) a stockholder, director (with the exception
of serving as the Independent Director of an Individual Borrower), officer, employee, partner,
member (other than a “special member” or “springing member”), manager, attorney or counsel of an
Individual Borrower, equity owners of an Individual Borrower or Guarantor or any Affiliate of an
Individual Borrower or Guarantor; (ii) a customer, supplier or other person who derives any of its
purchases or revenues from its activities with an Individual Borrower or Guarantor, equity owners
of an Individual Borrower or Guarantor or any Affiliate of an Individual Borrower or Guarantor;
(iii) a Person Controlling or under common Control with any such stockholder, director, officer,
employee, partner, member, manager, attorney, counsel, equity owner, customer, supplier or other
Person; or (iv) a member of the immediate family of any such stockholder, director, officer,
employee, partner, member, manager, attorney, counsel, equity owner, customer, supplier or other
Person and (b) has (i) prior experience as an independent director or independent manager for a
corporation, a trust or limited liability company whose charter documents required the unanimous
consent of all independent directors or independent managers thereof before such corporation, trust
or limited liability company could consent to the institution of bankruptcy or insolvency
proceedings against it or could file a petition seeking relief under any applicable federal or
state law relating to bankruptcy and (ii) at

10

 

least three years of employment experience with one or more nationally-recognized companies
that provides, inter alia, professional independent directors or independent managers in the
ordinary course of their respective business to issuers of securitization or structured finance
instruments, agreements or securities or lenders originating commercial real estate loans for
inclusion in securitization or structured finance instruments, agreements or securities (a
“Professional Independent Director”) and is at all times during his or her service as an
Independent Director of an Individual Borrower an employee of such a company or companies. A
natural Person who satisfies the foregoing definition except for being (or having been) the
independent director or independent manager of a “special purpose entity” affiliated with an
Individual Borrower (provided such affiliate does not or did not own a direct or indirect equity
interest in an Individual Borrower) shall not be disqualified from serving as an Independent
Director, provided that such natural Person satisfies all other criteria set forth above and that
the fees such individual earns from serving as independent director or independent manager of
affiliates of an Individual Borrower or in any given year constitute in the aggregate less than
five percent (5%) of such individual’s annual income for that year. A natural Person who satisfies
the foregoing definition other than subparagraph (a)(ii) shall not be disqualified from serving as
an Independent Director of an Individual Borrower if such individual is a Professional Independent
Director and such individual complies with the requirements of the previous sentence. A person
serving as a manager (and not as a director) of a limited liability company, but otherwise
satisfying this definition shall be deemed an Independent Director for purposes of this Agreement.

     “Individual Borrower” shall have the meaning set forth in the introductory paragraph hereto,
together with its successors and permitted assigns.

     “Individual Property” shall mean shall mean each parcel of real property, the Improvements
thereon and all personal property owned by an Individual Borrower and encumbered by a Mortgage,
together with all of such Individual Borrower’s rights pertaining to such property and
Improvements, as more particularly described in the granting clauses of the related Mortgage and
referred to therein as the “Property”.

     “Initial Interest Rate” shall mean a rate of five and six hundred nine thousandths percent
(5.609%) per annum.

     “Insolvency Opinion” shall mean that certain non-consolidation opinion letter dated the date
hereof delivered by Kutak Rock LLP in connection with the Loan.

     “Insurance Premiums” shall have the meaning set forth in Section 6.1(b) hereof.

     “Insurance Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

     “Interest Only Period” shall mean any Accrual Period for which Borrower is obligated to make a
payment of interest only pursuant to Section 2.3.1 hereof.

     “Lease” shall mean any lease, sublease or subsublease, letting, license, concession or other
agreement (whether written or oral and whether now or hereafter in effect) entered into by any
Individual Borrower (or a predecessor-in-interest to any Individual Borrower) pursuant to which any
Person is granted a possessory interest in, or right to use or occupy all or any portion

11

 

of any space in any Individual Property, and every modification, amendment or other agreement
relating to such lease, sublease, subsublease, or other agreement entered into in connection with
such lease, sublease, subsublease, or other agreement and every guarantee of the performance and
observance of the covenants, conditions and agreements to be performed and observed by the other
party thereto.

     “Legal Requirements” shall mean, all federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities affecting any Individual Property or any part thereof, or the
construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter
enacted and in force, and all permits, licenses and authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments,
either of record or known to Borrower, at any time in force affecting any Individual Property or
any part thereof, including, without limitation, any which may (a) require repairs, modifications
or alterations in or to any Individual Property or any part thereof, or (b) in any way limit the
use and enjoyment thereof.

     “Lender” shall have the meaning set forth in the introductory paragraph hereto, together with
its successors and assigns.

     “Lien” shall mean, any mortgage, deed of trust, deed to secure debt, indemnity deed of trust,
lien, pledge, hypothecation, assignment for security, security interest, or any other encumbrance,
charge or transfer of, on or affecting Borrower, any Individual Property, any portion thereof or
any interest therein, including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar
liens and encumbrances.

     “Loan” shall mean the loan made by Lender to Borrower pursuant to this Agreement.

     “Loan Documents” shall mean, collectively, this Agreement, the Note, the Mortgage, the
Environmental Indemnity, the Assignment of Management Agreement, the Guaranty, the Lockbox
Agreement, the Cash Management Agreement, the Contribution Agreement and all other documents
executed and/or delivered by any Individual Borrower or Guarantor in connection with the Loan.

     “Loan Group” shall have the meaning set forth in Section 9.2(b) hereof.

     “Lockbox Account” shall have the meaning set forth in Section 2.7.1 hereof.

     “Lockbox Agreement” shall mean that certain Blocked Account Control Agreement dated the date
hereof among Cole AB Abilene TX, LLC, Lender and Lockbox Bank (and joined by each Borrower and
Manager), as the same may be amended, restated, replaced, supplemented or otherwise modified from
time to time, relating to funds deposited in the Lockbox Account.

     “Lockbox Bank” shall mean JPMorgan Chase Bank, National Association, or the clearing bank
which establishes, maintains and holds the Lockbox Account, which shall be an Eligible Institution.

12

 

     “Management Agreement” shall mean the management agreement entered into among Manager, Cole
REIT III Operating Partnership, LP, and Cole Credit Property Trust III, Inc. pursuant to which
Manager is to provide management and other services with respect to each Individual Property and
certain other properties, or, if the context requires, the Replacement Management Agreement.

     “Manager” shall mean Cole Realty Advisors, Inc. (f/k/a Fund Realty Advisors, Inc.) an Arizona
corporation, or, if the context requires, a Qualified Manager who is managing the Properties in
accordance with the terms and provisions of this Agreement pursuant to a Replacement Management
Agreement.

     “Material Action” means to file any insolvency, or reorganization case or proceeding, to
institute proceedings to have any Individual Borrower be adjudicated bankrupt or insolvent, to
institute proceedings under any applicable insolvency law, to seek any relief under any law
relating to relief from debts or the protection of debtors, to consent to the filing or institution
of bankruptcy or insolvency proceedings against any Individual Borrower, to file a petition
seeking, or consent to, reorganization or relief with respect to any Individual Borrower under any
applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar
official of or for any Individual Borrower or a substantial part of its property, to make any
assignment for the benefit of creditors of any Individual Borrower, to admit in writing such
Individual Borrower’s inability to pay its debts generally as they become due, or to take action in
furtherance of any of the foregoing.

     “Maturity Date” shall mean January 1, 2028, or such other date on which the final payment of
principal of the Note becomes due and payable as therein or herein provided, whether at such stated
maturity date, by declaration of acceleration, or otherwise.

     “Maximum Legal Rate” shall mean the maximum nonusurious interest rate, if any, that at any
time or from time to time may be contracted for, taken, reserved, charged or received on the
indebtedness evidenced by the Note and as provided for herein or the other Loan Documents, under
the laws of such state or states whose laws are held by any court of competent jurisdiction to
govern the interest rate provisions of the Loan.

     “Minor Required Repairs” shall mean those certain Required Repairs identified on Schedule
VII hereto.

     “Monthly Debt Service Payment Amount” shall mean a constant monthly payment of $764,423.68.

     “Moody’s” shall mean Moody’s Investors Service, Inc.

     “Mortgage” shall mean, with respect to each Individual Property, that certain first priority
Mortgage and Security Agreement, Deed of Trust, Fixture Filing and Security Agreement, Deed of
Trust and Security Agreement or Deed to Secure Debt and Security Agreement, dated the date hereof,
executed and delivered by Borrower to Lender as security for the Loan and encumbering the
applicable Individual Property, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

13

 

     “Net Cash Flow” shall mean, with respect to the Properties for any period, the amount obtained
by subtracting Operating Expenses and Capital Expenditures for such period from Gross Income from
Operations for such period.

     “Net Operating Income” shall mean, for any period, the amount obtained by subtracting
Operating Expenses for such period from Gross Income from Operations for such period.

     “Net Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

     “Net Proceeds Deficiency” shall have the meaning set forth in Section 6.4(b)(vi)
hereof.

     “New Note” shall have the meaning set forth in Section 9.2(a) hereof.

     “Note” shall mean that certain Promissory Note, dated the date hereof, in the principal amount
of One Hundred Thirty Three Million Twenty Five Thousand and No/100 Dollars ($133,025,000.00), made
by Borrower in favor of Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

     “O&M Program” shall have the meaning set forth in Section 5.1.19(c) hereof.

     “Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower which is
signed by an authorized officer of Borrower or the general partner, managing member, sole member or
manager of Borrower, as applicable.

     “Operating Expenses” shall mean, with respect to each Individual Property, the total of all
expenditures incurred by or on behalf of Borrower (other than expenditures by a Tenant pursuant to
its Lease), computed in accordance with GAAP (or another basis of accounting acceptable to Lender
and consistently applied), of whatever kind relating to the operation, maintenance and management
of such Individual Property that are incurred on a regular monthly or other periodic basis,
including without limitation, bad debt, utilities, ordinary repairs and maintenance, insurance,
license fees, property taxes and assessments, advertising expenses, property management fees,
payroll and related taxes, computer processing charges, operational equipment or other lease
payments as approved by Lender, and other similar costs, but excluding depreciation and
amortization, acquisition costs, impairment charges, Debt Service pre-payments of principal (to the
extent permitted by this Agreement), Capital Expenditures and contributions to the Reserve Funds.

     “Other Charges” shall mean, with respect to each Individual Property, all ground rents,
maintenance charges, impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and similar areas
adjoining such Individual Property, now or hereafter levied or assessed or imposed against such
Individual Property or any part thereof.

     “Other Obligations” shall have the meaning as set forth in the Mortgage.

     “Payment Date” shall mean the first (1st) day of each calendar month during the
term of the Loan.

14

 

     “Permitted Encumbrances” shall mean, with respect to an Individual Property, collectively, (a)
the Liens and security interests created by the Loan Documents, (b) all Liens, encumbrances and
other matters disclosed in the Title Insurance Policy, (c) Liens, if any, for Taxes and Other
Charges imposed by any Governmental Authority not yet due or delinquent, (d) the Leases existing as
of the date hereof and any Leases entered into after the date hereof in accordance with Section
5.1.20, and (e) such other title and survey exceptions as Lender has approved or may approve in
writing in Lender’s sole discretion, which Permitted Encumbrances in the aggregate do not
materially adversely affect the value or use of such Individual Property (as currently used) or
Borrower ‘s ability to repay the Loan.

     “Permitted Investments” shall mean any one or more of the following obligations or securities
acquired at a purchase price of not greater than par, including those issued by Servicer, the
trustee under any Securitization or any of their respective Affiliates, payable on demand or having
a maturity date not later than the Business Day immediately prior to the first Payment Date
following the date of acquiring such investment and meeting one of the appropriate standards set
forth below:

     (i) obligations of, or obligations fully guaranteed as to payment of principal and
interest by, the United States or any agency or instrumentality thereof provided such
obligations are backed by the full faith and credit of the United States of America
including, without limitation, obligations of: the U.S. Treasury (all direct or fully
guaranteed obligations), the Farmers Home Administration (certificates of beneficial
ownership), the General Services Administration (participation certificates), the U.S.
Maritime Administration (guaranteed Title XI financing), the Small Business Administration
(guaranteed participation certificates and guaranteed pool certificates), the U.S.
Department of Housing and Urban Development (local authority bonds) and the Washington
Metropolitan Area Transit Authority (guaranteed transit bonds); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index plus a fixed
spread (if any) and must move proportionately with that index, and (D) such investments must
not be subject to liquidation prior to their maturity;

     (ii) Federal Housing Administration debentures;

     (iii) obligations of the following United States government sponsored agencies:
Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System (consolidated
systemwide bonds and notes), the Federal Home Loan Banks (consolidated debt obligations),
the Federal National Mortgage Association (debt obligations), the Financing Corp. (debt
obligations), and the Resolution Funding Corp. (debt obligations); provided, however, that
the investments described in this clause must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an
“r” highlighter affixed to their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index plus a fixed
spread (if any) and must move proportionately with that index, and (D) such investments must
not be subject to liquidation prior to their maturity;

15

 

     (iv) federal funds, unsecured certificates of deposit, time deposits, bankers’
acceptances and repurchase agreements with maturities of not more than 365 days of any bank,
the short term obligations of which at all times are rated in the highest short term rating
category by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least
one Rating Agency in the highest short term rating category and otherwise acceptable to each
other Rating Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher,
then current ratings assigned to the Securities); provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter
affixed to their rating, (C) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread (if any) and
must move proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;

     (v) fully Federal Deposit Insurance Corporation-insured demand and time deposits
in, or certificates of deposit of, or bankers’ acceptances issued by, any bank or trust
company, savings and loan association or savings bank, the short term obligations of which
at all times are rated in the highest short term rating category by each Rating Agency (or,
if not rated by all Rating Agencies, rated by at least one Rating Agency in the highest
short term rating category and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities); provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot
vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to liquidation
prior to their maturity;

     (vi) debt obligations with maturities of not more than 365 days and at all times
rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the Securities)
in its highest long-term unsecured rating category; provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter
affixed to their rating, (C) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread (if any) and
must move proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;

     (vii) commercial paper (including both non-interest-bearing discount obligations
and interest-bearing obligations payable on demand or on a specified date not more than one
year after the date of issuance thereof) with maturities of not more than

16

 

365 days and that at all times is rated by each Rating Agency (or, if not rated by all
Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investment would not, in and of itself,
result in a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities) in its highest short-term unsecured debt rating;
provided, however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to their maturity;

     (viii) units of taxable money market funds, which funds are regulated investment
companies, seek to maintain a constant net asset value per share and invest solely in
obligations backed by the full faith and credit of the United States, which funds have the
highest rating available from each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) for money market funds; and

     (ix) any other security, obligation or investment which has been approved as a
Permitted Investment in writing by (a) Lender and (b) each Rating Agency, as evidenced by a
written confirmation that the designation of such security, obligation or investment as a
Permitted Investment will not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the Securities by
such Rating Agency;

provided, however, that no obligation or security shall be a Permitted Investment if
(A) such obligation or security evidences a right to receive only interest payments
or (B) the right to receive principal and interest payments on such obligation or
security are derived from an underlying investment that provides a yield to maturity
in excess of 120% of the yield to maturity at par of such underlying investment.

     “Permitted Par Prepayment Date” shall mean the Payment Date which is three (3) months prior to
the Anticipated Repayment Date (or, if such Payment Date is not a Business Day, the immediately
preceding Business Day).

     “Permitted Prepayment Date” shall mean the second (2nd) anniversary of the first Payment Date
(or, if such day is not a Business Day, the immediately succeeding Business Day).

     “Permitted Transfer” shall mean any of the following: (a) any transfer, directly as a result
of the death of a natural person, of stock, membership interests, partnership interests or other
ownership interests previously held by the decedent in question to the Person or Persons lawfully
entitled thereto, or (b) any transfer, directly as a result of the legal incapacity of a

17

 

natural person, of stock, membership interests, partnership interests or other ownership
interests previously held by such natural person to the Person or Persons lawfully entitled
thereto.

     “Person” shall mean any individual, corporation, partnership, joint venture, limited liability
company, estate, trust, unincorporated association, any federal, state, county or municipal
government or any bureau, department or agency thereof and any fiduciary acting in such capacity on
behalf of any of the foregoing.

     “Personal Property” shall have the meaning set forth in the granting clause of the Mortgage
with respect to the applicable Individual Property.

     “Physical Conditions Report” shall mean, with respect to each Individual Property, a
structural engineering report prepared by a company satisfactory to Lender regarding the physical
condition of such Individual Property, satisfactory in form and substance to Lender in its sole
discretion, which report shall, among other things, (a) confirm that such Individual Property and
its use complies, in all material respects, with all applicable Legal Requirements (including,
without limitation, zoning, subdivision and building laws) and (b) include a copy of a final
certificate of occupancy with respect to all Improvements on such Individual Property.

     “Policies” shall have the meaning specified in Section 6.1(b) hereof.

     “Policy” shall have the meaning specified in Section 6.1(b) hereof.

     “Prepayment Rate” shall mean the bond equivalent yield (in the secondary market) on the United
States Treasury Security that as of the Prepayment Rate Determination Date has a remaining term to
maturity closest to, but not exceeding, the remaining term to the Permitted Par Prepayment Date as
most recently published in “Statistical Release H.15 (519), Selected Interest Rates,” or any
successor publication, published by the Board of Governors of the Federal Reserve System, or on the
basis of such other publication or statistical guide as Lender may reasonably select.

     “Prepayment Rate Determination Date” shall mean the date which is five (5) Business Days prior
to the date that such prepayment shall be applied in accordance with the terms and provisions of
Section 2.4.1 hereof.

     “Principal” shall mean the Special Purpose Entity that is (i) the general partner of an
Individual Borrower, if such Individual Borrower is a limited partnership, (ii) the managing member
of an Individual Borrower, if such Individual Borrower is a multi-member limited liability company,
or (iii) the beneficiary of an Individual Borrower, if such Individual Borrower is a Delaware
statutory trust.

     “Property” or “Properties” shall mean, collectively, each Individual Property.

     “Provided Information” shall mean any and all financial and other information provided at any
time prepared by, or on behalf of, Borrower, Principal, Guarantor and/or Manager.

     “Qualified Manager” shall mean either (a) Manager; or (b) in the reasonable judgment of
Lender, a reputable and experienced management organization (which may be an Affiliate of

18

 

Borrower) possessing experience in managing properties similar in size, scope, use and value
as the Properties, provided, that in the case of this clause (b), if required by Lender, Borrower
shall have obtained (i) prior written confirmation from the applicable Rating Agencies that
management of the Properties by such entity will not cause a downgrade, withdrawal or qualification
of the then current ratings of the Securities or any class thereof and (ii) if such entity is an
Affiliate of Borrower, an Additional Insolvency Opinion.

     “Rating Agencies” shall mean each of S&P, Moody’s, Fitch, and Realpoint or any other
nationally recognized statistical rating agency which has been approved by Lender and designated by
Lender to assign a rating to the Securities.

     “Realpoint” shall mean Realpoint, LLC, a Pennsylvania limited liability company.

     “Related Entities” shall have the meaning set forth in Section 5.2.10(e) hereof.

     “Release” of any Hazardous Substance includes but is not limited to any release, deposit,
discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Substances.

     “Release Amount” shall mean for an Individual Property the amount set forth on Schedule V
hereto, as the same may be reduced pursuant to Section 2.4.2 hereof.

     “Release Debt Service Coverage Ratio” shall mean the product of 1.89 multiplied by a fraction
of which (a) the numerator is the sum of the Release Amounts of all Properties subject to the Liens
of the Mortgages (including the Individual Property to be released), and (b) the denominator is the
sum of the then-current outstanding principal amount of the Loan.

     “Release Premium” shall mean, with respect to the related Individual Property released in
accordance with Section 2.6.2 hereof, the difference between the Adjusted Release Amount
and the Release Amount for such Individual Property.

     “Remediation” includes but is not limited to any response, remedial, removal, or corrective
action, any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any
Hazardous Substance, any actions to prevent, cure or mitigate any Release of any Hazardous
Substance, any action to comply with any Environmental Laws or with any permits issued pursuant
thereto, any inspection, investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous Substances.

     “REMIC Trust” shall mean a “real estate mortgage investment conduit” within the meaning of
Section 860D of the Code that holds the Note.

     “Rents” shall mean, with respect to an Individual Property, all rents (including percentage
rents), rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents,
royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses),
income, receivables, receipts, revenues, deposits (including, without limitation, security, utility
and other deposits), accounts, cash, issues, profits, charges for services rendered, all other
amounts payable as rent under any Lease or other agreement relating to the Individual

19

 

Property, including, without limitation, charges for electricity, oil, gas, water, steam,
heat, ventilation, air-conditioning and any other energy, telecommunication, telephone, utility or
similar items or time use charges, HVAC equipment charges, sprinkler charges, escalation charges,
license fees, maintenance fees, charges for Taxes, operating expenses or other reimbursables
payable to Borrower (or to the Manager for the account of Borrower) under any Lease, and other
consideration of whatever form or nature received by or paid to or for the account of or benefit of
Borrower or its agents or employees from any and all sources arising from or attributable to such
Individual Property.

     “Replacement Management Agreement” shall mean, collectively, (a) either (i) a management
agreement for the Properties with a Qualified Manager substantially in the same form and substance
as the Management Agreement, or (ii) a management agreement for the Properties with a Qualified
Manager, which management agreement shall be reasonably acceptable to Lender in form and substance,
provided, that in either case, Lender, at its option, may require that Borrower shall have obtained
prior written confirmation from the applicable Rating Agencies that such management agreement will
not cause a downgrade, withdrawal or qualification of the then current rating of the Securities or
any class thereof and (b) an assignment of management agreement and subordination of management
fees substantially in the form then used by Lender (or of such other form and substance reasonably
acceptable to Lender), executed and delivered to Lender by Borrower and such Qualified Manager at
Borrower’s expense.

     “Required Repair Account” shall have the meaning set forth in Section 7.1.1 hereof.

     “Required Repair Fund” shall have the meaning set forth in Section 7.1.1 hereof.

     “Required Repairs” shall have the meaning set forth in Section 7.1.1 hereof.

     “Reserve Funds” shall mean, collectively, the Tax and Insurance Escrow Fund, the Excess Cash
Flow Reserve Fund, the Required Repair Fund and any other escrow fund established by the Loan
Documents.

     “Restoration” shall mean the repair and restoration of an Individual Property after a Casualty
or Condemnation as nearly as possible to the condition such Individual Property was in immediately
prior to such Casualty or Condemnation, with such alterations as may be reasonably approved by
Lender.

     “Restricted Party” shall mean collectively, (a) Borrower, Principal and any Guarantor, and (b)
any general partner, managing member, or non-member manager of, Borrower, Principal, or any
Guarantor.

     “S&P” shall mean Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies.

     “Sale or Pledge” shall mean a voluntary or involuntary sale, conveyance, assignment, transfer,
encumbrance, pledge, grant of option or other transfer or disposal of a legal or beneficial
interest, whether direct or indirect.

20

 

     “Securities” shall have the meaning set forth in Section 9.1 hereof.

     “Securitization” shall have the meaning set forth in Section 9.1 hereof.

     “Servicer” shall have the meaning set forth in Section 9.5 hereof.

     “Seven Year Swap Yield” shall mean the seven year swap yield determined by Lender as currently
published on an SMKR100 live feed from Bloomberg, or, if such source is not available, as
determined by Lender in its sole but reasonable discretion from another source.

     “Severed Loan Documents” shall have the meaning set forth in Section 8.2(c) hereof.

     “Special Purpose Entity” shall mean a corporation, limited partnership or limited liability
company that, since the date of its formation and at all times on and after the date thereof, has
complied with and shall at all times comply with the following requirements unless it has received
either prior consent to do otherwise from Lender or a permitted administrative agent thereof, or,
while the Loan is securitized, confirmation from each of the applicable Rating Agencies that such
noncompliance would not result in the qualification, withdrawal, or downgrade of the ratings of any
Securities or any class thereof:

     (i) is and shall be organized solely for the purpose of (A) in the case of an
Individual Borrower, acquiring, developing, owning, holding, selling, leasing, transferring,
exchanging, managing and operating the applicable Individual Property, entering into and
performing its obligations under the Loan Documents with Lender, refinancing the applicable
Individual Property in connection with a permitted repayment of the Loan, and transacting
lawful business that is incident, necessary and appropriate to accomplish the foregoing; or
(B) in the case of a Principal, acting as a general partner of the limited partnership that
owns the applicable Individual Property or as member of the limited liability company that
owns the applicable Individual Property and transacting lawful business that is incident,
necessary and appropriate to accomplish the foregoing;

     (ii) has not engaged and shall not engage in any business unrelated to (A) the
acquisition, development, ownership, management or operation of the applicable Individual
Property, or (B) in the case of a Principal, acting as general partner of the limited
partnership that owns the applicable Individual Property or acting as a member of the
limited liability company that owns the applicable Individual Property, as applicable;

     (iii) has not owned and shall not own any real property other than, in the case of
an Individual Borrower, the applicable Individual Property;

     (iv) does not have, shall not have and at no time had any assets other than (A) in
the case of an Individual Borrower, the applicable Individual Property, personal property
necessary or incidental to its ownership and operation of the applicable Individual Property
and cash or (B) in the case of a Principal, its partnership interest in the limited
partnership or its membership interest in the limited liability company that owns the
applicable Individual Property and personal property necessary or incidental to its
ownership of such interests;

21

 

     (v) has not engaged in, sought, consented or permitted to and shall not engage in,
seek, consent to or permit (A) any dissolution, winding up, liquidation, consolidation or
merger unless required by applicable law (and in such case, after fifteen (15) days prior
written notice to Lender), (B) any sale or other transfer of all or substantially all of its
assets or any sale of assets outside the ordinary course of its business, except as
permitted by the Loan Documents, or (C) in the case of a Principal, any transfer of its
partnership or membership interests unless required by applicable law (and in such case,
after fifteen (15) days prior written notice to Lender);

     (vi) except as permitted under the Loan Documents or unless required by law, shall
not cause, consent to or permit any amendment of its limited partnership agreement, articles
of incorporation, articles of organization, certificate of formation, operating agreement or
other formation document or organizational document (as applicable) with respect to the
matters set forth in this definition;

     (vii) if such entity is a limited partnership, has and shall have at least one
general partner and has and shall have, as its only general partners, Special Purpose
Entities each of which (A) is a corporation or single-member Delaware limited liability
company, (B) has two (2) Independent Directors, and (C) holds a direct interest as general
partner in the limited partnership of not less than 0.5% (or 0.1%, if the limited
partnership is a Delaware entity);

     (viii) if such entity is a corporation, has and shall have at least two (2)
Independent Directors, and shall not cause or permit the board of directors of such entity
to take any Material Action either with respect to itself or, if the corporation is a
Principal, with respect to the applicable Individual Borrower or any action requiring the
unanimous affirmative vote of one hundred percent (100%) of the members of its board of
directors unless two (2) Independent Directors shall have participated in such vote and
shall have voted in favor of such action;

     (ix) if such entity is a limited liability company (other than a limited liability
company meeting all of the requirements applicable to a single-member limited liability
company set forth in this definition of “Special Purpose Entity”), has and shall have at
least one (1) member that is a Special Purpose Entity, that is a corporation, that has at
least two (2) Independent Directors and that directly owns at least one-half-of-one percent
(0.5%) of the equity of the limited liability company (or 0.1% if the limited liability
company is a Delaware entity);

     (x) if such entity is a single-member limited liability company, (A) is and shall
be a Delaware limited liability company, (B) has and shall have at least two (2) Independent
Directors serving as managers of such company, (C) shall not take any Material Action and
shall not cause or permit the members or managers of such entity to take any Material
Action, either with respect to itself or, if the company is a Principal, with respect to the
applicable Individual Borrower, in each case unless two (2) Independent Directors then
serving as managers of the company shall have consented in writing to such action, and (D)
has and shall have either (1) a member which owns no economic interest in the company, has
signed the company’s limited liability company

22

 

agreement and has no obligation to make capital contributions to the company, or (2)
two natural persons or one entity that is not a member of the company, that has signed its
limited liability company agreement and that, under the terms of such limited liability
company agreement becomes a member of the company immediately prior to the withdrawal or
dissolution of the last remaining member of the company;

     (xi) has not and shall not (and, if such entity is (a) a limited liability company,
has and shall have a limited liability company agreement or an operating agreement, as
applicable, (b) a limited partnership, has a limited partnership agreement, or (c) a
corporation, has a certificate of incorporation or articles that, in each case, provide that
such entity shall not) (1) dissolve, merge, liquidate, consolidate; (2) except as permitted
under the Loan Documents, sell all or substantially all of its assets; (3) unless required
by applicable law, amend its organizational documents with respect to the matters set forth
in this definition without the consent of Lender; or (4) without the affirmative vote of two
(2) Independent Directors of itself or the consent of a Principal that is a member or
general partner in it: (A) file or consent to the filing of any bankruptcy, insolvency or
reorganization case or proceeding, institute any proceedings under any applicable insolvency
law or otherwise seek relief under any laws relating to the relief from debts or the
protection of debtors generally, file a bankruptcy or insolvency petition or otherwise
institute insolvency proceedings; (B) seek or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator, custodian or any similar official for the
entity or a substantial portion of its property; (C) make an assignment for the benefit of
the creditors of the entity; or (D) take any action in furtherance of any of the foregoing;

     (xii) has at all times been and shall at all times remain solvent and has paid and
shall pay its debts and liabilities (including, a fairly-allocated portion of any personnel
and overhead expenses that it shares with any Affiliate) from its assets as the same shall
become due, and has maintained and shall maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations, provided, however, that the foregoing shall not
require any member, partner or beneficiary to make additional capital contributions;

     (xiii) has not failed and shall not fail to correct any known misunderstanding
regarding the separate identity of such entity and has not identified and shall not identify
itself as a division of any other Person;

     (xiv) except with respect to the other Individual Borrowers as contemplated by this
Agreement or the other Loan Documents, has maintained and shall maintain its bank accounts,
books of account, books, records, resolutions and agreements separate from those of any
other Person and, to the extent that it is required to file tax returns under applicable
law, has filed and shall file its own tax returns, except to the extent that it is required
by law to file consolidated tax returns and, if it is a corporation, has not filed and shall
not file a consolidated federal income tax return with any other corporation, except to the
extent that it is required by law to file consolidated tax returns, or to the extent that an
Individual Borrower or its Principal is treated as a “disregarded entity” for tax purposes
and is not required to file tax returns under applicable law;

23

 

     (xv) Intentionally omitted.

     (xvi) except with respect to the other Individual Borrowers as contemplated by this
Agreement, the Lockbox Agreement, the Cash Management Agreement or the other Loan Documents,
has not commingled and shall not commingle its funds or assets with those of any other
Person and has not participated and shall not participate in any cash management system with
any other Person;

     (xvii) has held and shall hold its assets in its own name;

     (xviii) has held itself out and identified itself and shall hold itself out and
identify itself, and has conducted and shall conduct its business in its name or in a name
franchised or licensed to it by an entity other than an Affiliate of itself or of an
Individual Borrower not as a division or part of any other Person, except (A) with respect
to the other Individual Borrowers, as contemplated by this Agreement, the Lockbox Agreement,
the Cash Management Agreement or the other Loan Documents, and (B) for business conducted on
behalf of itself by another Person under a business management services agreement that is on
commercially-reasonable terms, so long as the manager, or equivalent thereof, under such
business management services agreement holds itself out as an agent of an Individual
Borrower;

     (xix) except with respect to the other Individual Borrowers as contemplated by
this Agreement or the other Loan Documents, (A) has maintained and shall maintain its
financial statements, accounting records and other entity documents separate from those of
any other Person; (B) has shown and shall show, in its financial statements, its assets and
liabilities separate and apart from those of any other Person; and (C) has not permitted and
shall not permit its assets to be listed as assets on the financial statement of any of its
Affiliates except as required by GAAP (or another basis of accounting acceptable to Lender
and consistently applied); provided, however, that any such consolidated financial statement
contains a note indicating that the Special Purpose Entity’s separate assets and credit are
not available to pay the debts of such Affiliate and that the Special Purpose Entity’s
liabilities do not constitute obligations of the consolidated entity;

     (xx) except with respect to the other Individual Borrowers as contemplated by this
Agreement, the Lockbox Agreement, the Cash Management Agreement or the other Loan Documents,
has paid and shall pay its own liabilities and expenses, including the salaries of its own
employees, out of its own funds and assets, and has maintained and shall maintain a
sufficient number of employees in light of its contemplated business operations;

     (xxi) has observed and shall observe all partnership, corporate or limited
liability company formalities, as applicable;

     (xxii) has not incurred any Indebtedness other than (i) acquisition financing with
respect to the applicable Individual Property; construction financing with respect to the
Improvements and certain off-site improvements required by municipal and other

24

 

authorities as conditions to the construction of the Improvements; and first mortgage
financings secured by the applicable Individual Property; and Indebtedness pursuant to
letters of credit, guaranties, interest rate protection agreements and other similar
instruments executed and delivered in connection with such financings, (ii) unsecured trade
payables and operational debt not evidenced by a note, and (iii) Indebtedness incurred in
the financing of equipment and other personal property used on the applicable Individual
Property;

     (xxiii) shall have no Indebtedness other than (i) the Loan, (ii) liabilities
incurred in the ordinary course of business relating to the ownership and operation of the
Property and the routine administration of Borrower, in amounts not to exceed 2% of the
outstanding principal balance of the Loan which liabilities are not more than sixty (60)
days past the date incurred, are not evidenced by a note and are paid when due, and which
amounts are normal and reasonable under the circumstances, and (iii) such other liabilities
that are permitted pursuant to this Agreement;

     (xxiv) has not assumed, guaranteed or become obligated and shall not assume or
guarantee or become obligated for the debts of any other Person, has not held out and shall
not hold out its credit as being available to satisfy the obligations of any other Person or
has not pledged and shall not pledge its assets for the benefit of any other Person, in each
case, except (i) as permitted pursuant to this Agreement, (ii) in the case of an Individual
Borrower, in connection with the Loan, or (iii) with respect to the general partner of any
Individual Borrower that is a limited partnership, as such general partner may be liable
under applicable law for the obligations of such Individual Borrower as the general partner
thereof;

     (xxv) has not acquired and shall not acquire obligations or securities of its
partners, members or shareholders or any other owner or Affiliate except for a Principal
with respect to the obligations of, or interests in, a Borrower;

     (xxvi) has allocated and shall allocate fairly and reasonably any overhead expenses
that are shared with any of its Affiliates, constituents, or owners, or any guarantors of
any of their respective obligations, or any Affiliate of any of the foregoing, including,
but not limited to, paying for shared office space and for services performed by any
employee of an Affiliate;

     (xxvii) has maintained and used and shall maintain and use separate stationery,
invoices and checks bearing its name and not bearing the name of any other entity unless
such entity is clearly designated as being the Special Purpose Entity’s agent;

     (xxviii) Intentionally omitted.

     (xxix) has held itself out and identified itself and shall hold itself out and
identify itself as a separate and distinct entity under its own name or in a name franchised
or licensed to it by an entity other than an Affiliate of an Individual Borrower and not as
a division or part of any other Person,

25

 

     (xxx) except with respect to the other Individual Borrowers as contemplated by this
Agreement, the Lockbox Agreement, the Cash Management Agreement or the other Loan Documents,
has maintained and shall maintain its assets in such a manner that it shall not be costly or
difficult to segregate, ascertain or identify its individual assets from those of any other
Person;

     (xxxi) has not made and shall not make loans to any Person and has not held and
shall not hold evidence of indebtedness issued by any other Person or entity (other than
cash and investment-grade securities issued by an entity that is not an Affiliate of or
subject to common ownership with such entity);

     (xxxii) has not identified and shall not identify its partners, members or
shareholders, or any Affiliate of any of them, as a division or part of it, and has not
identified itself and shall not identify itself as a division of any other Person;

     (xxxiii) other than (A) the Loan, and (B) capital contributions and distributions
permitted under the terms of its organizational documents, has not entered into or been a
party to, and shall not enter into or be a party to, any transaction with any of its
partners, members, shareholders or Affiliates except in the ordinary course of its business
and on terms which are commercially reasonable terms comparable to those of an arm’s-length
transaction with an unrelated third party;

     (xxxiv) has not had and shall not have any obligation to, and has not indemnified
and shall not indemnify its partners, officers, directors or members, as the case may be, in
each case unless such an obligation or indemnification is fully subordinated to the Debt and
shall not constitute a claim against it in the event that its cash flow is insufficient to
pay the Debt;

     (xxxv) if such entity is a corporation, has considered and shall consider the
interests of its creditors in connection with all corporate actions;

     (xxxvi) has not had and shall not have any of its obligations guaranteed by any
Affiliate except as provided by the Loan Documents;

     (xxxvii) has not formed, acquired or held and shall not form, acquire or hold any
subsidiary, except that a Principal may acquire and hold its interest in an Individual
Borrower;

     (xxxviii) has complied and shall comply with all of the terms and provisions
contained in its organizational documents;

     (xxxix) has conducted and shall conduct its business so that each of the
assumptions made about it and each of the facts stated about it in the Insolvency Opinion
are true;

     (xl) has not permitted and shall not permit any Affiliate or constituent party
independent access to its bank accounts, other than the Manager;

26

 

     (xli) is, has always been and shall continue to be duly formed, validly existing,
and in good standing in the state of its incorporation or formation and in all other
jurisdictions where it is qualified to do business;

     (xlii) has paid all taxes which it owes and is not currently involved in any
dispute with any taxing authority;

     (xliii) is not now, nor has ever been, party to any lawsuit, arbitration, summons,
or legal proceeding that resulted in a judgment against it that has not been paid in full;

     (xliv) has no judgments or Liens of any nature against it except for tax liens not
yet due and the Permitted Encumbrances;

     (xlv) has provided Lender with complete financial statements that reflect a fair
and accurate view of the entity’s financial condition; and

     (xlvi) has no material contingent or actual obligations not related to the
applicable Individual Property.

     “Split Note” shall have the meaning set forth in Section 9.2(b) hereof.

     “State” shall mean, the State or Commonwealth in which the applicable Individual Property or
any part thereof is located.

     “Survey” shall mean a survey of an Individual Property prepared by a surveyor licensed in the
State and satisfactory to Lender and the company or companies issuing the Title Insurance Policy,
and containing a certification of such surveyor satisfactory to Lender.

     “Tax and Insurance Escrow Fund” shall have the meaning set forth in Section 7.2
hereof.

     “Taxes” shall mean all real estate and personal property taxes, assessments, water rates or
sewer rents, now or hereafter levied or assessed or imposed against any Individual Property or part
thereof.

     “Tenant” shall mean Albertson’s, or any other person or entity with a possessory right to all
or any part of an Individual Property pursuant to a Lease or other written agreement.

     “Tenant Direction Letter” shall have the meaning set forth in the Cash Management Agreement.

     “Terrorism Insurance Premium Cap” shall mean an amount equal to 250% of the annual Insurance
Premiums payable by Borrower for the year of determination for the insurance coverages required
under Section 6.1(a)(i) and (ii) hereof, but excluding any portion of such Insurance Premiums
relating to terrorism or earthquake coverage.

     “Threshold Amount” shall have the meaning set forth in Section 5.1.21 hereof.

27

 

     “Title Insurance Policy” shall mean, with respect to an Individual Property, an ALTA mortgagee
title insurance policy in the form acceptable to Lender (or, if an Individual Property is in a
State which does not permit the issuance of such ALTA policy, such form as shall be permitted in
such State and acceptable to Lender) issued with respect to the Individual Property and insuring
the lien of the Mortgage encumbering the Individual Property.

     “Transfer” shall have the meaning set forth in Section 5.2.10(b) hereof.

     “Transferee” shall have the meaning set forth in Section 5.2.10(e)(iii) hereof.

     “Transferee’s Principals” shall mean collectively, (A) Transferee’s managing members, general
partners or principal shareholders and (B) such other members, partners or shareholders which
directly or indirectly shall own a fifty-one percent (51%) or greater economic and voting interest
in Transferee.

     “UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in the
State in which the applicable Individual Property is located.

     “U.S. Obligations” shall mean non-redeemable securities evidencing an obligation to timely pay
principal and/or interest in a full and timely manner that are (a) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged, or (b) to the
extent acceptable to the Rating Agencies, other “government securities” within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, as amended.

     “Yield Maintenance Default Premium” shall mean an amount equal to the greater of (a) three
percent (3%) of the outstanding principal balance of the Loan to be prepaid or satisfied and (b)
the excess, if any, of (i) the sum of the present values of all then-scheduled payments of
principal and interest under the Note assuming that all scheduled payments are made timely and that
the remaining outstanding principal and interest on the Loan is paid on the Permitted Par
Prepayment Date (with each such payment and assumed payment discounted to its present value at the
date of prepayment at the rate which, when compounded monthly, is equivalent to the Prepayment Rate
when compounded semi-annually and deducting from the sum of such present values any short-term
interest paid from the date of prepayment to the next succeeding Payment Date in the event such
payment is not made on a Payment Date), over (ii) the principal amount being prepaid.

     “Yield Maintenance Premium” shall mean an amount equal to the greater of (a) one percent (1%)
of the outstanding principal of the Loan to be prepaid or satisfied and (b) the excess, if any, of
(i) the sum of the present values of all then-scheduled payments of principal and interest under
the Note assuming that all scheduled payments are made timely and that the remaining outstanding
principal and interest on the Loan is paid on the Permitted Par Prepayment Date (with each such
payment and assumed payment discounted to its present value at the date of prepayment at the rate
which, when compounded monthly, is equivalent to the Prepayment Rate when compounded semi-annually
and deducting from the sum of such present values any short-term interest paid from the date of
prepayment to the next succeeding Payment Date in the event such payment is not made on a Payment
Date), over (ii) the principal amount being prepaid.

28

 

     
Section 1.2 Principles of Construction. All references to sections and schedules are to
sections and schedules in or to this Agreement unless otherwise specified. All uses of the word
“including” shall mean “including, without limitation” unless the context shall indicate otherwise.
Unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. Unless otherwise specified, all meanings attributed to
defined terms herein shall be equally applicable to both the singular and plural forms of the terms
so defined.

ARTICLE 2 — GENERAL TERMS

     Section 2.1
Loan Commitment; Disbursement to Borrower.

     2.1.1
Agreement to Lend and Borrow. Subject to and upon the terms and conditions set
forth herein, Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on the
Closing Date.

     2.1.2
Single Disbursement to Borrower. Borrower may request and receive only one (1)
borrowing hereunder in respect of the Loan and any amount borrowed and repaid hereunder in respect
of the Loan may not be reborrowed. Borrower acknowledges and agrees that the Loan has been fully
funded as of the Closing Date.

     2.1.3
The Note, Mortgage and Loan Documents. The Loan shall be evidenced by the Note and
secured by the Mortgage and the other Loan Documents.

     2.1.4
Use of Proceeds. Borrower shall use the proceeds of the Loan to (a) acquire the
Properties or repay and discharge any existing loans relating to the Properties, (b) pay all past
due Basic Carrying Costs, if any, with respect to the Properties, (c) make deposits into the
Reserve Funds on the Closing Date in the amounts provided herein, (d) pay costs and expenses
incurred in connection with the closing of the Loan and the acquisition of the Properties, as
approved by Lender, (e) fund any working capital requirements of the Properties and (f) distribute
the balance, if any, to Borrower.

     Section 2.2 Interest Rate.

     2.2.1
Interest Rate. Interest on the outstanding principal balance of the Loan shall
accrue at the Initial Interest Rate or as otherwise set forth in this Agreement from (and
including) the Closing Date to but excluding the Anticipated Repayment Date. Interest on the
outstanding principal balance of the Loan shall accrue at the Adjusted Interest Rate or as
otherwise set forth in this Agreement from (and including) the Anticipated Repayment Date to but
excluding the Maturity Date.

     2.2.2
Interest Calculation. Interest on the outstanding principal balance of the Loan
shall be calculated by multiplying (a) the actual number of days elapsed in the relevant Accrual
Period by (b) a daily rate based on the Applicable Interest Rate or Default Rate, as applicable,
and a three hundred sixty (360) day year by (c) the outstanding principal balance of the Loan.

29

 

     2.2.3
Default Rate. In the event that, and for so long as, any Event of Default shall
have occurred and be continuing, the outstanding principal balance of the Loan and, to the extent
permitted by law, all accrued and unpaid interest in respect of the Loan and any other amounts due
pursuant to the Loan Documents, shall accrue interest at the Default Rate, calculated from the date
such payment was due without regard to any grace or cure periods contained herein.

     2.2.4
Usury Savings. This Agreement, the Note and the other Loan Documents are subject
to the express condition that at no time shall Borrower be obligated or required to pay interest on
the principal balance of the Loan at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the Maximum Legal Rate. If, by the terms of this
Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate, the
Applicable Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately
reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate
shall be deemed to have been payments in reduction of principal (without any Yield Maintenance
Premium or other prepayment consideration) and not on account of the interest due hereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due
under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of
interest from time to time in effect and applicable to the Loan for so long as the Loan is
outstanding.

     With respect to the foregoing provisions, the following shall apply with respect to the State
of Texas:

     (a) It is expressly stipulated and agreed to be the intent of Borrower and Lender at all
times to comply strictly with the applicable Texas law governing the maximum rate or amount of
interest payable on the Note, this Agreement or the Debt (or applicable United States federal law
to the extent that it permits Lender to contract for, charge, take, reserve or receive a greater
amount of interest than under Texas law). If the applicable law is ever judicially interpreted so
as to render usurious any amount (i) contracted for, charged, taken, reserved or received pursuant
to the Note, this Agreement or any of the other Loan Documents or any other communication or
writing by or between Borrower and Lender related to the transaction or transactions that are the
subject matter of the Loan Documents, (ii) contracted for, charged or received by reason of
Lender’s exercise of the option to accelerate the maturity of the Note, this Agreement and/or the
Debt, or (iii) Borrower will have paid or Lender will have received by reason of any voluntary
prepayment by Borrower of the Note and/or the Debt, then it is Borrower’s and Lender’s express
intent that all amounts charged in excess of the Maximum Lawful Rate (hereinafter defined) shall be
automatically cancelled, ab initio, and all amounts in excess of the Maximum Lawful Rate
theretofore collected by Lender shall be credited on the principal balance of the Note and/or the
Debt (or, if the Note and all Debt have been or would thereby be paid in full, refunded to
Borrower), and the provisions of the Note, this Agreement and the other Loan Documents immediately
be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without
the necessity of the execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder;
provided, however, if the Note has been paid in full before the end

30

 

of the stated term of the Note, then Borrower and Lender agree that Lender shall, with
reasonable promptness after Lender discovers or is advised by Borrower that interest was received
in an amount in excess of the Maximum Lawful Rate, either refund such excess interest to Borrower
and/or credit such excess interest against the Note and/or any Debt then owing by Borrower to
Lender. Borrower hereby agrees that as a condition precedent to any claim seeking usury penalties
against Lender, Borrower will provide written notice to Lender, advising Lender in reasonable
detail of the nature and amount of the violation, and Lender shall have sixty (60) days after
receipt of such notice in which to correct such usury violation, if any, by either refunding such
excess interest to Borrower or crediting such excess interest against the Note and/or the Debt then
owing by Borrower to Lender. All sums contracted for, charged or received by Lender for the use,
forbearance or detention of any debt evidenced by the Note, this Agreement and/or the Debt shall,
to the extent permitted by applicable law, be amortized or spread, using the actuarial method,
throughout the stated term of the Note, this Agreement and/or the Debt (including any and all
renewal and extension periods) until payment in full so that the rate or amount of interest on
account of the Note, this Agreement and/or the Debt does not exceed the Maximum Lawful Rate from
time to time in effect and applicable to the Note and/or the Debt for so long as debt is
outstanding. In no event shall the provisions of Chapter 346 of the Texas Finance Code (which
regulates certain revolving credit loan accounts and revolving triparty accounts) apply to the
Note, this Agreement and/or the Debt. Notwithstanding anything to the contrary contained herein or
in any of the other Loan Documents, it is not the intention of Lender to accelerate the maturity of
any interest that has not accrued at the time of such acceleration or to collect unearned interest
at the time of such acceleration.

     (b) As used herein, the term “Maximum Lawful Rate” shall mean the maximum lawful rate of
interest which may be contracted for, charged, taken, received or reserved by Lender in accordance
with the applicable laws of the State of Texas (or applicable United States federal law to the
extent that it permits Lender to contract for, charge, take, receive or reserve a greater amount of
interest than under Texas law), taking into account all Charges (as herein defined) made in
connection with the transaction evidenced by the Note, this Agreement and the other Loan Documents.
As used herein, the term “Charges” shall mean all fees, charges and/or any other things of value,
if any, contracted for, charged, received, taken or reserved by Lender in connection with the
transactions relating to the Note, this Agreement and the other Loan Documents, which are treated
as interest under applicable law. As used in this Section 2.2.4, the term “Debt” shall mean
any and all debt paid or payable by Borrower to Lender pursuant to the Loan Documents or any other
communication or writing by or between Borrower and Lender related to the transaction or
transactions that are the subject matter of this Agreement and the Loan Documents, except such debt
which has been paid or is payable by Borrower to Lender under the Note.

     (c) To the extent that Lender is relying on Chapter 303 of the Texas Finance Code to
determine the Maximum Lawful Rate payable on the Note and/or the Debt, Lender will utilize the
weekly ceiling from time to time in effect as provided in such Chapter 303, as amended. To the
extent United States federal law permits Lender to contract for, charge, take, receive or reserve a
greater amount of interest than under Texas law, Lender will rely on United States federal law
instead of such Chapter 303 for the purpose of determining the Maximum Lawful Rate. Additionally,
to the extent permitted by applicable law now or hereafter in effect, Lender may, at its option and
from time to time, utilize any other method of establishing the Maximum

31

 

Lawful Rate under such Chapter 303 or under other applicable law by giving notice, if
required, to Borrower as provided by applicable law now or hereafter in effect.

     Section 2.3 Loan Payment.

     2.3.1 Monthly Debt Service Payments.

     (a) Borrower shall pay to Lender (i) on the Closing Date, an amount equal to interest only
on the outstanding principal balance of the Loan for the initial Accrual Period, (ii) on February
1, 2011, and on each Payment Date thereafter up to and including the Payment Date on January 1,
2016, an amount equal to interest only on the outstanding principal balance of the Loan for the
related Accrual Period, and (iii) on February 1, 2016, and on each Payment Date thereafter up to
and including the Anticipated Repayment Date, the Monthly Debt Service Payment Amount, which
payments shall be applied first to accrued and unpaid interest and the balance to principal.

     (b) On each Payment Date occurring after the Anticipated Repayment Date Borrower shall (i)
make a payment to Lender of principal and interest in the amount of the Monthly Debt Service
Payment Amount, such payment to be applied to interest in an amount equal to interest that would
have accrued on the outstanding principal balance of the Loan (without adjustment for Accrued
Interest) at the Initial Interest Rate and the remainder to the principal balance of the Loan, and
(ii) pay the other amounts required to be paid in accordance with the Cash Management Agreement.
In addition, to the extent there is Excess Cash Flow for the preceding month, Borrower shall pay to
Lender such Excess Cash Flow, such payment to be applied as follows: (A) first, to the reduction of
the principal balance of the Note until the entire outstanding principal balance of the Note is
paid in full; and (B) then, to the payment of Accrued Interest. “Accrued Interest” shall mean
interest calculated at the Adjusted Interest Rate, and deferred and not paid pursuant to subsection
(i) above.

     2.3.2
Payments Generally. For purposes of making payments hereunder, but not for
purposes of calculating Accrual Periods, if the day on which such payment is due is not a Business
Day, then amounts due on such date shall be due on the immediately preceding Business Day and with
respect to payments of principal due on the Maturity Date, interest shall be payable at the
Applicable Interest Rate or the Default Rate, as the case may be, through and including the day
immediately preceding such Maturity Date. All amounts due under this Agreement and the other Loan
Documents shall be payable without setoff, counterclaim, defense or any other deduction whatsoever.

     2.3.3
Payment on Maturity Date. Borrower shall pay to Lender on the Maturity Date the
outstanding principal balance of the Loan (including without limitation the Accrued Interest), all
accrued and unpaid interest and all other amounts due hereunder and under the Note, the Mortgage
and the other Loan Documents.

     2.3.4
Late Payment Charge. If any principal, interest or any other sums due under the
Loan Documents (including the amounts due on the Maturity Date) are not paid by Borrower on or
prior to the date on which it is due, Borrower shall pay to Lender upon demand an amount equal to
the lesser of five percent (5%) of such unpaid sum and the Maximum Legal Rate in

32

 

order to defray the expense incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment. Any such amount shall
be secured by the Mortgage and the other Loan Documents to the extent permitted by applicable law.

     2.3.5
Method and Place of Payment. Except as otherwise specifically provided herein and
subject to the provisions of Section 2.7.3, all payments and prepayments under this
Agreement and the Note shall be made to Lender not later than 2:00 P.M., New York City time, on the
date when due and shall be made in lawful money of the United States of America in immediately
available funds at Lender’s office or as otherwise directed by Lender, and any funds received by
Lender after such time shall, for all purposes hereof, be deemed to have been paid on the next
succeeding Business Day.

     Section 2.4 Prepayments.

     2.4.1 Voluntary Prepayments. 

     (a) Except as otherwise expressly provided in this Section 2.4, Borrower shall not
have the right to prepay the Loan in whole or in part prior to the Anticipated Repayment Date.

     (b) On any Business Day after the Permitted Prepayment Date through the Maturity Date,
Borrower may, at its option, prepay the Debt in full (but not in part), provided that (i) Borrower
submits a notice to Lender setting forth the projected date of prepayment, which date shall be no
less than thirty (30) days from the date of such notice, and (ii) Borrower pays to Lender (A) the
unpaid principal amount of the Note, (B) all interest accrued and unpaid on the principal balance
of the Note to and including the date of prepayment, (C) all other sums due under the Note, this
Agreement and the other Loan Documents, (D) if such prepayment occurs prior to the Permitted Par
Prepayment Date, the Yield Maintenance Premium, and (E) if such prepayment is not paid on a
regularly scheduled Payment Date (or, if such day is not a Business Day, the immediately preceding
Business Day), interest for the full Accrual Period during which the prepayment occurs.

     (c) Notwithstanding anything contained in Section 2.4.1(a) above to the contrary,
Borrower may prepay a portion of the Loan in accordance with Section 2.6.2 hereof.

     2.4.2
Mandatory Prepayments. On the next occurring Payment Date following the date on
which Lender actually receives any Net Proceeds, if Lender is not obligated to make such Net
Proceeds available to Borrower for the Restoration of the applicable Individual Property or
otherwise remit such Net Proceeds to Borrower pursuant to Section 6.4 hereof, Borrower
authorizes Lender, at Lender’s option, to apply Net Proceeds as a prepayment of all or a portion of
the outstanding principal balance of the Loan together with accrued interest and any other sums due
hereunder in an amount equal to one hundred percent (100%) of such Net Proceeds; provided, however,
if an Event of Default has occurred and is continuing, Lender may apply such Net Proceeds to the
Debt (until paid in full) in any order or priority in its sole discretion. No Yield Maintenance
Premium or other prepayment consideration or premium shall be due in connection with any prepayment
made pursuant to this Section 2.4.2. Any Net Proceeds applied as a prepayment of a portion
of the outstanding principal balance of the Loan

33

 

shall reduce the Release Amount for the applicable Individual Property by an equivalent amount.

     2.4.3
Prepayments After Default. If during the continuance of an Event of Default,
payment of all or any part of the Debt is tendered by Borrower or otherwise recovered by Lender,
such tender or recovery shall be (a) deemed made on the next occurring Payment Date together with
the Monthly Debt Service Payment and (b) deemed a voluntary prepayment by Borrower in violation of
the prohibition against prepayment set forth in Section 2.4.1 hereof, and Borrower shall
pay, in addition to the Debt, an amount equal to the Yield Maintenance Default Premium which can be
applied by Lender in such order and priority as Lender shall determine in is sole and absolute
discretion.

     Section 2.5 Intentionally omitted.

     Section 2.6
Release of Property. Except as set forth in this Section 2.6,
no
repayment or prepayment of all or any portion of the Loan shall cause, give rise to a right to
require, or otherwise result in, the release of the Lien of the Mortgage on any Individual
Property.

     2.6.1 Release of Property. 

     (a) If Borrower has elected to prepay the entire Loan and the requirements of Section
2.4.1 and this Section 2.6.1 have been satisfied, all of the Properties shall be
released from the Liens of their respective Mortgages.

     (b) In connection with the release of the Mortgages, Borrower shall submit to Lender, not
less than fifteen (15) days prior to the date of prepayment, a release of Lien (and related Loan
Documents) for each Individual Property for execution by Lender. Each such release shall be in a
form appropriate in the jurisdiction in which the applicable Individual Property is located and
that would be satisfactory to a prudent lender and contains standard provisions, if any, protecting
the rights of the releasing lender. In addition, Borrower shall provide all other documentation
Lender reasonably requires to be delivered by Borrower in connection with such release. Borrower
shall reimburse Lender and Servicer for any costs and expenses Lender and Servicer incur arising
from such release (including reasonable attorneys’ fees and expenses) and Borrower shall pay, in
connection with such release, (i) all recording charges, filing fees, taxes or other expenses
payable in connection therewith, and (ii) to any Servicer, the current fee being assessed by such
Servicer to effect such release, which fee shall not exceed $500 per Individual Property being
released (exclusive of costs incurred).

     2.6.2 Release of Individual Property. On any Business Day after the Permitted
Prepayment Date through the Anticipated Repayment Date, an Individual Borrower may, at its option,
prepay a portion of the Loan, provided the applicable requirements of Section 2.4.1 and
this Section 2.6.2 have been satisfied, and such Individual Borrower may obtain the release
of its Individual Property from the Lien of the related Mortgage thereon (and related Loan
Documents) and the release of the related Individual Borrower’s obligations under the Loan
Documents (other than those expressly stated to survive). In connection with such partial
prepayment and release, the following conditions
must be satisfied:

34

 

     (a) The amount of the outstanding principal balance of the Loan to be prepaid shall
equal or exceed the Adjusted Release Amount for the applicable Individual Property, and such
prepayment shall be deemed a voluntary prepayment for all purposes hereunder and shall include the
applicable Yield Maintenance Premium (if such prepayment is made prior to the Permitted Par
Prepayment Date) and any other sums then due to Lender;

     (b) No Event of Default has occurred and is continuing (and no event which, with notice, the
passage or time, or both would constitute an Event of Default shall have occurred);

     (c) Subsequent to such release, each remaining Individual Borrower shall continue to be a
Special Purpose Entity pursuant to, and in accordance with, Section 4.1.30 hereof;

     (d) If required by the Rating Agencies (as determined by Lender), Borrower shall deliver to
Lender and the Rating Agencies an Additional Insolvency Opinion or an update of the Insolvency
Opinion indicating that the release does not affect the opinions set forth therein;

     (e) Borrower shall deliver an opinion of tax counsel that would be acceptable to a prudent
lender acting reasonably, prepared and delivered at Borrower’s expense, stating that as a result of
such release of the applicable Individual Property any REMIC Trust that has acquired the Loan (i)
will not fail to maintain its status as a REMIC Trust, and (ii) will not be subject to tax on any
“prohibited transactions” or “prohibited contributions”;

     (f) After giving effect to the release of the applicable Individual Property, the Debt Service
Coverage Ratio for the Properties then remaining subject to the Liens of the Mortgages based on the
trailing (twelve) (12) month period immediately preceding the release of the applicable Individual
Property shall be equal to or greater than the greater of (i) the Release Debt Service Coverage
Ratio, and (ii) the Debt Service Coverage Ratio for all of the Properties then subject to the Liens
of the Mortgages (including the Individual Property requested to be released) immediately preceding
the release of the applicable Individual Property based on the trailing twelve (12) month period;

     (g) Immediately after giving effect to the release of the applicable Individual Property, the
loan-to-value ratio of the remaining Properties, as determined by Lender in its sole discretion,
shall not exceed 125%. Unless Lender determines that applicable REMIC regulations or other
applicable authority require a different valuation method, Lender shall determine the aggregate
loan-to-value ratio of the remaining Properties by capitalizing net operating income for such
Properties for such period using a capitalization rate or range of capitalization rates that the
Lender has no reason to believe is incorrect.

     (h) In connection with the release of a Mortgage, Borrower shall submit to Lender, not less
than fifteen (15) days prior to the date of prepayment, a release of Lien (and related Loan
Documents) for the applicable Individual Property for execution by Lender. Such release shall be
in a form appropriate in the jurisdiction in which the applicable Individual Property is located
and that would be satisfactory to a prudent lender and contains standard provisions, if any,
protecting the rights of the releasing lender. In addition, Borrower shall provide all other
documentation Lender reasonably requires to be delivered by Borrower in connection with such
release. Borrower shall reimburse Lender and Servicer for any costs and expenses Lender and

35

 

Servicer incur arising from such release (including reasonable attorneys’ fees and expenses)
and Borrower shall have paid, in connection with such release, (i) all recording charges, filing
fees, taxes or other expenses payable in connection therewith, (ii) all costs and expenses (if
any) of the Rating Agencies incurred with respect to such release, and (iii) to any Servicer, the
current fee being assessed by such Servicer to effect such release, provided, however, such fee
shall not exceed $15,000 per release (exclusive of costs incurred); and

     (i) Borrower shall comply with Lender’s or Servicer’s reasonable requirements in connection
with such release (subject to the fee cap in clause (h) above).

     Notwithstanding the first sentence of this Section 2.6.2, in connection with an
exercise of the purchaser’s rights under the Denver Purchase Option, on any Business Day after the
date hereof, the Denver Individual Borrower may prepay a portion of the Loan and obtain the release
of the Denver Individual Property from the Lien of the related Mortgage thereon (and related Loan
Documents) and the release of the Denver Individual Borrower’s obligations under the Loan Documents
(other than those expressly stated to survive), provided the applicable requirements of Section
2.4.1 and this Section 2.6.2 (other than clause (b) of this Section 2.6.2) have been satisfied.

     Upon the release of any Individual Property and Individual Borrower pursuant to this
Section 2.6.2, all references herein or in any of the other Loan Documents to the term
“Properties” shall be deemed to exclude such Individual Property and all references in the Note,
this Agreement or any other Loan Document to the term “Borrower” or “Borrowers” shall be deemed to
exclude such Individual Borrower.

     Section 2.7
Lockbox Account/Cash Management.

     
2.7.1 Lockbox Account. 

     (a) During the term of the Loan, Borrower shall establish and maintain an account (the
“Lockbox Account”) with Lockbox Bank in trust for the benefit of Lender, which Lockbox Account
shall be under the sole dominion and control of Lender. The Lockbox Account shall be entitled
“Cole AB Abilene TX, LLC as Borrower and JPMorgan Chase Bank, National Association, as Lender,
pursuant to Loan Agreement dated as of December 15, 2010 — Lockbox Account”. Borrower hereby
grants to Lender a first-priority security interest in the Lockbox Account and all deposits at any
time contained therein and the proceeds thereof and will take all actions necessary to maintain in
favor of Lender a perfected first priority security interest in the Lockbox Account, including,
without limitation, filing UCC-1 Financing Statements and continuations thereof. Lender and
Servicer shall have the sole right to make withdrawals from the Lockbox Account and all costs and
expenses for establishing and maintaining the Lockbox Account shall be paid by Borrower. All
monies now or hereafter deposited into the Lockbox Account shall be deemed additional security for
the Debt. The Lockbox Agreement and Lockbox Account shall remain in effect until the Loan has been
repaid in full.

     (b) Borrower shall, or shall cause Manager to, on or prior to the Closing Date, deliver Tenant
Direction Letters to all Tenants under Leases to deliver all Rents payable thereunder directly to
the Lockbox Account. Borrower shall, and shall cause Manager to, deposit all

36

 

amounts received by Borrower or Manager constituting Rents into the Lockbox Account within one
(1) Business Day after receipt thereof.

     (c) Pursuant to the Lockbox Agreement, the Lockbox Bank will agree to transfer to the Cash
Management Account in immediately available funds by federal wire transfer all amounts on deposit
in the Lockbox Account (except for any required minimum balances and/or fees of the Lockbox Bank,
as specified in the Lockbox Agreement) once every Business Day throughout the term of the Loan.

     (d) Upon the occurrence and during the continuance of an Event of Default, Lender may, in
addition to any and all other rights and remedies available to Lender, apply any sums then present
in the Lockbox Account to the payment of the Debt in any order in its sole discretion.

     (e) The Lockbox Account shall not be commingled with other monies held by Borrower, Manager or
Lockbox Bank.

     (f) Borrower shall not further pledge, assign or grant any security interest in the Lockbox
Account or the monies deposited therein or permit any lien or encumbrance to attach thereto, or any
levy to be made thereon, or any UCC-1 Financing Statements, except those naming Lender as the
secured party, to be filed with respect thereto.

     (g) Borrower shall indemnify Lender and hold Lender harmless from and against any and all
actions, suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses
(including litigation costs and reasonable attorneys’ fees and expenses) arising from or in any way
connected with the Lockbox Account and/or the Lockbox Agreement (unless arising from the gross
negligence or willful misconduct of Lender) or the performance of the obligations for which the
Lockbox Account was established.

     2.7.2 Cash Management Account.

     (a) During the term of the Loan, Borrower shall establish and maintain a segregated Eligible
Account (the “Cash Management Account”) to be held by Agent in trust and for the benefit of Lender,
which Cash Management Account shall be under the sole dominion and control of Lender. The Cash
Management Account shall be entitled “Cole AB Abilene TX, LLC as Borrower and JPMorgan Chase Bank,
National Association, as Lender, pursuant to Loan Agreement dated as of December 15, 2010 — Cash
Management Account.” Borrower hereby grants to Lender a first priority security interest in the
Cash Management Account and all deposits at any time contained therein and the proceeds thereof and
will take all actions necessary to maintain in favor of Lender a perfected first priority security
interest in the Cash Management Account, including, without limitation, filing UCC-1 Financing
Statements and continuations thereof. Borrower will not in any way alter or modify the Cash
Management Account and will notify Lender of the account number thereof. Lender and Servicer shall
have the sole right to make withdrawals from the Cash Management Account and all costs and expenses
for establishing and maintaining the Cash Management Account shall be paid by Borrower pursuant to
the Fee Agreement (as defined in the Cash Management Agreement).

37

 

     (b) The insufficiency of funds on deposit in the Cash Management Account shall not relieve
Borrower from the obligation to make any payments, as and when due pursuant to this Agreement and
the other Loan Documents, and such obligations shall be separate and independent, and not
conditioned on any event or circumstance whatsoever.

     (c) All funds on deposit in the Cash Management Account following the occurrence and during
the continuance of an Event of Default may be applied by Lender in such order and priority as
Lender shall determine.

     (d) Borrower hereby agrees that Lender may modify the Cash Management Agreement for the
purpose of establishing additional sub-accounts in connection with any payments otherwise required
under this Agreement and the other Loan Documents and Lender shall provide notice thereof to
Borrower.

     2.7.3 Payments Received under the Cash Management Agreement. Notwithstanding anything to
the contrary contained in this Agreement or the other Loan Documents, and provided no Event of
Default has occurred and is continuing, Borrower’s obligations with respect to the payment of the
Monthly Debt Service Payment Amount and amounts required to be deposited into the Reserve Funds, if
any, shall be deemed satisfied to the extent sufficient amounts are deposited in the Cash
Management Account to satisfy such obligations pursuant to this Agreement on the dates each such
payment is required, regardless of whether any of such amounts are so applied by Lender.

ARTICLE 3 — CONDITIONS PRECEDENT

     Section 3.1 Conditions Precedent to Closing. The obligation of Lender to make the Loan
hereunder is subject to the fulfillment by Borrower or waiver by Lender of all of the conditions
precedent to closing set forth in the application or term sheet for the Loan between Borrower and
Lender and the commitment or commitment rider, if any, to the application or term sheet for the
Loan issued by Lender.

ARTICLE 4 — REPRESENTATIONS AND WARRANTIES

     Section 4.1 Borrower Representations. Borrower represents and warrants as of the date
hereof that:

     4.1.1 Organization. Borrower has been duly organized and is validly existing and in good
standing with requisite power and authority to own the Properties and to transact the businesses in
which it is now engaged. Borrower is duly qualified to do business and is in good standing in each
jurisdiction where it is required to be so qualified in connection with its businesses and
operations. Borrower possesses all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own the Properties and to transact the businesses in which it
is now engaged, and the sole business of Borrower is the ownership, management and operation of the
Properties. The ownership interests in Borrower are as set forth on the organizational chart
attached hereto as Schedule IV.

     4.1.2 Proceedings. Borrower has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the other Loan Documents. This Agreement

38

 

and such other Loan Documents have been duly executed and delivered by or on behalf of Borrower and
constitute legal, valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, subject only to applicable bankruptcy, insolvency and
similar laws affecting rights of creditors generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at
law).

     4.1.3 No Conflicts. The execution, delivery and performance of this Agreement and the
other Loan Documents by Borrower will not conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance (other than pursuant to the Loan Documents) upon any of the property or
assets of Borrower pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement,
partnership agreement, management agreement or other agreement or instrument to which Borrower is a
party or by which any of the Properties or Borrower’s assets is subject, nor will such action
result in any violation of the provisions of any statute or any order, rule or regulation of any
Governmental Authority having jurisdiction over Borrower or any of Borrower’s properties or assets,
and any consent, approval, authorization, order, registration or qualification of or with any court
or any such Governmental Authority required for the execution, delivery and performance by Borrower
of this Agreement or any other Loan Documents has been obtained and is in full force and effect.

     4.1.4 Litigation. There are no actions, suits or proceedings at law or in equity by or
before any Governmental Authority or other agency now pending or, to Borrower’s actual knowledge,
threatened against or affecting any Individual Borrower, Guarantor, Principal or, to the extent an
Individual Borrower, Guarantor or Principal is a party, any Individual Property, which actions,
suits or proceedings, if determined against such Individual Borrower, Guarantor, Principal or any
Individual Property, might materially adversely affect the condition (financial or otherwise) or
business of such Individual Borrower, Guarantor, Principal or the condition or ownership of any
Individual Property. In addition, no Individual Borrower has any knowledge of any actions, suits
or proceedings at law or in equity by or before any Governmental Authority or other agency now
pending or threatened against or affecting any Individual Property to which an Individual Borrower,
Guarantor or Principal is not a party, which actions, suits or proceedings, if determined against
such Individual Property might materially adversely affect the condition or ownership of such
Individual Property.

     4.1.5 Agreements. Borrower is not a party to any agreement or instrument or subject to any
restriction which might materially and adversely affect Borrower or any Individual Property, or
Borrower’s business, properties or assets, operations or condition, financial or otherwise.
Borrower is not in default in any material respect in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or instrument to which
it is a party or by which Borrower or any Individual Property is bound. Borrower has no material
financial obligation under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which Borrower is a party or by which Borrower or any Individual
Property is otherwise bound, other than (a) obligations incurred in the ordinary course of the
operation of any Individual Property as permitted pursuant to clause (xxiii) of the definition of
“Special Purpose Entity” set forth in Section 1.1 hereof and (b) obligations under the Loan
Documents.

39

 

     4.1.6 Title. Each Individual Borrower has good and marketable fee simple title to the real
property comprising part of its Individual Property and good title to the balance of the Individual
Property, free and clear of all Liens whatsoever except the Permitted Encumbrances, such other
Liens as are permitted pursuant to the Loan Documents and the Liens created by the Loan Documents.
To Borrower’s actual knowledge, the Permitted Encumbrances in the aggregate do not materially and
adversely affect the value, operation or use of the Properties (as currently used) or Borrower’s
ability to repay the Loan. To Borrower’s actual knowledge, each Mortgage, when properly recorded
in the appropriate records, together with any Uniform Commercial Code financing statements required
to be filed in connection therewith, will create (a) a valid, perfected first priority lien on the
corresponding Individual Property, subject only to Permitted Encumbrances and the Liens created by
the Loan Documents and (b) perfected security interests in and to, and perfected collateral
assignments of, all personalty owned by Borrower (including the Leases), all in accordance with the
terms thereof, in each case subject only to any applicable Permitted Encumbrances, such other Liens
as are permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. To
Borrower’s actual knowledge and except as set forth in the Title Insurance Policy, there are no
claims for payment for work, labor or materials affecting the Properties which are or may become a
Lien prior to, or of equal priority with, the Liens created by the Loan Documents.

     4.1.7 Solvency. Borrower has (a) not entered into this transaction or executed the Note,
this Agreement or any other Loan Documents with the actual intent to hinder, delay or defraud any
creditor and (b) received reasonably equivalent value in exchange for its obligations under such
Loan Documents. Giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds
and will, immediately following the making of the Loan, exceed Borrower’s total liabilities,
including, without limitation, subordinated, unliquidated, disputed and contingent liabilities.
The fair saleable value of Borrower’s assets is and will, immediately following the making of the
Loan, be greater than Borrower’s probable liabilities, including the maximum amount of its
contingent liabilities on its debts as such debts become absolute and matured. Borrower’s assets
do not and, immediately following the making of the Loan will not, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur debt and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such debt and liabilities as they
mature (taking into account the timing and amounts of cash to be received by Borrower and the
amounts to be payable on or in respect of obligations of Borrower). No petition in bankruptcy has
been filed against Borrower or any constituent Person in the last seven (7) years, and neither
Borrower nor any constituent Person in the last seven (7) years has ever made an assignment for the
benefit of creditors or taken advantage of any insolvency act for the benefit of debtors. Neither
Borrower nor any of its constituent Persons are contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major
portion of Borrower’s assets or property, and Borrower has no actual knowledge of any Person
contemplating the filing of any such petition against it or such constituent Persons.

     4.1.8
Full and Accurate Disclosure. No statement of fact made by Borrower in this
Agreement or in any of the other Loan Documents contains any untrue statement of a material fact or
omits to state any material fact necessary to make statements contained herein or therein not
misleading. There is no material fact presently known to Borrower which has not been disclosed to
Lender which adversely affects, nor as far as Borrower can foresee, might adversely

40

 

affect, any Individual Property or the business, operations or condition (financial or otherwise)
of Borrower.

     4.1.9 No Plan Assets. Borrower does not sponsor, is not obligated to contribute to, and is
not itself an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of
ERISA or Section 4975 of the Code, and none of the assets of Borrower constitutes or will
constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section
2510.3-101. In addition, (a) Borrower is not a “governmental plan” within the meaning of Section
3(32) of ERISA and (b) transactions by or with Borrower are not subject to any state or other
statute , regulation or other restriction regulating investments of, or fiduciary obligations with
respect to, governmental plans within the meaning of Section 3(32) of ERISA which is similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code and which prohibit or otherwise
restrict the transactions contemplated by this Agreement, including but not limited to the exercise
by Lender of any of its rights under the Loan Documents.

     4.1.10 Compliance. To Borrower’s actual knowledge, Borrower and the Properties and the use
thereof comply in all material respects with all applicable Legal Requirements, including, without
limitation, building and zoning ordinances and codes. Borrower is not in default or violation of
any order, writ, injunction, decree or demand of any Governmental Authority. There has not been
committed by Borrower or, to Borrower’s actual knowledge, any other Person in occupancy of or
involved with the operation or use of the Properties, any act or omission affording the federal
government or any other Governmental Authority the right of forfeiture as against any Individual
Property or any part thereof or any monies paid in performance of Borrower’s obligations under any
of the Loan Documents.

     4.1.11 Financial Information. All financial data, including, without limitation, the
statements of cash flow and income and operating expense, that have been delivered to Lender in
connection with the Loan (i) are true, complete and correct in all material respects, (ii)
accurately represent the financial condition of Borrower and such Individual Property, as
applicable, as of the date of such reports, and (iii) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance with GAAP (or
another basis of accounting acceptable to Lender and consistently applied), throughout the periods
covered, except as disclosed therein. Except for Permitted Encumbrances, Borrower does not have
any contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments that are known to Borrower and
reasonably likely to have a materially adverse effect on any Individual Property or the current
operation thereof, except as referred to or reflected in said financial statements. Since the date
of such financial statements, there has been no materially adverse change in the financial
condition, operations or business of Borrower from that set forth in said financial statements.

     4.1.12 Condemnation. No Condemnation or other proceeding has been commenced or, to
Borrower’s actual knowledge, is threatened or contemplated with respect to all or any portion of
any Individual Property or for the relocation of roadways providing access to any Individual
Property.

     4.1.13 Federal Reserve Regulations. No part of the proceeds of the Loan will be used for
the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation

41

 

U of the Board of Governors of the Federal Reserve System or for any other purpose which would be
inconsistent with such Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this Agreement or the
other Loan Documents.

     4.1.14 Utilities and Public Access. The applicable Individual Property has rights of
access to public ways and is served by water, sewer, sanitary sewer and storm drain facilities
adequate to service such Individual Property for its intended uses. All public utilities necessary
or convenient to the full use and enjoyment of such Individual Property are located either in the
public right of way abutting the Individual Property (which are connected so as to serve the
Individual Property without passing over other property) or in recorded easements serving such
Individual Property and such easements are set forth in the Title Insurance Policy. All roads
necessary for the use of the Individual Property for its current purposes have been completed and
dedicated to public use and accepted by all Governmental Authorities.

     4.1.15 Not a Foreign Person. Borrower is not a “foreign person” within the meaning of
§1445(f)(3) of the Code.

     4.1.16 Separate Lots. To Borrower’s actual knowledge, each Individual Property is
comprised of one (1) or more parcels which constitute a separate tax lot or lots and does not
constitute a portion of any other tax lot not a part of such Individual Property.

     4.1.17 Assessments. To Borrower’s actual knowledge and except as set forth in the Title
Insurance Policy, there are no pending or proposed special or other assessments for public
improvements or otherwise affecting any Individual Property nor are there any contemplated
improvements to any Individual Property that may result in such special or other assessments.

     4.1.18 Enforceability. To Borrower’s actual knowledge, the Loan Documents are not subject
to any right of rescission, set-off, counterclaim or defense by Borrower or Guarantor, including
the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the
exercise of any right thereunder, render the Loan Documents unenforceable (subject to principles of
equity and bankruptcy, insolvency and other laws generally affecting creditors’ rights and the
enforcement of debtors’ obligations), and neither Borrower nor Guarantor has asserted any right of
rescission, set-off, counterclaim or defense with respect thereto.

     4.1.19 No Prior Assignment. There are no prior collateral assignments of the Leases or any
portion of the Rents due and payable or to become due and payable which are presently outstanding.

     4.1.20 Insurance. Borrower has obtained and has delivered to Lender certified copies of
the Policies, or insurance certificates in form reasonably acceptable to Lender, reflecting the
insurance coverages, amounts and other requirements set forth in this Agreement. To Borrower’s
actual knowledge, no claims have been made or are currently pending, outstanding or otherwise
remain unsatisfied under any of the Policies and neither Borrower nor any other Person, has done,
by act or omission, anything which would impair the coverage of any such Policy.

42

 

     4.1.21 Use of Property. Each Individual Property is used exclusively for retail or
commercial purposes and other appurtenant and related uses.

     4.1.22 Certificate of Occupancy; Licenses. To Borrower’s actual knowledge, all
certifications, permits, licenses and approvals, including without limitation, certificates of
completion and occupancy permits, required for the legal use, occupancy and operation of each
Individual Property have been obtained and are in full force and effect. The use being made of
each Individual Property is in conformity with the certificate of occupancy issued for such
Individual Property.

     4.1.23 Flood Zone. Except as may be set forth in any flood certificate delivered to Lender
in connection with the Loan, none of the Improvements on any Individual Property are located in an
area as identified by the Federal Emergency Management Agency as an area having special flood
hazards or, if so located, the flood insurance required pursuant to Section 6.1(a)(i) is in full
force and effect with respect to such Individual Property.

     4.1.24 Physical Condition. To Borrower’s actual knowledge and except as set forth in the
Physical Conditions Report, each Individual Property, including, without limitation, all buildings,
improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and
doors, landscaping, irrigation systems and all structural components, are in good condition, order
and repair in all material respects; To Borrower’s actual knowledge, there exists no structural or
other material defects or damages in any Individual Property, whether latent or otherwise, and
Borrower has not received notice from any insurance company or bonding company of any defects or
inadequacies in any Individual Property, or any part thereof, which would adversely affect the
insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of
any termination or threatened termination of any policy of insurance or bond.

     4.1.25
Boundaries. To Borrower’s actual knowledge and except as set forth on the Survey,
all of the improvements which were included in determining the appraised value of each Individual
Property lie wholly within the boundaries and building restriction lines of such Individual
Property, and no improvements on adjoining properties encroach upon the Individual Property, and no
easements or other encumbrances upon the Individual Property encroach upon any of the Improvements,
so as to affect the value or marketability of the Individual Property except those which are
insured against by the Title Insurance Policy.

     4.1.26 Leases. The Properties are not subject to any leases other than the Leases
described in the rent roll attached hereto as Schedule II and made a part hereof, which
rent roll is true, complete and accurate in all respects as of the date hereof. Borrower is the
owner and lessor of landlord’s interest in the Leases. No Person has any possessory interest in
any Individual Property or right to occupy the same except under and pursuant to the provisions of
the Leases. The current Leases are in full force and effect and, to Borrower’s actual knowledge
there are no defaults thereunder by either party and there are no conditions that, with the passage
of time or the giving of notice, or both, would constitute defaults thereunder. No Rent (including
security deposits) has been paid more than one (1) month in advance of its due date. All security
deposits are held by Borrower in accordance with applicable law. To Borrower’s actual

43

 

knowledge all work to be performed by Borrower under each Lease has been performed as required and
has been accepted by the applicable Tenant , and any payments, free rent, partial rent, rebate of
rent or other payments, credits, allowances or abatements required to be given by Borrower to any
Tenant has already been received by such Tenant. There has been no prior sale, transfer or
assignment (other than to Borrower), hypothecation or pledge of any Lease or of the Rents received
therein (other than sales, transfers, assignments, hypothecations or pledges which may have been
made by the Tenants under the Leases). To Borrower’s actual knowledge and except as indicated on
Schedule II, no Tenant listed on Schedule II has assigned its Lease or sublet all
or any portion of the premises demised thereby, no such Tenant holds its leased premises under
assignment or sublease, nor does anyone except such Tenant and its employees occupy such leased
premises. Except as set forth in the Leases with Albertson’s, no Tenant under any Lease has a
right or option pursuant to such Lease or otherwise to purchase all or any part of the leased
premises or the building of which the leased premises are a part. No Tenant under any Lease has
any right or option for additional space in the Improvements.

     4.1.27 Survey. To Borrower’s actual knowledge, the Survey for each Individual Property
delivered to Lender in connection with this Agreement does not fail to reflect any material matter
affecting such Individual Property or the title thereto.

     4.1.28 Inventory. Borrower is the owner of all of the Equipment, Fixtures and Personal
Property (as such terms are defined in the Mortgage) located on or at each Individual Property,
other than Equipment, Fixtures and Personal Property owned by the Tenants under the Leases and
shall not lease any Equipment, Fixtures or Personal Property other than pursuant to the Leases.
All of the Equipment, Fixtures and Personal Property are sufficient to operate the Properties in
the manner required hereunder and in the manner in which it is currently operated.

     4.1.29 Filing and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or
other amounts in the nature of transfer taxes required to be paid by any Person under applicable
Legal Requirements applicable to the transfer of each Individual Property to Borrower have been
paid. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid
by any Person under applicable Legal Requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or enforcement of any of the
Loan Documents, including, without limitation, the Mortgage, have been paid, and, under current
Legal Requirements, such Mortgage is enforceable in accordance with its terms by Lender (or any
subsequent holder thereof), subject to principles of equity and bankruptcy, insolvency and other
laws generally applicable to creditors’ rights and the enforcement of debtors’ obligations.

     4.1.30 Special Purpose Entity/Separateness.

     (a) Until the Debt has been paid in full, Borrower hereby represents, warrants and covenants
that (i) each Borrower is, shall be and shall continue to be a Special Purpose Entity and (ii)
Principal is, shall be and shall continue to be a Special Purpose Entity.

     (b) The representations, warranties and covenants set forth in Section 4.1.30(a) shall
survive for so long as any amount remains payable to Lender under this Agreement or any other Loan
Document.

44

 

     (c) Any and all of the stated facts and factual assumptions relating to the conduct of
Borrower or Guarantor or any Affiliate of either such party made in any Insolvency Opinion,
including, but not limited to, any exhibits attached thereto, will have been and shall be true and
correct in all respects, and Borrower and Principal will have complied and will comply with all of
such stated facts and assumptions made with respect to it in any Insolvency Opinion. Each entity
other than Borrower, Principal and Lender with respect to which a factual assumption is made
relating to its conduct or a fact stated in any Insolvency Opinion will have complied and will
comply with all of such assumptions made and facts stated with respect to it in any such Insolvency
Opinion. Borrower covenants that in connection with any Additional Insolvency Opinion delivered in
connection with this Agreement it shall provide an updated certification regarding compliance with
the facts and the factual assumptions relating to the conduct of Borrower or Guarantor or any
Affiliate of either such party made therein.

     (d) Borrower covenants and agrees that Borrower shall provide Lender with not less than thirty
(30) days’ prior written notice prior to the removal of an Independent Director of any of Borrower
and/or Principal.

     4.1.31 Management Agreement. The Management Agreement is in full force and effect and
there is no default thereunder by any party thereto and no event has occurred that, with the
passage of time and/or the giving of notice would constitute a default thereunder. The Management
Agreement was entered into on commercially reasonable terms.

     4.1.32 Illegal Activity. No portion of any Individual Property has been or will be
purchased by Borrower with proceeds of any illegal activity.

     4.1.33 No Change in Facts or Circumstances; Disclosure. All information submitted by and
on behalf of Borrower to Lender and in all financial statements, rent rolls (including the rent
roll attached hereto as Schedule II), reports, certificates and other documents submitted
in connection with the Loan or in satisfaction of the terms thereof and all statements of fact made
by Borrower in this Agreement or in any other Loan Document, are accurate, complete and correct in
all material respects. There has been no material adverse change in any condition, fact,
circumstance or event that would make any such information inaccurate, incomplete or otherwise
misleading in any material respect or that otherwise materially and adversely affects or might
materially and adversely affect the use, operation or value of the Properties or the business
operations or the financial condition of Borrower. Borrower has disclosed to Lender all material
facts and has not failed to disclose any material fact that could cause any Provided Information or
representation or warranty made herein to be materially misleading.

     4.1.34 Investment Company Act. Borrower is not (a) an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940,
as amended; (b) a “holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the
Public Utility Holding Company Act of 1935, as amended; or (c) subject to any other federal or
state law or regulation which purports to restrict or regulate its ability to borrow money.

45

 

     4.1.35 Embargoed Person. As of the date hereof and at all times throughout the term of the
Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, (a)
none of the funds or other assets of Borrower and Cole Credit Property Trust III, Inc. constitute
property of, or are beneficially owned, directly or indirectly, by any Embargoed Person; (b) no
Embargoed Person has any interest of any nature whatsoever in Borrower or Cole Credit Property
Trust III, Inc., as applicable, with the result that the investment in Borrower or Cole Credit
Property Trust III, Inc., as applicable (whether directly or indirectly), is prohibited by law or
the Loan is in violation of law; and (c) none of the funds of Borrower or Cole Credit Property
Trust III, Inc., as applicable, have been derived from any unlawful activity with the result that
the investment in Borrower or Cole Credit Property Trust III, Inc., as applicable (whether directly
or indirectly), is prohibited by law or the Loan is in violation of law. Notwithstanding the
foregoing, to the extent that an Embargoed Person acquires a non-controlling interest in Cole
Credit Property Trust III, Inc., without the knowledge of Borrower or Cole Credit Property Trust
III, Inc., through a transaction brokered by a FINRA licensed broker dealer not affiliated with
Cole Credit Property Trust III, Inc., provided such broker dealer has executed a dealer agreement
or selling agreement with Cole Credit Property Trust III, Inc. or an affiliate of Cole Credit
Property Trust III, Inc. in which it covenants to, among other things, comply with The USA PATRIOT
Act (or any successor legislation), the resulting breach of the foregoing representations shall be
deemed to be unintentional and not grossly negligent for purposes of Section 9.3 hereof.

     4.1.36 Principal Place of Business; State of Organization. Borrower’s principal place of
business as of the date hereof is the address set forth in the introductory paragraph of this
Agreement. Each Individual Borrower is organized under the laws of the State of Delaware. Each
Individual Borrower’s organizational identification number assigned by the state of incorporation
or organization is correctly set forth in Schedule I to this Agreement.

     4.1.37 Environmental Representations and Warranties. To Borrower’s knowledge and except as
otherwise disclosed by those certain Phase I environmental reports (or Phase II environmental
reports, if required) delivered to Lender by Borrower in connection with the origination of the
Loan (such reports are collectively referred to below as the “Environmental Report”), (a) there are
no Hazardous Substances or underground storage tanks in, on, or under the Properties, except those
that are (i) in compliance with Environmental Laws and with permits issued pursuant thereto (to the
extent such permits are required under Environmental Law), (ii) de-minimis amounts necessary to
operate the Properties for the purposes set forth in the Loan Agreement which will not result in an
environmental condition in, on or under the Properties and which are otherwise permitted under and
used in compliance with Environmental Law and (iii) fully disclosed to Lender in writing pursuant
the Environmental Report; (b) there are no past, present or threatened Releases of Hazardous
Substances in, on, under or from the Properties which has not been fully remediated in accordance
with Environmental Law; (c) there is no threat of any Release of Hazardous Substances migrating to
the Properties in violation of any Environmental Law; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with
the Properties which has not been fully remediated in accordance with Environmental Law; (e)
Borrower does not know of, and has not received, any written or oral notice or other communication
from any Person (including but not limited to a Governmental Authority) relating to Hazardous
Substances or Remediation thereof, of possible liability of any Person pursuant to any
Environmental Law, other environmental

46

 

conditions in connection with the Properties, or any actual or potential administrative or judicial
proceedings in connection with any of the foregoing; and (f) Borrower has truthfully and fully
disclosed provided to Lender, in writing, any and all information relating to environmental
conditions in, on, under or from the Properties that is known to Borrower and has provided to
Lender all information that is contained in Borrower’s files and records, including, but not
limited to, any reports relating to Hazardous Substances in, on, under or from the Properties
and/or to the environmental condition of the Properties.

     4.1.38 Cash Management Account. Borrower hereby represents and warrants to Lender that:

     (a) This Agreement, together with the other Loan Documents, create a valid and continuing
security interest (as defined in the Uniform Commercial Code of the State of New York) in the
Lockbox Account and Cash Management Account in favor of Lender or Agent, which security interest is
prior to all other Liens, other than Permitted Encumbrances, and is enforceable as such against
creditors of and purchasers from Borrower. Other than in connection with the Loan Documents and
except for Permitted Encumbrances, Borrower has not sold, pledged, transferred or otherwise
conveyed the Lockbox Account and Cash Management Account ;

     (b) Each of the Lockbox Account and Cash Management Account constitutes “deposit accounts”
and/or “securities accounts” within the meaning of the Uniform Commercial Code of the State of New
York;

     (c) Pursuant and subject to the terms hereof and the other applicable Loan Documents, the
Lockbox Bank and Agent have agreed to comply with all instructions originated by Lender, without
further consent by Borrower, directing disposition of the Lockbox Account and Cash Management
Account and all sums at any time held, deposited or invested therein, together with any interest or
other earnings thereon and all proceeds thereof;

     (d) The Lockbox Account and Cash Management Account are not in the name of any Person other
than Borrower, as pledgor, or Lender, as pledgee. Borrower has not consented to the Lockbox Bank
and Agent complying with instructions with respect to the Lockbox Account and Cash Management
Account from any Person other than Lender; and

     (e) The Properties are not subject to any cash management system (other than pursuant to the
Loan Documents), and any and all existing tenant instruction letters issued in connection with any
previous financing have been duly terminated prior to the date hereof.

     4.1.39 True Lease. Borrower hereby represents and warrants to Lender that each Lease
reflects the intent of Borrower and Tenant that it is a true lease and not a financing arrangement.

     Section 4.2
Survival of Representations. Borrower agrees that all of the representations
and warranties of Borrower set forth in Section 4.1 hereof and elsewhere in this Agreement
and in the other Loan Documents shall survive for so long as any amount remains owing to Lender
under this Agreement or any of the other Loan Documents by Borrower. All representations,
warranties, covenants and agreements made in this Agreement or in the other

47

 

Loan Documents by Borrower shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf.

ARTICLE 5 — BORROWER COVENANTS

     Section 5.1 Affirmative Covenants. From the date hereof until payment and performance in
full of all obligations of Borrower under the Loan Documents or, solely with respect to any
Individual Borrower that obtains the earlier release of the Lien of the Mortgage affecting such
Individual Borrower’s Individual Property (and all related obligations) in accordance with the
terms of this Agreement and the other Loan Documents, then exclusive of any such Individual
Borrower and such Individual Property so released, Borrower hereby covenants and agrees with Lender
that:

     5.1.1 Existence; Compliance with Legal Requirements. Borrower shall do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises and comply with all Legal Requirements applicable to it and the
Properties. There shall never be committed by Borrower, and Borrower shall never permit any other
Person in occupancy of or involved with the operation or use of an Individual Property to commit
any act or omission affording the federal government or any state or local government the right of
forfeiture against any Individual Property or any part thereof or any monies paid in performance of
Borrower’s obligations under any of the Loan Documents. Borrower hereby covenants and agrees not
to commit, permit or suffer to exist any act or omission affording such right of forfeiture.
Borrower shall at all times maintain, preserve and protect all franchises and trade names and
preserve all the remainder of the Properties used or useful in the conduct of its business and
shall keep the Properties in good working order and repair, and from time to time make, or cause to
be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements
thereto, all as more fully provided in the applicable Mortgage. Borrower shall cause the
Properties to be insured at all times by financially sound and reputable insurers, to such extent
and against such risks, and cause to be maintained liability and such other insurance, as is more
fully provided in this Agreement. After prior written notice to Lender, Borrower, at Borrower’s
expense, may contest by appropriate legal proceeding promptly initiated and conducted in good faith
and with due diligence, the validity of any Legal Requirement, the applicability of any Legal
Requirement to Borrower or an Individual Property or any alleged violation of any Legal
Requirement, provided that (i) no Event of Default has occurred and remains uncured; (ii) such
proceeding shall be permitted under and be conducted in accordance with the provisions of any
instrument to which Borrower is subject and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) no Individual Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, cancelled or lost; (iv) Borrower shall promptly upon final
determination thereof comply with any such Legal Requirement determined to be valid or applicable
or cure any violation of any Legal Requirement; (v) such proceeding shall suspend the enforcement
of the contested Legal Requirement against Borrower or any Individual Property; and (vi) Borrower
shall furnish such security as may be required in the proceeding, or as may be requested by Lender,
to insure compliance with such Legal Requirement, together with all interest and penalties payable
in connection therewith. Lender may apply any such security, as necessary to cause compliance with
such Legal Requirement at any time when, in the reasonable judgment of Lender, the

48

 

validity, applicability or violation of such Legal Requirement is finally established or any
Individual Property (or any part thereof or interest therein) shall be in danger of being sold,
forfeited, terminated, cancelled or lost.

     5.1.2 Taxes and Other Charges. Borrower shall pay or cause to be paid all Taxes and Other
Charges now or hereafter levied or assessed or imposed against the Properties or any part thereof
as the same become due and payable; provided, however, Borrower’s obligation to directly pay (or
cause to be paid) Taxes shall be suspended for so long as Borrower complies with the terms and
provisions of Section 7.2 hereof. Borrower will deliver to Lender receipts for payment or
other evidence satisfactory to Lender that the Taxes and Other Charges have been so paid or are not
then delinquent no later than ten (10) days prior to the date on which the Taxes and/or Other
Charges would otherwise be delinquent if not paid, provided, however, (i) Borrower is not required
to furnish such receipts for payment of Taxes and Other Charges in the event Taxes and Other
Charges have been paid by Lender pursuant to Section 7.2 hereof, and (ii) if the Tenant under a
Lease pays such Taxes or Other Charges directly to the applicable authority and Borrower timely
requests and diligently pursues evidence of payment, and further provided that no enforcement
action has been commenced by the applicable authority resulting from such Tenant’s failure to pay
Taxes or Other Charges, Borrower shall have an additional thirty (30) day period to provide such
evidence to Lender. Borrower shall not suffer and shall promptly cause to be paid and discharged
any Lien or charge whatsoever which may be or become a Lien or charge against the Properties (other
than Permitted Encumbrances), and shall promptly pay for or cause to be paid all utility services
provided to the Properties. After prior written notice to Lender, Borrower, at Borrower’s expense,
may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and
with due diligence, the amount or validity or application in whole or in part of any Taxes or Other
Charges, provided that (i) no Event of Default has occurred and remains uncured; (ii) such
proceeding shall be permitted under and be conducted in accordance with the provisions of any other
instrument to which Borrower is subject and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) no Individual Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, cancelled or lost; (iv) Borrower shall promptly upon final
determination thereof pay the amount of any such Taxes or Other Charges, together with all costs,
interest and penalties which may be payable in connection therewith; (v) such proceeding shall
suspend the collection of such contested Taxes or Other Charges from any Individual Property; and
(vi) Borrower shall furnish such security as may be required in the proceeding, or as may be
requested by Lender, to insure the payment of any such Taxes or Other Charges, together with all
interest and penalties thereon. Notwithstanding the foregoing, a Tenant, at its own expense, may
contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with
due diligence, the amount or validity or application in whole or in part of any Taxes or Other
Charges, provided that (i) such contest is permitted under such Tenant’s Lease, (ii) such
proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) either no Individual Property nor any part thereof or interest therein will be in danger of
being sold, forfeited or lost, or Borrower or Tenant shall furnish such security as may be required
in the proceeding, or as may be requested by Lender, to insure the payment of any such Taxes or
Other Charges, together with all interest and penalties thereon; and (iv) Tenant shall be required
to promptly upon final determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in connection therewith.
Lender may pay

49

 

over any such cash deposit or part thereof held by Lender to the claimant entitled thereto at any
time when, in the judgment of Lender, the entitlement of such claimant is established or any
Individual Property (or part thereof or interest therein) shall be in danger of being sold,
forfeited, terminated, cancelled or lost or there shall be any danger of the Lien of the Mortgage
being primed by any related Lien (other than Permitted Encumbrances).

     5.1.3 Litigation. Borrower shall give prompt written notice to Lender of any litigation or
governmental proceedings pending or threatened against Borrower and/or Guarantor which might
materially adversely affect Borrower’s or Guarantor’s condition (financial or otherwise) or
business or any Individual Property.

     5.1.4 Access to Property. Subject to the rights of Tenants under the Leases, Borrower
shall permit agents, representatives and employees of Lender to inspect the Properties or any part
thereof at reasonable hours upon reasonable advance notice.

     5.1.5 Notice of Default. Borrower shall promptly advise Lender of any material adverse
change in Borrower’s or Guarantor’s condition, financial or otherwise, or of the occurrence of any
Default or Event of Default of which Borrower has knowledge.

     5.1.6 Cooperate in Legal Proceedings. Borrower shall cooperate fully with Lender with
respect to any proceedings before any court, board or other Governmental Authority which may in any
way affect the rights of Lender hereunder or any rights obtained by Lender under any of the other
Loan Documents and, in connection therewith, permit Lender, at its election, to participate in any
such proceedings.

     5.1.7 Perform Loan Documents. Borrower shall observe, perform and satisfy all the terms,
provisions, covenants and conditions of, and shall pay when due all costs, fees and expenses to the
extent required under the Loan Documents executed and delivered by, or applicable to, Borrower.

     5.1.8 Award and Insurance Benefits. Borrower shall cooperate with Lender in obtaining for
Lender the benefits of any Awards or Insurance Proceeds lawfully or equitably payable in connection
with any Individual Property, and Lender shall be reimbursed for any reasonable expenses incurred
in connection therewith (including reasonable attorneys’ fees and disbursements, and the payment by
Borrower of the actual expense of an appraisal on behalf of Lender in case of Casualty or
Condemnation affecting any Individual Property or any part thereof) out of such Insurance Proceeds.

     5.1.9 Further Assurances. Borrower shall, at Borrower’s sole cost and expense:

     (a) furnish to Lender all instruments, documents, boundary surveys, footing or foundation
surveys, certificates, plans and specifications, appraisals, title and other insurance reports and
agreements, and each and every other document, certificate, agreement and instrument required to be
furnished by Borrower pursuant to the terms of the Loan Documents or which are reasonably requested
by Lender in connection therewith;

     (b) execute and deliver to Lender such documents, instruments, certificates, assignments and
other writings, and do such other acts necessary or desirable, to evidence,

50

 

preserve and/or protect the collateral at any time securing or intended to secure the
obligations of Borrower under the Loan Documents, as Lender may reasonably require; and

     (c) do and execute all and such further lawful and reasonable acts, conveyances and assurances
for the better and more effective carrying out of the intents and purposes of this Agreement and
the other Loan Documents, as Lender shall reasonably require from time to time.

     5.1.10 Principal Place of Business, State of Organization. Borrower will not cause or
permit any change to be made in its name, identity (including its trade name or names), place of
organization or formation (as set forth in Section 4.1.36 hereof) or, except for Transfers
permitted under the Loan Documents, Borrower’s corporate or partnership structure unless Borrower
shall have first notified Lender in writing of such change at least thirty (30) days prior to the
effective date of such change, and shall have first taken all action required by Lender for the
purpose of perfecting or protecting the lien and security interests of Lender pursuant to this
Agreement, and the other Loan Documents and, in the case of a change in Borrower’s structure, which
is not permitted under the Loan Documents, without first obtaining the prior written consent of
Lender, which consent may given or denied in Lender’s sole discretion. Upon Lender’s request,
Borrower shall, at Borrower’s sole cost and expense, execute and deliver additional financing
statements, security agreements and other instruments which may be necessary to effectively
evidence or perfect Lender’s security interest in the Properties as a result of such change of
principal place of business or place of organization. Borrower’s principal place of business and
chief executive office, and the place where Borrower keeps its books and records, including
recorded data of any kind or nature, regardless of the medium or recording, including software,
writings, plans, specifications and schematics, has been for the preceding four months (or, if
less, the entire period of the existence of Borrower) and will continue to be the address of
Borrower set forth at the introductory paragraph of this Agreement (unless Borrower notifies Lender
in writing at least thirty (30) days prior to the date of such change). Borrower shall promptly
notify Lender of any change in its organizational identification number. If Borrower does not now
have an organizational identification number and later obtains one, Borrower promptly shall notify
Lender of such organizational identification number.

     5.1.11 Financial Reporting. 

     (a) Borrower will keep and maintain or will cause to be kept and maintained on a Fiscal Year
basis, in accordance with the requirements for a Special Purpose Entity set forth herein and GAAP
(or another basis of accounting acceptable to Lender and consistently applied), proper and accurate
books, records and accounts reflecting all of the financial affairs of Borrower and all items of
income and expense in connection with the operation of the Properties. Lender shall have the right
from time to time at all times during normal business hours upon reasonable notice to examine such
books, records and accounts at the office of Borrower or any other Person maintaining such books,
records and accounts and to make such copies or extracts thereof as Lender shall desire. After the
occurrence of an Event of Default, Borrower shall pay any costs and expenses incurred by Lender to
examine Borrower’s accounting records with respect to the Property, as Lender shall determine to be
necessary or appropriate in the protection of Lender’s interest.

51

 

     (b) Borrower will furnish to Lender annually, within one hundred twenty (120) days following
the end of each Fiscal Year of Borrower, a complete copy of Borrower’s (and no other Persons)
combined annual financial statements audited by an independent certified public accountant
acceptable to Lender in accordance with GAAP (or another basis of accounting acceptable to Lender
and consistently applied), together with related combined statements of operations, income,
members’ capital and cash flows. Such statements shall set forth the financial condition and the
results of operations for the Properties for such Fiscal Year, and shall include, but not be
limited to, amounts representing annual net operating income, net cash flow, gross income, and
operating expenses.

     (c) Borrower will furnish, or cause to be furnished, to Lender on or before forty-five (45)
days after the end of each calendar quarter the following items, accompanied by an Officer’s
Certificate stating that such items are true, correct, accurate, and complete and fairly present
the financial condition and results of the operations of Borrower and the Properties: (i) a rent
roll for the subject quarter; and (ii) quarterly and year-to-date operating statements (including
Capital Expenditures, if any) prepared for each calendar quarter, noting net operating income,
gross income, and operating expenses and other information necessary and sufficient to fairly
represent the financial position and results of operation of the Properties during such calendar
quarter, and containing a comparison of budgeted income and expenses and the actual income and
expenses. In addition, such certificate shall also be accompanied by an Officer’s Certificate
stating that the representations and warranties of Borrower set forth in Section 4.1.30 are
true and correct as of the date of such certificate.

     (d) Prior to the occurrence of a Securitization, or after (i) an Event of Default, or (ii) a
Cash Sweep Event other than a Cash Sweep Event caused by an Event of Default (but in the case of
(ii), only until a Cash Sweep Event Cure), Borrower will furnish, or cause to be furnished, to
Lender on or before thirty (30) days after the end of each calendar month (other than January and
the last month of each calendar quarter) the following items, accompanied by an Officer’s
Certificate stating that such items are true, correct, accurate, and complete and fairly present
the financial condition and results of the operations of Borrower and the Properties: (i) a rent
roll for the subject month; and (ii) monthly and year-to-date operating statements (including
Capital Expenditures, if any) prepared for each calendar month, noting net operating income, gross
income, and operating expenses, and other information necessary and sufficient to fairly represent
the financial position and results of operation of the Properties during such calendar month, and
containing a comparison of budgeted income and expenses and the actual income and expenses.

     (e) Borrower shall furnish to Lender prompt notice (containing reasonable detail) of any
material changes in the financial or physical condition of any Individual Property, as reasonably
determined by Borrower, including, but not limited to, any termination or cancellation of terrorism
or other insurance required by this Agreement.

     (f) Borrower shall furnish to Lender, within ten (10) Business Days after request (or as soon
thereafter as may be reasonably possible), such further detailed information with respect to the
operation of the Properties and the financial affairs of Borrower as may be reasonably requested by
Lender, and financial and sales information from any Tenant designated by Lender (to the extent
such financial and sales information is required to be provided under the applicable

52

 

Lease and same is received by Borrower after request therefor). Borrower has advised Lender
that as more particularly set forth in Article 27 of the Albertson’s Lease, Tenant’s financial
statements are confidential.

     (g) Borrower will cause Cole Credit Property Trust III, Inc. (the general partner of
Guarantor) to furnish to Lender annually, within one hundred twenty (120) days following the end of
its Fiscal Year, financial statements audited by an independent certified public accountant, which
shall include an annual balance sheet and profit and loss statement, in the form previously
provided to Lender or in another form reasonably approved by Lender.

     (h) Any reports, statements or other information required to be delivered under this
Agreement shall be delivered electronically in a manner acceptable to Lender and prepared using a
spreadsheet program, or, if requested by Lender, (i) delivered in paper form and/or on a diskette
and/or (ii) prepared using Microsoft Word for Windows files (which files may be prepared using a
spreadsheet program and saved as word processing files). Subject to the last sentence of
subsection (f) above, Borrower agrees that Lender may disclose information regarding the Properties
and Borrower that is provided to Lender pursuant to this Section 5.1.11 in connection with
the Securitization to such parties requesting such information in connection with such
Securitization.

     5.1.12
Business and Operations. Borrower will continue to engage in the businesses
presently conducted by it as and to the extent the same are necessary for the ownership,
maintenance, management and operation of the Properties. Borrower will qualify to do business and
will remain in good standing under the laws of the jurisdiction of its formation as and to the
extent the same are required for the ownership, maintenance, management and operation of the
Properties. Borrower shall at all times during the term of the Loan, continue to own all of
Equipment, Fixtures and Personal Property which are necessary to operate the Properties in the
manner required hereunder and in the manner in which it is currently operated, other than
Equipment, Fixtures and Personal Property owned by the Tenants under the Leases.

     5.1.13
Title to the Property. Borrower will warrant and defend (a) the title to each
Individual Property and every part thereof, subject only to Liens permitted hereunder (including
Permitted Encumbrances) and (b) the validity and priority of the Lien of each Mortgage on the
applicable Individual Property, subject only to Liens permitted hereunder (including Permitted
Encumbrances), in each case against the claims of all Persons whomsoever. Borrower shall reimburse
Lender for any losses, costs, damages or expenses (including reasonable attorneys’ fees and
expenses) incurred by Lender if an interest in any Individual Property, other than as permitted
hereunder, is claimed by another Person.

     5.1.14
Costs of Enforcement. In the event (a) that the Mortgage encumbering any
Individual Property is foreclosed in whole or in part or that the Mortgage is put into the hands of
an attorney for collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage
encumbering an Individual Property prior to or subsequent to the Mortgage in which proceeding
Lender is made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Borrower or any of its constituent Persons or an assignment by Borrower or
any of its constituent Persons for the benefit of its creditors, Borrower, its successors or
assigns, shall be chargeable with and agrees to pay all costs of collection and

53

 

defense, including reasonable attorneys’ fees and expenses, incurred by Lender or Borrower in
connection therewith and in connection with any appellate proceeding or post-judgment action
involved therein, together with all required service or use taxes.

     5.1.15 Estoppel Statement.

     (a) After request by Lender, Borrower shall within ten (10) days furnish Lender with a
statement, duly acknowledged and certified, setting forth (i) the original principal amount of the
Note, (ii) the unpaid principal amount of the Note, (iii) the Applicable Interest Rate of the Note,
(iv) the date installments of interest and/or principal were last paid, (v) any offsets or defenses
to the payment of the Debt, if any, claimed by Borrower, and (vi) that the Note, this Agreement,
the Mortgage and the other Loan Documents are valid, legal and binding obligations and have not
been modified or if modified, giving particulars of such modification.

     (b) Borrower shall use commercially reasonable efforts to deliver to Lender upon request,
tenant estoppel certificates from each commercial Tenant leasing space at the Properties in form
and substance reasonably satisfactory to Lender provided that Borrower shall not be required to
deliver such certificates more frequently than two (2) times in any calendar year.

     5.1.16
Loan Proceeds. Borrower shall use the proceeds of the Loan received by it on the
Closing Date only for the purposes set forth in Section 2.1.4 hereof.

     5.1.17
Performance by Borrower. Borrower shall in a timely manner observe, perform and
fulfill each and every covenant, term and provision of each Loan Document executed and delivered
by, or applicable to, Borrower, and shall not enter into or otherwise suffer or permit any
amendment, waiver, supplement, termination or other modification of any Loan Document executed and
delivered by, or applicable to, Borrower without the prior written consent of Lender.

     5.1.18
Confirmation of Representations. Borrower shall deliver, in connection with any
Securitization, (a) one (1) or more Officer’s Certificates certifying as to the accuracy of all
representations made by Borrower in the Loan Documents as of the date of the closing of such
Securitization in all relevant jurisdictions, and (b) certificates of the relevant Governmental
Authorities in all relevant jurisdictions indicating the good standing and qualification of
Borrower, Principal and Guarantor as of the date of the Securitization.

     5.1.19 Environmental Covenants.

     (a) Borrower covenants and agrees that: (i) all uses and operations on or of the
Property, whether by Borrower or any other Person, shall be in compliance with all Environmental
Laws and permits issued pursuant thereto; (ii) there shall be no Releases of Hazardous Substances
in, on, under or from the Property except those that are in compliance with all Environmental Laws
and with permits issued pursuant thereto (to the extent such permits are required by Environmental
Law); (iii) there shall be no Hazardous Substances in, on, or under the Property, except those that
are (A) in compliance with all Environmental Laws and with permits issued pursuant thereto (to the
extent such permits are required by Environmental Law), or (B) de-minimis amounts necessary to
operate the Property for the purposes set forth in the Loan Agreement which will not result in an
environmental condition in, on or under the

54

 

Property and which are otherwise permitted under and used in compliance with Environmental
Law; (iv) Borrower shall keep the Properties free and clear of all liens and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act or omission of Borrower or any
other Person (the “Environmental Liens”), subject to a right to contest such liens under applicable
environmental law, provided (A) any such contest stays any enforcement proceeding by the applicable
authority, (B) neither the applicable Individual Property nor any part thereof or interest therein
will be in danger of being sold, forfeited, terminated, cancelled or lost, and (C) Borrower shall
furnish such security as may be required in the proceeding, or as may be requested by Lender; (v)
Borrower shall, at its sole cost and expense, fully and expeditiously cooperate in all activities
pursuant to subsection (b) below, including but not limited to providing all relevant information
and making knowledgeable persons available for interviews; (vi) Borrower shall, at its sole cost
and expense, perform any environmental site assessment or other investigation of environmental
conditions in connection with the Properties, pursuant to any reasonable written request of Lender
made in the event that Lender has a good faith reason to believe based on credible evidence or
information that an environmental hazard exists on the Properties (including but not limited to
sampling, testing and analysis of soil, water, air, building materials and other materials and
substances whether solid, liquid or gas), and share with Lender the reports and other results
thereof, and Lender and other Indemnified Parties shall be entitled to rely on such reports and
other results thereof; (vii) Borrower shall, at its sole cost and expense, comply with all
reasonable written requests of Lender made in the event that Lender has a good faith reason to
believe based on credible evidence or information that an environmental hazard exists on the
Properties to (A) reasonably effectuate Remediation of any condition (including but not limited to
a Release of a Hazardous Substance) in, on, under or from the Properties; (B) comply with any
Environmental Law; (C) comply with any directive from any Governmental Authority; and (D) take any
other reasonable action necessary or appropriate for protection of human health or the environment;
(viii) Borrower shall not do or allow any Tenant or other user of the Properties to do any act that
materially increases the dangers to human health or the environment, involves Hazardous Substances
or an environmental condition and poses an unreasonable risk of harm to any Person (whether on or
off the Property), involves Hazardous Substances or an environmental condition and impairs or may
impair the value of the Properties, is contrary to any requirement of any insurer, involves
Hazardous Substances or an environmental condition and constitutes a public or private nuisance,
involves Hazardous Substances or an environmental condition and constitutes waste, or involves
Hazardous Substances or an environmental condition and violates any covenant, condition, agreement
or easement applicable to the Properties; and (ix) Borrower shall immediately notify Lender in
writing upon learning of (A) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Properties; (B) any non-compliance with any
Environmental Laws related in any way to the Properties; (C) any actual or potential Environmental
Lien; (D) any required or proposed Remediation of environmental conditions relating to the
Properties; and (E) any written or oral notice or other communication of which Borrower becomes
aware from any source whatsoever (including but not limited to a governmental entity) relating in
any way to the release or potential release of Hazardous Substances or Remediation thereof, likely
to result in liability of any Person pursuant to any Environmental Law, other environmental
conditions in connection with the Property, or any actual or potential administrative or judicial
proceedings in connection with anything referred to in this Section.

55

 

     (b) In the event that Lender has a good faith reason to believe based on credible evidence
or information that an environmental hazard exists on the Properties that may, in Lender’s sole
discretion, endanger any Tenants or other occupants of the Properties or their guests or the
general public or may materially and adversely affect the value of the Properties, upon reasonable
notice from Lender, Borrower shall, at Borrower’s expense, promptly cause an engineer or consultant
satisfactory to Lender to conduct an environmental assessment or audit (the scope of which shall be
determined in Lender’s sole and absolute discretion) and take any samples of soil, groundwater or
other water, air, or building materials or any other invasive testing requested by Lender and
promptly deliver the results of any such assessment, audit, sampling or other testing; provided,
however, if such results are not delivered to Lender within a reasonable period or if Lender has a
good faith reason to believe based on credible evidence or information that an environmental hazard
exists on the Property that, in Lender’s sole judgment, endangers any Tenant or other occupant of
the Property or their guests or the general public or may materially and adversely affect the value
of the Property, upon reasonable notice to Borrower, Lender and any other Person designated by
Lender, including but not limited to any receiver, any representative of a governmental entity, and
any environmental consultant, shall have the right, but not the obligation, and subject to the
rights of Tenants, to enter upon the Properties at all reasonable times to assess any and all
aspects of the environmental condition of the Properties and its use, including but not limited to
conducting any environmental assessment or audit (the scope of which shall be determined in
Lender’s sole and absolute discretion) and taking samples of soil, groundwater or other water, air,
or building materials, and reasonably conducting other invasive testing. Borrower shall cooperate
with and provide Lender and any such Person designated by Lender with access to the Properties
subject to the rights of Tenants.

     (c) Borrower hereby represents and warrants that Borrower has delivered to Lender true and
complete copies of each of the O&M Programs listed on the attached Schedule VI
(collectively, the “O&M Program”), and has, as of the date hereof, complied in all respects with
the O&M Program. Borrower hereby covenants and agrees that, during the term of the Loan, including
any extension or renewal thereof, Borrower shall comply in all respects with the terms and
conditions of the O&M Program.

     5.1.20
Leasing Matters. Any Leases written after the date hereof shall be subject to the
prior written approval of Lender, which approval shall not be unreasonably withheld, conditioned or
delayed. Upon request, Borrower shall furnish Lender with executed copies of all Leases. All
renewals of Leases and all proposed Leases shall provide for rental rates comparable to existing
local market rates. All proposed Leases shall be on commercially reasonable terms and shall not
contain any terms which would materially affect Lender’s rights under the Loan Documents. All
Leases executed after the date hereof shall provide that they are subordinate to the applicable
Mortgage and that the lessee agrees to attorn to Lender or any purchaser at a sale by foreclosure
or power of sale. Borrower (i) shall observe and perform the obligations imposed upon the lessor
under the Leases in a commercially reasonable manner; (ii) shall enforce and may amend or terminate
the terms, covenants and conditions contained in the Leases upon the part of the lessee thereunder
to be observed or performed in a commercially reasonable manner and in a manner not to impair the
value of the Individual Property involved except that no termination by Borrower or acceptance of
surrender by a Tenant of any Leases shall be permitted unless by reason of a tenant default and
then only in a commercially reasonable manner to preserve and protect the Individual Property;
provided, however, that no such termination or

56

 

surrender of any Lease covering more than 6,000 square feet will be permitted without the prior
written consent of Lender; (iii) shall not collect any of the rents more than one (1) month in
advance (other than security deposits); (iv) shall not execute any other assignment of lessor’s
interest in the Leases or the Rents (except as contemplated by the Loan Documents); (v) shall not
alter, modify or change the terms of the Leases in a manner inconsistent with the provisions of the
Loan Documents; and (vi) shall execute and deliver at the request of Lender all such further
assurances, confirmations and assignments in connection with the Leases as Lender shall from time
to time reasonably require. Notwithstanding anything to the contrary contained herein, all new
Leases and all amendments, modifications, extensions, and renewals of existing Leases with Tenants
that are Affiliates of Borrower shall be subject to the prior written consent of Lender.

To the extent Lender’s approval is required pursuant to this Section 5.1.20 to any Lease or
modification, Borrower’s written request therefor shall be delivered together with such materials
reasonably requested by Lender in order to evaluate such request (it being acknowledged and agreed
that no request for consent shall be effective unless and until such materials have been delivered
to Lender). Each such request shall conspicuously state, in large bold type on the top of the
first page of such request, that “PURSUANT TO SECTION 5.1.20 OF THE LOAN AGREEMENT, THIS IS
A REQUEST FOR LENDER’S CONSENT. LENDER’S RESPONSE IS REQUESTED WITHIN FIFTEEN (15) BUSINESS DAYS.
LENDER’S FAILURE TO RESPOND WITHIN SUCH TIME PERIOD WILL ENABLE BORROWER TO DELIVER A SECOND NOTICE
REQUESTING LENDER’S CONSENT”. In the event Lender fails to approve or disapprove to such initial
request within fifteen (15) Business Days’ of the effective date of such initial request, Borrower
may deliver to Lender a second written request for approval, which second written request for
approval shall conspicuously state, in large bold type on the top of the first page of such
request, that “THIS IS A REQUEST FOR LENDER’S CONSENT. LENDER’S CONSENT IS REQUESTED WITHIN FIVE
(5) BUSINESS DAYS. THE LEASE SHALL BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY
WITHIN FIVE (5) BUSINESS DAYS’ OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. In the event that
Lender fails to approve or disapprove the second written request within such five (5) Business Day
period, then Lender’s consent shall be deemed to have been granted. Notwithstanding the foregoing,
if four (4) or more Leases have been deemed approved pursuant to this Section 5.1.20, then
Borrower shall not be entitled to receive deemed approval with respect to any additional Leases.

     5.1.21
Alterations. Borrower shall obtain Lender’s prior written consent to any
alterations to any Improvements, which consent shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, Lender’s consent shall not be required in connection with
any non-structural alterations, that will not have a material adverse effect on Borrower’s
financial condition, the value of the Individual Property or the Individual Property’s Net
Operating Income, and (a) that are performed pursuant to the terms and provisions of any Lease
executed on or before the date hereof, (b) that are performed pursuant to the terms and provisions
of any Lease executed after the date hereof, provided that such Lease shall satisfy the
requirements of Section 5.1.20, or (c) that are performed in connection with the
Restoration of any Individual Property after the occurrence of a Casualty or Condemnation in
accordance with the terms and provisions of this Agreement. If the total unpaid amounts due and
payable with respect to alterations to the Improvements at an Individual Property (other than such
amounts to

57

 

be paid or reimbursed by Tenants under the Leases) shall at any time exceed $100,000.00 (the
 “Threshold Amount”), Borrower shall promptly deliver to Lender as security for the payment of such
amounts and as additional security for Borrower’s obligations under the Loan Documents any of the
following: (A) cash, (B) U.S. Obligations, (C) other securities having a rating acceptable to
Lender and that, at Lender’s option, the applicable Rating Agencies have confirmed in writing will
not, in and of itself, result in a downgrade, withdrawal or qualification of the initial, or, if
higher, then current ratings assigned to any Securities or any class thereof in connection with any
Securitization or (D) a completion and performance bond or an irrevocable letter of credit (payable
on sight draft only) issued by a financial institution having a rating by S&P of not less than
“A-1+” if the term of such bond or letter of credit is no longer than three (3) months or, if such
term is in excess of three (3) months, issued by a financial institution having a rating that is
acceptable to Lender and that, at Lender’s option, the applicable Rating Agencies have confirmed in
writing will not, in and of itself, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned to any Securities or class thereof in
connection with any Securitization. Such security shall be in an amount equal to the excess of the
total unpaid amounts with respect to alterations to the Improvements on the Individual Property
(other than such amounts to be paid or reimbursed by Tenants under the Leases) over the Threshold
Amount and Lender may apply such security from time to time at the option of Lender to pay for such
alterations.

     5.1.22 Operation of Property. 

     (a) Borrower shall cause the Properties to be operated, in all material respects, in
accordance with the Leases and Management Agreement (or Replacement Management Agreement) as
applicable. In the event that the Management Agreement expires or an Individual Property is
removed from the application of the Management Agreement (without limiting any obligation of
Borrower to obtain Lender’s consent to any removal of an Individual Property from the application
of the Management Agreement or modification of the Management Agreement as it relates to the
Individual Property if required in accordance with the terms and provisions of this Agreement),
Borrower shall promptly enter into a Replacement Management Agreement with Manager or another
Qualified Manager, as applicable. Borrower shall comply, and shall cause its Affiliates to comply,
with any exclusive use provisions and radius restrictions granted in favor of Tenants in the
Leases.

     (b) Borrower shall: (i) promptly perform and/or observe, in all material respects, all of
the covenants and agreements required to be performed and observed by it under the Management
Agreement and do all things necessary to preserve and to keep unimpaired its material rights
thereunder; (ii) promptly notify Lender of any material default under the Management Agreement of
which it is aware; (iii) promptly deliver to Lender a copy of each financial statement, business
plan, capital expenditures plan, notice, report and estimate received by it with respect to the
Individual Property under the Management Agreement; and (iv) enforce the performance and observance
of all of the covenants and agreements required to be performed and/or observed by Manager under
the Management Agreement, in a commercially reasonable manner.

     5.1.23
Embargoed Person. Borrower has performed (or caused to be performed) and shall
perform (or cause to be performed) reasonable due diligence to insure that at all times

58

 

throughout the term of the Loan, including after giving effect to any Transfers permitted pursuant
to the Loan Documents, (a) none of the funds or other assets of Borrower, Principal and Cole Credit
Property Trust III, Inc. constitute property of, or are beneficially owned, directly or indirectly,
by any Embargoed Person; (b) no Embargoed Person has any interest of any nature whatsoever in
Borrower, Principal or Cole Credit Property Trust III, Inc., as applicable, with the result that
the investment in Borrower, Principal or Cole Credit Property Trust III, Inc., as applicable
(whether directly or indirectly), is prohibited by law or the Loan is in violation of law; and (c)
none of the funds of Borrower, Principal or Cole Credit Property Trust III, Inc., as applicable,
have been derived from, or are the proceeds of, any unlawful activity, including money laundering,
terrorism or terrorism activities, with the result that the investment in Borrower, Principal or
Cole Credit Property Trust III, Inc., as applicable (whether directly or indirectly), is prohibited
by law or the Loan is in violation of law, or may cause any Individual Property to be subject to
forfeiture or seizure. Notwithstanding the foregoing, to the extent that an Embargoed Person
acquires a non-controlling interest in Cole Credit Property Trust III, Inc., without the knowledge
of Borrower or Cole Credit Property Trust III, Inc., through a transaction brokered by a FINRA
licensed broker dealer not affiliated with Cole Credit Property Trust III, Inc., provided such
broker dealer has executed a dealer agreement or selling agreement with Cole Credit Property Trust
III, Inc. or an affiliate of Cole Credit Property Trust III, Inc. in which it covenants to, among
other things, comply with The USA PATRIOT Act (or any successor legislation), the resulting breach
of the foregoing representations shall be deemed to be unintentional and not grossly negligent for
purposes of Section 9.3 hereof.

     
5.1.24 Supplemental Mortgage Affidavits. As of the date hereof, each Individual Borrower
represents that it has paid all state, county and municipal recording and all other taxes imposed
upon the execution and recordation of the Mortgages. If at any time Lender determines (i) based on
applicable law, that Lender is not being afforded the maximum amount of security available from any
one or more of the Properties as a direct or indirect result of applicable taxes not having been
paid with respect to any Individual Property or (ii) Lender and/or the Rating Agencies, in
connection with a Securitization, require the amount secured by any Mortgage be increased, Borrower
agrees that it will execute, acknowledge and deliver to Lender, immediately upon Lender’s request,
supplemental affidavits and/or Mortgages increasing the amount of the Debt attributable to any such
Individual Property (as set forth as the Release Amount on Schedule V annexed hereto) for
which all applicable taxes have been paid to an amount determined by Lender, and Borrower shall, on
demand, pay any additional taxes.

     5.1.25
 True Lease. Each Borrower shall reflect its applicable Lease in all
applicable books, records and reports (including, without limitation, income tax filings) in a
manner consistent with “true lease” treatment rather than “financing” treatment.

     5.1.26 Denver Shortfall Payment. Each other Individual Borrower and Guarantor
agree to pay any shortfall between (i) the Denver Purchase Option Price and (ii) all amounts due
under Section 2.6.2 hereof in connection with the exercise of the Denver Purchase Option,
including the Adjusted Release Amount for the Denver Individual Property and any applicable Yield
Maintenance Premium (if such payment is made prior to the Permitted Par Prepayment Date) (the
“Denver Shortfall Payment”).

     5.1.27 Tenant Reports.

59

 

     For so long as the Lease to Albertson’s remains in effect, Borrower shall deliver, or cause to
be delivered to Lender, the following:

     (i) within 10 days after Borrower receives such information from Tenant, complete
financial statements of Tenant including a balance sheet, profit and loss statement, statement of
cash flows and all other related schedules for the fiscal period then ended. All such financial
statements shall be prepared in accordance with GAAP (or such other accounting practices
consistently applied) from period to period, and shall be certified to be accurate and complete by
Tenant in all material respects (or the treasurer or other appropriate officer of Tenant). The
annual financial statements of Tenant delivered pursuant to this Section shall be audited by
independent accountants in accordance with GAAP (or such other accounting practices consistently
applied);

     Borrower has advised Lender that as more particularly set forth in Article 27 of the
Albertson’s Lease, Tenant’s financial statements are confidential. Notwithstanding the foregoing,
Lender may disclose the following corporate level financial information in connection with a
Securitization: net sales or operating revenues; income (loss) from continuing operations; income
(loss) from continuing operations per common share; total assets; long-term obligations and
redeemable preferred stock (including long-term debt, capital leases, and redeemable preferred
stock); and, cash dividends declared per common share.

     If Tenant does not provide the information required hereunder as required pursuant to the
Albertson’s Lease, then Borrower shall take commercially reasonable efforts to require such Tenant
to comply with the applicable provisions of its Lease and thereafter diligently pursue the same,
provided, however, Borrower shall not be required pursuant to the foregoing covenant to declare an
event of default under the applicable Lease.

     Section 5.2
Negative Covenants. From the date hereof until payment and performance in
full of all obligations of Borrower under the Loan Documents or, solely with respect to any
Individual Borrower that obtains the earlier release of the Lien of the Mortgage affecting such
Individual Borrower’s Individual Property (and all related obligations) in accordance with the
terms of this Agreement and the other Loan Documents, then exclusive of such Individual Borrower
and such Individual Property so released, Borrower covenants and agrees with Lender that it will
not do, directly or indirectly, any of the following:

     5.2.1 Operation of Property. 

     (a) Borrower shall not, without Lender’s prior written consent (which consent shall not be
unreasonably withheld): (i) surrender, terminate, cancel, amend or modify the Management Agreement
as it relates to the Properties; provided, that Borrower may, without Lender’s consent, replace the
Manager so long as the replacement manager is a Qualified Manager pursuant to a Replacement
Management Agreement and remove an Individual Property from the application of the Management
Agreement in connection with such replacement; (ii) reduce or consent to the reduction of the term
of the Management Agreement as it relates to an Individual Property; (iii) increase or consent to
the increase of the amount of any charges under the Management Agreement as it relates to the
Individual Property; or (iv) otherwise modify,

60

 

change, supplement, alter or amend, or waive or release any of its rights and remedies under,
the Management Agreement as it relates to the Individual Property in any material respect.

     (b) Following the occurrence and during the continuance of an Event of Default, Borrower
shall not exercise any rights, make any decisions, grant any approvals or otherwise take any action
under the Management Agreement as it relates to the Properties without the prior written consent of
Lender, which consent may be granted, conditioned or withheld in Lender’s sole discretion.

     5.2.2
Liens.   Borrower shall not create, incur, assume or suffer to exist any Lien on any
portion of any Individual Property or permit any such action to be taken, except for Permitted
Encumbrances.

     5.2.3
Dissolution.   Borrower shall not, without obtaining the prior written consent of
Lender (a) engage in any dissolution, liquidation or consolidation or merger with or into any other
business entity, (b) engage in any business activity not related to the ownership and operation of
the Properties, (c) transfer, lease or sell, in one transaction or any combination of transactions,
the assets or all or substantially all of the properties or assets of Borrower except to the extent
permitted by the Loan Documents, (d) unless required by applicable law (and in such case, following
fifteen (15) days prior written notice to Lender), modify, amend, waive or terminate its
organizational documents or its qualification and good standing in any jurisdiction or (e) cause
the Principal to (i) dissolve, wind up or liquidate or take any action, or omit to take an action,
as a result of which the Principal would be dissolved, wound up or liquidated in whole or in part,
or (ii) unless required by applicable law (and in such case, following fifteen (15) days prior
written notice to Lender) amend, modify, waive or terminate the organizational documents of the
Principal.

     5.2.4 Change In Business. Borrower shall not enter into any line of business other than
the ownership and operation of the Properties, or make any material change in the scope or nature
of its business objectives, purposes or operations, or undertake or participate in activities other
than the continuance of its present business. Nothing contained in this Section 5.2.4   is
intended to expand the rights of Borrower contained in Section 5.2.10(d)   hereof.

     5.2.5 Debt Cancellation. Borrower shall not cancel or otherwise forgive or release any
claim or debt (other than termination of Leases in accordance herewith) owed to Borrower by any
Person, except for adequate consideration and in the ordinary course of Borrower’s business.

     5.2.6 Zoning. Borrower shall not initiate or consent to any zoning reclassification of
any portion of any Individual Property or seek any variance under any existing zoning ordinance or
use or permit the use of any portion of such Individual Property in any manner that could result in
such use becoming a non conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior consent of Lender.

     5.2.7 No Joint Assessment. Borrower shall not suffer, permit or initiate the joint
assessment of any Individual Property (a) with any other real property constituting a tax lot
separate from any Individual Property, and (b) which constitutes real property with any portion of
any Individual Property which may be deemed to constitute personal property, or any other

61

 

procedure whereby the lien of any taxes which may be levied against such personal property shall be
assessed or levied or charged to such real property portion of any Individual Property.

     5.2.8 Intentionally Omitted.

     5.2.9 ERISA.

     (a) Borrower shall not engage in any transaction which would cause any obligation, or
action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the
Note, this Agreement or the other Loan Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under ERISA.

     (b) Borrower further covenants and agrees to deliver to Lender such certifications or
other evidence from time to time throughout the term of the Loan, as requested by Lender in its
sole discretion, that (A) Borrower is not and does not maintain an “employee benefit plan” as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan”
within the meaning of Section 3(32) of ERISA; (B) Borrower is not subject to any state statute
regulating investment of, or fiduciary obligations with respect to governmental plans and (C) one
or more of the following circumstances is true:

     (i) Equity interests in Borrower are publicly offered securities, within the
meaning of 29 C.F.R. §2510.3-101(b)(2);

     (ii) Less than twenty-five percent (25%) of each outstanding class of equity
interests in Borrower are held by “benefit plan investors” within the meaning of 29 C.F.R.
§2510.3-101(f)(2); or

     (iii) Borrower qualifies as an “operating company” or a “real estate operating
company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).

     5.2.10 Transfers. 

     (a) Borrower acknowledges that Lender has examined and relied on the experience of
Borrower and its stockholders, general partners, members, principals and (if Borrower is a trust)
beneficial owners in owning and operating properties such as the Properties in agreeing to make the
Loan, and will continue to rely on Borrower’s ownership of the Properties as a means of maintaining
the value of the Properties as security for repayment of the Debt and the performance of the Other
Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of
the Properties so as to ensure that, should Borrower default in the repayment of the Debt or the
performance of the Other Obligations, Lender can recover the Debt by a sale of the Properties.

     (b) Without the prior written consent of Lender, and except to the extent otherwise set
forth in this Section 5.2.10 , Borrower shall not, and shall not permit any Restricted Party
do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain,
encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of
(directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) the Properties or any part thereof or any legal or
beneficial

62

 

interest therein or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other
than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the
provisions of Section 5.1.20, (B) Permitted Transfers, and (C) subject to Section
5.1.23 above, any issuance, sale, pledge or transfer of non-controlling interests in Cole
Credit Property Trust III, Inc.

     (c) Subject to the exclusions in Section 5.2.10(b), a Transfer shall include, but
not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the
Properties or any part thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of an Individual Property for other than actual
occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of
a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents;
(iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such
corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a
limited or general partnership or joint venture, any merger or consolidation or the change,
removal, resignation or addition of a general partner or the Sale or Pledge of the partnership
interest of any general partner or any profits or proceeds relating to such partnership interest,
or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such
limited partnership interest or the creation or issuance of new limited partnership interests; (v)
if a Restricted Party is a limited liability company, any merger or consolidation or the change,
removal, resignation or addition of a managing member or non-member manager (or if no managing
member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no
managing member, any member) or any profits or proceeds relating to such membership interest, or
the Sale or Pledge of non-managing membership interests or the creation or issuance of new
non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any
merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted
Party or the creation or issuance of new legal or beneficial interests.

     (d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall
not be required in connection with one or a series of Transfers, of not more than forty-nine
percent (49%) of the stock, the limited partnership interests or non-managing membership interests
(as the case may be) in a Restricted Party; provided, however, no such Transfer
shall result in the change of Control in a Restricted Party, and as a condition to each such
Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed
Transfer, and provided, further, all outstanding partnership interests in Guarantor
shall at all times be owned, directly or indirectly, by Cole Credit Property Trust III, Inc. If
after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of
direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that
owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of
the Closing Date, Borrower shall, no less than thirty (30) days prior to the effective date of any
such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender and the
Rating Agencies. In addition, at all times, Cole Credit Property Trust III, Inc. must continue to
Control Borrower, Guarantor and Manager and own, directly or indirectly, at least a 51% legal and
beneficial interest in Borrower, Guarantor and Manager.

     (e) No Transfer of the Properties and assumption of the Loan, or Transfer of any direct
interest in any Individual Borrower shall occur during the period that is sixty (60) days

63

 

prior to and sixty (60) days after a Securitization. Otherwise, Lender’s consent to a
Transfer of the Properties and assumption of the Loan or Transfer of one hundred percent (100%) of
the outstanding membership or partnership interests in Borrower shall not be unreasonably withheld
provided that Lender receives not less than sixty (60) days prior written notice of such Transfer
and no Event of Default has occurred and is continuing, and further provided that the following
additional requirements are satisfied:

     (i) Borrower shall pay or cause to be paid to Lender a transfer fee equal to one
percent (1%) of the outstanding principal balance of the Loan at the time of such Transfer,
unless the applicable Transfer is a Transfer to an Identified Affiliate that is a Cole
sponsored entity, in which case no transfer fee shall be required;

     (ii) Borrower shall pay or cause to be paid any and all reasonable out-of-pocket
costs incurred in connection with such Transfer (including, without limitation, Lender’s
reasonable counsel fees and disbursements and all recording fees, title insurance premiums
and mortgage and intangible taxes and the fees and expenses of the Rating Agencies pursuant
to clause (x) below);

     (iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must
have demonstrated expertise in owning and operating properties similar in location, size,
class and operation to the Properties, which expertise shall be reasonably determined by
Lender;

     (iv) Transferee and Transferee’s Principals shall, as of the date of such transfer,
have an aggregate net worth and liquidity reasonably acceptable to Lender;

     (v) Transferee, Transferee’s Principals and all other entities which may be owned
or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must
not have been party to any bankruptcy proceedings, voluntary or involuntary, made an
assignment for the benefit of creditors or taken advantage of any insolvency act, or any act
for the benefit of debtors within seven (7) years prior to the date of the proposed
Transfer;

     (vi) Transferee shall ratify or assume (subject to Section 9.3 hereof) all
of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender
in all respects, including, without limitation, by entering into an assumption agreement in
form and substance satisfactory to Lender;

     (vii) There shall be no material litigation or regulatory action pending or
threatened against Transferee, Transferee’s Principals or Related Entities which is not
reasonably acceptable to Lender;

     (viii) Transferee, Transferee’s Principals and Related Entities shall not have
defaulted under its or their obligations with respect to any other Indebtedness in a manner
which is not reasonably acceptable to Lender;

     (ix) Transferee and Transferee’s Principals must be able to satisfy all the
representations and covenants set forth in Sections 4.1.30, 4.1.35, 5.1.23 and
5.2.9 of this

64

 

Agreement, no Default or Event of Default shall otherwise occur as a result of such
Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational
documentation reasonably requested by Lender, which shall be reasonably satisfactory to
Lender and (B) all certificates, agreements, covenants and legal opinions reasonably
required by Lender, provided that such certificates, agreements and covenants shall not
materially increase the obligations of Borrower under the Loan Documents or materially
decrease the rights of Borrower under the Loan Documents;

     (x) If required by Lender, Transferee shall be approved by the Rating Agencies
selected by Lender, which approval, if required by Lender, shall take the form of a
confirmation in writing from such Rating Agencies to the effect that such Transfer will not
result in a qualification, reduction, downgrade or withdrawal of the ratings in effect
immediately prior to such assumption or transfer for the Securities or any class thereof
issued in connection with a Securitization which are then outstanding;

     (xi) Prior to any release of Guarantor, one (1) or more substitute guarantors
reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of
Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a
replacement guaranty and environmental indemnity reasonably satisfactory to Lender;

     (xii) Borrower shall deliver, at its sole cost and expense, an endorsement to the
Title Insurance Policies, as modified by the assumption agreement, as valid first liens on
the Properties and naming the Transferee as owner of the Properties, which endorsement shall
insure that, as of the date of the recording of the assumption agreement, the Properties
shall not be subject to any additional exceptions or liens other than those contained in the
Title Insurance Policies issued on the date hereof and the Permitted Encumbrances;

     (xiii) The Properties shall be managed by a Qualified Manager pursuant to a
Replacement Management Agreement; and

     (xiv) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender
an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance
to Lender.

     Immediately upon a Transfer to such Transferee and the satisfaction of all of the above
requirements, the named Borrower and Guarantor herein shall be released from all liability under
this Agreement, the Note, the Mortgages and the other Loan Documents accruing after such Transfer.
The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to
provide written evidence thereof reasonably requested by Borrower.

     (f) No Transfer of any direct interest in a Principal or a manager of an Individual
Borrower or of a Principal shall occur during the period that is sixty (60) days prior to and sixty
(60) days after a Securitization. Otherwise, Lender’s consent to a Transfer of one hundred percent
(100%) of the outstanding membership interests in a Principal or a manager of an Individual
Borrower or of a Principal shall not be unreasonably withheld provided that Lender

65

 

receives not less than sixty (60) days prior written notice of such Transfer and no Event of
Default has occurred and is continuing, and further provided that the following additional
requirements are satisfied:

     (i) The Transferee shall be, or shall be owned and controlled by, an Identified
Affiliate;

     (ii) Borrower shall pay or cause to be paid any and all reasonable out-of-pocket
costs incurred in connection with such Transfer (including, without limitation, Lender’s
reasonable counsel fees and disbursements and all recording fees, title insurance premiums
and mortgage and intangible taxes and the fees and expenses of the Rating Agencies pursuant
to clause (x) below), provided that no transfer fee shall be required;

     (iii) The Transferee or Transferee’s Principals must have demonstrated expertise in
owning and operating properties similar in location, size, class and operation to the
Properties, which expertise shall be reasonably determined by Lender;

     (iv) Transferee and Transferee’s Principals shall, as of the date of such transfer,
have an aggregate net worth and liquidity reasonably acceptable to Lender;

     (v) Transferee, Transferee’s Principals and all other entities which may be owned
or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must
not have been party to any bankruptcy proceedings, voluntary or involuntary, made an
assignment for the benefit of creditors or taken advantage of any insolvency act, or any act
for the benefit of debtors within seven (7) years prior to the date of the proposed
Transfer;

     (vi) Transferee shall ratify all of the obligations of Borrower under the Loan
Documents in a manner satisfactory to Lender in all respects, including, without limitation,
by entering into an assumption agreement in form and substance satisfactory to Lender;

     (vii) There shall be no material litigation or regulatory action pending or
threatened against Transferee, Transferee’s Principals or Related Entities which is not
reasonably acceptable to Lender;

     (viii) Transferee, Transferee’s Principals and Related Entities shall not have
defaulted under its or their obligations with respect to any other Indebtedness in a manner
which is not reasonably acceptable to Lender;

     (ix) Transferee and Transferee’s Principals must be able to satisfy all the
representations and covenants set forth in Sections 4.1.30, 4.1.35, 5.1.23 and
5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a
result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all
organizational documentation reasonably requested by Lender, which shall be reasonably
satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions
reasonably required by Lender, provided that such certificates, agreements and covenants
shall not

66

 

materially increase the obligations of Borrower under the Loan Documents or materially
decrease the rights of Borrower under the Loan Documents;

     (x) If required by Lender, Transferee shall be approved by the Rating Agencies
selected by Lender, which approval, if required by Lender, shall take the form of a
confirmation in writing from such Rating Agencies to the effect that such Transfer will not
result in a qualification, reduction, downgrade or withdrawal of the ratings in effect
immediately prior to such assumption or transfer for the Securities or any class thereof
issued in connection with a Securitization which are then outstanding;

     (xi) Intentionally omitted;

     (xii) Intentionally omitted;

     (xiii) The Properties shall be continue to be managed by a Qualified Manager
pursuant to the Management Agreement or a Replacement Management Agreement; and

     (xiv) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender
an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance
to Lender.

     (g) Lender shall not be required to demonstrate any actual impairment of its security or
any increased risk of default hereunder in order to declare the Debt immediately due and payable
upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer
regardless of whether voluntary or not, or whether or not Lender has consented to any previous
Transfer.

ARTICLE 6 — INSURANCE; CASUALTY; CONDEMNATION;

     Section 6.1 Insurance.

     (a) From the date hereof until payment and performance in full of all obligations of
Borrower under the Loan Documents or, solely with respect to any Individual Borrower that obtains
the earlier release of the Lien of the Mortgage affecting such Individual Borrower’s Individual
Property (and all related obligations) in accordance with the terms of this Agreement and the other
Loan Documents, then exclusive of any such Individual Borrower and such Individual Property so
released, Borrower shall obtain and maintain, or cause to be maintained, insurance for Borrower and
the Properties providing at least the following coverages:

     (i) comprehensive all risk “special form” insurance including, but not limited to,
loss caused by any type of windstorm or hail on the Improvements and the Personal Property,
(A) in an amount equal to one hundred percent (100%) of the “Full Replacement Cost,” which
for purposes of this Agreement shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings) with a waiver of depreciation;
(B) containing an agreed amount endorsement with respect to the Improvements and Personal
Property waiving all co-insurance provisions or to be written on a no co-insurance form; and
(C) providing for no deductible in excess of $10,000.00 for all such insurance coverage;
provided however with respect to windstorm

67

 

and earthquake coverage, providing for a deductible satisfactory to Lender in its
reasonable discretion. In addition, Borrower shall obtain: (y) if any portion of the
Improvements is currently or at any time in the future located in a federally designated
“special flood hazard area”, flood hazard insurance in an amount equal to the lesser of (1)
the outstanding principal balance of the Note or (2) the maximum amount of such insurance
available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act
of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended or such
greater amount as Lender shall reasonably require, and (z) earthquake insurance in amounts
and in form and substance reasonably satisfactory to Lender in the event the Individual
Property is located in an area with a high degree of seismic activity; provided that the
insurance pursuant to clauses (y) and (z) hereof shall be on terms consistent with the
comprehensive all risk insurance policy required under this subsection (i);

     (ii) business income or rental loss insurance (A) with loss payable to Lender; (B)
covering all risks required to be covered by the insurance provided for in subsection
(i) above; (C) in an amount equal to one hundred percent (100%) of the projected gross
revenues from the operation of the Properties (as reduced to reflect expenses not incurred
during a period of Restoration) for a period of at least eighteen (18) months after the date
of the Casualty; and (D) containing an extended period of indemnity endorsement which
provides that after the physical loss to the Improvements and Personal Property has been
repaired, the continued loss of income will be insured until such income either returns to
the same level it was at prior to the loss, or the expiration of six (6) months from the
date that the Individual Property is repaired or replaced and operations are resumed,
whichever first occurs, and notwithstanding that the policy may expire prior to the end of
such period. The amount of such business income or rental loss insurance shall be
determined prior to the date hereof and at least once each year thereafter based on
Borrower’s reasonable estimate of the gross revenues from the Individual Property for the
succeeding twelve (12) month period. All proceeds payable to Lender pursuant to this
subsection (ii) shall be deemed Rents and, as long as no Event of Default has occurred and
is continuing, shall be applied by Lender in accordance with the Cash Management Agreement,
except if Lender has elected, in accordance with its rights under Section 6.3 hereof, to
apply Net Proceeds in respect of any Casualty or Condemnation to the payment of the Debt or
Other Obligation, in which case Lender shall apply such proceeds in accordance with
Section 2.4.2 hereof. Nothing herein contained shall be deemed to relieve Borrower
of its obligations to pay the obligations secured by the Loan Documents on the respective
dates of payment provided for in this Agreement and the other Loan Documents except to the
extent such amounts are actually paid out of the proceeds of such business income insurance;

     (iii) at all times during which structural construction, repairs or alterations are
being made with respect to the Improvements, and only if the Individual Property coverage
form does not otherwise apply, (A) owner’s contingent or protective liability insurance,
otherwise known as Owner Contractor’s Protective Liability, covering claims not covered by
or under the terms or provisions of the below mentioned commercial general liability
insurance policy and (B) the insurance provided for in subsections (i), (ii) and (x)
above written in a so-called builder’s risk completed value form (1) on a non-

68

 

reporting basis, (2) against all risks insured against pursuant to subsections (i),
(ii) and (x) above, (3) including permission to occupy the Individual Property and (4)
with an agreed amount endorsement waiving co-insurance provisions;

     (iv) comprehensive boiler and machinery insurance, if steam boilers or other
pressure-fixed vessels are in operation, in amounts as shall be reasonably required by
Lender on terms consistent with the commercial property insurance policy required under
subsection (i) above;

     (v) commercial general liability insurance against claims for personal injury,
bodily injury, death or property damage occurring upon, in or about the Individual Property,
such insurance (A) to be on the so-called “occurrence” form with a combined limit of not
less than Two Million and 00/100 Dollars ($2,000,000.00) in the aggregate and One Million
and 00/100 Dollars ($1,000,000.00) per occurrence; (B) to continue at not less than the
aforesaid limit until required to be changed by Lender in writing by reason of changed
economic conditions making such protection inadequate and (C) to cover at least the
following hazards: (1) premises and operations; (2) products and completed operations on an
“if any” basis; (3) independent contractors; (4) blanket contractual liability for all
written contracts and (5) contractual liability covering the indemnities contained in
Article 9 of the Mortgage to the extent the same is available;

     (vi) automobile liability coverage for all owned and non-owned vehicles, including
rented and leased vehicles containing minimum limits per occurrence of One Million Dollars
and 00/100 Dollars ($1,000,000.00);

     (vii) worker’s compensation and employer’s liability subject to the worker’s
compensation laws of the applicable state;

     (viii) ordinance & law coverage with minimum limits as follows: Coverage A (value
of undamaged portion) to be ‘included’ in the insured replacement cost limit; Coverage B
(demolition/debris removal) to be 25% of the building’s replacement cost limit, and Coverage
C (increased cost of construction) to be 25% of the building’s replacement cost value;

     (ix) umbrella and excess liability insurance in an amount not less than
$50,000,000.00 per occurrence on terms consistent with the commercial general liability
insurance policy required under subsection (v) above, including, but not limited to,
supplemental coverage for employer liability and automobile liability, which umbrella
liability coverage shall apply in excess of the automobile liability coverage in clause (vi)
above;

     (x) the insurance required under this Section 6.1(a) above shall cover
perils of terrorism (both certified and non-certified, foreign and domestic) and acts of
terrorism (both certified and non-certified, foreign and domestic) and Borrower shall
maintain insurance for loss resulting from perils and acts of terrorism (both foreign and
domestic) on terms (including amounts) consistent with those required under Sections
6.1(a) above at all times during the term of the Loan; provided, that, if the Terrorism
Risk Insurance

69

 

Program Reauthorization Act of 2007, as amended and as may be further amended from time
to time (including any extensions thereof), is no longer in effect, Borrower shall only be
required to obtain such insurance under this Section 6.1(a)(x) to the extent
obtainable for an annual premium not to exceed the applicable Terrorism Insurance Premium
Cap; and

     (xi) upon sixty (60) days written notice, such other reasonable insurance,
including, but not limited to, sinkhole or land subsidence insurance, and in such reasonable
amounts as Lender from time to time may reasonably request against such other insurable
hazards which at the time are commonly insured against for property similar to the
Individual Property located in or around the region in which the Individual Property is
located.

     (b) All insurance provided for in Section 6.1(a) hereof, shall be obtained under valid and
enforceable policies (collectively, the “Policies” or in the singular, the “Policy”), and shall be
subject to the approval of Lender as to insurance companies, amounts, and deductibles, and shall
designate Lender as loss payee, mortgagee or additional insured, as applicable. The Policies shall
be issued by financially sound and responsible insurance companies authorized to do business in the
State and having a rating of “A-:X” or better in the current Best’s Insurance Reports and a claims
paying ability rating of “A-” or better by at least two (2) of the Rating Agencies including, (i)
S&P, (ii) Fitch, and (iii) Moody’s, if Moody’s is rating the Securities. The Policies described in
Section 6.1 hereof (other than those strictly limited to liability protection) shall designate
Lender as loss payee. Not later than five (5) Business Days prior to the expiration dates of each
Policy theretofore furnished to Lender, Borrower shall deliver to Lender evidence satisfactory to
Lender that such Policy has been renewed or replaced by another policy conforming to the provisions
of Section 6.1. Borrower shall provide confirmation that all renewed or replaced premiums (the
 “Insurance Premiums”) have been paid in full, no later than (A) in the case of Borrower provided
Policies, the date the premiums on each such Policy shall be delinquent, or (B) in the case of
Tenant provided Policies, two (2) Business Days after the date such Tenant is required to provide
such proof to Borrower under the applicable Lease.

     (c) Any blanket insurance Policy shall specifically allocate to the Individual Property
the amount of coverage from time to time required hereunder and shall otherwise provide the same
protection as would a separate Policy insuring only the Individual Property in compliance with the
provisions of Section 6.1(a) hereof.

     (d) All Policies provided for or contemplated by Section 6.1(a) hereof, except for
the Policy referenced in Section 6.1(a)(vii) of this Agreement, shall name Borrower as the
insured and shall designate Lender as loss payee, mortgagee or additional insured, as applicable,
as its interests may appear, and in the case of property damage, boiler and machinery, flood and
earthquake insurance, shall contain a so-called New York standard non-contributing mortgagee clause
in favor of Lender providing that the loss thereunder shall be payable to Lender.

     (e) All Policies shall contain clauses or endorsements to the effect that:

     (i) no act or negligence of Borrower, or anyone acting for Borrower, or of any
Tenant or other occupant, or failure to comply with the provisions of any Policy, which

70

 

might otherwise result in a forfeiture of the insurance or any part thereof, shall in
any way affect the validity or enforceability of the insurance insofar as Lender is
concerned;

     (ii) the Policy shall not be materially changed (other than to increase the
coverage provided thereby) or canceled without at least thirty (30) days written notice to
Lender and any other party named therein as an additional insured;

     (iii) the issuers thereof shall give written notice to Lender if the Policy has not
been renewed thirty (30) days prior to its expiration, unless the applicable insurers will
not agree to provide such notice; and

     (iv) Lender shall not be liable for any Insurance Premiums thereon or subject to
any assessments thereunder.

     (f) If at any time Lender is not in receipt of written evidence that all insurance
required hereunder is in full force and effect, Lender shall have the right, without notice to
Borrower (except as provided below), to take such action as Lender deems necessary to protect its
interest in the Properties, including, without limitation, the obtaining of such insurance coverage
as Lender in its sole discretion deems appropriate after three (3) Business Days notice to Borrower
if prior to the date upon which any such coverage will lapse or at any time Lender deems necessary
(regardless of prior notice to Borrower) to avoid the lapse of any such coverage. All premiums
incurred by Lender in connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by Borrower to Lender upon demand and, until paid, shall be secured by the
Mortgage and shall bear interest at the Default Rate.

     (g) Notwithstanding the foregoing, if Albertson’s obtains insurance from a third-party
insurer satisfying the requirements hereof with respect to its Individual Property (including,
without limitation, naming Lender as an additional insured or loss payee, as applicable), such
insurance shall satisfy Borrower’s obligations hereunder. In addition, if Albertson’s obtains
insurance from a third-party insurer satisfying the requirements hereof in all respects other than
the carrier’s rating in the current Best’s Insurance Reports, such insurance will be deemed to
satisfy Borrower’s obligations hereunder provided (A) the applicable carrier’s rating in the
current Best’s Insurance Reports satisfies the requirements of the Albertson’s Lease, and (B)
Borrower provides (or causes to be provided) secondary coverage either through a separate insurance
Policy or a blanket insurance Policy covering substantially all real property owned directly or
indirectly by Guarantor, including, without limitation, the Property, which such coverage shall (i)
be provided by a carrier that satisfies the ratings requirements set forth herein, and (ii) include
coverage for perils which are required pursuant to Section 6.1  and not covered or
collectible from insurance provided by Albertson’s.

     (h) Lender acknowledges that the insurance in place as of the date hereof, as evidenced by
the certificates of insurance provided by Borrower and/or Tenant in connection with the closing of
the Loan, shall be deemed to satisfy the foregoing requirements as in effect on the date hereof.

     Section 6.2 Casualty. If any Individual Property shall be damaged or destroyed, in whole
or in part (other than damage costing less than $25,000 to repair), by fire or other casualty

71

 

(a “Casualty”), Borrower shall give prompt notice of such damage to Lender. Subject to the last
sentence of this Section 6.2, the applicable Individual Borrower shall promptly commence
and diligently prosecute, or cause to be promptly commenced and diligently prosecuted, the
completion of the Restoration of the Individual Property pursuant to Section 6.4 hereof as
nearly as possible to the condition the Individual Property was in immediately prior to such
Casualty, with such alterations as may be reasonably approved by Lender and otherwise in accordance
with Section 6.4 hereof. Borrower shall pay (or cause to be paid) all costs of such
Restoration whether or not such costs are covered by insurance. Lender may, but shall not be
obligated to make proof of loss if not made promptly by Borrower. In addition, Lender may
participate in any settlement discussions with any insurance companies (and shall approve the final
settlement, which approval shall not be unreasonably withheld or delayed) with respect to any
Casualty in which the Net Proceeds or the costs of completing the Restoration are equal to or
greater than five percent (5%) of the Release Amount for the applicable Individual Property, and
Borrower shall deliver to Lender all instruments required by Lender to permit such participation.

     Section 6.3
Condemnation. Borrower shall promptly give Lender notice of the actual or
threatened commencement of any proceeding for the Condemnation of any Individual Property and shall
deliver to Lender copies of any and all papers served in connection with such proceedings. Lender
may participate in any such proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Borrower, at its expense, shall
diligently prosecute any such proceedings, and shall consult with Lender, its attorneys and
experts, and cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any taking by any public or quasi-public authority through Condemnation or
otherwise (including, but not limited to, any transfer made in lieu of or in anticipation of the
exercise of such taking), Borrower shall continue to pay the Debt at the time and in the manner
provided for its payment in the Note and in this Agreement and the Debt shall not be reduced until
any Award shall have been actually received and applied by Lender, after the deduction of expenses
of collection, to the reduction or discharge of the Debt. Lender shall not be limited to the
interest paid on the Award by the condemning authority but shall be entitled to receive out of the
Award interest at the rate or rates provided herein or in the Note. If any portion of the
Individual Property is taken by a condemning authority, subject to the last sentence of this
Section 6.3, the applicable Individual Borrower shall promptly commence and diligently
prosecute, or cause to be promptly commenced and diligently prosecuted, the completion of the
Restoration of the Individual Property pursuant to Section 6.4 hereof and otherwise comply
with the provisions of Section 6.4 hereof. If the Individual Property is sold, through
foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender shall have the right,
whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the Debt.

     Section 6.4
Restoration. The following provisions shall apply in connection with the
Restoration of an Individual Property:

     (a) If the Net Proceeds shall be less than five percent (5%) of the Release Amount for the
applicable Individual Property and the costs of completing the Restoration shall be less than five
percent (5%) of the Release Amount for the applicable Individual Property, the Net Proceeds will be
disbursed by Lender to Borrower upon receipt, provided that all of the conditions set forth in
Section 6.4(b)(i) hereof are met and Borrower delivers to Lender a written undertaking to

72

 

expeditiously commence and to satisfactorily complete with due diligence the Restoration in
accordance with the terms of this Agreement.

     (b) If the Net Proceeds are equal to or greater than five percent (5%) of the Release
Amount for the applicable Individual Property or the costs of completing the Restoration are equal
to or greater than five percent (5%) of the Release Amount for the applicable Individual Property,
Lender shall make the Net Proceeds available for the Restoration in accordance with the provisions
of this Section 6.4. The term “Net Proceeds” for purposes of this Section 6.4
shall mean: (i) the net amount of all insurance proceeds received by Lender pursuant to
Section 6.1 (a)(i), (iv), (ix) and (x) as a result of such damage or
destruction, after deduction of its reasonable costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting same (“Insurance Proceeds”), or (ii) the net amount
of the Award, after deduction of its reasonable costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting same (“Condemnation Proceeds”), whichever the case
may be.

     (i) The Net Proceeds shall be made available to Borrower for Restoration provided
that each of the following conditions are met:

     (A) no Event of Default shall have occurred and be continuing;

     (B) (1) in the event the Net Proceeds are Insurance Proceeds, less than
forty percent (40%) of the total floor area of the Improvements on the Individual
Property has been damaged, destroyed or rendered unusable as a result of such
Casualty or (2) in the event the Net Proceeds are Condemnation Proceeds, less than
twenty five percent (25%) of the land constituting the Individual Property is taken,
and such land is located along the perimeter or periphery of the Individual
Property, and no material portion of the Improvements is located on such land;

     (C) Leases demising in the aggregate a percentage amount equal to or
greater than the Rentable Space Percentage of the total rentable space in the
Individual Property which has been demised under executed and delivered Leases in
effect as of the date of the occurrence of such Casualty or Condemnation, whichever
the case may be, shall remain in full force and effect during and after the
completion of the Restoration, notwithstanding the occurrence of any such Casualty
or Condemnation, whichever the case may be, and Borrower and/or Tenant, as
applicable under the respective Lease, will make all necessary repairs and
restorations thereto at their sole cost and expense. The term “Rentable Space
Percentage” shall mean (1) in the event the Net Proceeds are Insurance Proceeds, a
percentage amount equal to ninety percent (90%) and (2) in the event the Net
Proceeds are Condemnation Proceeds, a percentage amount equal to ninety percent
(90%);

     (D) Borrower shall commence or cause to be commenced the Restoration as
soon as reasonably practicable (but in no event later than sixty (60) days after
such Casualty or Condemnation, whichever the case may be, occurs) and shall
diligently pursue the same to satisfactory completion;

73

 

     (E) Lender shall be satisfied that any operating deficits, including all
scheduled payments of principal and interest under the Note, which will be incurred
with respect to the Individual Property as a result of the occurrence of any such
Casualty or Condemnation, whichever the case may be, will be covered out of (1) the
Net Proceeds, (2) the insurance coverage referred to in Section 6.1(a)(ii)
hereof, if applicable, or (3) by other funds of Borrower;

     (F) Lender shall be satisfied that the Restoration will be completed on or
before the earliest to occur of (1) six (6) months prior to the Anticipated
Repayment Date, (2) the earliest date required for such completion under the terms
of any Leases, (3) such time as may be required under all applicable Legal
Requirements in order to repair and restore the Individual Property to the condition
it was in immediately prior to such Casualty or to as nearly as possible the
condition it was in immediately prior to such Condemnation, as applicable, or (4)
the expiration of the insurance coverage referred to in Section 6.1(a)(ii)
hereof;

     (G) the Individual Property and the use thereof after the Restoration will
be in compliance with and permitted under all applicable Legal Requirements;

     (H) the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable Legal
Requirements;

     (I) such Casualty or Condemnation, as applicable, does not result in the
loss of access to the Individual Property or the Improvements;

     (J) the projected Debt Service Coverage Ratio for the Properties, in the
aggregate, for the twelve months after the Restoration, after giving effect to the
Restoration at the applicable Individual Property, shall be equal to or greater than
1.30 to 1.0;

     (K) Borrower shall deliver, or cause to be delivered, to Lender a signed
detailed budget approved in writing by Borrower’s architect or engineer stating the
entire cost of completing the Restoration, which budget shall be subject to Lender’s
approval; and

     (L) the Net Proceeds together with any cash or cash equivalent deposited by
Borrower with Lender are sufficient in Lender’s discretion to cover the cost of the
Restoration (provided that Borrower shall not be required to deposit any cash or
cash equivalent with Lender if the Net Proceeds and the costs of completing the
Restoration are each less than One Hundred Thousand and 00/100 Dollars ($100,000.00)
and the conditions in the preceding subsections (A) through (K) shall be satisfied).

     (ii) The Net Proceeds shall be held by Lender in an interest-bearing Eligible
Account and, until disbursed in accordance with the provisions of this Section
6.4(b),

74

 

shall constitute additional security for the Debt and Other Obligations under the Loan
Documents. The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower
from time to time during the course of the Restoration, upon receipt of evidence
satisfactory to Lender that (A) all materials installed and work and labor performed (except
to the extent that they are to be paid for out of the requested disbursement) in connection
with the Restoration have been paid for in full, and (B) there exist no notices of pendency,
stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or any
other liens or encumbrances of any nature whatsoever on the Property which have not either
been fully bonded to the satisfaction of Lender and discharged of record or in the
alternative fully insured to the satisfaction of Lender by the title company issuing the
Title Insurance Policy.

     (iii) All plans and specifications required in connection with the Restoration
shall be subject to prior review and acceptance in all respects by Lender and by an
independent consulting engineer selected by Lender (the “Casualty Consultant”), such
acceptance not to be unreasonably withheld, conditioned or delayed. Lender shall have the
use of the plans and specifications and all permits, licenses and approvals required or
obtained in connection with the Restoration. The identity of the contractors,
subcontractors and materialmen engaged in the Restoration, as well as the contracts under
which they have been engaged, shall be subject to prior review and approval by Lender and
the Casualty Consultant, such acceptance not to be unreasonably withheld, conditioned or
delayed. All reasonable costs and expenses incurred by Lender in connection with making the
Net Proceeds available for the Restoration including, without limitation, reasonable counsel
fees and disbursements and the Casualty Consultant’s reasonable fees, shall be paid by
Borrower.

     (iv) In no event shall Lender be obligated to make disbursements of the Net
Proceeds in excess of an amount equal to the costs actually incurred from time to time for
work in place as part of the Restoration, as certified by the Casualty Consultant,
minus the Casualty Retainage. The term “Casualty Retainage” shall mean an amount
equal to ten percent (10%) of the costs actually incurred for work in place as part of the
Restoration, as certified by the Casualty Consultant, until the Restoration has been
completed. The Casualty Retainage shall in no event, and notwithstanding anything to the
contrary set forth above in this Section 6.4(b), be less than the amount actually
held back by Borrower from contractors, subcontractors and materialmen engaged in the
Restoration. The Casualty Retainage shall not be released until the Casualty Consultant
certifies to Lender that the Restoration has been completed in accordance with the
provisions of this Section 6.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate governmental
and quasi-governmental authorities, and Lender receives evidence satisfactory to Lender that
the costs of the Restoration have been paid in full or will be paid in full out of the
Casualty Retainage; provided, however, that Lender will release the portion of the Casualty
Retainage being held with respect to any contractor, subcontractor or materialman engaged in
the Restoration as of the date upon which the Casualty Consultant certifies to Lender that
the contractor, subcontractor or materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of the contractor’s,
subcontractor’s or materialman’s contract, the contractor, subcontractor or materialman

75

 

delivers the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by Lender or by the
title company issuing the Title Insurance Policy, and Lender receives an endorsement to the
Title Insurance Policy insuring the continued priority of the lien of the Mortgage and
evidence of payment of any premium payable for such endorsement. If required by Lender, the
release of any such portion of the Casualty Retainage shall be approved by the surety
company, if any, which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.

     (v) Lender shall not be obligated to make disbursements of the Net Proceeds more
frequently than once every calendar month.

     (vi) If at any time the Net Proceeds or the undisbursed balance thereof shall not,
in the opinion of Lender in consultation with the Casualty Consultant, be sufficient to pay
in full the balance of the costs which are estimated by the Casualty Consultant to be
incurred in connection with the completion of the Restoration, Borrower shall deposit the
deficiency (the “Net Proceeds Deficiency”) with Lender before any further disbursement of
the Net Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall be
held by Lender and shall be disbursed for costs actually incurred in connection with the
Restoration on the same conditions applicable to the disbursement of the Net Proceeds, and
until so disbursed pursuant to this Section 6.4(b) shall constitute additional
security for the Debt and Other Obligations under the Loan Documents.

     (vii) The excess, if any, of the Net Proceeds (and the remaining balance, if any,
of the Net Proceeds Deficiency) deposited with Lender after the Casualty Consultant
certifies to Lender that the Restoration has been completed in accordance with the
provisions of this Section 6.4(b), and the receipt by Lender of evidence
satisfactory to Lender that all costs incurred in connection with the Restoration have been
paid in full, shall be deposited in the Cash Management Account to be disbursed in
accordance with the Cash Management Agreement, provided no Event of Default shall have
occurred and shall be continuing under the Note, this Agreement or any of the other Loan
Documents.

     (c) All Net Proceeds not required (i) to be made available for the Restoration or (ii) to
be returned to Borrower as excess Net Proceeds pursuant to Section 6.4(b)(vii) hereof may
be retained and applied by Lender toward the payment of the Debt in accordance with Section
2.4.2 hereof, or, at the discretion of Lender, the same may be paid, either in whole or in
part, to Borrower for such purposes as Lender shall approve, in its discretion.

     (d) Notwithstanding anything in Section 6.4(a), (b) or (c) above, if immediately
after giving effect to the release of the portion of the Property taken through Condemnation, the
loan-to-value ratio of the remaining Property, as determined by Lender in its sole discretion
exceeds 125%, all Condemnation Proceeds shall be retained and applied by Lender toward the payment
of the Debt in accordance with Section 2.4.2 hereof. Unless Lender determines that
applicable REMIC regulations or other applicable authority require a different valuation method,
Lender shall determine the loan-to-value ratio of the remaining Property by capitalizing net
operating income for such Property for such period using a capitalization rate or range of
capitalization rates that the Lender has no reason to believe is incorrect.

76

 

     (e) In the event of foreclosure of the Mortgage with respect to an Individual Property, or
other transfer of title to an Individual Property in extinguishment in whole or in part of the Debt
all right, title and interest of Borrower in and to the Policies that are not blanket Policies then
in force concerning such Individual Property (other than to the extent those Policies provide
liability coverage to Borrower) and all proceeds payable thereunder shall thereupon vest in the
purchaser at such foreclosure or Lender or other transferee in the event of such other transfer of
title.

     (f) If Albertson’s is leasing all or substantially all of a building located on an
Individual Property, and the Improvements thereon suffer a Casualty or Condemnation, then provided
(i) Albertson’s is not in monetary or material non-monetary default under its Lease for such
Individual Property, (ii) such Lease remains in full force and effect notwithstanding such Casualty
or Condemnation, (iii) Albertson’s remains liable for the obligations under such Lease (without
reduction or abatement unless covered by business interruption/rent loss insurance), and (iv) such
Lease requires Restoration of the Improvements, such Lease shall govern and control in the event of
a conflict between the foregoing provisions of this Section 6.4 and such Lease.

ARTICLE 7 — RESERVE FUNDS

     Section 7.1
Required Repairs. 

     7.1.1
Deposits. On the Closing Date, Borrower shall deposit with Lender the aggregate
amount for the Properties set forth on Schedule III-A and Schedule III-B
(together, Schedule III) as security for the performance of the Required Repairs
(hereinafter defined) for the Properties. Amounts so deposited with Lender shall be held by Lender
in accordance with Section 7.6 hereof. Amounts so deposited shall hereinafter be referred
to as Borrower’s “Required Repair Fund” and the account in which such amounts are held shall
hereinafter be referred to as Borrower’s “Required Repair Account”. Lender acknowledges that
Albertson’s, under the Albertson’s Lease, is responsible for the Required Repairs with respect to
the Properties. Borrower shall use commercially reasonable efforts to cause Albertson’s to perform
the repairs at the Properties, as more particularly set forth on Schedule III hereto (such
repairs hereinafter referred to as “Required Repairs”) on or before the required deadline for each
repair as set forth on Schedule III-A and Schedule III-B, respectively. It shall
be an Event of Default under this Agreement if (i) Borrower does not use commercially reasonable
efforts to cause Albertson’s to perform the Required Repairs listed on Schedule III-B by
the required deadline for each repair, or (ii) if Borrower or Albertson’s does not complete the
Required Repairs listed on Schedule III-A by the required deadline for each repair.
Borrower and Lender acknowledge that with respect to Minor Required Repairs only, for purposes of
the foregoing clause (i), “commercially reasonable efforts” (x) shall include sending a written
demand letter regarding the Required Repairs to Albertson’s, which demand letter shall be resent
not less than once every six months until the applicable Required Repair has been completed, and
(y) shall not require that Borrower declare a default under the applicable Albertson’s Lease if
Albertson’s fails to complete any of the Required Repairs. In addition to its other remedies
hereunder or under the other Loan Documents, upon the occurrence of an Event of Default under this
Section 7.1.1, Lender, at its option, may withdraw all Required Repair Funds from the
Required Repair Account and Lender may apply such funds either to completion of the Required
Repairs at the Property or toward

77

 

payment of the Debt in such order, proportion and priority as Lender may determine in its sole
discretion.

     7.1.2
Release of Required Repair Funds. Lender shall disburse to Borrower the Required
Repair Funds from the Required Repair Account from time to time upon satisfaction by Borrower of
each of the following conditions: (a) Borrower shall submit a written request for payment to
Lender at least thirty (30) days prior to the date on which Borrower requests such payment be made
and specifies the Required Repairs to which the request relates, (b) on the date such request is
received by Lender and on the date such payment is to be made, no Event of Default shall exist, (c)
Lender shall have received an Officers’ Certificate stating that all Required Repairs related to
the requested disbursement have been completed in good and workmanlike manner and in accordance
with all applicable federal, state and local laws, rules and regulations, together with such other
evidence of completion reasonably required by Lender; in addition, if such Required Repairs were
performed by Borrower, Borrower shall (i) provide to Lender a copy of any license, permit or other
approval by any Governmental Authority required to commence and/or complete the Required Repairs,
(ii) shall identify in the Officer’s Certificate each Person that supplied materials or labor in
connection with the Required Repairs to be funded by the requested disbursement, and (iii) shall
certify in such Officer’s Certificate that each such Person has been paid in full or will be paid
in full upon such disbursement, such Officers’ Certificate to be accompanied by lien waivers or
other evidence of payment satisfactory to Lender, and (d) Lender shall have received such other
evidence as Lender shall reasonably request that the Required Repairs to be funded by the requested
disbursement have been completed and are paid for or will be paid upon such disbursement to
Borrower. Lender shall not be required to make disbursements from the Required Repair Account with
respect to an Individual Property (i) more than once a month, and (ii) unless such requested
disbursement is in an amount greater than $25,000.00 (or a lesser amount if the total amount in the
Required Repair Account is less than $25,000.00), in which case only one disbursement of the amount
remaining in the account shall be made) and such disbursement shall be made only upon satisfaction
of each condition contained in this Section 7.1.2.

     Section 7.2
Tax and Insurance Escrow Fund. Borrower shall pay to Lender (a) on the
Closing Date an initial deposit and (b) on each Payment Date thereafter (i) one-twelfth (1/12) of
the Taxes and Other Charges that Lender estimates will be payable during the next ensuing twelve
(12) months in order to accumulate with Lender sufficient funds to pay all such Taxes and Other
Charges at least thirty (30) days prior to their respective due dates, and (ii) one-twelfth (1/12)
of the Insurance Premiums that Lender estimates will be payable for the renewal of the coverage
afforded by the Policies upon the expiration thereof in order to accumulate with Lender sufficient
funds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration of the
Policies (said amounts in (a) and (b) above hereinafter called the “Tax and Insurance Escrow
Fund”). Lender will apply the Tax and Insurance Escrow Fund to payments of Taxes and Insurance
Premiums required to be made by Borrower pursuant to Sections 5.1.2 and 6.1 hereof and
under the Mortgage. In making any payment relating to the Tax and Insurance Escrow Fund, Lender
may do so according to any bill, statement or estimate procured from the appropriate public office
(with respect to Taxes) or insurer or agent (with respect to Insurance Premiums), without inquiry
into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment,
sale, forfeiture, tax lien or title or claim thereof. If the amount of the Tax and Insurance
Escrow Fund shall exceed the amounts due for Taxes, Other

78

 

Charges and Insurance Premiums pursuant to Sections 5.1.2 and 6.1 hereof, Lender shall, in
its sole discretion, return any excess to Borrower or credit such excess against future payments to
be made to the Tax and Insurance Escrow Fund. If at any time Lender reasonably determines that the
Tax and Insurance Escrow Fund is not or will not be sufficient to pay Taxes, Other Charges and
Insurance Premiums by the dates set forth in (a) and (b) above, Lender shall notify Borrower of
such determination and Borrower shall increase its monthly payments to Lender by the amount that
Lender estimates is sufficient to make up the deficiency at least thirty (30) days prior to the due
date of the Taxes and Other Charges and/or thirty (30) days prior to expiration of the Policies, as
the case may be.

     Notwithstanding anything to the contrary hereinbefore contained, Lender shall waive the
requirement set forth herein for Borrower to make deposits for the payment of Insurance Premiums
into the Tax and Insurance Escrow Fund so long as (a) no Event of Default has occurred and is
continuing, and (b) Borrower shall have provided Lender with satisfactory evidence (as determined
by Lender) that each Individual Property is insured in accordance with Section 6.1 of this
Agreement.

     Further notwithstanding anything to the contrary hereinbefore contained, Lender shall waive
the requirement set forth herein for Borrower to make deposits for the payment of Taxes into the
Tax and Insurance Escrow Fund so long as (a) no Event of Default has occurred and is continuing,
(b) Taxes are actually paid prior to assessment of any penalty for late payment and prior to
delinquency and (c) Borrower provides to Lender evidence satisfactory to Lender that such Taxes
have been paid prior to assessment of any penalty for late payment and prior to delinquency which
evidence shall be provided to Lender no later than thirty (30) days after the date that such Taxes
would be delinquent if not paid.

     Section 7.3 Intentionally Omitted.

     Section 7.4 Intentionally Omitted.

     Section 7.5 Excess Cash Flow Reserve Fund.

     7.5.1
Deposits to Excess Cash Flow Reserve Fund. During a Cash Sweep Period prior to the
Anticipated Repayment Date, all Excess Cash Flow in the Cash Management Account shall be deposited
with Lender and held by Lender as additional security for the Loan, and amounts so held shall be
hereinafter referred to as the “Excess Cash Flow Reserve Fund” and the account to which such
amounts are held shall hereinafter be referred to as the “Excess Cash Flow Reserve Account”. If on
or prior to the Anticipated Repayment Date Borrower does not pay to Lender the outstanding
principal balance of the Loan, all accrued and unpaid interest and all other amounts due hereunder
and under the Note, the Mortgage and the other Loan Documents, then, on the Anticipated Repayment
Date, all funds in the Excess Cash Flow Reserve Account shall be applied pursuant to the second
sentence of Section 2.3.1(b) hereof. Following the Anticipated Repayment Date, all Excess
Cash Flow in the Cash Management Account shall be applied by Lender pursuant to Section
2.3.1(b) hereof.

     7.5.2
Release of Excess Cash Flow Reserve Funds. Upon the occurrence of a Cash Sweep
Event Cure, all Excess Cash Flow Reserve Funds shall be deposited into the Cash

79

 

Management Account as revenue from the Property to be disbursed in accordance with the Cash
Management Agreement. Any Excess Cash Flow Reserve Funds remaining after the Debt has been paid in
full shall be paid to Borrower.

     Section 7.6 Reserve Funds, Generally. 

     (a) Borrower grants to Lender a first-priority perfected security interest in each of the
Reserve Funds and any and all monies now or hereafter deposited in each Reserve Fund as additional
security for payment of the Debt. Until expended or applied in accordance herewith, the Reserve
Funds shall constitute additional security for the Debt.

     (b) Upon the occurrence and during the continuance of an Event of Default, Lender may, in
addition to any and all other rights and remedies available to Lender, apply any sums then present
in any or all of the Reserve Funds to the payment of the Debt in any order in its sole discretion.

     (c) The Reserve Funds shall not constitute trust funds and may be commingled with other
monies held by Lender. The Reserve Funds shall be held in an Eligible Account in Permitted
Investments as directed by Lender or Lender’s Servicer. All interest on a Reserve Fund shall be
added to and become a part thereof. Borrower shall be responsible for payment of any federal,
state or local income or other tax applicable to the interest earned on the Reserve Funds credited
or paid to Borrower.

     (d) Borrower shall not, without obtaining the prior written consent of Lender, further
pledge, assign or grant any security interest in any Reserve Fund or the monies deposited therein
or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1
Financing Statements, except those naming Lender as the secured party, to be filed with respect
thereto.

     (e) As long as Reserve Funds are invested in investments that constitute Permitted
Investments at the time such investments are made, Lender and Servicer shall not be liable for any
loss sustained on the investment of any funds constituting the Reserve Funds. Borrower shall
indemnify Lender and Servicer and hold Lender and Servicer harmless from and against any and all
actions, suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses
(including litigation costs and reasonable attorneys’ fees and expenses) arising from or in any way
connected with the Reserve Funds or the performance of the obligations for which the Reserve Funds
were established, unless arising from the gross negligence, willful misconduct or bad faith of the
party seeking indemnification. Borrower shall assign to Lender all rights and claims Borrower may
have against all persons or entities supplying labor, materials or other services which are to be
paid from or secured by the Reserve Funds; provided, however, that Lender may not pursue any such
right or claim unless an Event of Default has occurred and remains uncured.

     (f) The required monthly deposits into the Reserve Funds and the Monthly Debt Service
Payment Amount, shall be added together and shall be paid as an aggregate sum by Borrower to
Lender.

80

 

     (g) Any amount remaining in the Reserve Funds after the Debt has been paid in full shall
be returned to Borrower.

ARTICLE 8 — DEFAULTS

     Section 8.1 Event of Default. 

     (a) Each of the following events shall constitute an event of default hereunder (an “Event
of Default”):

     (i) (x) if the Monthly Debt Service Payment Amount is not paid when due, except to
the extent there are sufficient funds in the Cash Management Agreement to pay such Monthly
Debt Service Payment Amount when due, (y) the outstanding principal balance of the Loan, all
accrued and unpaid interest and all other amounts due hereunder and under the Note, the
Mortgage and the other Loan Documents is not paid on the Maturity Date, or (z) any other
payment required hereunder or under the other Loan Documents is not paid within five (5)
days of the applicable due date;

     (ii) if any of the Taxes or Other Charges are not paid prior to the date when the
same become delinquent, except to the extent that Borrower or Tenant is contesting the same
in accordance with the terms of Section 5.1.2 hereof, or there are sufficient funds
in the Cash Management Account to pay such Taxes or Other Charges and Lender fails to or
refuses to release the same from to the extent required under this Agreement;

     (iii) if the Policies are not kept in full force and effect, or if certified copies
of the Policies (or, if any such Policy is an umbrella Policy covering more than the
Property or Tenant is providing any such Policy, certificates or other evidence of such
Policy reasonably acceptable to Lender) are not delivered to Lender within fifteen (15) days
after request;

     (iv) if Borrower Transfers or otherwise encumbers any portion of the Properties
without Lender’s prior written consent in violation of the provisions of this Agreement and
Article 6 of the Mortgage;

     (v) if any representation or warranty made by Borrower herein or in any other Loan
Document, or in any report, certificate, financial statement or other instrument, agreement
or document furnished to Lender shall have been false or misleading in any material respect
as of the date the representation or warranty was made;

     (vi) if Borrower or Principal shall make an assignment for the benefit of
creditors;

     (vii) if a receiver, liquidator or trustee shall be appointed for Borrower or
Principal or any other guarantor under any guarantee issued in connection with the Loan or
if Borrower or Principal shall be adjudicated a bankrupt or insolvent, or if any petition
for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any
similar federal or state law, shall be filed by or against, consented to, or acquiesced in
by, Borrower or Principal, or if any proceeding for the dissolution or liquidation of
Borrower

81

 

or Principal shall be instituted; provided, however, if such appointment, adjudication,
petition or proceeding was involuntary and not consented to by Borrower or Principal upon
the same not being discharged, stayed or dismissed within ninety (90) days;

     (viii) if Borrower attempts to assign its rights under this Agreement or any of the
other Loan Documents or any interest herein or therein in contravention of the Loan
Documents;

     (ix) if Guarantor or any guarantor or indemnitor under any guaranty or indemnity
issued in connection with the Loan shall make an assignment for the benefit of creditors or
if a receiver, liquidator or trustee shall be appointed for Guarantor or any guarantor or
indemnitor under any guarantee or indemnity issued in connection with the Loan or if
Guarantor or such other guarantor or indemnitor shall be adjudicated a bankrupt or
insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be filed by or against,
consented to, or acquiesced in by, Guarantor or such other guarantor or indemnitor, or if
any proceeding for the dissolution or liquidation of Guarantor or such other guarantor or
indemnitor shall be instituted; provided, however, if such appointment, adjudication,
petition or proceeding was involuntary and not consented to by Guarantor or such other
guarantor or indemnitor, upon the same not being discharged, stayed or dismissed within
ninety (90) days; provided, further, however, it shall be at
Lender’s option to determine whether any of the foregoing shall be an Event of Default;

     (x) if Borrower breaches any covenant contained in Section 4.1.30 hereof or
any negative covenant contained in Section 5.2 hereof;

     (xi) if Borrower breaches any covenant contained in Section 5.1.22 hereof
related to any exclusive use provision or radius restriction set forth in any Lease, or any
Affiliate of Borrower breaches any exclusive use provision or radius restriction set forth
in any Lease;

     (xii) intentionally omitted;

     (xiii) with respect to any term, covenant or provision set forth herein which
specifically contains a notice requirement and/or grace period, if Borrower shall be in
default under such term, covenant or condition after the giving of such notice and/or the
expiration of such grace period;

     (xiv) if any of the factual assumptions relating to the conduct of Borrower or
Guarantor or any Affiliate of either such party, prior to the date hereof contained in the
Insolvency Opinion delivered to Lender in connection with the Loan, or in any Additional
Insolvency Opinion delivered subsequent to the closing of the Loan, is or shall become
untrue in any material respect;

     (xv) if a material default has occurred and continues beyond any applicable cure
period under the Management Agreement as it relates to an Individual Property (or any
Replacement Management Agreement) and if such default permits the Manager thereunder to
remove the Individual Property from the application of the Management

82

 

Agreement or terminate or cancel the Management Agreement (or any Replacement
Management Agreement);

     (xvi) if Borrower shall continue to be in Default under any of the terms, covenants
or conditions of Section 9.1 hereof, or fails to cooperate with Lender in connection
with a Securitization pursuant to the provisions of Section 9.1 hereof, for five (5)
Business Days after notice to Borrower from Lender, provided, however, if such Default is
susceptible of cure but cannot reasonably be cured within such period and provided further
that Borrower shall have commenced to cure such Default within such period and thereafter
diligently and expeditiously proceeds to cure the same, such five (5) Business Day period
shall be extended for such time as is reasonably necessary for Borrower in the exercise of
due diligence to cure such Default, such additional period not to exceed thirty (30) days;

     (xvii) if Borrower shall continue to be in Default under any of the other terms,
covenants or conditions of this Agreement not specified in subsections (i) to
(xii) above, for ten (10) days after notice to Borrower from Lender, in the case of
any Default which can be cured by the payment of a sum of money, or for thirty (30) days
after notice from Lender in the case of any other Default; provided, however, that if such
non-monetary Default is susceptible of cure but cannot reasonably be cured within such
thirty (30) day period and provided further that Borrower shall have commenced to cure such
Default within such thirty (30) day period and thereafter diligently and expeditiously
proceeds to cure the same, such thirty (30) day period shall be extended for such time as is
reasonably necessary for Borrower in the exercise of due diligence to cure such Default,
such additional period not to exceed one hundred twenty (120) days; or

     (xviii) if there shall be default under any of the other Loan Documents beyond any
applicable cure periods contained in such documents, whether as to Borrower or the
Individual Property, or if any other such event shall occur or condition shall exist, if the
effect of such default, event or condition is to accelerate the maturity of any portion of
the Debt or to permit Lender to accelerate the maturity of all or any portion of the Debt.

     (b) Upon the occurrence of an Event of Default (other than an Event of Default described
in clauses (vi), (vii) or (viii) above) and at any time thereafter while such Event of Default is
continuing, in addition to any other rights or remedies available to it pursuant to this Agreement
and the other Loan Documents or at law or in equity but subject to Section 9.3, Lender may
take such action, without notice or demand, that Lender deems advisable to protect and enforce its
rights against Borrower and the Properties, including, without limitation, declaring the Debt to be
immediately due and payable, and Lender may enforce or avail itself of any or all rights or
remedies provided in the Loan Documents against Borrower and in and to all or any Individual
Property, including, without limitation, all rights or remedies available at law or in equity; and
upon any Event of Default described in clauses (vi), (vii) or (viii) above, the Debt and Other
Obligations of Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower hereby expressly
waives any such notice or demand, anything contained herein or in any other Loan Document to the
contrary notwithstanding.

83

 

     Section 8.2 Remedies.

     (a) Upon the occurrence and during the continuance of an Event of Default, subject to
Section 9.3, all or any one or more of the rights, powers, privileges and other remedies
available to Lender against Borrower under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or at law or in equity may be exercised by
Lender at any time and from time to time, whether or not all or any of the Debt shall be declared
due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Loan Documents with respect
to all or any part of any Individual Property. Subject to Section 9.3, any such actions
taken by Lender shall be cumulative and concurrent and may be pursued independently, singularly,
successively, together or otherwise, at such time and in such order as Lender may determine in its
sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Lender permitted by law, equity or contract or as set forth herein
or in the other Loan Documents. Without limiting the generality of the foregoing, Borrower agrees
that if an Event of Default is continuing and to the fullest extent permitted by law (i) Lender is
not subject to any “one action” or “election of remedies” law or rule, and (ii) all liens and other
rights, remedies or privileges provided to Lender shall remain in full force and effect until
Lender has exhausted all of its remedies against each Individual Property and each Mortgage has
been foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or the Debt has
been paid in full. With respect to Borrower and the Properties, nothing contained herein
or in any other Loan Document shall be construed as requiring Lender to resort to any Individual
Property for the satisfaction of any of the Debt in any preference or priority, and Lender may
seek satisfaction out of all of the Properties, or any part thereof, in its absolute discretion in
respect of the Debt. In addition, to the fullest extent permitted by law, Lender shall have the
right from time to time to partially foreclose a Mortgage in any manner and for any amounts secured
by such Mortgage then due and payable as determined by Lender in its sole discretion including,
without limitation, the following circumstances: (i) in the event Borrower defaults beyond any
applicable grace period in the payment of one or more scheduled payments of principal and interest,
Lender may foreclose one or more of the Mortgages to recover such delinquent payments or (ii) in
the event Lender elects to accelerate less than the entire outstanding principal balance of the
Loan, Lender may foreclose one or more of the Mortgages to recover so much of the principal balance
of the Loan as Lender may accelerate and such other sums secured by one or more of the Mortgages as
Lender may elect. Notwithstanding one or more partial foreclosures, the remaining Properties shall
remain subject to the Mortgages to secure payment of sums secured by the Mortgages and not
previously recovered, to the fullest extent permitted by law.

     (b) Lender shall have the right from time to time to sever the Note and the other Loan
Documents into one or more separate notes, mortgages and other security documents (the “Severed
Loan Documents”) in such denominations as Lender shall determine in its sole discretion for
purposes of evidencing and enforcing its rights and remedies provided hereunder. Borrower shall
execute and deliver to Lender from time to time, promptly after the request of Lender, a severance
agreement and such other documents as Lender shall request in order to effect the severance
described in the preceding sentence, all in form and substance reasonably
satisfactory to Lender and provided that such severance agreement and other documents
incorporate the provisions of Section 9.3. Borrower hereby absolutely and irrevocably
appoints

84

 

Lender as its true and lawful attorney, coupled with an interest, in its name and stead to
make and execute all documents necessary or desirable to effect the aforesaid severance, Borrower
ratifying all that its said attorney shall do by virtue thereof; provided, however, Lender shall
not make or execute any such documents under such power until ten (10) days after notice has been
given to Borrower by Lender of Lender’s intent to exercise its rights under such power. Borrower
shall be obligated to pay any costs or expenses incurred in connection with the preparation,
execution, recording or filing of the Severed Loan Documents and the Severed Loan Documents shall
not contain any representations, warranties or covenants not contained in the Loan Documents and
any such representations and warranties contained in the Severed Loan Documents will be given by
Borrower only as of the Closing Date. Notwithstanding the foregoing, provided no Event of Default
shall then exist, Borrower’s liability for costs or expenses shall be subject to Section
9.6 below.

     (c) As used in this Section 8.2, a “foreclosure” shall include, without
limitation, any sale by power of sale.

     Section 8.3
Remedies Cumulative; Waivers. The rights, powers and remedies of Lender
under this Agreement shall be cumulative and, subject to Section 9.3, not exclusive of any
other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or
the other Loan Documents, or existing at law or in equity or otherwise. Lender’s rights, powers
and remedies may be pursued singularly, concurrently or otherwise, at such time and in such order
as Lender may determine in Lender’s sole discretion. No delay or omission to exercise any remedy,
right or power accruing upon an Event of Default shall impair any such remedy, right or power or
shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from
time to time and as often as may be deemed expedient. A waiver of one Default or Event of Default
with respect to Borrower shall not be construed to be a waiver of any subsequent Default or Event
of Default by Borrower or to impair any remedy, right or power consequent thereon.

ARTICLE 9 — SPECIAL PROVISIONS

     Section 9.1
Securitization. 

     9.1.1 Sale of Notes and Securitization. 

     (a) Borrower acknowledges and agrees that Lender may sell all or any portion of the Loan
and the Loan Documents, or issue one or more participations therein, or consummate one or more
private or public securitizations of rated single- or multi-class securities (the “Securities”)
secured by or evidencing ownership interests in all or any portion of the Loan and the Loan
Documents or a pool of assets that include the Loan and the Loan Documents (such sales,
participations and/or securitizations, collectively, a “Securitization”).

     (b) At the request of Lender, and to the extent not already required to be provided by or
on behalf of Borrower under this Agreement, Borrower shall use reasonable efforts to provide
information not in the possession of Lender or which may be reasonably required by Lender or
take other actions reasonably required by Lender, in each case in order to satisfy the market
standards to which Lender customarily adheres or which may be reasonably required by

85

 

prospective
investors and/or the Rating Agencies in connection with any such Securitization. Lender shall have
the right to provide to prospective investors and the Rating Agencies any information in its
possession, including, without limitation, financial statements relating to Borrower, Guarantors,
if any, the Property and any Tenant of the Improvements. Borrower acknowledges that certain
information regarding the Loan and the parties thereto and the Property may be included in a
private placement memorandum, prospectus or other disclosure documents (the “Disclosure
Documents”). Borrower agrees that each of Borrower, Principal, Guarantor and their respective
officers and representatives, shall, at Lender’s request, and subject to Section 9.6 below,
at Borrower’s sole cost and expense, cooperate with Lender’s efforts to arrange for a
Securitization in accordance with the market standards to which Lender customarily adheres and/or
which may be required by prospective investors and/or the Rating Agencies in connection with any
such Securitization. Borrower, Principal and Guarantor agree to review, at Lender’s request in
connection with the Securitization, the Disclosure Documents as such Disclosure Documents relate to
Borrower, Principal, Guarantor, the Properties and the Loan, including without limitation, the
sections entitled “Risk Factors,” “Special Considerations,” “Description of the Mortgage,”
“Description of the Mortgage Loan and Mortgaged Property,” “The Manager,” “The Borrower,” and
“Certain Legal Aspects of the Mortgage Loan,” and shall confirm that the factual statements and
representations contained in such sections and such other information in the Disclosure Documents
(to the extent such information relates to, or is based on, or includes any information regarding
the Properties, Borrower, Guarantor, Manager and/or the Loan) do not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements made,
in the light of the circumstances under which they were made, not misleading.

     (c) In connection with a Securitization, Borrower agrees to make, upon Lender’s written
request, without limitation, all structural or other changes to the Loan (including delivery of one
or more new component notes to replace the original note or modify the original note to reflect
multiple components of the Loan and such new notes or modified note may have different interest
rates and amortization schedules), modifications to any documents evidencing or securing the Loan,
creation of one or more mezzanine loans (including amending Borrower’s organizational structure to
provide for one or more mezzanine borrowers), modification of Borrower’s organizational documents
(including, without limitation, in the case of a limited partnership, to increase the general
partner’s percentage ownership in the partnership to not less than 0.5%), delivery of opinions of
counsel acceptable to the Rating Agencies or potential investors and addressing such matters as the
Rating Agencies or potential investors may require; provided, however, that in creating such new
notes or modified notes or mezzanine notes Borrower shall not be required to (i) modify the
weighted average interest rate payable under the Note (and further provided that any subsequent
prepayment of the Loan shall be applied on a pro-rata basis to all promissory notes so that the
weighted average interest rate does not change), (ii) modify the stated maturity of the Note, (iii)
modify the aggregate amortization of principal of the Note, (iv) modify any other material economic
term of the Loan, or (v) decrease the time periods during which Borrower is permitted to perform
its obligations under the Loan Documents. In connection with the foregoing, Borrower covenants and
agrees to modify the Cash Management Agreement to reflect the newly created components and/or
mezzanine loans.

     9.1.2
Securitization Costs. Subject to Section 9.6 below, all out-of-pocket
third party costs and expenses incurred by Borrower and Guarantor in connection with Borrower’s

86

 

complying with requests made under this Section 9.1 (including, without limitation, the
fees and expenses of the Rating Agencies and expenses incurred pursuant to Section
9.1.1(c)) shall be paid by Borrower.

     Section 9.2 Uncross of Properties.

     (a) Each Individual Borrower agrees that Lender shall have the right, at any time and from
time to time, to release any Individual Property (the “Affected Property”) or Individual Borrower
from the cross-defaulting and/or the cross-collateralization effected pursuant to the grant of the
Mortgage from such Individual Borrower and secured by the lien of the applicable Mortgage. In
furtherance thereof, Lender shall have the right to (i) sever and divide the Note and the other
Loan Documents in order to allocate to such Affected Property the portion of the Loan allocable to
such Individual Property (the “Allocated Loan Amount”) which portion shall be evidenced by a new
note and secured by such other loan documents (collectively, the “New Note”) having a principal
amount equal to the Allocated Loan Amount applicable to such Affected Property, (ii) segregate the
applicable portion of each of the Reserve Funds relating to the Affected Property, (iii) release
any cross-default and/or cross-collateralization provisions applicable to such Affected Property
and (iv) take such additional action consistent therewith; provided, that such New Note secured by
such Affected Property, together with the Loan Documents secured by the remaining Properties, shall
not increase in the aggregate (A) any monetary obligation of Borrower under the Loan Documents
(provided, however, it being acknowledged and agreed that such New Note shall immediately after the
dividing of the Note have the same initial weighted average coupon as the original Note prior to
such dividing, notwithstanding that such New Note may, in connection with the application of
principal to such New Note, subsequently cause the weighted average coupon of such New Note to
change (but not increase, except that the weighted average coupon may subsequently increase due to
prepayments or if an Event of Default shall occur)), or (B) any other obligation of Borrower under
the Loan Documents in any material respect or decrease the rights of Borrower under the Loan
Documents. In connection with the transfer of any such Affected Property as provided for in this
Section 9.2, the Loan shall be reduced by an amount equal to the amount of the New Note applicable
to such Affected Property and the new loan secured by such Affected Property and the New Note shall
be in an amount equal to such Allocated Loan Amount. Subsequent to the release of the Affected
Property from the lien of the Loan pursuant to this Section 9.2, the balances of the components of
the Loan shall be the same as they would have been had a prepayment occurred in an amount equal to
the Allocated Loan Amount of the Affected Property. At the request of Lender, each Individual
Borrower shall otherwise cooperate with Lender in its attempt to satisfy all requirements necessary
in order for Lender to obtain written confirmation from the Rating Agencies that such transfer of
the Affected Property from the Securitization and splitting of the Loan shall not cause a
downgrade, withdrawal or qualification of the then current ratings of the Securities or any class
thereof, which requirements shall include, without limitation: (A) delivery of evidence that the
single purpose nature and bankruptcy remoteness of each Individual Borrower owning an Individual
Property other than the Affected Property following such release have not been adversely affected
and are in accordance with the terms and provisions of this Agreement (which evidence may include a
“bring-down” of the Insolvency Opinion); and (B) the execution of such documents and instruments
and delivery by Lender of
such opinions of counsel as are typical for similar transactions, including, an opinion of
counsel that the release of the Affected Property will not be a “significant modification” of this
Loan

87

 

within the meaning of Section 1.860G-2(b) of the regulations of the United States Department
of the Treasury and that all other requirements applicable, if any, to the REMIC Trust that holds
the Note (if applicable), have been satisfied or have not otherwise been violated. Subject to
Section 9.6 below, Borrower shall be responsible for its own actual out-of-pocket costs and
expenses incurred in connection with the provisions of this Section 9.2(a), including
without limitation, payment of any mortgage recording tax or title insurance premiums.

     (b) In addition to the foregoing, each Individual Borrower agrees that Lender shall have
the unilateral right, at any time and from time to time prior to a Securitization, to divide the
Loan into two or more Loans which are not cross-defaulted and/or cross-collateralized. Lender may
designate two or more groups of Individual Properties and Individual Borrowers (each, a “Loan
Group”) for such new Loans. Such new Loans shall be internally cross-defaulted and/or
cross-collateralized. Lender reserves the right to structure each Loan Group as one or more senior
and/or junior mortgage components, and/or mezzanine loans. In furtherance thereof, Lender shall
have the right to (i) sever or divide the Note and the other Loan Documents in order to allocate to
each such Loan Group the applicable Allocated Loan Amount, which shall be evidenced by two or more
promissory notes and related security documents (each, collectively, a “Split Note”), (ii)
segregate the applicable portion of each of the Reserve Funds relating to each Loan Group, (iii)
release any cross-default and/or cross-collateralization provisions applicable to such Loan Groups,
and (iv) take such additional action consistent therewith; provided, that all such Split Notes,
together, shall not increase in the aggregate (A) any monetary obligation of Borrower under the
Loan Documents (provided, however, it being acknowledged and agreed that such Split Notes shall
immediately after the dividing of the Note have the same initial weighted average coupon as the
original Note prior to such dividing, notwithstanding that such Split Notes may, in connection with
the application of principal to such Split Notes, subsequently cause the weighted average coupon of
such Split Notes to change (but not increase, except that the weighted average coupon may
subsequently increase due to prepayments or if an Event of Default shall occur)), or (B) any other
obligation of Borrower under the Loan Documents in any material respect or decrease the rights of
Borrower under the Loan Documents. At the request of Lender, each Individual Borrower shall
otherwise cooperate with Lender in connection with the foregoing, which cooperation shall include,
without limitation: (a) additional Loan Documents or amendments to existing Loan Documents as
reasonably required by Lender, (b) new opinions or updates to the legal opinions delivered to
Lender in connection with the closing of the Loan, (c) endorsements and/or updates to the Title
Insurance Policies delivered to Lender in connection with the closing of the Loan, (d) a new cash
management structure for each Loan Group, and (e) any other certificates, instruments and documents
reasonably determined by Lender as necessary or appropriate to such severance, which documentation
shall be in form and substance acceptable to Lender in its reasonable discretion. Lender’s rights
pursuant to this Section 9.2(b) shall be in addition to Lender’s rights under Section
9.1.1(c), above, and shall not in any way shall limit or otherwise effect such rights. Subject
to Section 9.6 below, Borrower shall be responsible for its own actual out-of-pocket costs
and expenses incurred in connection with the provisions of this Section 9.2(b), including without
limitation, payment of any mortgage recording tax, title insurance premiums and fees related to
outside counsel legal opinions.

     Section 9.3
Exculpation. Notwithstanding anything to the contrary contained in this
Agreement, the Note, the Mortgages or the other Loan Documents but subject to the qualifications
below, Lender shall not enforce the liability and obligation of Borrower to perform

88

 

and observe the
obligations contained in the Note, this Agreement, the Mortgages or the other Loan Documents by any
action or proceeding wherein a money judgment shall be sought against Borrower, except that Lender
may bring a foreclosure action, an action for specific performance or any other appropriate action
or proceeding to enable Lender to enforce and realize upon its interest under the Note, this
Agreement, the Mortgages and the other Loan Documents, or in one or more Properties, the Rents, or
any other collateral given to Lender pursuant to the Loan Documents; provided, however, that,
except as specifically provided herein, any judgment in any such action or proceeding shall be
enforceable against Borrower only to the extent of Borrower’s interest in the Properties, in the
Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this
Agreement, the Mortgages and the other Loan Documents, agrees that it shall not sue for, seek or
demand any deficiency judgment against Borrower in any such action or proceeding under or by reason
of or under or in connection with the Note, this Agreement, the Mortgages or the other Loan
Documents. The provisions of this Section shall not, however, (a) constitute a waiver, release or
impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the
right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and
sale under the Mortgages (as long as Lender shall not sue for, seek or demand any deficiency
judgment against Borrower); (c) affect the validity or enforceability of or any guaranty made in
connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the
right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of any
assignment of leases contained in the Mortgage; (f) constitute a prohibition against Lender seeking
a deficiency judgment against Borrower (but not Guarantor) if necessary in order to fully realize
the security granted by the Mortgages or to commence any other appropriate action or proceeding in
order for Lender to exercise its remedies against any Individual Property; or (g) constitute a
waiver of the right of Lender to enforce the liability and obligation of Borrower, by money
judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other
obligation incurred by Lender (including attorneys’ fees and expenses reasonably incurred) arising
out of or in connection with the following:

     (i) fraud or intentional misrepresentation by any Individual Borrower, Principal or
Guarantor in connection with the Loan;

     (ii) the gross negligence or willful misconduct of any Individual Borrower,
Principal or Guarantor;

     (iii) material physical waste of any Individual Property by or knowingly permitted
by any Individual Borrower, Principal or Guarantor, or to which an Individual Borrower,
Principal or Guarantor has knowledge of and has acquiesced to;

     (iv) the removal or disposal by or knowingly permitted by any Individual Borrower,
Principal or Guarantor or any Affiliate of the foregoing of any portion of any Individual
Property after an Event of Default (unless otherwise permitted under the Loan Documents);

     (v) the misapplication or conversion by any Individual Borrower, Principal or
Guarantor of (A) any Insurance Proceeds paid by reason of any loss, damage or destruction to
any Individual Property, (B) any Awards received in connection with a

89

 

Condemnation of all or
a portion of any Individual Property, (C) any Rents following an Event of Default, or (D)
any Rents paid more than one month in advance;

     (vi) failure of any Individual Borrower, Principal or Guarantor or any Affiliate of
the foregoing to pay charges for labor or materials incurred, Taxes or other charges or
judgments that can create Liens on any Individual Borrower’s interest in any portion of any
Individual Property to the extent such Liens are not bonded over or discharged in accordance
with this Agreement or the other Loan Documents;

     (vii) failure to appoint a new property manager upon the request of Lender as
permitted under this Agreement;

     (viii) failure of any Individual Borrower or Principal to maintain its status as a
Special Purpose Entity or a breach by any such party of any representation, warranty or
covenant set forth in Section 4.1.30 hereof;

     (ix) failure of any Individual Borrower to permit on-site inspections of its
Individual Property subject to the rights of Tenants and any applicable cure period set
forth in the Loan Documents;

     (x) failure of any Individual Borrower to provide financial information as required
under the Loan Documents subject to any applicable cure period (except for financial
information required to be delivered by a Tenant pursuant to the applicable Lease that has
not been delivered to Borrower, provided Borrower has requested such financial information
from such Tenant);

     (xi) the breach of any representation, warranty, covenant or indemnification
provision in the Environmental Indemnity, in this Agreement or in any Mortgage concerning
environmental laws, hazardous substances or asbestos or any indemnification of Lender with
respect thereto in either document;

     (xii) any security deposits, advance deposits or any other deposits collected with
respect to any Individual Property which are not delivered to Lender upon a foreclosure of
such Individual Property or action in lieu thereof, except to the extent any such security
deposits were applied in accordance with the terms and conditions of any of the Leases prior
to the occurrence of the Event of Default that gave rise to such foreclosure or action in
lieu thereof;

     (xiii) any failure to pay the Denver Shortfall Payment;

     (xiv) any acts of terrorism that occur while Borrower does not have the insurance
coverages required pursuant to Section 6.1(a)(x) hereof;

     (xv) any unsatisfied deductible in the event of a claim under the insurance
coverages described in Section 6.1(a)(x) hereof; and

     (xvi) failure of any Individual Borrower to timely deliver evidence of payment of
Taxes.

90

 

     Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan
Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under
Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for
the full amount of the Debt secured by the Mortgages or to require that all collateral shall
continue to secure all of the Debt owing to Lender in accordance with the Loan Documents, and (B)
the Debt shall be fully recourse to Borrower (i) in the event of: (a) any Individual Borrower or
Principal filing a voluntary petition under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (b) the filing of an involuntary petition against any Individual
Borrower or Principal under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law in which such Individual Borrower, Principal or Guarantor colludes with, or
otherwise assists such Person, or solicits or causes to be solicited petitioning creditors for any
involuntary petition against such Individual Borrower or Principal from any Person; (c) any
Individual Borrower or Principal filing an answer consenting to or otherwise acquiescing in or
joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code
or any other Federal or state bankruptcy or insolvency law; (d) any Individual Borrower or
Principal consenting to or acquiescing in or joining in an application for the appointment of a
custodian, receiver, trustee, or examiner for such Individual Borrower or Principal or any portion
of any Individual Property (other than a receiver requested by Lender in connection with
enforcement of its rights under the Loan Documents); (e) any Individual Borrower or Principal
making an assignment for the benefit of creditors, or admitting, in writing or in any legal
proceeding, its insolvency or inability to pay its debts as they become due; (ii) if the first full
monthly payment of interest on the Note is not paid within five (5) days of notice that such
payment is late (provided, however, that such grace period relates only to the recourse trigger
described in this paragraph); (iii) if any Individual Borrower fails to obtain Lender’s prior
written consent to any Indebtedness or voluntary Lien encumbering the Property as required by the
Loan Documents; or (iv) if any Individual Borrower fails to obtain Lender’s prior written consent
to any Transfer as required by this Agreement or the Mortgage.

     Section 9.4
Matters Concerning Manager. At the option of Lender exercised by written
notice to Borrower and Manager, Borrower shall cause any Individual Property to be removed from the
application of the Management Agreement (i) upon the occurrence and during the continuance of an
Event of Default, (ii) if Manager shall become subject to a Bankruptcy Action, or (iii) if Manager
is in default under the terms of the Management Agreement with respect to any Individual Property
beyond any applicable grace or cure period; and upon such a removal of such Individual Property
from the application of the Management Agreement, Borrower shall replace the Manager with a
Qualified Manager pursuant to a Replacement Management Agreement, it being understood and agreed
that the property management fee for such Qualified Manager shall not exceed then prevailing market
rates.

     Section 9.5 Servicer. At the option of Lender, the Loan may be serviced by a master
servicer, primary servicer, special servicer and/or trustee (any such master servicer, primary
servicer, special servicer, and trustee, together with its agents, nominees or designees, are
collectively referred to as “Servicer”) selected by Lender and Lender may delegate all or any
portion of its responsibilities under this Agreement and the other Loan Documents to Servicer
pursuant to a pooling and servicing agreement, servicing agreement, special servicing agreement or
other agreement providing for the servicing of one or more mortgage loans (collectively, the
 “Servicing Agreement”) between Lender and Servicer. Borrower shall not be responsible for (i)

91

 

any
set up fees or other initial costs relating to or arising under the Servicing Agreement, (ii) the
payment of the regular monthly master servicing fee or trustee fee due to Servicer under the
Servicing Agreement, or (iii) any fees or expenses required to be borne by, and not reimbursable
to, Servicer. Notwithstanding the foregoing, Borrower shall promptly reimburse Lender on demand
for the following costs and expenses payable by Lender to Servicer as a result of the Loan becoming
specially serviced: (i) any liquidation fees that are due and payable to Servicer under the
Servicing Agreement in connection with the exercise of any or all remedies permitted under this
Agreement, (ii) any workout fees and special servicing fees that are due and payable with respect
to the Loan to Servicer under the Servicing Agreement, which fees may be due and payable under the
Servicing Agreement on a periodic or continuing basis, and (iii) the costs of all property
inspections and/or appraisals of the Properties (or any updates to any existing inspection or
appraisal) that Servicer may be required to obtain (other than the cost of regular annual
inspections required to be borne by Servicer under the Servicing Agreement).

     Section 9.6
Aggregate Cap on Costs. In no event shall Borrower’s actual out-of-pocket
costs and expenses pursuant to either of Section 8.2(b) or Section 9.1.1(c) hereof
exceed $20,000, and in no event shall Borrower’s actual out-of-pocket costs and expenses pursuant
to either of Section 9.2(a) or Section 9.2(b) hereof exceed $50,000. In addition,
in no event shall Borrower’s actual out-of-pocket costs and expenses pursuant to Section
8.2(b), Sections 9.1.1(b) and (c) and Sections 9.2(a) and (b) hereof, in the
aggregate, exceed $50,000. If such actual out-of-pocket costs and expenses, in the aggregate,
exceed the foregoing limitations, Lender shall reimburse Borrower for such excess costs and
expenses.

ARTICLE 10 — MISCELLANEOUS

     Section 10.1
Survival. This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall survive the making
by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue in
full force and effect so long as all or any of the Debt is outstanding and unpaid unless a longer
period is expressly set forth herein or in the other Loan Documents. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to include the legal
representatives, successors and assigns of such party. All covenants, promises and agreements in
this Agreement, by or on behalf of each party, shall inure to the benefit of the legal
representatives, successors and assigns of the other party.

     Section 10.2 Lender’s Discretion.
 Whenever pursuant to this Agreement, Lender exercises
any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to
Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms
are satisfactory or not satisfactory shall (except as is otherwise specifically herein provided) be
in the sole discretion of Lender and shall be final and conclusive.

     Section 10.3
Governing Law. 

     (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER
AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT
HERETO WERE DISBURSED FROM THE STATE OF NEW YORK,

92

 

WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT, 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 (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT
THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND
SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS (OTHER THAN
LIENS AND SECURITY INTERESTS IN THE LOCKBOX ACCOUNT, THE CASH MANAGEMENT ACCOUNT AND THE RESERVE
FUNDS) SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE
INDIVIDUAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE
LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.
TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE
OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.

     (b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY AT LENDER’S OPTION BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING,
AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION
OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

CT Corporation System

111 Eighth Avenue

New York, NY 10011

93

 

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS
WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW
YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN
NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY
CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME
DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE
AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III)
SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW
YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

     Section 10.4 Modification, Waiver in Writing. No modification, amendment, extension,
discharge, termination or waiver of any provision of this Agreement, or of the Note, or of any
other Loan Document, nor consent to any departure by Borrower or Lender therefrom, shall in any
event be effective unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. Except as otherwise expressly provided in the Loan
Documents, no notice to, or demand on Borrower, shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances (unless such future notice or demand
is otherwise required to be given under applicable law).

     Section 10.5 Delay Not a Waiver. Neither any failure nor any delay on the part of any
party in insisting upon strict performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege hereunder, or under the Note or under any other
Loan Document, or any other instrument given as security therefor, shall operate as or constitute a
waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise,
or the exercise of any other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under this Agreement, the
Note or any other Loan Document, Lender shall not be deemed to have waived any right either to
require prompt payment when due of all other amounts due under this Agreement, the Note or the
other Loan Documents, or to declare a default for failure to effect prompt payment of any such
other amount.

     Section 10.6 Notices. All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document shall be given in writing and shall be effective for all
purposes if hand delivered or sent by (a) certified or registered United States mail, postage
prepaid, return receipt requested or (b) expedited prepaid delivery service, either commercial or
United States Postal Service, with proof of attempted delivery, and by telecopier (with answer back
acknowledged), addressed as follows (or at such other address and Person as

94

 

shall be designated from time to time by any party hereto, as the case may be, in a written notice
to the other parties hereto in the manner provided for in this Section):

	 	 	 	 	 

	 

	 	If to Lender:
	 	JPMorgan Chase Bank, National Association
	 

	 	 	 	383 Madison Avenue
	 

	 	 	 	New York, New York 10179
	 

	 	 	 	Attention: Joseph E. Geoghan
	 

	 	 	 	Facsimile No.: (212) 272-7047
	 
	 	 	 	 
	 

	 	with a copy to:
	 	JPMorgan Chase Bank, National Association
	 

	 	 	 	383 Madison Avenue
	 

	 	 	 	New York, New York 10179
	 

	 	 	 	Attention: Nancy Alto
	 

	 	 	 	Facsimile No.: (212) 623-4779
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	Katten Muchin Rosenman LLP
	 

	 	 	 	550 S. Tryon Street, Suite 2900
	 

	 	 	 	Charlotte, North Carolina 28202
	 

	 	 	 	Attention: Daniel S. Huffenus
	 

	 	 	 	Facsimile No.: 704-344-3056
	 
	 	 	 	 
	 

	 	If to Borrower:
	 	c/o Cole Real Estate Investments
	 

	 	 	 	2555 East Camelback Road, Ste. 400
	 

	 	 	 	Phoenix, Arizona 85016
	 

	 	 	 	Attention: Legal Department
	 

	 	 	 	Facsimile No.: (480) 449-7012
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Kutak Rock LLP
	 

	 	 	 	8601 North Scottsdale Road, Suite 300
	 

	 	 	 	Scottsdale, Arizona 85253
	 

	 	 	 	Attention: Mitch Padover
	 

	 	 	 	Facsimile No.: (480) 429-5001

     A notice shall be deemed to have been given: in the case of hand delivery, at the time of
delivery; in the case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day; or in the case of expedited prepaid delivery and telecopy, upon the
first attempted delivery on a Business Day; or in the case of telecopy, upon sender’s receipt of a
machine-generated confirmation of successful transmission after advice by telephone to recipient
that a telecopy notice is forthcoming.

     Section 10.7
 Trial by Jury. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY
SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING

95

 

IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY
BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.

     Section 10.8 Headings. The Article and/or Section headings and the Table of Contents in
this Agreement are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.

     Section 10.9 Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

     Section 10.10 Preferences. Lender shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments by Borrower to any portion of the obligations of
Borrower hereunder, provided such reapplication is consistent with the provisions of this
Agreement. To the extent Borrower makes a payment or payments to Lender, which payment or proceeds
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of such payment or
proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be
revived and continue in full force and effect, as if such payment or proceeds had not been received
by Lender.

     Section 10.11 Waiver of Notice. Borrower shall not be entitled to any notices of any
nature whatsoever from Lender except with respect to matters for which this Agreement or the other
Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower
and except with respect to matters for which Borrower is not, pursuant to applicable Legal
Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives the right
to receive any notice from Lender with respect to any matter for which this Agreement or the other
Loan Documents do not specifically and expressly provide for the giving of notice by Lender to
Borrower.

     Section 10.12 Remedies of Borrower. In the event that a claim or adjudication is made that
Lender or its agents have acted unreasonably or unreasonably delayed acting in any case where by
law or under this Agreement or the other Loan Documents, Lender or such agent, as the case may be,
has an obligation to act reasonably or promptly, Borrower agrees that neither Lender nor its agents
shall be liable for any monetary damages, and Borrower’s sole remedies shall be limited to
commencing an action seeking injunctive relief or declaratory judgment. The parties hereto agree
that any action or proceeding to determine whether Lender has acted reasonably shall be determined
by an action seeking declaratory judgment.

96

 

     Section 10.13 Expenses; Indemnity. 

     (a) Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender
upon receipt of written notice from Lender for all reasonable costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by Lender in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby and all the costs of furnishing
all opinions by counsel for Borrower (including without limitation any opinions reasonably
requested by Lender as to any legal matters arising under this Agreement or the other Loan
Documents with respect to the Properties); (ii) Borrower’s ongoing performance of and compliance
with Borrower’s respective agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date, including, without
limitation, confirming compliance with environmental and insurance requirements; (iii) Lender’s
ongoing performance and compliance with all agreements and conditions contained in this Agreement
and the other Loan Documents on its part to be performed or complied with after the Closing Date
other than regular monthly master servicing fees or trustee fees; (iv) the negotiation,
preparation, execution, delivery and administration of any consents, amendments, waivers or other
modifications to this Agreement and the other Loan Documents or any other documents requested by
Borrower or otherwise required hereunder; (v) securing Borrower’s compliance with any requests made
pursuant to the provisions of this Agreement; (vi) subject to Section 9.3 hereof, the
filing and recording fees and expenses, title insurance and reasonable fees and expenses of counsel
for providing to Lender all reasonably required legal opinions, and other similar expenses incurred
in creating and perfecting the Lien in favor of Lender pursuant to this Agreement and the other
Loan Documents; (vii) subject to Section 9.3 hereof, enforcing or preserving any rights, in
response to third party claims or the prosecuting or defending of any action or proceeding or other
litigation, in each case against, under or affecting Borrower, this Agreement, the other Loan
Documents, the Property, or any other security given for the Loan; and (viii) subject to
Section 9.3 hereof, enforcing any obligations of or collecting any payments due from
Borrower under this Agreement, the other Loan Documents or with respect to the Properties
(including, without limitation, any fees incurred by Servicer in connection with the transfer of
the Loan to a special servicer prior to a Default or Event of Default) or in connection with any
refinancing or restructuring of the credit arrangements provided under this Agreement in the nature
of a “work-out” or of any insolvency or bankruptcy proceedings; provided, however, that Borrower
shall not be liable for the payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, fraud or willful misconduct of Lender. Any cost and
expenses due and payable to Lender may be paid from any amounts in the Lockbox Account or Cash
Management Account, as applicable.

     (b) Subject to Section 9.3 hereof, Borrower shall indemnify, defend and hold harmless
the Indemnified Parties from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of
counsel in connection with any investigative, administrative or judicial proceeding commenced or
threatened, whether or not an Indemnified Party shall be designated a party thereto), that may be
imposed on, incurred by, or asserted against any Indemnified Party in any manner relating to or
arising out of (i) any breach by Borrower of its obligations under, or

97

 

any material misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents, or (ii) the use or intended use of the proceeds of the Loan (collectively, the
“Indemnified Liabilities”); provided, however, that Borrower shall not have any obligation to any
Indemnified Party hereunder to the extent that such Indemnified Liabilities arise from the gross
negligence, illegal acts, fraud or willful misconduct of such Indemnified Party. To the extent
that the undertaking to indemnify, defend and hold harmless set forth in the preceding sentence may
be unenforceable because it violates any law or public policy, Borrower shall pay the maximum
portion that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnified Parties.

     (c) Borrower covenants and agrees to pay for or, if Borrower fails to pay, to reimburse Lender
for, any fees and expenses incurred by any Rating Agency in connection with any Rating Agency
review of the Loan, the Loan Documents or any transaction contemplated thereby or any consent,
approval, waiver or confirmation obtained from such Rating Agency pursuant to the terms and
conditions of this Agreement or any other Loan Document and Lender shall be entitled to require
payment of such fees and expenses as a condition precedent to the obtaining of any such consent,
approval, waiver or confirmation. Any Rating Agency fees in connection with the initial
Securitization shall be subject to Section 9.1.2 above.

     Section 10.14 Schedules Incorporated. The Schedules annexed hereto are hereby incorporated
herein as a part of this Agreement with the same effect as if set forth in the body hereof.

     Section 10.15 Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in
and to this Agreement, the Note and the other Loan Documents shall take the same free and clear of
all offsets, counterclaims or defenses which are unrelated to such documents which Borrower may
otherwise have against any assignor of such documents, and no such unrelated counterclaim or
defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such
assignee upon such documents and any such right to interpose or assert any such unrelated offset,
counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower.

     Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries. 

     (a) Borrower and Lender intend that the relationships created hereunder and under the other
Loan Documents be solely that of borrower and lender. Nothing herein or therein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between
Borrower and Lender nor to grant Lender any interest in the Properties other than that of
mortgagee, beneficiary or lender.

     (b) This Agreement and the other Loan Documents are solely for the benefit of Lender and
Borrower and nothing contained in this Agreement or the other Loan Documents shall be deemed to
confer upon anyone other than Lender and Borrower any right to insist upon or to enforce the
performance or observance of any of the obligations contained herein or therein. All conditions to
the obligations of Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of Lender and no other Person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that

98

 

Lender will refuse to make the Loan in the absence of strict compliance with any or all
thereof and no other Person shall under any circumstances be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by Lender if, in Lender’s
sole discretion, Lender deems it advisable or desirable to do so.

     Section 10.17 Publicity. All news releases, publicity or advertising by Borrower or Lender
(including Affiliates of either such party) through any media intended to reach the general public
which refers to Borrower, Lender, the Loan, the Loan Documents, the financing evidenced thereby,
shall be subject to the prior written approval of the other party; provided however, the foregoing
shall not apply to information included in Disclosure Documents or regulatory filings of Cole
Credit Property Trust III, Inc.

     Section 10.18 Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets.

     (a) Each Individual Borrower acknowledges that Lender has made the Loan to Borrower upon
the security of its collective interest in the Properties and in reliance upon the aggregate
of the Properties taken together being of greater value as collateral security than the sum
of each Individual Property taken separately. Each Individual Borrower agrees that the
Mortgages are and will be cross-collateralized and cross-defaulted with each other so that
(i) an Event of Default under any of the Mortgages shall constitute an Event of Default under
each of the other Mortgages which secure the Note; (ii) an Event of Default under the Note or
this Agreement shall constitute an Event of Default under each Mortgage; (iii) each Mortgage
shall constitute security for the Note as if a single blanket lien were placed on all of the
Properties as security for the Note; and (iv) such cross-collateralization shall in no event
be deemed to constitute a fraudulent conveyance.

     (b) To the fullest extent permitted by law, Borrower, for itself and its successors and
assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s partners
and others with interests in Borrower, and of the Properties, and agrees not to assert any
right under any laws pertaining to the marshalling of assets, the sale in inverse order of
alienation, homestead exemption, the administration of estates of decedents, or any other
matters whatsoever to defeat, reduce or affect the right of Lender under the Loan Documents
to a sale of the Properties for the collection of the Debt without any prior or different
resort for collection or of the right of Lender to the payment of the Debt out of the net
proceeds of the Properties in preference to every other claimant whatsoever. In addition,
each Individual Borrower, for itself and its successors and assigns, waives in the event of
foreclosure of any or all of the Mortgages, any equitable right otherwise available to an
Individual Borrower which would require the separate sale of the Properties or require Lender
to exhaust its remedies against any Individual Property or any combination of the Properties
before proceeding against any other Individual Property or combination of Properties; and
further in the event of such foreclosure each Individual Borrower does hereby expressly
consents to and authorizes, at the option of Lender, the foreclosure and sale either
separately or together of any combination of the Properties.

99

 

     Section 10.19 Waiver of Counterclaim. Borrower hereby waives the right to assert a
counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it
by Lender or its agents.

     Section 10.20 Conflict; Construction of Documents; Reliance. In the event of any conflict
between the provisions of this Agreement and any of the other Loan Documents, the provisions of
this Agreement shall control. The parties hereto acknowledge that they were represented by
competent counsel in connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect to the Loan,
Borrower shall rely solely on its own judgment and advisors in entering into the Loan without
relying in any manner on any statements, representations or recommendations of Lender or any
parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation
whatsoever in the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue of the ownership
by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them may
acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or
remedies. Borrower acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to or competitive
with the business of Borrower or its Affiliates.

     Section 10.21 Brokers and Financial Advisors. Borrower represents that except for Eastdil
Secured (“Broker”) it has dealt with no financial advisors, brokers, underwriters, placement
agents, agents or finders in connection with the transactions contemplated by this Agreement.
Borrower will pay Broker a commission pursuant to a separate agreement. Borrower shall indemnify,
defend and hold Lender harmless from and against any and all claims, liabilities, costs and
expenses of any kind (including reasonable attorneys’ fees and expenses) in any way relating to or
arising from a claim by any Person (including Broker) that such Person acted on behalf of Borrower
in connection with the transactions contemplated herein. Lender represents that it has dealt with
no financial advisors, brokers, underwriters, placement agents, agents or finders in connection
with the transactions contemplated by this Agreement. Lender shall indemnify, defend and hold
Borrower harmless from and against any and all claims, liabilities, costs and expenses of any kind
(including reasonable attorneys’ fees and expenses) in any way relating to or arising from a claim
by any Person that such Person acted on behalf of Lender in connection with the transactions
contemplated herein. The provisions of this Section 10.21 shall survive the expiration and
termination of this Agreement and the payment of the Debt.

     Section 10.22 Prior Agreements. This Agreement and the other Loan Documents contain the
entire agreement of the parties hereto and thereto in respect of the transactions contemplated
hereby and thereby, and all prior agreements among or between such parties, whether oral or
written, are superseded by the terms of this Agreement and the other Loan Documents.

     Section 10.23 Joint and Several Liability. If Borrower consists of more than one (1)
Person, the obligations and liabilities of each Person shall be joint and several. The parties

100

 

hereto acknowledge that the defined term “Borrower” (as well as the defined term defining each
other Collective Group) has been defined to collectively include each Individual Borrower (and in
the case of each Collective Group, defined to collectively include each member of the same). It is
the intent of the parties hereto in determining whether (a) a breach of a representation or a
covenant has occurred, (b) there has occurred a Default or Event of Default, or (c) an event has
occurred which would create recourse obligations under Section 9.3 of this Agreement, that
any such breach, occurrence or event with respect to any Individual Borrower (or with respect to
any single member of a Collective Group) shall be deemed to be such a breach, occurrence or event
with respect to every Individual Borrower (and in the case of each Collective Group, each member of
the same) and that every Individual Borrower need not have been involved with such breach,
occurrence or event in order for the same to be deemed such a breach, occurrence or event with
respect to every Individual Borrower (and likewise that each member of a Collective Group need not
have been involved with such breach, occurrence or event in order for the same to be deemed such a
breach, occurrence or event with respect to such Collective Group). The term “Collective Group” as
used in this Agreement shall refer to each of the groups of entities represented in this Agreement
by the following defined terms: Borrower and Principal. The obligations and liabilities of each
Individual Borrower shall be joint and several.

     Section 10.24 Certain Additional Rights of Lender (VCOC). Notwithstanding anything to the
contrary contained in this Agreement, Lender shall have:

     (a) the right to routinely consult with and advise Borrower’s management regarding the
significant business activities and business and financial developments of Borrower; provided,
however, that such consultations shall not include discussions of environmental compliance programs
or disposal of hazardous substances. Consultation meetings should occur on a regular basis (no
less frequently than quarterly) with Lender having the right to call special meetings at any
reasonable times and upon reasonable advance notice;

     (b) the right, in accordance with the terms of this Agreement, to examine the books and
records of Borrower at any reasonable times upon reasonable notice;

     (c) the right, in accordance with the other terms of this Agreement, including, without
limitation, Section 5.1.11 hereof, to receive monthly, quarterly and year end financial
reports, including balance sheets, statements of income, shareholder’s equity and cash flow, a
management report and schedules of outstanding indebtedness; and

     (d) the right, without restricting any other rights of Lender under this Agreement (including
any similar right), to approve any acquisition by Borrower of any other significant property (other
than personal property required for the day to day operation of the Properties).

     The rights described above in this Section 10.24 may be exercised by any entity which
owns and controls, directly or indirectly, substantially all of the interests in Lender.

101

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

102

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
duly authorized representatives, all as of the day and year first above written.

	 	 	 	 	 
	 	BORROWER

COLE AB ABILENE TX, LLC, a Delaware limited liability company

COLE AB ALBUQUERQUE (LOMAS BLVD) NM, LLC, a Delaware
limited liability company

COLE AB ALBUQUERQUE NM, LLC, a Delaware limited
liability company

COLE AB ALEXANDRIA LA, LLC, a Delaware limited
liability company

COLE AB ARLINGTON TX, LLC, a Delaware limited
liability company

COLE AB BATON ROUGE (COLLEGE DR) LA, LLC, a Delaware
limited liability company

COLE AB BATON ROUGE LA, LLC, a Delaware limited
liability company

COLE AB BATON ROUGE (GEORGE O’NEAL RD) LA, LLC, a
Delaware limited liability company

COLE AB BOSSIER CITY LA, LLC, a Delaware limited
liability company

COLE AB CLOVIS NM, LLC, a Delaware limited liability
company

COLE AB DENVER CO, LLC, a Delaware limited liability
company

COLE AB DURANGO CO, LLC, a Delaware limited liability
company

 	 
	 	By:  	/s/ Todd J. Weiss
 	 
	 	 	Name:  	Todd J. Weiss as Officer of, and on 	 
	 	 	behalf of, each of the 12 entities listed above 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	COLE AB EL PASO TX, LLC, a Delaware limited liability
company

COLE AB FARMINGTON NM, LLC, a Delaware limited
liability company

COLE AB FORT COLLINS CO, LLC, a Delaware limited
liability company

COLE AB FORT WORTH (OAKMONT) TX, LLC, a Delaware
limited liability company

COLE AB FORT WORTH TX, LLC, a Delaware limited
liability company

COLE AB FORT WORTH (CLIFFORD ST) TX, LLC, a Delaware
limited liability company

COLE AB FORT WORTH (SYCAMORE SCHOOL RD) TX, LLC, a
Delaware limited liability company

COLE AB LAFAYETTE LA, LLC, a Delaware limited
liability company

COLE AB LAKE HAVASU CITY AZ, LLC, a Delaware limited
liability company

COLE AB LOS LUNAS NM, LLC, a Delaware limited
liability company

COLE AB MESA AZ, LLC, a Delaware limited liability
company

COLE AB MIDLAND TX, LLC, a Delaware limited liability
company

 	 
	 	By:  	/s/ Todd J. Weiss
 	 
	 	 	Name:  	Todd J. Weiss as Officer of, and on 	 
	 	 	behalf of, each of the 12 entities listed above 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	COLE AB ODESSA TX, LLC, a Delaware limited liability
company

COLE AB PHOENIX AZ, LLC, a Delaware limited liability
company

COLE AB SCOTTSDALE AZ, LLC, a Delaware limited
liability company

COLE AB SILVER CITY NM, LLC, a Delaware limited
liability company

COLE AB TUCSON (GRANT RD) AZ, LLC, a Delaware limited
liability company

COLE AB TUCSON AZ, LLC, a Delaware limited liability
company

COLE AB WEATHERFORD TX, LLC, a Delaware limited
liability company

COLE AB YUMA AZ, LLC, a Delaware limited liability
company

 	 
	 	By:  	/s/ Todd J. Weiss
 	 
	 	 	Name:  	Todd J. Weiss as Officer of, and on 	 
	 	 	behalf of, each of the 8 entities listed above 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking
association chartered under the laws of the United States of America

 	 
	 	By:  	/s/ Steven Hantz
 	 
	 	 	Name:  	Steven Hantz 	 
	 	 	Title:  	Executive Director 	 

 

 

	 	 	 	 	 

JOINDER AGREEMENT

          The undersigned (“Joinder Party”) hereby acknowledges and agrees that it has read and
reviewed the foregoing Loan Agreement to which this Joinder Agreement has been attached.
Capitalized terms used but not defined herein shall have the meaning set forth in the Loan
Agreement.

          Joinder Party hereby covenants, represents, warrants, acknowledges and agrees as follows:

          (a) Joinder Party has read and reviewed the Loan Agreement and is familiar with the terms and
provisions thereof.

          (b) Joinder Party covenants and agrees to observe and perform all of the covenants and
agreements of Joinder Party contained in Section 5.1.26 and Section 9.1 of the Loan
Agreement.

          (c) The obligations of Joinder Party under this Joinder Agreement are enforceable against
Joinder Party and are not subject to any defenses, offsets or counterclaims.

          (d) The provisions of this Joinder Agreement are for the benefit of Lender.

          (e) THIS JOINDER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

[remainder of page intentionally left blank]

 

 

          IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and
delivered as of the date first above written.

	 	 	 	 	 
	 	JOINDER PARTY:

COLE REIT III OPERATING PARTNERSHIP, LP, a Delaware limited partnership

 	 
	 	By:  	Cole Credit Property Trust III, Inc., a Maryland corporation, its General Partner
 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                                /s/ John M. Pons
 	 
	 	 	Name:  	John M. Pons 	 
	 	 	Title:  	Authorized Officerexv10w6

Exhibit 10.6

COLE CREDIT PROPERTY TRUST II, INC.

THIRD AMENDED AND RESTATED

DISTRIBUTION REINVESTMENT PLAN

Effective July 1, 2010

     Cole Credit Property Trust II, Inc., a Maryland corporation (the “Company”), has adopted this Third
Amended and Restated Distribution Reinvestment Plan (the “Plan”), to be administered by the Company
or an unaffiliated third party (the “Administrator”) as agent for participants in the Plan
(“Participants”), on the terms and conditions set forth below.

     1. Election to Participate. Any holder of shares of common stock of the Company, par value
$.01 per share (the “Shares”), and, subject to Section 8(b) herein, any participant in any previous
or subsequent publicly offered limited partnership, real estate investment trust or other real
estate program sponsored by an affiliate of Cole REIT Advisors II, LLC, the Company’s advisor (an
“Affiliated Program”), may become a Participant in the Plan by making a written election to
participate in the Plan by completing and executing an authorization form obtained from the
Administrator or any other appropriate documentation as may be acceptable to the Administrator.
Participants in the Plan generally are required to have the full amount of their cash distributions
(other than “Excluded Distributions” as defined below) with respect to all Shares, or shares of
stock or units of limited partnership interest of an Affiliated Program (collectively,
“Securities”), owned by them reinvested pursuant to the Plan. However, the Administrator shall
have the sole discretion, upon the request of a Participant, to accommodate a Participant’s request
for less than all of the Participant’s Securities to be subject to participation in the Plan.

     2. Distribution Reinvestment. The Administrator will receive all cash distributions (other
than Excluded Distributions) paid by the Company or an Affiliated Program with respect to
Securities of Participants (collectively, the “Distributions”). Participation will commence with
the next Distribution payment after receipt of the Participant’s election pursuant to Paragraph 1
hereof, provided it is received on or prior to the last day of the period to which such
Distribution relates. A holder of Securities will become a Participant in the Plan effective on
the first day of the period following such election, and the election will apply to all
Distributions attributable to such period and to all periods thereafter. As used in this Plan, the
term “Excluded Distributions” shall mean those cash or other distributions designated as Excluded
Distributions by the Company’s board of directors, or the board of directors or general partner of
an Affiliated Program, as applicable.

     3. General Terms of Plan Investments.

          (a) The Administrator will invest Distributions in Shares at a price equal to the Estimated
Share Value (as defined herein), as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like with respect to the Shares. For purposes of establishing the
purchase price for Shares pursuant to the Plan, “Estimated Share Value” shall mean the most
recently disclosed reasonable estimated value of the Shares as determined by the Company’s board of
directors, including a majority of the independent directors. If the Company has sold property and
has made one or more special distributions to stockholders of all or a portion of the net proceeds
from such sales subsequent to the establishment of the Estimated Share Value, the purchase price
for Shares will be reduced by the net sale proceeds per share distributed to investors prior to the
investment date. The Company’s board of directors will, in its sole discretion, determine which
distributions, if any, constitute a special distribution. No advance notice of pricing pursuant
to this Paragraph 3(a) shall be required, other than to the extent the issue is a material event,
requiring the public filing of a Form 8-K.

          (b) The Administrator will invest Distributions in Shares that are registered with the
Securities and Exchange Commission (the “Commission”) pursuant to an effective registration
statement for Shares for use in the Plan (a “Registration Statement”).

          (c) Selling commissions will not be paid for the Shares purchased pursuant to the Plan.

          (d) Dealer manager fees will not be paid for the Shares purchased pursuant to the Plan.

          (e) For each Participant, the Administrator will maintain an account which shall reflect for
each period for which Distributions are paid (a “Distribution Period”) the Distributions received
by the Administrator on behalf of such Participant. A Participant’s account shall be reduced as
purchases of Shares are made on behalf of such Participant.

 

 

          (f) Distributions shall be invested in Shares by the Administrator on the payment date with
respect to such Distributions to the extent Shares are available for purchase under the Plan. If
sufficient Shares are not available, any such funds that have not been invested in Shares within 30
days after receipt by the Administrator and, in any event, by the end of the fiscal quarter in
which they are received, will be distributed to Participants. Any interest earned on such accounts
will be returned to the respective Participant.

          (g) Participants may acquire fractional Shares, computed to four decimal places, so that 100%
of the Distributions will be used to acquire Shares. The ownership of the Shares shall be reflected
on the books of the Company or its transfer agent.

          (h) A Participant will not be able to acquire Shares under the Plan to the extent that such
purchase would cause the Participant to exceed the ownership limits set forth in the Company’s
charter, as amended, unless exempted by the Board.

     4. Absence of Liability. Neither the Company nor the Administrator shall have any
responsibility or liability as to the value of the Shares or any change in the value of the Shares
acquired for the Participant’s account. Neither the Company nor the Administrator shall be liable
for any act done in good faith, or for any good faith omission to act hereunder.

     5. Suitability. Each Participant shall notify the Administrator in the event that, at any
time during his participation in the Plan, there is any material change in the Participant’s
financial condition, as compared to information previously provided to the shareholder’s broker or
financial advisors or inaccuracy of any representation under the subscription agreement for the
Participant’s initial purchase of Securities. A material change shall include any anticipated or
actual material decrease in net worth or annual gross income, or any other material change in
circumstances that is likely to cause the Participant’s broker or financial advisor to determine
that an investment in Shares is no longer suitable and appropriate for the Participant or that
would cause the Participant to fail to meet the minimum suitability standards set forth in the
Subscription Agreement signed by the Participant.

     6. Reports to Participants. Within ninety (90) days after the end of each calendar year, the
Administrator will mail to each Participant a statement of account describing, as to such
Participant, the Distributions received, the number of Shares purchased and the per share purchase
price for such Shares pursuant to the Plan during the prior year. Each statement also shall advise
the Participant that, in accordance with Section 5 hereof, the Participant is required to notify
the Administrator in the event there is any material change in the Participant’s financial
condition or if any representation made by the Participant under the subscription agreement for the
Participant’s initial purchase of Securities becomes inaccurate. Tax information regarding a
Participant’s participation in the Plan will be sent to each Participant by the Company or the
Administrator at least annually.

     7. Taxes. Taxable Participants may incur a tax liability for Distributions even though they
have elected not to receive their Distributions in cash but rather to have their Distributions
reinvested in Shares under the Plan.

     8. Reinvestment in Subsequent Programs.

          (a) The Company may determine, in its sole discretion, to cause the Administrator to provide
to each Participant notice of the opportunity to have some or all of such Participant’s
Distributions (at the discretion of the Administrator and, if applicable, the Participant) invested
through the Plan in any publicly offered Affiliated Program (a “Subsequent Program”). If the
Company makes such an election, Participants may invest Distributions in equity securities issued
by such Subsequent Program through the Plan only if the following conditions are satisfied:

          (i) prior to the time of such reinvestment, the Participant has received the final prospectus
and any supplements thereto offering interests in the Subsequent Program and such prospectus allows
investment pursuant to a distribution reinvestment plan;

          (ii) a registration statement covering the interests in the Subsequent Program has been
declared effective under the Securities Act of 1933, as amended;

          (iii) the offering and sale of such interests are qualified for sale under the applicable
state securities laws;

          (iv) the Participant executes the subscription agreement included with the prospectus for the
Subsequent Program; and

 

 

          (v) the Participant qualifies under applicable investor suitability standards as contained in
the prospectus for the Subsequent Program.

          (b) The Company may determine, in its sole discretion, to cause the Administrator to allow one
or more participants of an Affiliated Program to become a “Participant.” If the Company makes such
an election, such Participants may invest distributions received from the Affiliated Program in
Shares through this Plan, if the following conditions are satisfied:

          (i) prior to the time of such reinvestment, the Participant has received the final prospectus
and any supplements thereto offering interests in the Plan and such prospectus allows investment
pursuant to the Plan;

          (ii) a registration statement covering the interests in the Plan has been declared effective
under the Securities Act of 1933, as amended;

          (iii) the offering and sale of such interests are qualified or sale under the applicable state
securities laws;

          (iv) the Participant executes the subscription agreement included with the prospectus for the
Plan; and

          (v) the Participant qualifies under applicable investor suitability standards as contained in
the prospectus for the Plan, the Participant’s broker or financial advisor determines that an
investment in Shares is suitable and appropriate for the Participant.

     9. Termination.

          (a) A Participant may terminate or modify his participation in the Plan at any time by written
notice to the Administrator. To be effective for any Distribution, such notice must be received by
the Administrator on or prior to the last day of the Distribution Period to which it relates.

          (b) A Participant’s transfer of Shares will terminate participation in the Plan with respect
to such transferred Shares as of the first day of the Distribution Period in which such transfer is
effective, unless the transferee of such Shares in connection with such transfer demonstrates to
the Administrator that such transferee meets the requirements for participation hereunder and
affirmatively elects participation by delivering an executed authorization form or other instrument
required by the Administrator.

     10. State Regulatory Restrictions. The Administrator is authorized to deny participation in
the Plan to residents of any state or foreign jurisdiction that imposes restrictions on
participation in the Plan that conflict with the general terms and provisions of this Plan.

     11. Amendment or Termination by Company.

          (a) The terms and conditions of this Plan may be amended by the Company at any time, including
but not limited to an amendment to the Plan to substitute a new Administrator to act as agent for
the Participants, by mailing an appropriate notice at least ten (10) days prior to the effective
date thereof to each Participant, provided, however, the Company may not amend the Plan to (a)
provide for selling commissions or dealer manager fees to be paid for shares purchased pursuant to
this Plan or (b) revoke a Participant’s right to terminate or modify his participation in the Plan.

          (b) The Administrator may terminate a Participant’s individual participation in the Plan and
the Company may terminate the Plan itself, at any time by providing ten (10) days’ prior notice to
a Participant, or to all Participants, as the case may be.

          (c) After termination of the Plan or termination of a Participant’s participation in the Plan,
the Administrator will send to each Participant a check for the amount of any Distributions in the
Participant’s account that have not been invested in Shares. Any future Distributions with respect
to such former Participant’s Shares made after the effective date of the termination of the
Participant’s participation will be sent directly to the former Participant.

     12. Participation by Limited Partners of Cole Operating Partnership II, LP. For purposes of
this Plan, “stockholders” shall be deemed to include limited partners of Cole Operating Partnership
II, LP (the “Partnership”), “Participants” shall be deemed to include limited partners of the
Partnership that elect to participate in the Plan, and

 

 

“Distribution,” when used with respect to a limited partner of the Partnership, shall mean
cash distributions on limited partnership interests held by such limited partner.

     13. Governing Law. This Plan and the Participants’ election to participate in the Plan shall
be governed by the laws of the State of Maryland.

     14. Notice. Any notice or other communication required or permitted to be given by any
provision of this Plan shall be in writing and, if to the Administrator, addressed to Cole Credit
Property Trust II Investor Services Department, 2575 East Camelback Road, Suite 500, Phoenix,
Arizona 85016, or such other address as may be specified by the Administrator by written notice to
all Participants. Notices to a Participant may be given by letter addressed to the Participant at
the Participant’s last address of record with the Administrator or by filing such notice with the
SEC as part of a current report to stockholders on Form 8-K. Each Participant shall notify the
Administrator promptly in writing of any changes of address.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}]]