10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________

Form 10-Q

_________________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission file number 000-55187

__________________________________________

COLE REAL ESTATE INCOME STRATEGY

(DAILY NAV), INC.

(Exact name of registrant as specified in its charter)

__________________________________________

Maryland	27-3147801
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
2325 East Camelback Road, Suite 1100 Phoenix, Arizona 85016	(602) 778-8700
(Address of principal executive offices; zip code)	(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

________________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of November 10, 2014, there were approximately 6.7 million shares of Wrap Class common stock, approximately 864,000 shares of Advisor Class common stock and approximately 255,000 shares of Institutional Class common stock, par value $0.01 each, of Cole Real Estate Income Strategy (Daily NAV), Inc. outstanding.

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

INDEX

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Unaudited Balance Sheets as of September 30, 2014 and December 31, 2013	3
Condensed Consolidated Unaudited Statements of Operations for the three and nine months ended September 30, 2014 and 2013	4
Condensed Consolidated Unaudited Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2014 and 2013	5
Condensed Consolidated Unaudited Statement of Stockholders’ Equity for the nine months ended September 30, 2014	6
Condensed Consolidated Unaudited Statements of Cash Flows for the nine months ended September 30, 2014 and 2013	7
Notes to Condensed Consolidated Unaudited Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	29
Item 4. Controls and Procedures	30
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	31
Item 1A. Risk Factors	31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3. Defaults Upon Senior Securities	32
Item 4. Mine Safety Disclosures	32
Item 5. Other Information	33
Item 6. Exhibits	33
Signature	34

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS

(in thousands, except share and per share amounts)

	September 30, 2014			December 31, 2013
ASSETS
Investment in real estate assets:
Land	$	45,209		$	24,143
Buildings and improvements, less accumulated depreciation of $3,404 and $1,451, respectively	150,231			67,123
Intangible lease assets, less accumulated amortization of $1,877 and $795, respectively	26,808			11,530
Total investment in real estate assets, net	222,248			102,796
Investment in marketable securities	504			460
Total investment in real estate assets and marketable securities, net	222,752			103,256
Cash and cash equivalents	5,511			5,370
Restricted cash	76			105
Rents and tenant receivables	977			581
Prepaid expenses and other assets	298			107
Deferred financing costs, less accumulated amortization of $1,126 and $489, respectively	1,864			464
Total assets	$	231,478		$	109,883
LIABILITIES AND STOCKHOLDERS’ EQUITY
Line of credit and note payable	$	112,750		$	43,900
Accounts payable and accrued expenses	955			479
Escrowed investor proceeds	76			105
Due to affiliates	772			829
Acquired below market lease intangibles, less accumulated amortization of $229 and $126, respectively	2,108			1,348
Distributions payable	580			317
Deferred rental income and other liabilities	532			261
Total liabilities	117,773			47,239
Commitments and contingencies
Redeemable common stock	12,690			6,982
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding	—			—
A Shares common stock, $0.01 par value; 163,000,000 shares authorized, 759,516 and 23,767 shares issued and outstanding, respectively	8			—
I Shares common stock, $0.01 par value; 163,000,000 shares authorized, 252,927 and 129,176 shares issued and outstanding, respectively	3			1
W Shares common stock, $0.01 par value; 164,000,000 shares authorizes, 6,401,672 and 3,993,916 shares issued and outstanding, respectively	64			40
Capital in excess of par value	108,589			59,573
Accumulated distributions in excess of earnings	(7,650		)	(3,949		)
Accumulated other comprehensive income (loss)	1			(3		)
Total stockholders’ equity	101,015			55,662
Total liabilities and stockholders’ equity	$	231,478		$	109,883

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

3

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014		2013
Revenues:
Rental and other property income	$	3,224		$	1,304		$	7,884	$	2,997
Tenant reimbursement income	216			55			593		134
Interest income on marketable securities	2			2			6		4
Total revenue	3,442			1,361			8,483		3,135
Expenses:
General and administrative expenses	396			332			936		894
Property operating expenses	259			61			698		167
Advisory expenses	304			325			676		450
Acquisition related expenses	639			381			1,222		645
Depreciation	815			281			1,953		608
Amortization	407			134			979		291
Total operating expenses	2,820			1,514			6,464		3,055
Operating income (loss)	622			(153		)	2,019		80
Other expense:
Interest and other expense, net	703			236			1,704		588
Net (loss) income	$	(81	)	$	(389	)	$	315	$	(508	)
Weighted average number of common shares outstanding:
Basic and diluted	6,800,702			2,894,887			5,551,843		2,113,659
Net (loss) income per common share:
Basic and diluted	$	(0.01	)	$	(0.13	)	$	0.06	$	(0.24	)
Distributions declared per common share	$	0.25		$	0.22		$	0.72	$	0.66

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

4

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014		2013
Net (loss) income	$	(81	)	$	(389	)	$	315	$	(508	)
Other comprehensive income (loss):
Reclassification of previous unrealized loss on marketable securities into net loss	—			1			—		1
Unrealized (loss) gain on marketable securities	(2		)	3			4		(6		)
Total other comprehensive (loss) income	(2		)	4			4		(5		)
Comprehensive (loss) income	$	(83	)	$	(385	)	$	319	$	(513	)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

5

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

CONDENSED CONSOLIDATED UNAUDITED STATEMENT OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

	A Shares Common Stock			I Shares Common Stock			W Shares Common Stock					Capital in Excess of Par Value			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive (Loss) / Income			Total Stockholders’ Equity
	Number  of Shares	Par  Value		Number  of Shares	Par  Value		Number  of Shares		Par  Value
Balance, January 1, 2014	23,767	$	—	129,176	$	1	3,993,916		$	40		$	59,573		$	(3,949	)	$	(3	)	$	55,662
Issuance of common stock	735,749	8		123,751	2		2,590,725		26			59,152			—			—			59,188
Distributions to investors	—	—		—	—		—		—			—			(4,016		)	—			(4,016		)
Commissions on stock sales and related distribution and dealer manager fees	—	—		—	—		—		—			(877		)	—			—			(877		)
Other offering costs	—	—		—	—		—		—			(440		)	—			—			(440		)
Redemptions of common stock	—	—		—	—		(182,969	)	(2		)	(3,111		)	—			—			(3,113		)
Changes in redeemable common stock	—	—		—	—		—		—			(5,708		)	—			—			(5,708		)
Comprehensive income	—	—		—	—		—		—			—			315			4			319
Balance as of September 30, 2014	759,516	$	8	252,927	$	3	6,401,672		$	64		$	108,589		$	(7,650	)	$	1		$	101,015

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

6

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended September 30,
	2014			2013
Cash flows from operating activities:
Net income (loss)	$	315		$	(508	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	1,953			608
Amortization of intangible lease assets and below market lease intangibles, net	979			258
Amortization of deferred financing costs	637			178
Amortization on marketable securities, net	1			2
Gain (Loss) on sale of marketable securities	(2		)	2
Changes in assets and liabilities:
Rents and tenant receivables	(396		)	(116		)
Prepaid expenses and other assets	(191		)	(72		)
Accounts payable and accrued expenses	351			(15		)
Deferred rental income and other liabilities	271			34
Due to affiliates	(187		)	237
Net cash provided by operating activities	3,731			608
Cash flows from investing activities:
Investment in real estate and related assets	(121,499		)	(49,017		)
Investment in marketable securities	(265		)	(323		)
Proceeds from sale of marketable securities	226			85
Change in restricted cash	29			(350		)
Net cash used in investing activities	(121,509		)	(49,605		)
Cash flows from financing activities:
Proceeds from issuance of common stock	57,657			37,164
Offering costs on issuance of common stock	(1,187		)	(165		)
Redemptions of common stock	(3,113		)	(413		)
Distributions to investors	(2,222		)	(917		)
Proceeds from line of credit and note payable	111,804			31,475
Repayments of line of credit	(42,954		)	(17,840		)
Deferred financing costs paid	(2,037		)	(360		)
Change in escrowed investor proceeds liability	(29		)	350
Net cash provided by financing activities	117,919			49,294
Net increase in cash and cash equivalents	141			297
Cash and cash equivalents, beginning of period	5,370			998
Cash and cash equivalents, end of period	$	5,511		$	1,295
Supplemental disclosures of non-cash investing and financing activities:
Accrued dealer manager fee and other offering costs	$	340		$	397
Distributions declared and unpaid	$	580		$	223
Common stock issued through distribution reinvestment plan	$	1,531		$	330
Unrealized gain (loss) on marketable securities	$	4		$	(6	)
Reclassification of unrealized loss on marketable securities into net income (loss)	$	—		$	1
Accrued capital expenditures and deferred financing costs	$	125		$	1,150
Supplemental cash flow disclosures:
Interest paid	$	1,029		$	394

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

7

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

September 30, 2014

NOTE 1 — ORGANIZATION AND BUSINESS

Cole Real Estate Income Strategy (Daily NAV), Inc. (the “Company”) is a Maryland corporation that was formed on July 27, 2010, which has elected to be taxed, and currently qualifies, as a real estate investment trust (“REIT”) for federal income tax purposes. Substantially all of the Company’s business is conducted through Cole Real Estate Income Strategy (Daily NAV) Operating Partnership, LP (“Cole OP”), a Delaware limited partnership. The Company is the sole general partner of, and owns, directly or indirectly, 100% of the partnership interest in, Cole OP. The Company is externally managed by Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company (“Cole Advisors”), an affiliate of the Company’s sponsor, Cole Capital^®, which is a trade name used to refer to a group of affiliated entities directly or indirectly controlled by American Realty Capital Properties, Inc. (“ARCP”), a self-managed publicly traded REIT, organized as a Maryland corporation, listed on The NASDAQ Global Select Market. On February 7, 2014, ARCP acquired Cole Real Estate Investments, Inc. (“Cole”), which, prior to its acquisition, indirectly owned and/or controlled the Company’s external advisor, Cole Advisors, the Company’s dealer manager, Cole Capital Corporation (“CCC”), the Company’s property manager, CREI Advisors, LLC (“CREI Advisors”), and Cole Capital. As a result of ARCP’s acquisition of Cole, ARCP indirectly owns and/or controls Cole Advisors, CCC, CREI Advisors and Cole Capital.

On December 6, 2011, pursuant to a registration statement filed on Form S-11 (Registration No. 333-169535) (the “Initial Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), the Company commenced its initial public offering on a “best efforts” basis of $4.0 billion in shares of common stock. On August 26, 2013, pursuant to a registration statement filed on Form S-11 (Registration No. 333-186656) (the “Multi-Class Registration Statement”) under the Securities Act, the Company designated the existing shares of the Company’s common stock that were sold prior to such date to be Wrap Class shares (“W Shares”) of common stock and registered two new classes of the Company’s common stock, Advisor Class shares (“A Shares”) and Institutional Class shares (“I Shares”). Pursuant to the Multi-Class Registration Statement, the Company is offering up to $4.0 billion in shares of common stock of the three classes (the “Offering”), consisting of $3.5 billion in shares in the Company’s primary offering (the “Primary Offering”) and $500.0 million in shares pursuant to a distribution reinvestment plan (the “DRIP”). The Company is offering to sell any combination of W Shares, A Shares and I Shares with a dollar value up to the maximum offering amount.

The per share purchase price for each class of common stock varies from day-to-day and, on each business day, is equal to, for each class of common stock, the Company’s net asset value (“NAV”) for such class, divided by the number of shares of that class outstanding as of the close of business on such day, plus, for A Shares sold in the Primary Offering, applicable selling commissions. The Company’s NAV per share is calculated daily as of the close of business by an independent fund accountant using a process that reflects (1) estimated values of each of the Company’s commercial real estate assets, related liabilities and notes receivable secured by real estate provided periodically by the Company’s independent valuation expert in individual appraisal reports, (2) daily updates in the price of liquid assets for which third party market quotes are available, (3) accruals of daily distributions and (4) estimates of daily accruals, on a net basis, of operating revenues, expenses, debt service costs and fees. As of September 30, 2014, the NAV per share for W Shares, A Shares and I Shares was $17.10, $17.05 and $17.14, respectively. The Company’s NAV is not audited or reviewed by its independent registered public accounting firm.

The Company intends to use substantially all of the net proceeds from the Offering to acquire and operate a diversified portfolio primarily consisting of (1) necessity retail, office and industrial properties that are leased to creditworthy tenants under long-term net leases and are strategically located throughout the United States and U.S. protectorates, (2) notes receivable secured by commercial real estate, including the origination of loans, and (3) cash, cash equivalents, other short-term investments and traded real estate-related securities. As of September 30, 2014, the Company owned 71 commercial properties located in 26 states, containing 1.7 million rentable square feet of commercial space, including the square feet of buildings which are on land subject to ground leases. As of September 30, 2014, these properties were 99.6% leased.

The Company is structured as a perpetual-life, non-exchange traded REIT. This means that, subject to regulatory approval of filing for additional offerings, the Company will be selling shares of common stock on a continuous basis and for an indefinite period of time to the extent permissible under applicable law. The Company will endeavor to take all reasonable actions to avoid interruptions in the continuous offering of shares of common stock. The Company reserves the right to terminate the Offering at any time.

8

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The condensed consolidated unaudited financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2013, and related notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The condensed consolidated unaudited financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q.

The condensed consolidated unaudited financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Investment in and Valuation of Real Estate and Related Assets

Real estate and related assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate and related assets consist of the cost of acquisition, excluding acquisition related expenses, construction and any tenant improvements, major improvements and betterments that extend the useful life of the real estate and related assets and leasing costs. All repairs and maintenance are expensed as incurred.

The Company is required to make subjective assessments as to the useful lives of its depreciable assets. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life of the assets. Real estate and related assets, other than land, are depreciated or amortized on a straight-line basis. The estimated useful lives of the Company’s real estate and related assets by class are generally as follows:

Buildings	40 years
Tenant improvements	Lesser of useful life or lease term
Intangible lease assets	Lease term

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors, a significant decrease in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses, reduced lease rates or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate and related assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions. No impairment indicators were identified and no impairment losses were recorded during the nine months ended September 30, 2014 or 2013.

9

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, terminal capitalization and discount rates, the expected number of months it takes to re-lease the property, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in estimating expected future cash flows could result in a different determination of the property’s expected future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the fair value of the real estate and related assets.

When a real estate asset is identified by the Company as held for sale, the Company will cease depreciation and amortization of the assets related to the property and estimate the fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount would be recorded to reflect the estimated fair value of the property, net of selling costs. There were no assets identified as held for sale as of September 30, 2014 or December 31, 2013.

Allocation of Purchase Price of Real Estate and Related Assets

Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and identified intangible assets and liabilities, consisting of the value of above market and below market leases and the value of in-place leases, based in each case on their respective fair values. Acquisition related expenses are expensed as incurred. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and building). The Company obtains an independent appraisal for each real property acquisition. The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information.

The fair values of above market and below market lease intangibles are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease including any bargain renewal periods, with respect to a below market lease. The above market and below market lease intangibles are capitalized as intangible lease assets or liabilities, respectively. Above market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. In considering whether or not the Company expects a tenant to execute a bargain renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition, such as the financial strength of the tenant, remaining lease term, the tenant mix of the leased property, the Company’s relationship with the tenant and the availability of competing tenant space. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market or below market lease intangibles relating to that lease would be recorded as an adjustment to rental income.

The fair values of in-place leases include estimates of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rental and other property income which are avoided by acquiring a property with an in-place lease. Direct costs associated with obtaining a new tenant include commissions and other direct costs, and are estimated in part by utilizing information obtained from independent appraisals and management’s consideration of current market costs to execute a similar lease. The intangible values of opportunity costs, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease are capitalized as intangible lease assets and are amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed.

The Company may acquire certain properties subject to contingent consideration arrangements that may obligate the Company to pay additional consideration to the seller based on the outcome of future events. Additionally, the Company may acquire certain properties for which it funds certain contingent consideration amounts into an escrow account pending the outcome of certain future events. The outcome may result in the release of all or a portion of the escrow funds to the Company or the seller or a combination thereof. Contingent consideration arrangements will be based on a predetermined formula and have set time periods regarding the obligation to make future payments, including funds released to the seller from escrow accounts, or the right to receive escrowed funds as set forth in the respective purchase and sale agreement. Contingent consideration arrangements, including amounts funded through an escrow account, will be recorded upon acquisition of the

10

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

respective property at their estimated fair value, and any changes to the estimated fair value, subsequent to acquisition, will be reflected in the accompanying condensed consolidated unaudited statements of operations. The determination of the amount of contingent consideration arrangements is based on the probability of several possible outcomes as identified by management.

The Company will estimate the fair value of assumed mortgage notes payable based upon indications of current market pricing for similar types of debt financing with similar maturities. Assumed mortgage notes payable will initially be recorded at their estimated fair value as of the assumption date, and any difference between such estimated fair value and the mortgage note’s outstanding principal balance will be amortized to interest expense over the term of the respective mortgage note payable.

The determination of the fair values of the real estate and related assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could impact the Company’s results of operations.

Investment in Marketable Securities

Investment in marketable securities consists primarily of the Company’s investment in corporate and government debt securities. The Company determines the appropriate classification for debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. As of September 30, 2014, the Company classified its investments as available-for-sale as the Company is not actively trading the securities; however, the Company may sell them prior to their maturity. These investments are carried at their estimated fair value with unrealized gains and losses reported in accumulated other comprehensive (loss) income.

The Company monitors its available-for-sale securities for impairments. A loss is recognized when the Company determines that a decline in the estimated fair value of a security below its amortized cost is other-than-temporary. The Company considers many factors in determining whether the impairment of a security is deemed to be other-than-temporary, including, but not limited to, the length of time the security has had a decline in estimated fair value below its amortized cost, the amount of the unrealized loss, the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value, recent events specific to the issuer or industry, external credit ratings and recent changes in such ratings. The analysis of determining whether the impairment of a security is deemed to be other-than-temporary requires significant judgments and assumptions. The use of alternative judgments and assumptions could result in a different conclusion.

The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method and is recorded in the accompanying condensed consolidated unaudited statements of operations in interest and other expense, net. Upon the sale of a security, the realized net gain or loss is computed on the specific identification method.

Restricted Cash and Escrows

Included in restricted cash were escrowed investor proceeds for which shares of common stock had not been issued as of September 30, 2014 and December 31, 2013.

Concentration of Credit Risk

As of September 30, 2014, the Company had cash on deposit, including restricted cash, at three financial institutions, in one of which the Company had deposits in excess of federally insured levels totaling $5.3 million; however, the Company has not experienced any losses in such accounts. The Company limits significant cash deposits to accounts held by financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits.

As of September 30, 2014, no single tenant accounted for greater than 10% of the Company’s 2014 gross annualized rental revenues. Tenants in the discount store, manufacturing, drugstore and grocery industries accounted for 15%14%, 10% and 10%, respectively, of the Company’s 2014 gross annualized rental revenues. Additionally, the Company has certain geographic concentrations in its property holdings. In particular, as of September 30, 2014, eight of the Company’s properties were located in Texas, accounting for 17% of the Company’s 2014 gross annualized rental revenues.

11

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

Offering and Related Costs

Cole Advisors funds all of the organization and offering costs associated with the sale of the Company’s common stock (excluding selling commissions, the distribution fee and the dealer manager fee) and is reimbursed for such costs up to 0.75% of gross proceeds from the Offering, excluding selling commissions charged on A Shares sold in the Primary Offering. As of September 30, 2014, Cole Advisors or its affiliates had paid organization and offering costs in excess of the 0.75% in connection with the Offering. These excess costs were not included in the financial statements of the Company because such costs were not a liability of the Company as they exceeded 0.75% of gross proceeds from the Offering. As the Company raises additional proceeds from the Offering, these excess costs may become payable to Cole Advisors.

Redeemable Common Stock

The Company has adopted a share redemption program that permits its stockholders to redeem their shares, subject to certain limitations. The Company records amounts that are redeemable under the share redemption program as redeemable common stock outside of permanent equity on its condensed consolidated unaudited balance sheets. Redeemable common stock is recorded at the greater of the carrying amount or redemption value each reporting period. Changes in the value from period to period are recorded as an adjustment to capital in excess of par value.

As of September 30, 2014 and December 31, 2013, the quarterly redemption capacity was equal to 10% of the Company’s NAV and this amount was recorded as redeemable common stock on the condensed consolidated unaudited balance sheet for a total of $12.7 million and $7.0 million, respectively.

Recent Accounting Pronouncements

In April 2014, the U.S. Financial Accounting Standards Board (the “FASB”), issued Accounting Standards Update (“ASU”) 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”), which amends the reporting requirements for discontinued operations by updating the definition of a discontinued operation to be a component of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, resulting in fewer disposals that qualify for discontinued operations reporting, yet, the pronouncement also requires expanded disclosures for discontinued operations. The adoption of ASU 2014-08 did not have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company did not have any discontinued operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers, including real estate sales, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. The Company does not believe ASU 2014-09, when effective, will have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company currently accounts for real estate sales in a manner that is consistent with ASU 2014-09.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which requires management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. ASU 2014-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with early application permitted. The Company does not believe ASU 2014-15, when effective, will have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company currently does not have any conditions that give rise to substantial doubt about its ability to continue as a going concern.

NOTE 3 — FAIR VALUE MEASUREMENTS

GAAP defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. GAAP emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement.

12

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows:

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).

Level 3 – Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.

The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities:

Cash and cash equivalents – The Company considers the carrying amounts of these financial assets to approximate fair value because of the short period of time between their origination and their expected realization. These financial assets are considered Level 1.

Line of credit and note payable – The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. The estimated fair value of the Company’s debt was $112.8 million and $43.9 million as of September 30, 2014 and December 31, 2013, respectively, which approximated the carrying value on such dates. The fair value of the Company’s debt is estimated using Level 2 inputs.

Marketable securities – The Company’s marketable securities are carried at fair value and are valued using Level 1 inputs. The estimated fair value of the Company’s marketable securities are based on quoted market prices that are readily and regularly available in an active market.

Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, on disposition of the financial assets and liabilities. As of September 30, 2014, there have been no transfers of financial assets or liabilities between fair value hierarchy levels.

NOTE 4 — REAL ESTATE ACQUISITIONS

2014 Property Acquisitions

During the nine months ended September 30, 2014, the Company acquired a 100% interest in 39 commercial properties for an aggregate purchase price of $121.4 million (the “2014 Acquisitions”). The Company purchased the 2014 Acquisitions with net proceeds from the Offering combined with proceeds from borrowings, as discussed in Note 6 to these condensed consolidated unaudited financial statements. The Company allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the purchase price allocation for the acquisitions purchased during the nine months ended September 30, 2014 (in thousands):

	2014 Acquisitions
Land	$	21,067
Building and improvements	85,060
Acquired in-place leases	12,898
Acquired above market leases	3,286
Acquired below market leases	(863		)
Total purchase price	$	121,448

13

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

The Company recorded revenue of $1.2 million and $1.8 million, respectively, and net loss of $192,000 and $579,000, respectively, for the three and nine months ended September 30, 2014 related to the 2014 Acquisitions. In addition, the Company recorded $639,000 and $1.2 million, respectively, of acquisition related expenses for the three and nine months ended September 30, 2014.

The following information summarizes selected financial information of the Company as if all of the 2014 Acquisitions were completed on January 1, 2013 for each period presented below. The table below presents the Company’s estimated revenue and net income (loss), on a pro forma basis, for the three and nine months ended September 30, 2014 and 2013 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014		2013
Pro forma basis
Revenue	$	3,993	$	3,158		$	12,037	$	8,526
Net income (loss)	$	234	$	(266	)	$	1,264	$	(1,015	)

The pro forma information for the three and nine months ended September 30, 2014 was adjusted to exclude acquisition related expenses recorded during such periods related to the 2014 Acquisitions. These expenses were recognized in the pro forma information for the nine months endedSeptember 30, 2013. The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2013, nor does it purport to represent the results of future operations.

2013 Property Acquisitions

During the nine months ended September 30, 2013, the Company acquired a 100% interest in 18 commercial properties for an aggregate purchase price of $50.0 million (the “2013 Acquisitions”). The Company purchased the 2013 Acquisitions with net proceeds from the Offering and borrowings from the Line of Credit (as defined in Note 6). The Company allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the purchase price allocation for the acquisitions purchased during the nine months ended September 30, 2013 (in thousands):

	2013 Acquisitions
Land	$	8,635
Building and improvements	35,768
Acquired in-place leases	5,868
Acquired above market leases	213
Acquired below market leases	(515		)
Total purchase price	$	49,969

The Company recorded revenue of $643,000 and $977,000, respectively, and a net loss of $7,000 and $64,000, respectively, for the three and nine months ended September 30, 2013 related to the 2013 Acquisitions. In addition, the Company recorded $381,000 and $645,000, respectively, of acquisition related expenses for the three and nine months ended September 30, 2013.

14

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

The following information summarizes selected financial information of the Company as if all of the 2013 Acquisitions were completed on January 1, 2012 for each period presented below. The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2013 and 2012 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013		2012
Pro forma basis:
Revenue	$	1,741		$	1,683	$	5,226	$	5,056
Net (loss) income	$	(50	)	$	297	$	555	$	371

The pro forma information for the three and nine months ended September 30, 2013 was adjusted to exclude acquisition related expenses recorded during such periods related to the 2013 Acquisitions. These expenses were recognized in the pro forma information for the nine months endedSeptember 30, 2012. The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2012, nor does it purport to represent the results of future operations.

NOTE 5 — MARKETABLE SECURITIES

The Company owned marketable securities with an estimated fair value of $504,000 and $460,000 as of September 30, 2014 and December 31, 2013, respectively. The following is a summary of the Company’s available-for-sale securities as of September 30, 2014 (in thousands):

	Available-for-Sale Securities
	Amortized Cost Basis		Unrealized Gain			Fair Value
U.S. Treasury Bonds	$	134	$	2		$	136
U.S. Agency Bonds	70		(1		)	69
Corporate Bonds	299		—			299
Total available-for-sale securities	$	503	$	1		$	504

The following table provides the activity for the marketable securities during the nine months endedSeptember 30, 2014 (in thousands):

	Amortized Cost Basis			Unrealized (Loss) Gain			Fair Value
Marketable securities as of December 31, 2013	$	463		$	(3	)	$	460
Face value of marketable securities acquired	265			—			265
Amortization on marketable securities	1			—			1
Sales of securities	(226		)	—			(226		)
Increase in fair value of marketable securities	—			4			4
Marketable securities as of September 30, 2014	$	503		$	1		$	504

During the nine months endedSeptember 30, 2014, the Company sold 29 marketable securities for aggregate proceeds of $226,000, which approximated their carrying value. In addition, the Company recorded an unrealized gain of $4,000 on its investments, which is included in accumulated other comprehensive income (loss) on the accompanying condensed consolidated unaudited statement of stockholders’ equity for the nine months endedSeptember 30, 2014 and the condensed consolidated unaudited balance sheet as of September 30, 2014.

15

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

The scheduled maturities of the Company’s marketable securities as of September 30, 2014 are as follows (in thousands):

	Available-for-Sale Securities
	Amortized Cost		Estimated Fair Value
Due within one year	$	45	$	45
Due after one year through five years	271		271
Due after five years through ten years	181		182
Due after ten years	6		6
Total	$	503	$	504

Actual maturities of marketable securities can differ from contractual maturities because borrowers on certain debt securities may have the right to prepay their respective debt obligations at any time. In addition, factors such as prepayments and interest rates may affect the yields on the such securities.

NOTE 6 — LINE OF CREDIT AND NOTE PAYABLE

As of September 30, 2014, the Company had $112.8 million of debt outstanding, with a weighted average years to maturity of 3.7 years and a weighted average interest rate of 2.40%. The following table summarizes the debt activity for the nine months ended September 30, 2014 and the debt balances as of September 30, 2014 and December 31, 2013 (in thousands):

			During the Nine Months Ended September 30, 2014
	Balance as of December 31, 2013			Debt Issuance		Repayments			Balance as of September 30, 2014
Line of credit	$	43,900		$	91,500	$	(42,954	)	$	92,446
Fixed rate debt	—			20,304		—			20,304
Total	$	43,900		$	111,804	$	(42,954	)	$	112,750

During the nine months endedSeptember 30, 2014, the Company entered into an amended and restated credit agreement (the “Amended Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent, (“JPMorgan Chase”), U.S. Bank National Association and other lending institutions that may become parties to the Amended Credit Agreement. As of September 30, 2014, the Company had $92.4 million of debt outstanding under its secured revolving line of credit, as amended (the “Line of Credit”). The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the Line of Credit was $160.8 million as of September 30, 2014.

As of September 30, 2014, the Line of Credit allowed the Company to borrow up to $75.0 million in revolving loans (the “Revolving Loans”), and includes a $25.0 million term loan (the “Term Loan”), with the maximum amount outstanding not to exceed the borrowing base (the “Borrowing Base”), calculated as 65% of the aggregate value allocated to each qualified property comprising eligible collateral (collectively, the “Qualified Properties”) during the period from September 30, 2014 through September 11, 2015 and 60% of the Qualified Properties during the period from September 12, 2015 to September 12, 2017 (the “Amended Line of Credit”). As of September 30, 2014, the Company had $7.6 million available for borrowing. The Line of Credit matures on September 12, 2017; however, the Company may elect to extend the maturity dates of such loans to September 12, 2019, subject to satisfying certain conditions described in the Amended Credit Agreement.

16

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

The Revolving Loans and Term Loan will bear interest at rates depending upon the type of loan specified by the Company. For a eurodollar rate loan the interest rate will be equal to the one-month, two-month, three-month or six-month LIBOR for the interest period, as elected by the Company, multiplied by the Statutory Reserve Rate (as defined in the Amended Credit Agreement), plus the applicable rate (the “Eurodollar Applicable Rate”). The Eurodollar Applicable Rate is based upon the Company’s overall leverage ratio, generally defined in the Amended Credit Agreement as the total consolidated outstanding indebtedness of the Company divided by the total consolidated asset value of the Company (as defined in the Amended Credit Agreement) (the “Leverage Ratio”), and ranges from 1.90% at a Leverage Ratio of 50.0% or less to 2.45% at a Leverage Ratio greater than 60.0%. For base rate committed loans, the interest rate will be a per annum amount equal to the greatest of: (a) JPMorgan Chase’s Prime Rate; (b) the Federal Funds Effective Rate (as defined in the Amended Credit Agreement) plus 0.50%; and (c) one-month LIBOR multiplied by the Statutory Reserve plus 1.0% plus the applicable rate (the “Base Rate Applicable Rate”). The Base Rate Applicable Rate is based upon the Leverage Ratio, and ranges from 0.90% at a Leverage Ratio of 50.0% or less to 1.45% at a Leverage Ratio greater than 60.0%. As of September 30, 2014, amounts outstanding on the Line of Credit accrued interest at an annual rate of 2.09%.

The Amended Credit Agreement contains customary representations, warranties, borrowing conditions and affirmative, negative and financial covenants, including minimum net worth, debt service coverage and leverage ratio requirements and dividend payout and REIT status requirements. The Amended Credit Agreement also includes usual and customary events of default and remedies for facilities of this nature. Based on the Company’s analysis and review of its results of operations and financial condition, as of September 30, 2014, the Company believes it was in compliance with the covenants of the Amended Credit Agreement.

In addition, during the nine months endedSeptember 30, 2014, the Company entered into a $20.3 million loan (the “PNC Loan”), agreement with PNC Bank, National Association. The PNC Loan has a fixed interest rate of 3.82% per annum with interest payments due monthly. The principal amount will be due October 1, 2021, the maturity date. The PNC Loan is collateralized by eight single-tenant commercial properties and one multi-tenant commercial property, which were purchased for an aggregated collective purchase price of $33.8 million.

NOTE 7 — COMMITMENTS AND CONTINGENCIES

Litigation

In the ordinary course of business, the Company may become subject to litigation or claims. The Company is not aware of any pending legal proceedings of which the outcome is reasonably possible to have a material effect on its results of operations, financial condition or liquidity.

Environmental Matters

In connection with the ownership and operation of real estate, the Company potentially may be liable for costs and damages related to environmental matters. The Company owns certain properties that are subject to environmental remediation. In each case, the seller of the property, the tenant of the property and/or another third party has been identified as the responsible party for environmental remediation costs related to the respective property. Additionally, in connection with the purchase of certain of the properties, the respective sellers and/or tenants have indemnified the Company against future remediation costs. In addition, the Company carries environmental liability insurance on its properties that provides limited coverage for remediation liability and pollution liability for third-party bodily injury and property damage claims. Accordingly, the Company does not believe that it is reasonably possible that the environmental matters identified at such properties will have a material effect on its results of operations, financial condition or liquidity, nor is it aware of any environmental matters at other properties which it believes are reasonably possible to have a material effect on its results of operations, financial condition or liquidity.

NOTE 8 — RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS

The Company has incurred, and will continue to incur, commissions, fees and expenses payable to Cole Advisors and certain of its affiliates in connection with the Offering, and the acquisition, management and performance of the Company’s assets.

17

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

Offering

In connection with the Offering, CCC, the Company’s dealer manager, will receive selling commissions, an asset-based dealer manager fee and/or an asset-based distribution fee, as summarized in the table below for each class of common stock:

	Selling Commission (1)	Dealer Manager Fee (2)		Distribution Fee (2)
W Shares	—	0.55	%	—
A Shares	up to 3.75%	0.55	%	0.50	%
I Shares	—	0.25	%	—

(1) The selling commission is based on the offering price for A Shares. The selling commission expressed as a percentage of NAV per A Share, rather than the offering price, is up to 3.90%, subject to rounding and the effect of volume discounts the Company is offering on certain purchases of $150,001 or more of A Shares. Selling commissions are deducted directly from the offering price for A Shares and paid to CCC. CCC reallows 100% of the selling commissions on A Shares to participating broker-dealers.

(2) The dealer manager and distribution fees accrue daily in an amount equal to 1/365th of the percentage of NAV per W Share, A Share or I Share, as applicable, for such day on a continuous basis. CCC, in its sole discretion, may reallow a portion of the dealer manager fee and distribution fee to participating broker-dealers.

All organization and offering expenses associated with the sale of the Company’s common stock (excluding selling commissions, the distribution fee and the dealer manager fee) are paid for by Cole Advisors or its affiliates and can be reimbursed by the Company up to 0.75% of the aggregate gross offering proceeds, excluding selling commissions charged on A Shares sold in the Primary Offering. As of September 30, 2014, Cole Advisors or its affiliates had paid organization and offering costs in excess of the 0.75% in connection with the Offering. These excess costs were not included in the financial statements of the Company because such costs were not a liability of the Company as they exceeded 0.75% of gross proceeds from the Offering. As the Company raises additional proceeds from the Offering, these excess costs may become payable to Cole Advisors.

The Company recorded commissions, fees and expense reimbursements as shown in the table below for services provided by Cole Advisors and its affiliates related to the services described above during the periods indicated (in thousands):

	Three Months Ended September 30,			Nine Months Ended September 30,
	2014		2013	2014		2013
Offering:
Selling commissions	$	259	—	$	478	$	—
Selling commissions reallowed by CCC	$	259	—	$	478	$	—
Distribution fees	$	12	—	$	17	$	—
Distribution fees reallowed by CCC	$	9	—	$	11	$	—
Dealer manager fees	$	159	67	$	382	$	144
Dealer manager fees reallowed by CCC	$	12	1	$	20	$	2
Organization and offering expense reimbursement	$	171	69	$	440	$	281

As of September 30, 2014, $977,000 of the amounts shown above had been paid to Cole Advisors and its affiliates and $340,000 had been incurred, but not yet paid, for services provided by Cole Advisors or its affiliates in connection with the offering stage of the Offering and was a liability to the Company. No selling commissions or distribution fees were recorded during the three and nine months ended September 30, 2013 as no A Shares were sold prior to October 2013.

Acquisitions, Operations and Performance

The Company pays Cole Advisors an asset-based advisory fee that is payable in arrears on a monthly basis and accrues daily in an amount equal to 1/365th of 0.90% of the Company’s NAV for each class of common stock, for each day.

18

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

The Company will reimburse Cole Advisors for the operating expenses it paid or incurred in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse for any amount by which its operating expenses (including the advisory fee) at the end of the four preceding fiscal quarters exceeds the greater of (1) 2% of average invested assets; or (2) 25% of net income, other than any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of assets for that period.

In addition, the Company will reimburse Cole Advisors for all out-of-pocket expenses incurred in connection with the acquisition of the Company’s investments. While most of the acquisition expenses are expected to be paid to third parties, a portion of the out-of-pocket acquisition expenses may be reimbursed to Cole Advisors or its affiliates. Acquisition expenses, together with any acquisition fees paid to third parties for a particular real estate-related asset, will in no event exceed 6% of the gross purchase price of such asset.

In the fourth quarter of 2013, Cole Advisors implemented an expense cap, which has been continued for the nine months ended September 30, 2014 and will be continued for the three months ending December 31, 2014, whereby Cole Advisors will fund all general and administrative expenses of the Company that are in excess of an amount calculated by multiplying the average NAV, for the respective three month period by an annualized rate of 1.25% (the “Excess G&A”). General and administrative expenses, as presented in these condensed consolidated unaudited financial statements, include, but are not limited to, legal fees, audit fees, board of directors costs, professional fees, escrow and trustee fees, insurance, state franchise and income taxes and fees for unused amounts on the Line of Credit. At Cole Advisors’ discretion, it may fund the Excess G&A through reimbursement to the Company or payment to third parties on behalf of the Company, but in no event will the Company be liable to Cole Advisors in future periods for such amounts paid or reimbursed. During the three and nine months ended September 30, 2014, the Company incurred $131,000 and $371,000, respectively, of Excess G&A which will be reimbursed by Cole Advisors, of which $131,000 had not been reimbursed and was due to the Company as of September 30, 2014. As of September 30, 2014, the $131,000 was included as a reduction to due to affiliates on the condensed consolidated unaudited balance sheets.

As compensation for services provided pursuant to the advisory agreement, the Company will also pay Cole Advisors a performance-based fee calculated based on the Company’s annual total return to stockholders for each class of common stock (defined below), payable annually in arrears. The performance fee will be calculated such that for any calendar year in which the total return per share for a particular class exceeds 6% (the “6% Return”), Cole Advisors will receive 25% of the excess total return on such class above the 6% Return allocable to that class, but in no event will the Company pay Cole Advisors more than 10% of the aggregate total return, for that class, for such year. However, in the event the NAV per share of the Company’s W Shares, A Shares and I Shares decreases below the base NAV for the respective share class ($15.00, $16.72 and $16.82 for the W Shares, A Shares and I Shares, respectively) (the “Base NAV”), the performance-based fee for a respective class will not be calculated on any increase in NAV up to the Base NAV for the respective share class. In addition, the performance fee will not be paid with respect to any calendar year in which the NAV per share as of the last business day of the calendar year (the “Ending NAV”) for the respective share class is less than the Base NAV of that class. The Base NAV of any share class is subject to downward adjustment in the event that the Company’s board of directors, including a majority of the independent directors, determines that such an adjustment is necessary to provide an appropriate incentive to Cole Advisors to perform in a manner that seeks to maximize stockholder value and is in the best interests of the Company’s stockholders. In the event of any stock dividend, stock split, recapitalization or similar change in the Company’s capital structure, the Base NAV for the respective share class shall be ratably adjusted to reflect the effect of any such event.

The total return to stockholders is defined, for each class of the Company’s common stock, as the change in NAV per share plus distributions per share for such class. The NAV per share for a class calculated on the last trading day of a calendar year shall be the amount against which changes in NAV per share for such class are measured during the subsequent calendar year. Therefore, for each class of the Company’s common stock, payment of the performance-based component of the advisory fee (1) is contingent upon the Company’s actual annual total return exceeding the 6% Return and the Ending NAV per share for the respective share class being greater than the Base NAV of that class, (2) will vary in amount based on the Company’s actual performance, (3) cannot cause the Company’s total return as a percentage of stockholders’ invested capital for the year to be reduced below 6% and (4) is payable to Cole Advisors if the Company’s total return exceeds the 6% Return in a particular calendar year, even if the total return to stockholders (or any particular stockholder) on a cumulative basis over any longer or shorter period has been less than 6% per annum. Cole Advisors will not be obligated to return any portion of advisory fees paid based on the Company’s subsequent performance.

19

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

The Company recorded fees and expense reimbursements as shown in the table below for services provided by Cole Advisors or its affiliates related to the services described above during the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Acquisitions, Operations and Performance:
Acquisition expense reimbursement	$	151	$	—	$	286	$	—
Advisory fee	$	263	$	109	$	635	$	235
Operating expense reimbursement	$	—	$	—	$	—	$	—
Performance fee	$	41	$	215	$	41	$	215

As of September 30, 2014, $507,000 of the amounts shown above had been paid to Cole Advisors and its affiliates and $455,000 had been incurred, but not yet paid, for services provided by Cole Advisors or its affiliates in connection with the acquisitions and operations stage and was a liability to the Company. Cole Advisors waived its right to receive acquisition expense reimbursements for the three and nine months ended September 30, 2013; accordingly, the Company did not reimburse Cole Advisors for any acquisition expenses during these periods. Additionally, Cole Advisors waived its right to receive operating expense reimbursements for the three and nine months ended September 30, 2014 and 2013; accordingly, the Company did not reimburse Cole Advisors for any such expenses during the three and nine months ended September 30, 2014 and 2013.

Due to Affiliates

As of September 30, 2014, $772,000 was due to Cole Advisors and its affiliates related to advisory, distribution and dealer manager fees and the reimbursement of organization, offering and acquisition expenses, which were included in due to affiliates on the condensed consolidated unaudited balance sheet. As of December 31, 2013, $829,000 was due to Cole Advisors and its affiliates related to performance fees, advisory, distribution and dealer manager fees, the reimbursement of organization and offering expenses, and escrow deposits that were paid on the Company’s behalf in connection with the acquisition of the Company’s properties, which were included in due to affiliates on the condensed consolidated unaudited balance sheet.

NOTE 9 — ECONOMIC DEPENDENCY

Under various agreements, the Company has engaged or will engage Cole Advisors and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issuance, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon Cole Advisors and its affiliates. In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services.

NOTE 10 — SUBSEQUENT EVENTS

ARCP/RCAP Agreement

On September 30, 2014, an affiliate of ARCP entered into a definitive agreement (the “RCAP Agreement”) with RCS Capital Corporation (“RCAP”) pursuant to which RCAP would acquire Cole Capital. The acquisition would include CCI II Advisors and CCC. Despite the indirect change of control that would occur for the Company’s advisor, dealer manager and sponsor upon consummation of the transaction contemplated by the RCAP Agreement, such entities are expected to continue to serve in their respective capacities to the Company following the transaction.

The RCAP Agreement contemplates a strategic arrangement by which an indirect wholly-owned subsidiary of ARCP would act as sub-advisor (the “Sub-advisor”) to, and acquire and property manage real estate assets for, the non-traded real estate investment trusts sponsored by Cole Capital, including the Company, after completion of the transaction. As set forth in the RCAP Agreement, the Sub-advisor and RCAP (by way of its ownership of the Company’s advisor) would equally share the acquisition and advisory fees and expenses currently provided pursuant to the Company’s advisory agreement. In addition, the Sub-advisor would receive a portion of any disposition and incentive fees that may later become due to RCAP for advising the

20

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS - (Continued)

September 30, 2014

Company. The Sub-advisor would also receive all acquisition fees and expenses for property acquisitions under any purchase and sale agreement or letter of intent executed on or prior to September 30, 2014. All fees and expenses payable to RCAP or the Sub-advisor under the sub-advisory arrangement would be limited to the total amounts payable to the Company’s advisor under the advisory agreement, which would not change as a result of this arrangement. The completion of the transaction contemplated by the RCAP Agreement is subject to various closing conditions.

On October 22, 2014, Cole Advisors entered into an interim sub-advisory agreement (the “Interim Agreement”) with RCAP Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a subsidiary of RCAP (the “RCAP Sub-advisor”), in connection with the first closing under the RCAP Agreement. Pursuant to the Interim Agreement, the RCAP Sub-advisor will use commercially reasonable best efforts to manage and supervise the operations and administration of the Company, other than the acquisition, operation and disposition of the Company’s assets, pending the final closing under the RCAP Agreement. The Interim Agreement provides for substantially the same allocation of advisory services and compensation as contemplated under the RCAP agreement.

On November 3, 2014, RCAP publicly announced that it had notified ARCP of its purported termination of the RCAP Agreement, and that the RCAP Sub-advisor would not act as sub-advisor with respect to the Company. Also on November 3, 2014, ARCP publicly announced that it had informed RCAP that RCAP’s attempt to terminate the RCAP Agreement constitutes a breach of the RCAP Agreement.

On November 11, 2014, ARCP filed a complaint in the Court of Chancery of the State of Delaware against RCAP alleging that RCAP’s attempt to terminate the RCAP Agreement constitutes a breach of the RCAP Agreement and seeking, among other things, specific performance of the RCAP Agreement or, in the alternative, money damages.

Investment in Real Estate Assets

Subsequent to September 30, 2014, the Company acquired a 100% interest in four real estate properties for an aggregate purchase price of $5.0 million. These were funded with proceeds from the Offering. The Company has not completed its initial purchase price allocations with respect to these properties and therefore cannot provide the disclosures included for these properties in Note 4 to these condensed consolidated unaudited financial statements.

Status of the Offering

As of November 10, 2014, the Company had received $136.0 million in gross offering proceeds through the issuance of approximately 8.2 million shares of its common stock in the Offering (including shares issued pursuant to the DRIP).

Share Redemptions

Subsequent to September 30, 2014 through November 10, 2014, the Company redeemed approximately 170,000 shares for $2.9 million.

Line of Credit

As of November 10, 2014, the Company had $92.4 million outstanding under the Line of Credit and $7.6 million available for borrowing.

Cap on General and Administrative Expenses

As discussed in Note 8 to these condensed consolidated unaudited financial statements, Cole Advisors stated that it will continue the existing expense cap for the three months ending December 31, 2014, whereby Cole Advisors will fund all Excess G&A of the Company for such periods.

21

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated unaudited financial statements, the notes thereto and the other unaudited financial data included in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with our audited consolidated financial statements and the notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2013. The terms “we,” “us,” “our” and the “Company” refer to Cole Real Estate Income Strategy (Daily NAV), Inc. and unless otherwise defined herein, capitalized terms used herein shall have the same meanings as set forth in our condensed consolidated unaudited financial statements and the notes thereto.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q of Cole Real Estate Income Strategy (Daily NAV), Inc., other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. Such statements include, in particular, statements about our plans, strategies and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue” or other similar words.

Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to:

• changes in economic conditions generally and the real estate and securities markets specifically;

• the effect of financial leverage, including changes in interest rates, availability of credit, loss of flexibility due to negative and affirmative covenants, refinancing risk at maturity and generally the increased risk of loss if our investments fail to perform as expected;

• our ability to raise a substantial amount of capital in the near term;

• our ability to access sources of liquidity when we have the need to fund redemptions of common stock in excess of the proceeds from the sales of shares of our common stock in our continuous offering and the consequential risk that we may not have the resources to satisfy redemption requests;

• our ability to effectively deploy the proceeds raised in our public offering;

• legislative or regulatory changes (including changes to the laws governing the taxation of REITs); and

• changes to GAAP.

Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. We caution readers not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date this Quarterly Report on Form 10-Q is filed with the SEC. We make no representation or warranty (express or implied) about the accuracy of any such forward-looking statements contained in this Quarterly Report on Form 10-Q. Additionally, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. The forward-looking statements should be read in light of the risk factors identified in “Item 1A – Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2013.

22

Overview

We were formed on July 27, 2010 to acquire and operate a diversified portfolio of (1) necessity retail, office and industrial properties that are leased to creditworthy tenants under long-term net leases, and are strategically located throughout the United States and U.S. protectorates, (2) notes receivable secured by commercial real estate, including the origination of loans, and (3) cash, cash equivalents, other short-term investments and traded real estate securities. We commenced our principal operations on December 7, 2011, when we issued the initial $10.0 million in shares of our common stock in the Offering and acquired our first real estate property. We have no paid employees and are externally advised and managed by Cole Advisors, our advisor. We elected to be taxed, and currently qualify, as a REIT for federal income tax purposes.

On February 7, 2014, ARCP acquired Cole, which, prior to its acquisition, indirectly owned and/or controlled our external advisor, Cole Advisors, our dealer manager, CCC, our property manager, CREI Advisors, and our sponsor, Cole Capital. As a result of ARCP’s acquisition of Cole, ARCP indirectly owns and/or controls Cole Advisors, CCC, CREI Advisors and Cole Capital.

As of September 30, 2014, we owned 71 properties located in 26 states, comprised of 1.7 million rentable square feet of commercial space, including the square footage of buildings which are on land subject to ground leases. Our operating results and cash flows are primarily influenced by rental income from our commercial properties, interest expense on our property indebtedness and acquisition and operating expenses. Rental and other property income accounted for 94% and 93%, respectively, of our total revenue for the three and nine months ended September 30, 2014, and 96% of our total revenue for both the three and nine months ended September 30, 2013. As 99.6% of our rentable square feet was under lease as of September 30, 2014 with a weighted average remaining lease term of 12.2 years, we believe our exposure to changes in commercial rental rates on our portfolio is substantially mitigated, except for vacancies caused by tenant bankruptcies or other factors. Cole Advisors regularly monitors the creditworthiness of our tenants by reviewing the tenant’s financial results, credit rating agency reports, when available, on the tenant or guarantor, the operating history of the property with such tenant, the tenant’s market share and track record within its industry segment the general health and outlook of the tenant’s industry segment, and other information for changes and possible trends. If our advisor identifies significant changes or trends that may adversely affect the creditworthiness of a tenant, it will gather a more in-depth knowledge of the tenant’s financial condition and, if necessary, attempt to mitigate the tenant credit risk by evaluating the possible sale of the property or identifying a possible replacement tenant should the current tenant fail to perform on the lease.

As of September 30, 2014, the debt leverage ratio of our consolidated real estate assets, which is the ratio of debt to total gross real estate and related assets, net of gross intangible lease liabilities, was 50%. As we acquire additional commercial real estate, we will be subject to changes in real estate prices and changes in interest rates on any current variable rate debt, refinancings or new indebtedness used to acquire the properties. We may manage our risk of changes in real estate prices on future property acquisitions, when applicable, by entering into purchase agreements and loan commitments simultaneously, or through loan assumption, so that our operating yield is determinable at the time we enter into a purchase agreement, by contracting with developers for future delivery of properties or by entering into sale-leaseback transactions. We manage our interest rate risk by monitoring the interest rate environment in connection with our future property acquisitions, when applicable, or upcoming debt maturities to determine the appropriate financing or refinancing terms, which may include fixed rate loans, variable rate loans or interest rate hedges. If we are unable to acquire suitable properties or obtain suitable financing terms for future acquisitions or refinancing, our results of operations may be adversely affected.

Results of Operations

Our results of operations are influenced by the timing of acquisitions and the operating performance of our real estate investments. The following table shows the property statistics of our consolidated real estate assets as of September 30, 2014 and 2013:

	As of September 30,
	2014		2013
Number of properties	71		28
Approximate rentable square feet	1.7 million		515,000
Percentage of rentable square feet leased	99.6	%	99.7	%

(1) Includes square feet of the buildings on land that are subject to ground leases.

23

The following table summarizes our consolidated real estate investment activity during the three and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Properties acquired	18			8			39			18
Approximate purchase price of acquired properties	$	72	million	$	29	million	$	121	million	$	50	million
Approximate rentable square feet	672,000			206,000			1.0		million	290,000

As shown in the tables above, we owned 71 commercial properties as of September 30, 2014, compared to 28 commercial properties as of September 30, 2013. Accordingly, our results of operations for the three and nine months ended September 30, 2014, compared to the three and nine months ended September 30, 2013, reflect significant increases in most categories.

Three Months EndedSeptember 30, 2014 Compared to the Three Months EndedSeptember 30, 2013

Revenue. Revenue increased$2.0 million to $3.4 million for the three months endedSeptember 30, 2014, compared to $1.4 million for the three months endedSeptember 30, 2013. Of this amount, rental and other property income increased$1.9 million to $3.2 million for the three months endedSeptember 30, 2014, compared to $1.3 million for the three months endedSeptember 30, 2013. The increase was primarily due to the acquisition of 43 properties subsequent to September 30, 2013. We also recorded tenant reimbursement income of $216,000 related to certain operating expenses paid by us subject to reimbursement by tenants during the three months endedSeptember 30, 2014, compared to $55,000 during the three months endedSeptember 30, 2013.

General and Administrative Expenses. General and administrative expenses increased $64,000 to $396,000 for the three months endedSeptember 30, 2014, compared to $332,000 for the three months endedSeptember 30, 2013, due to increased accounting fees, offset by the expense cap on general and administrative expenses for the three months endedSeptember 30, 2014 as discussed in Note 8 to the condensed consolidated unaudited financial statements in this Quarterly Report on Form 10-Q. There was no such cap during the three months endedSeptember 30, 2013. The primary general and administrative expense items are professional fees, board of directors costs, state franchise and income taxes, escrow and trustee fees, fees for unused amounts on the Line of Credit, and other licenses and fees. During the three months endedSeptember 30, 2014, we incurred $131,000 of Excess G&A, which will be reimbursed by our advisor.

Property Operating Expenses. Property operating expenses increased$198,000 to $259,000 for the three months endedSeptember 30, 2014, compared to $61,000 for the three months endedSeptember 30, 2013. The increase was primarily due to the acquisition activity subsequent to September 30, 2013. The primary property operating expense items are property taxes, repairs and maintenance and property insurance.

Advisory Expenses. Advisory expenses decreased$21,000 to $304,000 for the three months endedSeptember 30, 2014, compared to $325,000 for the three months endedSeptember 30, 2013, as we recorded advisory fees earned by our advisor pursuant to our advisory agreement. The decrease in advisory fees was primarily due to a decrease in the performance fee earned by our advisor based on the total return per share for each share class, which must exceed 6% for any calendar year in order to become payable.

Acquisition Related Expenses. Acquisition related expenses increased$258,000 to $639,000 for the three months endedSeptember 30, 2014, compared to $381,000 for the three months endedSeptember 30, 2013. The increase was primarily due to acquisition related reimbursements and expenses incurred in connection with the purchase of 18 commercial properties for an aggregate purchase price of $71.9 million during the three months endedSeptember 30, 2014, compared to acquisition related expenses incurred in connection with the purchase of eight commercial properties for an aggregate purchase price of $28.7 million during the three months endedSeptember 30, 2013.

Depreciation and Amortization Expenses. Depreciation and amortization expenses increased$807,000 to $1.2 million for the three months ended September 30, 2014, compared to $415,000 for the three months ended September 30, 2013. The increase was primarily related to depreciation and amortization on 43 properties acquired subsequent to September 30, 2013.

Interest and Other Expense, Net. Interest and other expense, net increased$467,000 to $703,000 for the three months ended September 30, 2014, compared to $236,000 for the three months endedSeptember 30, 2013, primarily due to an increase of $59.6 million in our average outstanding debt balance for the three months endedSeptember 30, 2014 compared to the three months endedSeptember 30, 2013. This increase was also due to an increase in amortization related to deferred financing costs incurred subsequent to September 30, 2013.

24

Nine Months EndedSeptember 30, 2014 Compared to the Nine Months EndedSeptember 30, 2013

Revenue. Revenue increased$5.4 million to $8.5 million for the nine months endedSeptember 30, 2014, compared to $3.1 million for the nine months endedSeptember 30, 2013. Of this amount, rental and other property income increased$4.9 million to $7.9 million for the nine months endedSeptember 30, 2014, compared to $3.0 million for the nine months endedSeptember 30, 2013. The increase was primarily due to the acquisition of 43 properties subsequent to September 30, 2013. We also recorded tenant reimbursement income of $593,000 related to certain operating expenses paid by us subject to reimbursement by tenants during the nine months endedSeptember 30, 2014, compared to $134,000 during the nine months endedSeptember 30, 2013.

General and Administrative Expenses. General and administrative expenses remained relatively constant, increasing$42,000 to $936,000 for the nine months endedSeptember 30, 2014, compared to $894,000 for the nine months endedSeptember 30, 2013. The increase was primarily due to increased accounting fees, which were offset by the expense cap on general and administrative expenses for the nine months endedSeptember 30, 2014 as discussed in Note 8 to the condensed consolidated unaudited financial statements in this Quarterly Report on Form 10-Q. There was no such cap during the nine months endedSeptember 30, 2013. The primary general and administrative expense items are professional fees, board of directors costs, state franchise and income taxes, escrow and trustee fees, fees for unused amounts on the Line of Credit, and other licenses and fees. During the nine months endedSeptember 30, 2014, we incurred $371,000 of Excess G&A, of which $131,000 had not been reimbursed and was due to the Company as of September 30, 2014.

Property Operating Expenses. Property operating expenses increased$531,000 to $698,000 for the nine months endedSeptember 30, 2014, compared to $167,000 for the nine months endedSeptember 30, 2013. The increase was primarily due to the acquisition activity subsequent to September 30, 2013. The primary property operating expense items are property taxes, repairs and maintenance and property insurance.

Advisory Expenses. Advisory expenses increased$226,000 to $676,000 for the nine months endedSeptember 30, 2014, compared to $450,000 for the nine months endedSeptember 30, 2013, as we recorded advisory fees earned by our advisor pursuant to our advisory agreement. The increase in advisory fees was primarily due to an increase in our NAV resulting from the issuance of common stock subsequent to September 30, 2013.

Acquisition Related Expenses. Acquisition related expenses increased$577,000 to $1.2 million for the nine months endedSeptember 30, 2014, compared to $645,000 for the nine months endedSeptember 30, 2013. The increase was primarily due to acquisition related reimbursements and expenses incurred in connection with the purchase of 39 commercial properties for an aggregate purchase price of $121.4 million during the nine months endedSeptember 30, 2014, compared to acquisition related expenses incurred in connection with the purchase of 18 commercial properties for an aggregate purchase price of $50.0 million during the nine months endedSeptember 30, 2013.

Depreciation and Amortization Expenses. Depreciation and amortization expenses increased$2.0 million to $2.9 million for the nine months endedSeptember 30, 2014, compared to $899,000 for the nine months endedSeptember 30, 2013. The increase was primarily related to depreciation and amortization on 43 properties acquired subsequent to September 30, 2013.

Interest and Other Expense, Net. Interest and other expense, net increased$1.1 million to $1.7 million for the nine months endedSeptember 30, 2014, compared to $588,000 for the nine months endedSeptember 30, 2013, primarily due to an increase of $50.9 million in our average outstanding debt balance for the nine months endedSeptember 30, 2014 compared to the nine months endedSeptember 30, 2013. This increase was also due to an increase in amortization related to $2.1 million of deferred financing costs incurred subsequent to September 30, 2013.

Distributions

Our board of directors authorized a daily distribution, based on 365 days in the calendar year, of $0.002563727 per share for stockholders of record as of the close of business on each day of the period commencing on January 1, 2014 and ending on March 31, 2014. In addition, our board of directors authorized a daily distribution of $0.002678083 per share for stockholders of record as of the close of business on each day of the period commencing on April 1, 2014 and ending on December 31, 2014. The daily distribution amount for each class of outstanding common stock will be adjusted based on the relative NAV of the various classes each day so that, from day to day, distributions constitute a uniform percentage of the NAV per share of all classes. As a result, from day to day, the per share daily distribution for each outstanding class of common stock may be higher or lower than the daily distribution amount authorized by our board of directors based on the relative NAV of each class of common stock on that day.

25

During the nine months endedSeptember 30, 2014 and 2013, we paid distributions of $3.8 million and $1.2 million, respectively, including $1.5 million and $330,000, respectively, through the issuance of shares pursuant to the DRIP. Our distributions for the nine months endedSeptember 30, 2014 were funded by cash flows from operations, including cash flow in excess of distributions of $3.7 million, or 99%, and offering proceeds of $22,000, or 1%. Our distributions for the nine months endedSeptember 30, 2013 were funded by cash flows from operations, including cash flow in excess of distributions from the prior year, of $705,000, or 57%, and offering proceeds of $542,000, or 43%. Net cash provided by operating activities for the nine months endedSeptember 30, 2014 and 2013 reflect a reduction for real estate acquisition related expenses. We treat our real estate acquisition expenses as funded by proceeds from the Offering of our shares. Therefore, for consistency, proceeds from the issuance of common stock may be reported as a source of distributions to the extent that acquisition expenses have reduced net cash flows from operating activities in the current and prior periods.

Share Redemptions

We have adopted a share redemption plan to provide limited liquidity whereby, on a daily basis, stockholders may request that we redeem all or any portion of their shares. Our share redemption plan provides that, on each business day, stockholders may request that we redeem all or any portion of their shares, subject to a minimum redemption amount and certain short-term trading fees. The redemption price per share for each class on any business day will be our NAV per share for such class for that day, calculated by the independent fund accountant in accordance with our valuation policies.

Our share redemption plan includes certain redemption limits, including a quarterly limit and, in some cases, a stockholder by stockholder limit. During the nine months endedSeptember 30, 2014, we received redemption requests for, and redeemed approximately 183,000 W Shares of our common stock for $3.1 million. Subsequent to September 30, 2014 through November 10, 2014, the Company redeemed approximately 170,000 shares for $2.9 million.

We intend to fund share redemptions with available cash, proceeds from our liquid investments and proceeds from sales of additional shares. We may, after taking the interests of our Company as a whole and the interests of our remaining stockholders into consideration, use proceeds from any available sources at our disposal to satisfy redemption requests, including, but not limited to, proceeds from sales of additional shares, excess cash flow from operations, sales of our liquid investments, incurrence of indebtedness and, if necessary, proceeds from the disposition of real estate properties or real estate-related assets. In an effort to have adequate cash available to support our share redemption plan, Cole Advisors may determine to reserve borrowing capacity under the Line of Credit. Cole Advisors could then elect to borrow against the Line of Credit in part to redeem shares presented for redemption during periods when we do not have sufficient proceeds from the sale of shares in the Offering to fund all redemption requests.

Liquidity and Capital Resources

General

Our principal demands for funds will be for real estate and real estate related investments, for the payment of acquisition related expenses, operating expenses, distributions and redemptions to stockholders and principal and interest on any current and any future indebtedness. Generally, cash needs for items other than acquisitions and acquisition related expenses will be generated from operations of our current and future investments. We expect to meet cash needs for acquisitions from the net proceeds of the Offering and from debt financings. The sources of our operating cash flows will primarily be driven by the rental income received from current and future leased properties. We expect to continue to raise capital through the Offering and to utilize such funds and future proceeds from secured or unsecured financing to complete future property acquisitions. Refer to Item 1A - Risk Factors for potential impacts to our ability to raise capital in the near term.

Our investment guidelines provide that we will target the following aggregate allocation to relatively liquid investments, such as U.S. government securities, agency securities, corporate debt, publicly traded debt and equity real estate-related securities, cash, cash equivalents and other short-term investments and, in Cole Advisors’ discretion, a line of credit (collectively, the “Liquid Assets”): (1) 10% of our NAV up to $1.0 billion; and (2) 5% of our NAV in excess of $1.0 billion. To the extent that Cole Advisors elects to maintain borrowing capacity under a line of credit, the amount available under the line of credit will be included in calculating the Liquid Assets under these guidelines. These are guidelines, and our stockholders should not expect that we will, at all times, hold liquid assets at or above the target levels or that all liquid assets will be available to satisfy redemption requests as we receive them. We anticipate that both our overall allocation to liquid assets as a percentage of our NAV and our allocation to different types of liquid assets will vary. In making these determinations, our advisor will consider our receipt of proceeds from sales of additional shares, our cash flow from operations, available borrowing capacity under a line of credit, if any, or from additional mortgages on our real estate, our receipt of proceeds from sales of assets and the anticipated use of cash to fund redemptions, as well as the availability and pricing of different investments. The amount of the Liquid Assets is determined by our advisor, in its sole discretion, but is subject to review by our independent directors on a quarterly basis.

26

Short-term Liquidity and Capital Resources

On a short-term basis, our principal demands for funds will be for operating expenses, distributions and redemptions to stockholders and interest on our outstanding debt. We expect to meet our short-term liquidity requirements through available cash, cash provided by property operations, proceeds from the Offering and borrowings from the Line of Credit or other borrowings. As of September 30, 2014, the Borrowing Base under the Line of Credit was $100.0 million and we had $7.6 million available for borrowing. As of November 10, 2014, we had $92.4 million outstanding under the Line of Credit and $7.6 million available for borrowing. We believe that the resources stated above will be sufficient to satisfy our operating requirements for the foreseeable future, and we do not anticipate a need to raise funds from sources other than those described above within the next 12 months.

Long-term Liquidity and Capital Resources

On a long-term basis, our principal demands for funds will be for property and other asset acquisitions and the payment of tenant improvements, operating expenses, including debt service payments on any outstanding indebtedness, and distributions and redemptions to our stockholders. We expect to meet our long-term liquidity requirements through proceeds from the Offering, secured or unsecured financings from banks and other lenders, any available capacity on the Line of Credit by the addition of properties to the Borrowing Base, proceeds from the sale of marketable securities and net cash flows provided by operations.

As of September 30, 2014, we had received and accepted subscriptions for approximately 7.6 million shares of common stock for gross proceeds of $126.5 million. As of September 30, 2014, we had redeemed approximately 222,000 W Shares of common stock for $3.7 million. No valid redemption requests received during the nine months endedSeptember 30, 2014 went unfulfilled.

As of September 30, 2014, we had $112.8 million of debt outstanding and $7.6 million of available borrowings on the Line of Credit based on the Borrowing Base. See Note 6 to our condensed consolidated unaudited financial statements in this Quarterly Report on Form 10-Q for certain terms of our debt. Our contractual obligations as of September 30, 2014 were as follows (in thousands):

	Payments due by period (1)
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
Principal payments - line of credit	$	92,446	$	—	$	92,446	$	—	$	—
Interest payments - line of credit (2)	5,779		1,957		3,822		—		—
Principal payments - fixed debt rate	20,304		—		—		—		20,304
Interest payments - fixed debt rate	5,511		786		1,575		1,573		1,577
Total	$	124,040	$	2,743	$	97,843	$	1,573	$	21,881

(1) The table does not include amounts due to our advisor or its affiliates pursuant to our advisory agreement because such amounts are not fixed and determinable.

(2) Payment obligations for the amount outstanding under the Line of Credit were calculated based on an interest rate of 2.09% in effect as of September 30, 2014.

Our charter prohibits us from incurring debt that would cause our borrowings to exceed 75% of our gross assets, valued at the aggregate cost (before depreciation and other non-cash reserves), unless approved by a majority of our independent directors and disclosed to our stockholders in our next quarterly report. Our board of directors has adopted a policy to further limit our borrowings to 60% of the greater of cost (before depreciation or other non-cash reserves) or fair market value of our gross assets, unless the excess borrowing is approved by a majority of our independent directors and disclosed to our stockholders in our next quarterly report. During the initial period of the Offering, our board of directors, including a majority of our independent directors, approved borrowings exceeding this limit because we were and are in the process of raising sufficient equity capital to acquire our portfolio. After we have acquired a substantial portfolio, our advisor will target a leverage of 50% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our gross assets. As of September 30, 2014, our ratio of debt to total gross real estate assets, net of gross intangible lease liabilities, was 50%.

27

Cash Flow Analysis

Operating Activities. Net cash provided by operating activities was $3.7 million for the nine months endedSeptember 30, 2014, compared to $608,000 for the nine months endedSeptember 30, 2013. The increase was primarily due to an increase in net income before non-cash adjustments for depreciation, amortization of intangibles, amortization of deferred financing costs and amortization of discounts on marketable securities of $3.3 million, offset by a decrease in our working capital balances of $220,000. See “— Results of Operations” for a more complete discussion of the factors impacting our operating performance.

Investing Activities. Net cash used in investing activities increased$71.9 million to $121.5 million for the nine months endedSeptember 30, 2014, compared to $49.6 million for the nine months endedSeptember 30, 2013. The increase was primarily due to the acquisition of 39 commercial properties during nine months endedSeptember 30, 2014, compared to the acquisition of 18 commercial properties during the nine months endedSeptember 30, 2013.

Financing Activities. Net cash provided by financing activities increased$68.6 million to $117.9 million for the nine months endedSeptember 30, 2014, compared to $49.3 million for the nine months endedSeptember 30, 2013. The increase was primarily due to an increase in net borrowings on the Line of Credit and note payable of $55.2 million and an increase in net proceeds from the issuance of common stock of $19.5 million. This increase was partially offset by an increase in redemptions of common stock of $2.7 million.

Election as a REIT

From the date of our formation and until the day following the date on which we issued shares to stockholders other than our initial stockholder, we were a qualified subchapter S subsidiary of our initial stockholder, and therefore were disregarded as an entity separate from our initial stockholder for U.S. federal income tax purposes. We have elected to be taxed, and currently qualify, as a REIT under the Internal Revenue Code of 1986, as amended. To maintain our qualification as a REIT, we must continue to meet certain requirements relating to our organization, sources of income, nature of assets, distributions of income to our stockholders and recordkeeping. As a REIT, we generally are not subject to federal income tax on taxable income that we distribute to our stockholders so long as we distribute at least 90% of our annual taxable income (determined without regard to the deduction for dividends paid and excluding certain non-cash items and net capital gains).

If we fail to maintain our qualification as a REIT for any reason in a taxable year and applicable relief provisions do not apply, we will be subject to tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates. We will not be able to deduct distributions paid to our stockholders in any year in which we fail to maintain our qualification as a REIT. We also will be disqualified for the four taxable years following the year during which qualification was lost unless we are entitled to relief under specific statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to maintain our qualification as a REIT for federal income tax purposes. No provision for federal income taxes has been made in our accompanying condensed consolidated unaudited financial statements. We are subject to certain state and local taxes related to the operations of properties in certain locations, which, if applicable, have been provided for in our accompanying condensed consolidated unaudited financial statements.

Critical Accounting Policies and Estimates

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If management’s judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. We consider our critical accounting policies to be the following:

• Investment in and Valuation of Real Estate and Related Assets;

• Allocation of Purchase Price of Real Estate and Related Assets;

• Revenue Recognition; and

• Income Taxes.

28

A complete description of such policies and our considerations is contained in our Annual Report on Form 10-K for the year ended December 31, 2013 and our critical accounting policies have not changed during the nine months endedSeptember 30, 2014. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2013, and related notes thereto.

Commitments and Contingencies

We may be subject to certain commitments and contingencies with regard to certain transactions. Refer to Note 7 to our condensed consolidated unaudited financial statements in this Quarterly Report on Form 10-Q for further explanations.

Related-Party Transactions and Agreements

We have entered into agreements with Cole Advisors and its affiliates whereby we agree to pay certain fees to, or reimburse certain expenses paid by, Cole Advisors or its affiliates, primarily advisory and performance fees and expenses, organization and offering costs, selling commissions, dealer manager fees and expenses, distribution fees and reimbursement of certain acquisition and operating costs. See Note 8 to our condensed consolidated unaudited financial statements in this Quarterly Report on Form 10-Q for a discussion of the various related-party transactions, agreements and fees.

Subsequent Events

Certain events occurred subsequent to September 30, 2014 through the filing date of this Quarterly Report on Form 10-Q. Refer to Note 10 to our condensed consolidated unaudited financial statements in this Quarterly Report on Form 10-Q for further explanation.

Recent Accounting Pronouncements

Refer to Note 2 to our condensed consolidated unaudited financial statements in this Quarterly Report on Form 10-Q for further explanation. There have been no accounting pronouncements issued, but not yet applied by us, that will significantly impact our financial statements.

Off-Balance Sheet Arrangements

As of September 30, 2014 and December 31, 2013, we had no material off-balance sheet arrangements that had or are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity or capital resources.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In connection with the acquisition of our properties, we have obtained variable rate debt financing, and are therefore exposed to changes in LIBOR. As of September 30, 2014, we had $92.4 millionof variable rate debt outstanding on the Line of Credit, and a change of 50 basis points in interest rates would result in a change in interest expense of $462,000 per annum. In the future, our objectives in managing interest rate risks will be to limit the impact of interest rate changes on operations and cash flows, and to lower overall borrowing costs. To achieve these objectives, we expect to borrow primarily at interest rates with the lowest margins available and, in some cases, with the ability to convert variable rates to fixed rates. In addition, we expect that we may enter into derivative financial instruments such as interest rate swaps, interest rate caps and rate lock arrangements in order to mitigate our interest rate risk. To the extent we enter into such arrangements, we will be exposed to credit and market risks including, but not limited to, the failure of any counterparty to perform under the terms of the derivative contract or the adverse effect on the value of the financial instrument resulting from a change in interest rates. We do not have any foreign operations and thus we are not exposed to foreign currency fluctuations.

29

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we, under the supervision and with the participation of our chief executive officer and chief financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures, as of September 30, 2014, were effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified by the rules and forms promulgated under the Exchange Act and is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

No change occurred in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended September 30, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

30

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business we may become subject to litigation or claims. We are not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or to which our properties are the subject.

Item 1A. Risk Factors

The following risk factors supplement the risk factors set forth in “Item 1A - Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013. The risk factors contained in this “Item 1A - Risk Factors” should be read in conjunction with our condensed consolidated unaudited financial statements, the notes thereto, and the other unaudited financial data, and Management's Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q.

The suspension or termination of selling agreements by broker-dealers participating in the offering, or our inability to generate additional selling agreements with prospective broker-dealers, will impact our ability to raise capital in the near term.

On October 29, 2014, ARCP, the indirect parent of our sponsor, our advisor, our dealer manager and our property manager, announced that, as a result of an independent investigation being conducted by its audit committee, certain of ARCP’s financial statements should no longer be relied upon, and that such independent investigation is ongoing. Subsequently, our dealer manager was advised by several of the broker-dealers participating in the offering that they would either terminate or suspend their selling dealer agreements with our dealer manager, and by certain prospective broker-dealers that, for a period of time, they would suspend their initial review of the offering prior to entering into a selling dealer agreement with our dealer manager. As a result, we may not be able to raise a substantial amount of capital in the near term. If we are not able to raise a substantial amount of capital, we may have difficulty in identifying and purchasing suitable properties on attractive terms in order to meet our investment objectives and may be unable to reduce our current leverage profile. This could also adversely affect our ability to pay regular distributions from cash flow from operations to investors.

Certain members of our management and the management of our advisor have been and may continue to be required to devote time and resources to addressing issues created as a result of ARCP’s recent announcement that certain of ARCP’s financial statements should no longer be relied upon. To the extent such matters require further attention of the members of our management and the management of our advisor, such persons’ focus on our business strategy may be diminished.

On October 29, 2014, ARCP, the indirect parent of our sponsor, our advisor, our dealer manager and our property manager, announced that, as a result of an independent investigation being conducted by its audit committee, certain of ARCP’s financial statements should no longer be relied upon and that such independent investigation is ongoing. Certain members of our management and the management of our advisor have been and may continue to be required to devote time and resources to addressing issues created as a result of such announcement. Should such persons be required to devote further attention to these matters, their focus on our business strategy may be diminished.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On August 11, 2010, we sold 20,000 shares of common stock at $10.00 per share to our initial stockholder, for a total amount of $200,000. We issued these shares in a private transaction exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) under the Securities Act. On September 20, 2011, our board of directors authorized a reverse stock split providing for the combination of each three shares of our common stock issued and outstanding into two shares of our common stock, resulting in 13,333 shares of common stock issued to our initial stockholder subsequent to the reverse stock split. Following ARCP’s acquisition of Cole, ARCP’s operating partnership, as the successor to our initial stockholder, continues to own 13,333 shares of our common stock.

On December 6, 2011, the Initial Registration Statement for our public offering of up to $4.0 billion in shares of common stock was declared effective under the Securities Act. The Initial Registration Statement covered up to $3.5 billion in shares in a primary offering and up to $500.0 million in shares pursuant to the DRIP. On December 7, 2011, we satisfied the conditions of our escrow agreement and accepted the initial subscription for 666,667 W Shares of our common stock in the offering under the Initial Registration Statement, at a price of $15.00 per share, resulting in gross proceeds of $10.0 million. Additionally, as of September 30, 2014, we were authorized to issue 10.0 million shares of preferred stock, but had none issued or outstanding.

31

As of September 30, 2014, we had issued approximately 7.6 million shares in the Offering for gross proceeds of $126.5 million, out of which we have incurred $1.2 million in dealer manager fees, selling commissions and distribution fees and $949,000 in organization and offering costs. With the net offering proceeds of $124.4 million and the borrowings from the Line of Credit and note payable, we acquired $224.6 million in real estate and related assets and incurred $2.5 million of acquisition related expenses. The Company did not make any sales of unregistered securities during the nine months ended September 30, 2014.

As of November 10, 2014, we have sold the following common shares and raised the following proceeds in connection with the Offering (dollar amounts in thousands):

	W Shares		A Shares		I Shares		Total
Primary Offering
Shares	6,913,914		854,892		245,900		8,014,706
Proceeds	$	114,554	$	14,549	$	4,169	$	133,272
Distribution Reinvestment Plan
Shares	141,633		8,970		9,440		160,043
Proceeds	$	2,398	$	153	$	161	$	2,712

We have adopted a share redemption plan to provide limited liquidity whereby, on a daily basis, stockholders may request that we redeem all or any portion of their shares. The redemption price per share for each class on any business day is equal to our NAV per share for such class for that day, calculated by the independent fund accountant after the close of business on the redemption request day, without giving effect to any share purchases or redemptions to be effected on such day. Subject to limited exceptions, stockholders who redeem their shares of our common stock within the first 365 days from the date of purchase are subject to a short-term trading fee of 2% of the aggregate NAV per share of the shares of common stock received. In each calendar quarter, net redemptions are limited under our share redemption plan to 5% of our total NAV as of the end of the immediately preceding quarter, plus any unused percentage carried over to the next quarter, but the maximum carryover percentage may never exceed 15% in the aggregate, and net redemptions in any quarter may never exceed 10% of the prior quarter’s NAV.

The provisions of the share redemption program in no way limit our ability to repurchase shares from stockholders by any other legally available means for any reason that our board of directors, in its discretion, deems to be in our best interest. During the three months ended September 30, 2014, we redeemed W Shares as follows:

Period	Total Number of Shares Redeemed	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 - July 31, 2014	10,233	$	17.03	10,233	(1)
August 1 - August 31, 2014	4,667	$	17.07	4,667	(1)
September 1 - September 30, 2014	66,472	$	17.08	66,472	(1)
Total	81,372			81,372	(1)

(1) A description of the maximum number of shares that may be purchased under our share redemption program, the date our share redemption program was announced (in the Initial Registration Statement and the Multi-Class Registration Statement) and the amount of shares approved under our share redemption program is included in the narrative preceding this table.

Item 3. Defaults Upon Senior Securities

No events occurred during the three months ended September 30, 2014 that would require a response to this item.

Item 4. Mine Safety Disclosures

Not applicable.

32

Item 5. Other Information

No events occurred during the three months ended September 30, 2014 that would require a response to this item.

Item 6. Exhibits

The exhibits listed on the Exhibit Index (following the signature section of this Quarterly Report on Form 10-Q) are included herewith, or incorporated herein by reference.

33

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Cole Real Estate Income Strategy (Daily NAV), Inc. (Registrant)
By:	/s/ Simon J. Misselbrook
Name:	Simon J. Misselbrook
Title:	Chief Financial Officer and Treasurer (Principal Financial Officer)

Date: November 12, 2014

34

EXHIBIT INDEX

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
3.1	Second Articles of Amendment and Restatement of Cole Real Estate Income Strategy (Daily NAV), Inc., dated as of August 26, 2013 (Incorporated by reference to the Company’s Form 8-K (File No. 333-169535), filed on August 26, 2013).
3.2	Bylaws of Cole Real Estate Income Strategy (Daily NAV), Inc. effective September 28, 2011 (Incorporated by reference to Exhibit 3.2 to the Company’s pre-effective amendment No. 4 to Form S-11 (File No. 333-169535), filed on November 3, 2011).
3.3	First Amendment of Bylaws effective June 14, 2012 (Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K (File No. 333-169535), filed on June 19, 2012).
4.1	Amended and Restated Distribution Reinvestment Plan (Incorporated by reference to Appendix E to the Company’s prospectus filed pursuant to Rule 424(b)(3) (File No. 333-186656), filed on August 26, 2013).
4.2	Multiple Class Plan of Cole Real Estate Income Strategy (Daily NAV), Inc., dated as of August 26, 2013 (Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K (File No. 333-169535), filed on August 26, 2013).
10.1*	Loan Agreement, dated September 9, 2014, by and between Cole WG Reidsville NC, LLC, Cole DG Indepnednce (23rd St.) MO, LLC, Cole KG Cedar Rapids IA, LLC, Cole NG Prescott AZ, LLC, Cole LO Fremont OH, LLC, Cole CV Wisconsin Rapids WI, LLC, Cole DG Gladwin MI, LLC, Cole DT Lexington MI, LLC and ARCP MT Enid OK, LLC and PNC Bank, National Association.
10.2*	Amended and Restated Credit Agreement, dated September 12, 2014, by and between Cole Real Estate Income Strategy (Daily NAV) Operating Partnership, LP and J.P. Morgan Securities, LLC, as lead arranger and bookrunner, JPMorgan Chase Bank, N.A. as administrative agent, swing line lender and letter of credit issuer, and U.S Bank National Association as syndication agent and documentation agent.
31.1*	Certifications of the Principal Executive Officer of the Company pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certifications of the Principal Financial Officer of the Company pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certifications of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

35

EX-10.1

Exhibit 10.1

Loan Number: 94-0960753

Cole Retail Portfolio

LOAN AGREEMENT

Dated as of September 9, 2014

Between

COLE WG REIDSVILLE NC, LLC, COLE DG INDEPENDENCE (23^rd ST.) MO, LLC, COLE KG CEDAR RAPIDS IA, LLC, COLE NG PRESCOTT AZ, LLC, COLE LO FREMONT OH, LLC, COLE CV WISCONSIN RAPIDS WI, LLC, COLE DG GLADWIN MI, LLC, COLE DG LEXINGTON MI, LLC, and ARCP MT ENID OK, LLC,

each a Delaware limited liability company

as Borrower

and

PNC BANK, NATIONAL ASSOCIATION,

as Lender

TABLE OF CONTENTS

			Page
I.	DEFINITIONS; PRINCIPLES OF CONSTRUCTION			1
	Section 1.1		Definitions	1
	Section 1.2		Principles of Construction	28
II.	GENERAL TERMS			29
	Section 2.1		The Loan	29
		2.1.1.	Agreement to Lend and Borrow	29
		2.1.2.	Single Disbursement to Borrower	29
		2.1.3.	The Note, Security Instrument and Other Loan Documents	29
		2.1.4.	Use of Proceeds	29
	Section 2.2		Interest Rate and Payments	29
		2.2.1.	Interest Generally; Usury	29
		2.2.2.	Interest Calculation	30
		2.2.3.	Payments Before Maturity Date; Monthly Debt Service Payment Amount	30
		2.2.4.	Payment on Maturity Date	30
		2.2.5.	Payments After Default	30
		2.2.6.	Late Payment Charge	30
		2.2.7.	Release on Payment in Full	31
	Section 2.3		Manner of Making Payments	31
		2.3.1.	Making of Payments	31
		2.3.2.	Credit for Payment Receipt	31
		2.3.3.	Invalidated Payments	31
		2.3.4.	No Deductions, etc.	31
		2.3.5.	Application of Payments	31
		2.3.6.	Increased Costs	32
		2.3.7.	Indemnified Taxes	32
	Section 2.4		Prepayments	33
		2.4.1.	Voluntary Prepayments	33
		2.4.2.	Prepayment Consideration	34
		2.4.3.	Mandatory Prepayments	34
		2.4.4.	Prepayments After Event of Default	34
		2.4.5.	Voluntary Prepayment in Connection with Enid Property	35
	Section 2.5		Optional Lender Forbearance	35

i    ATLANTA 5579734.9

III.	CASH MANAGEMENT			36
	Section 3.1		Establishment of Lockbox Account and Cash Management Account	36
		3.1.1.	Establishment of Lockbox Account	36
		3.1.2.	Establishment of Cash Management Account	36
		3.1.3.	Accounts Generally	37
	Section 3.2		Transfers from the Lockbox Account	37
	Section 3.3		Monthly Disbursements from the Cash Management Account	37
		3.3.1.	Disbursements Prior to Optional Lender Forbearance	37
		3.3.2.	Disbursements Upon Optional Lender Forbearance	38
	Section 3.4		Deposit and Disbursement of Funds Allocated for Payment of Monthly Reserve Fund Deposits	39
	Section 3.5		Deposit and Disbursement of Funds Allocated to Triggering Event Period Reserve Funds; Excess Cash Reserve Fund	39
	Section 3.6		Borrower’s Obligation Not Affected	40
	Section 3.7		Payments Received Under this Agreement	40
IV.	REPRESENTATIONS AND WARRANTIES			40
	Section 4.1		Borrower Representations	40
		4.1.1.	Organization	40
		4.1.2.	Proceedings	40
		4.1.3.	No Conflicts	41
		4.1.4.	Litigation	41
		4.1.5.	Agreements	41
		4.1.6.	Title	41
		4.1.7.	Solvency; No Bankruptcy Filing	41
		4.1.8.	Financial Information	42
		4.1.9.	Full and Accurate Disclosure	42
		4.1.10.	No Plan Assets	42
		4.1.11.	Compliance	43
		4.1.12.	Compliance with Anti-Terrorism Laws, Anti-Money Laundering/ International Trade Law Compliance	43
		4.1.13.	Reliance	44
		4.1.14.	No Contingent Liabilities	44
		4.1.15.	Condemnation	44
		4.1.16.	Federal Reserve Regulations	44
		4.1.17.	Access; Utilities	44
		4.1.18.	Not a Foreign Person	44

ii    ATLANTA 5579734.9

		4.1.19.	Separate Lots	44
		4.1.20.	Assessments	44
		4.1.21.	Enforceability	45
		4.1.22.	No Prior Assignment	45
		4.1.23.	Insurance	45
		4.1.24.	Use of Property	45
		4.1.25.	Certificate of Occupancy; Licenses	45
		4.1.26.	Flood Zone	45
		4.1.27.	Physical Condition	45
		4.1.28.	Boundaries	46
		4.1.29.	Leases	46
		4.1.30.	Survey	47
		4.1.31.	[Reserved]	47
		4.1.32.	Filing and Recording Taxes	47
		4.1.33.	Management Agreement	47
		4.1.34.	Illegal Activity	47
		4.1.35.	Investment Company Act	47
		4.1.36.	Bank Holding Company	47
		4.1.37.	Principal Place of Business; State of Organization	47
		4.1.38.	Taxpayer Identification Number	48
		4.1.39.	Business Purposes	48
		4.1.40.	Taxes	48
		4.1.41.	Forfeiture	48
		4.1.42.	Accounts	48
		4.1.43.	Reciprocal Easement Agreements	49
		4.1.44.	Material Agreements	49
	Section 4.2		Survival of Representations	49
V.	BORROWER COVENANTS			50
	Section 5.1		Existence; Compliance with Legal Requirements; Insurance	50
	Section 5.2		Taxes and Other Charges	51
	Section 5.3		Litigation	51
	Section 5.4		Access to Property	52
	Section 5.5		Notice of Default	52
	Section 5.6		Cooperate in Legal Proceedings	52
	Section 5.7		Performance Under Loan Documents	52

iii    ATLANTA 5579734.9

	Section 5.8		Award and Insurance Benefits	52
	Section 5.9		Further Assurances	52
	Section 5.10		Financial Reporting	53
	Section 5.11		Business and Operations	55
	Section 5.12		Title to the Property	56
	Section 5.13		Costs of Enforcement	56
	Section 5.14		Estoppel Statements	56
	Section 5.15		Loan Proceeds	56
	Section 5.16		No Joint Assessment	56
	Section 5.17		Leasing Matters	57
	Section 5.18		Alterations; Repairs	58
	Section 5.19		Access Laws	58
	Section 5.20		Property Management	59
	Section 5.21		Compliance with Anti-Terrorism Laws	60
	Section 5.22		Liens	61
	Section 5.23		Dissolution	61
	Section 5.24		Change In Business	61
	Section 5.25		Debt Cancellation	61
	Section 5.26		Affiliate Transactions	61
	Section 5.27		Zoning	61
	Section 5.28		Name, Identity, Structure, or Principal Place of Business	61
	Section 5.29		ERISA	62
	Section 5.30		Reciprocal Easement Agreements	62
	Section 5.31		Specific Environmental Obligations	62
VI.	TRANSFERS			62
	Section 6.1		Borrower Acknowledgement	62
	Section 6.2		Prohibition on Transfers	63
	Section 6.3		Transfer Documentation	64
	Section 6.4		No Impairment	64
	Section 6.5		Death or Incapacity of Individual Guarantor	65
	Section 6.6		Additional Permitted Transfers	65
		6.6.1.	Permitted Transfers of Interests in Guarantor	65
		6.6.2.	Permitted Transfers of Non-Controlling Interests; UPREIT Transactions	65
		6.6.3.	Additional Insolvency Opinion	66
	Section 6.7		Sanctioned Persons	66

iv    ATLANTA 5579734.9

	Section 6.8		Partial Releases	66
VII.	INSURANCE; CASUALTY; CONDEMNATION; RESTORATION			67
	Section 7.1		Insurance	67
	Section 7.2		Casualty	72
	Section 7.3		Condemnation	73
	Section 7.4		Restoration	73
VIII.	SINGLE PURPOSE ENTITY PROVISIONS			77
	Section 8.1		Single Purpose Entity Separateness	77
	Section 8.2		Single Purpose Entity and Cash Management Compliance	84
	Section 8.3		Recycled Entity Representations	84
IX.	RESERVE FUNDS			85
	Section 9.1		Reserve Funds and Reserve Accounts Generally	85
	Section 9.2		Tax and Insurance Escrow Fund	86
	Section 9.3		Early Lease Termination Reserve	86
		9.3.1.	Disbursements for Qualified Replacement Lease for Entire Vacated Space	87
		9.3.2.	Disbursements for Qualified Replacement Lease for Less Than Entire Vacated Space	87
X.	DEFAULTS			88
	Section 10.1		Event of Default	88
	Section 10.2		Remedies	91
	Section 10.3		Remedies Cumulative; Waivers	93
XI.	SPECIAL PROVISIONS			93
	Section 11.1		Sale of Notes and Securitization	93
	Section 11.2		Securitization Indemnification	95
	Section 11.3		Exculpation	96
	Section 11.4		Servicer	100
	Section 11.5		Conversion to Registered Form	100
	Section 11.6		Mezzanine Financing	100
XII.	ACCOUNTS AND ACCOUNT COLLATERAL			102
	Section 12.1		Permitted Investments	102
	Section 12.2		Income From Permitted Investments	102
	Section 12.3		Sole Dominion and Control	102
	Section 12.4		Grant of Security Interest	103
	Section 12.5		No Other Security Interest	103

v    ATLANTA 5579734.9

	Section 12.6	Change of Account Names	103
	Section 12.7	Rights on Default	103
	Section 12.8	Limitations on Liability of Lender	103
	Section 12.9	Indemnity	104
	Section 12.10	Disbursement of Disputed Funds	104
	Section 12.11	Disbursement Upon Payment in Full	105
XIII.	MISCELLANEOUS		105
	Section 13.1	Survival	105
	Section 13.2	Lender’s Discretion	105
	Section 13.3	Governing Law	105
	Section 13.4	Modification, Waiver in Writing	106
	Section 13.5	Nonwaiver	106
	Section 13.6	Notices	106
	Section 13.7	Financing Statements	107
	Section 13.8	Waiver of Trial by Jury	107
	Section 13.9	Headings	108
	Section 13.10	Severability	108
	Section 13.11	Preferences	108
	Section 13.12	Waiver of Automatic or Supplemental Stay	108
	Section 13.13	Bankruptcy Acknowledgment	108
	Section 13.14	Waiver of Notice	109
	Section 13.15	Remedies of Borrower	109
	Section 13.16	Expenses; Indemnity	109
	Section 13.17	Exhibits Incorporated	110
	Section 13.18	Offsets, Counterclaims and Defenses	110
	Section 13.19	No Joint Venture or Partnership; No Third Party Beneficiaries	110
	Section 13.20	Disclosure of Information	111
	Section 13.21	Waiver of Marshalling of Assets	111
	Section 13.22	Waiver of Counterclaim	112
	Section 13.23	Conflict; Construction of Documents; Reliance	112
	Section 13.24	Brokers and Financial Advisors	112
	Section 13.25	Prior Agreements	112
	Section 13.26	Assignments	112
	Section 13.27	Joint and Several Liability	113
	Section 13.28	Duplicate Originals; Counterparts	113

vi    ATLANTA 5579734.9

LOAN AGREEMENT

THIS LOAN AGREEMENT, dated as of September 9, 2014 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”), is made between PNC BANK, NATIONAL ASSOCIATION, a national banking association (together with its successors and assigns, “Lender”) and COLE WG REIDSVILLE NC, LLC, COLE DG INDEPENDENCE (23^RD ST.) MO, LLC, COLE KG CEDAR RAPIDS IA, LLC, COLE NG PRESCOTT AZ, LLC, COLE LO FREMONT OH, LLC, COLE CV WISCONSIN RAPIDS WI, LLC, COLE DG GLADWIN MI, LLC, COLE DG LEXINGTON MI, LLC, and ARCP MT ENID OK, LLC, each a Delaware limited liability company, having its principal place of business at 2325 East Camelback Road, Suite 1100, Phoenix, AZ 85016 (each an “Individual Borrower” and collectively, “Borrower”).

RECITALS:

A.    Borrower desires to obtain the Loan from Lender; and

B.    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.

C.    Borrower acknowledges that while Lender has originated this Loan for its own account, the provisions contained herein regarding Lender’s right to sell, participate or Securitize the Loan are an important inducement to Lender making the Loan.

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

I.DEFINITIONS; PRINCIPLES OF CONSTRUCTION

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

“Acceptable Limited Liability Company” shall have the meaning set forth in Section 8.1(c) hereof.

“Access Laws” shall mean the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, all similar state and local Laws and ordinances related to access and all rules, regulations, and orders issued pursuant thereto including, without limitation, the Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities.

“Account Collateral” shall mean: (a) the Accounts, the Reserve Funds, the Triggering Event Period Reserve Funds, and any and all other amounts from time to time deposited or held in any of the Accounts; (b) any and all amounts invested in Permitted Investments; (c) all interest, dividends, Cash, checks, drafts, certificates, securities, investment property, financial assets, instruments and other property from time to time held in the Accounts, or received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and (d) to the extent not covered by clauses (a) - (c) above, all “proceeds” (as defined under the UCC), products, distributions, dividends or substitutions on or of any or all of the foregoing.

“Accounts” shall mean, collectively, the Lockbox Account, the Cash Management Account, the Reserve Accounts, the Triggering Event Period Reserve Accounts, and any sub-accounts established

ATLANTA 5579734.9

-1-

under any of the foregoing, and any other escrow accounts or reserve accounts established by the Loan Documents.

“Act” shall have the meaning set forth in Section 8.1(c)(i) hereof.

“Acts of Terror” shall have the meaning set forth in Section 7.1(l) hereof.

“Additional Collateral” shall have the meaning set forth in Section 1 of the Assignment of Agreements.

“Additional Insolvency Opinion” shall mean any non-consolidation opinion acceptable to Lender and any applicable Rating Agencies required to be delivered in connection with the Loan Documents after the Closing Date.

“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.

“Affiliated Manager” shall mean any Manager which is an Affiliate of any Individual Borrower, SPC Party or any Guarantor, or in which Borrower, SPC Party, or any Guarantor has, directly or indirectly, any legal, beneficial or economic interest.

“Allocated Loan Amount”, with respect to each Individual Property, shall (subject to any reduction pursuant to Sections 6.8, 7.4(c) or 7.4(d) hereof) mean (for purposes of this Agreement and the Contribution Agreement):

Property	Allocated Loan Amount
603 South Scales Street, Reidsville, NC	$3,602,928.00
10601 East 23rd St., Independence, MO	$837,219.00
30 Four Oaks Dr. SW, Cedar Rapids, IA	$1,501,220.00
1470 Gail Gardner Way, Prescott, AZ	$2,367,308.00
1952 North State Route 53, Fremont, OH	$5,312,009.00
2410 South 8th St., Wisconsin Rapids, WI	$1,789,916.00
1105 N. State Street, Gladwin, MI	$779,480.00
6908 Lakeshore Road, Lexington, MI	$707,306.00
3828 West Owen K Garriott, Enid, OK	$3,406,614.00

“ALTA” shall mean American Land Title Association, or any successor thereto.

“Alteration Threshold” shall mean, with respect to each Individual Property, five percent (5.0%) of the Allocated Loan Amount for such Individual Property.

ATLANTA 5579734.9

-2-

“Annual Budget” shall mean the operating budget, including all planned Capital Expenditures, for the Property prepared by each Individual Borrower for the applicable Fiscal Year or other period.

“Anti-Terrorism Laws” shall mean any Laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering, or bribery, all as amended, supplemented or replaced from time to time.

“Applicable Interest Rate” shall mean a rate of THREE and 82/100^th percent (3.82%) per annum (the “Initial Interest Rate”). In the case of an Optional Lender Forbearance as provided herein, the term “Applicable Interest Rate” shall mean the Adjusted Interest Rate from and after the Maturity Date through and including the date this Note is paid in full. The term “Adjusted Interest Rate” shall mean the greater of (x) the Initial Interest Rate plus four percent (4.0%); or (y) the Yield Rate on the then current on the run 10 year U.S. Treasury Obligation (the “Specified U.S. Treasury Security”) plus four percent (4.0%). The term “Yield Rate” shall mean the yield rate for the Specified U.S. Treasury Security as such yield rate is reported in the Wall Street Journal on the fifth (5th) business day preceding the Maturity Date. In the event that no such yield rate is published for the Specified U.S. Treasury Security, then the nearest equivalent U.S. Treasury Security shall be selected at Lender’s sole discretion, and the yield rate therefor shall be the “Yield Rate”. If the publication of such yield rates in the Wall Street Journal is discontinued, Lender shall determine such yield rates from another source selected by Lender.

“Applicable Policies” shall have the meaning set forth in Section 7.1(l) hereof.

“Appraisal” shall mean an appraisal (i) in form and substance acceptable to Lender and prepared no later than thirty (30) days prior to the date of determination of the Loan to Value Ratio and (ii) prepared in accordance with the requirements of FIRREA by an independent third party appraiser holding an MAI designation, who is licensed or state certified if required under the laws of the states where each Individual Property is located, who meets the requirements of FIRREA and who is otherwise acceptable to Lender.

“Approved Accountant” shall mean an accounting firm or other independent certified public accountant reasonably acceptable to Lender.

“Approved Bank” means (a) a bank or other financial institution which has the Required Rating, (b) if a Securitization has not occurred, a bank or other financial institution acceptable to Lender or (c) if a Securitization has occurred, a bank or other financial institution with respect to which Lender shall have received a Rating Agency Confirmation.

“Approved Annual Budget” shall have the meaning set forth in Section 5.10(e) hereof.

“Approved Lease Form” shall have the meaning set forth in Section 5.17(b)(i) hereof.

“Assignment of Agreements” shall mean that certain first priority Assignment of Agreements Affecting Real Estate, dated as of the date hereof, from Borrower, as assignor, to Lender, as assignee, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Assignment of Leases” shall mean, with respect to each Individual Property that certain first priority Assignment of Leases and Rents, dated as of the date hereof, from each Individual Borrower, as assignor, to Lender, as assignee, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

ATLANTA 5579734.9

-3-

“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, each Individual Borrower and Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Award” shall mean any award, payment or other compensation paid by any Governmental Authority to Borrower in connection with a Condemnation in respect of any Individual Property, including interest thereon, which may heretofore and hereafter be made with respect to any Individual Property, whether from the exercise of the right of eminent domain (including but not limited to any transfer made in lieu of or in anticipation of the exercise of the right), or for a change of grade, or for any other injury to or decrease in the value 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 other Creditors Rights Laws; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code or other Creditors Rights Laws that is not dismissed within one hundred and twenty (120) days; (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 other Creditors Rights Laws; (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 Individual Property; or (e) such Person making an assignment for the benefit of creditors.

“Bankruptcy Code” shall mean Title 11 U.S.C. § 101 et seq., and the regulations adopted and promulgated pursuant thereto (as the same may be amended from time to time).

“Basel III” shall mean the global regulatory standards issued on January 13, 2011 by members of the Basel Committee on Banking Supervision.

“Basic Carrying Costs” shall mean, with respect to each Individual Property, the sum of the following costs associated with each 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 of this Agreement and Section 13.27 hereof.

“Business Day” shall mean any day other than a Saturday, Sunday or any other day on which national banks in New York, New York, Pittsburgh, Pennsylvania or Overland Park, Kansas are authorized or required to be closed.

“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” shall mean coin or currency of the United States of America or immediately available federal funds, including such funds delivered by wire transfer.

“Cash Management Account” shall have the meaning set forth in Section 3.1.2 hereof.

“Cash Management Bank” shall mean an Eligible Institution selected by Lender.

“Cash Management Covenants” shall mean the covenants of Borrower set forth in Section 3.1.1 and Section 12.5 hereof.

ATLANTA 5579734.9

-4-

“Casualty” shall have the meaning specified in Section 7.2 hereof.

“Casualty Consultant” shall have the meaning set forth in Section 7.4(b)(iii) hereof.

“Casualty Retainage” shall have the meaning set forth in Section 7.4(b)(iv) hereof.

“Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Official Body or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of Law) by any Official Body; provided however, that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision Practices (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of Law), in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.

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

“Code” shall mean the Internal Revenue Code of 1986, as amended, and 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.

“Collateral” shall mean the Property, the Accounts, the Account Collateral, the Guaranty, the Personal Property, the Additional Collateral, the Management Agreement as it relates to the Property, and all other real or personal property that is at any time pledged, mortgaged or otherwise given as security to Lender for the payment of the Debt or the performance of the Other Obligations.

“Compliance Authority” shall mean each and all of the (a) U.S. Treasury Department/Office of Foreign Assets Control, (b) U.S. Treasury Department/Financial Crimes Enforcement Network, (c) U.S. State Department/Directorate of Defense Trade Controls, (d) U.S. Commerce Department/Bureau of Industry and Security, (e) U.S. Internal Revenue Service, (f) U.S. Justice Department, and (g) U.S. Securities and Exchange Commission.

“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 any Individual Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting any Individual Property.

“Condemnation Proceeds” shall have the meaning set forth in Section 7.4(b) hereof.

“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, including the power to elect a majority of the directors or trustees of a corporation or trust, as the case may be. “Controlled” and “Controlling” shall have correlative meanings.

“Contribution Agreement” shall mean that certain Contribution Agreement of even date herewith executed by Borrower and Lender.

ATLANTA 5579734.9

-5-

“Covered Entity” shall mean Borrower and its Affiliates, all Guarantors, all owners of the foregoing, and all brokers or other agents of Borrower acting in any capacity in connection with the Loan.

“Covered Rating Agency Information” shall mean any Provided Information furnished to the Rating Agencies in connection with issuing, monitoring and/or maintaining the Securities.

“Creditors Rights Laws” shall mean with respect to any Person, any existing or future Law of any jurisdiction, domestic or foreign, applicable to such Person, relating to bankruptcy, insolvency, reorganization, rehabilitation, conservatorship, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to its debts or debtors.

“Debt” shall mean the outstanding principal amount of the Loan set forth in, and evidenced by, this Agreement, the Note and the other Loan Documents, together with all interest accrued and unpaid thereon and all other sums (including, without limitation, the Prepayment Consideration) due to Lender in respect of the Loan under the Note, this Agreement, any Security Instrument or any other Loan Document.

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

“Debt Service Coverage Ratio” shall mean a ratio determined by Lender on a quarterly basis in which: (a) the numerator is Underwritten Net Cash Flow for the twelve (12) calendar month period immediately preceding the date of calculation and (b) the denominator is the Debt Service payments due and payable for the twelve (12) calendar month period immediately preceding the date of calculation; provided, however, solely for purposes of calculating the Debt Service Coverage Ratio, Debt Service shall mean the constant derived using an interest rate equal to the Applicable Interest Rate based upon a thirty (30) year amortization schedule computed on the basis of a 360-day year consisting of twelve (12) thirty (30) day months multiplied by the principal amount of the Loan.

“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.

“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) five percent (5%) above the Applicable Interest Rate.

“Deferred Delaware Opinion” shall mean a legal opinion issued by counsel satisfactory to Lender and the Rating Agencies stating that Delaware law shall apply to the issue of which parties have authority to file a Bankruptcy Action on behalf of Borrower.

“Disbursement Date” shall mean the first day of each calendar month, or if such first day is not a Business Day, the next succeeding Business Day; provided that, in the event that on such day there are insufficient funds in the Cash Management Account to satisfy in full the then applicable Required Disbursement Amounts, the “Disbursement Date” shall mean the fifth day of each calendar month, or if such fifth day is not a Business Day, the next succeeding Business Day.

“Disbursement Fee” shall mean a nonrefundable fee equal to $200.00 payable as a condition to disbursement from certain of the Reserve Accounts, as set forth in Article IX hereof, as compensation for Lender’s review, analysis and processing of such disbursement.

“Disclosure Document” shall have the meaning set forth in Section 11.2(a) hereof.

ATLANTA 5579734.9

-6-

“Early Lease Termination Reserve Account” shall have the meaning set forth in Section 9.3 hereof.

“Early Lease Termination Reserve Funds” shall have the meaning set forth in Section 9.3 hereof.

“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 and subject to supervision or examination by federal or state authorities. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument. Notwithstanding the foregoing, any Reserve Account or Triggering Event Period Reserve Account may at Lender’s option, be (i) commingled with other monies held by Lender, or (ii) established as one or more separate accounts at an Eligible Institution (which may include one or more book-entry sub-accounts as deemed necessary by Lender).

“Eligible Institution” shall mean a depository institution or trust company, insured by the Federal Deposit Insurance Corporation, (a) the short term unsecured debt obligations or commercial paper of which are rated at least “A-1” 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 (b) the long term unsecured debt obligations of which are rated at least “AA-” by S&P, “Aa3” by Moody’s and “AA-” by Fitch in the case of accounts in which funds are held for more than thirty (30) days, provided that PNC Bank shall be deemed to be an Eligible Institution for so long as it maintains (i) a short term unsecured debt obligations or commercial paper rating of at least “A-1” 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 and (ii) a long term unsecured debt obligations rating of at least “A-” by S&P, “A-1” by Moody’s and “A” by Fitch in the case of accounts in which funds are held for more than thirty (30) days.

"Enid Property" shall mean the Individual Property located at 3828 West Owen K Garriott, Enid, OK.

“Environmental Indemnity” shall mean that certain Environmental Indemnification Agreement, dated as of the date hereof, executed by Borrower and each Guarantor on a joint and several basis for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Environmental Law” shall have the meaning set forth in Section 2(b) of the Environmental Indemnity.

“Environmental Reports” shall mean those certain Phase I Environmental Site Assessments with respect to each Individual Property set forth on Schedule I attached hereto.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

“Event of Default” shall have the meaning set forth in Section 10.1(a) hereof.

ATLANTA 5579734.9

-7-

“Excess Cash Reserve Account” shall have the meaning set forth in Section 3.5 hereof.

“Excess Cash Reserve Fund” shall have the meaning set forth in Section 3.5 hereof.

“Exchange Act” shall have the meaning set forth in Section 11.2(a) hereof.

“Exchange Act Filing” shall have the meaning set forth in Section 11.2(a) hereof.

“Excluded Taxes” shall have the meaning set forth in Section 2.3.7(a) hereof.

“Extraordinary Expense” shall mean an extraordinary operating expense not set forth in the Approved Annual Budget.

“FIRREA” shall mean the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (as the same may have been or may hereafter be amended, restated, supplemented or otherwise modified).

“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.

“Flood Insurance Acts” shall have the meaning set forth in Section 7.1(a)(vii) hereof.

“Flood Insurance Policies” shall have the meaning set forth in Section 7.1(a)(vii) hereof.

“GAAP” shall mean generally accepted accounting principles in the United States of America as are in effect from time to time, and applied on a consistent basis both as to classification of items and amounts.

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

“Governmental Plan” shall have the meaning set forth in Section 4.1.10(b) hereof.

“Gross Income From Operations” shall mean, during any period, all cash income derived from the ownership and operation of the Property from whatever source, during such period, including, but not limited to, Rents, utility charges, escalations, forfeited security deposits, interest on credit accounts, service fees or charges, license fees, parking fees, rent concessions or credits, and other required pass-throughs but excluding (i) sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower to any Governmental Authority, (ii) refunds and uncollectible accounts, (iii) proceeds from sales of furniture, fixtures and equipment, (iv) Insurance Proceeds (other than business interruption or other loss of income insurance), (v) Awards, (vi) unforfeited security deposits, (vii) utility and other similar deposits, (viii) any disbursements to Borrower from the Reserve Funds or the Triggering Event Period Reserve Funds, and (ix) any payments from any other events not related to the ordinary course of operation of the Property.

“Guarantor” shall mean Cole Real Estate Income Strategy (Daily NAV) Operating Partnership, LP, a Delaware limited partnership, and any other Person guaranteeing any payment or performance obligation of Borrower in respect of the Loan following the date hereof, and any other Person providing any indemnity in respect of the Loan following the date hereof.

ATLANTA 5579734.9

-8-

“Guaranty” shall mean that certain Guaranty of Recourse Obligations of Borrower, dated as of the date hereof, from Guarantor to Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Hazardous Materials” shall have the meaning set forth in Section 2(d) of the Environmental Indemnity.

“Improvements” shall have the meaning set forth in the Granting Clauses of each Security Instrument with respect to each Individual Property.

“Indebtedness” shall mean, as to any Person at any time the sum (without duplication) of all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person, for, or in respect of: (i) borrowed money, (ii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility, (iii) reimbursement obligations (contingent or otherwise) under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device, (iv) any other transaction (including, without limitation forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements, or (v) any guaranty.

“Indemnified Parties” shall mean Lender (including Lender as holder of any Security Instrument, as mortgagee in possession, or as successor in interest to the owner of the Property by virtue of a foreclosure or acceptance of a deed in lieu of foreclosure), each Person, if any, who Controls, or is Controlled by, or is under common Control with Lender, each Servicer, any Person who may hold or acquire or will have held (either during the term of the Loan or as a part of or following a foreclosure or acceptance of a deed in lieu of foreclosure) a full or partial interest in the Loan (including, but not limited to, custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of other Persons), any receiver or other fiduciary appointed in a foreclosure or other Creditors Right Law proceeding, any Person who was involved in the origination or modification of the Loan, any Person in whose name the Lien of any Security Instrument is or will be recorded, each of their respective successors and assigns (other than any transferee of any Individual Property that is not Lender, a successor to Lender by merger, consolidation or acquisition of all or substantially all of the assets of Lender or a subsequent holder of the Note or the owner of an interest in the Note), and each of their respective directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, and subcontractors.

“Indemnified Taxes” shall mean any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority.

“Independent Director” shall mean a natural Person who:

(a)    is not at the time of initial appointment and has never been, and will not while serving as Independent Director be: (i) a stockholder (or other equity owner), director (with the exception of serving as the Independent Director of any Individual Borrower or SPC Party), officer, employee, partner, member (other than a “special member” or “springing member”), manager, attorney or counsel of any Individual Borrower, equity owners of any Individual Borrower or any Guarantor or any Affiliate of any Individual Borrower or any Guarantor; (ii) a creditor, customer, supplier, service provider (including provider of professional services) or other Person who derives any of its purchases or revenues from its activities with any Individual Borrower or any Guarantor, equity owners of any Individual Borrower or any Guarantor or any Affiliate of any Individual Borrower or any Guarantor; (iii) a member of the immediate family of any

ATLANTA 5579734.9

-9-

Person described in subsection (i) or subsection (ii) above that is a natural person; and (iv) any Person Controlling or under common Control with any Person described in subsection (i), subsection (ii) or subsection (iii) above; 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 least three (3) years of employment experience with CT Corporation, Corporation Service Company, Lord Securities Corporation, National Registered Agents, Inc., Stewart Management Company, or Wilmington Trust Company, or if none of these companies is then providing professional independent directors, another nationally recognized company acceptable to Lender and any applicable Rating Agencies, that is not an Affiliate of any Individual Borrower or any Guarantor and 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 an employee of such a company or companies at all times during his or her service as an Independent Director. 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 Borrower or SPC Party (provided such Affiliate does not or did not own a direct or indirect equity interest in Borrower or SPC Party) 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 Borrower or SPC Party 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 if such individual is a Professional Independent Director and such individual complies with the requirements of the previous sentence.

“Individual Borrower” shall have the meaning set forth in the introductory paragraph hereto, together with its successors and permitted assigns and as further defined in Section 13.27 hereof.

“Individual Property” shall mean each parcel of real property, the Improvements thereon and all personal property owned by Borrower and encumbered by a Security Instrument, and any part or portion thereof, together with all rights pertaining to such property and Improvements, as more particularly described in the Granting Clauses of each Security Instrument and referred to therein as the “Property”.

“Insolvency Opinion” shall mean the substantive non-consolidation opinion that may be required to be delivered by counsel to Borrower pursuant to Section 11.1(b)(i) hereof, reasonably satisfactory to Lender and the Rating Agencies, providing that in the event that any of the Specified Parties were to become a debtor in a case under the Bankruptcy Code, in a properly presented and competently argued case and based upon currently existing case law, the bankruptcy court or other court of competent jurisdiction applying the Law to the facts as properly found would not have valid legal grounds to disregard the separate identity of Borrower so that the assets of Borrower would be substantively consolidated with and become a part of any of the Specified Parties’ respective bankruptcy estates. For purposes of the Insolvency Opinion, the “Specified Parties” shall mean any party owning, directly or indirectly, more than forty-nine percent (49%) of the equity interests in Borrower and any Affiliated Manager. If Borrower is a recycled entity, the Insolvency Opinion shall address that issue in a manner satisfactory to Lender and the Rating Agencies.

ATLANTA 5579734.9

-10-

“Insurance Premiums” shall have the meaning set forth in Section 7.1(b) hereof.

“Insurance Proceeds” shall have the meaning set forth in Section 7.4(b) hereof.

“Interest Accrual Period” shall mean, with respect to any Payment Date, the period beginning on and including the first (1^st) day of the calendar month preceding each Payment Date through and including the last day of the calendar month preceding each Payment Date.

“Interest Bearing Accounts” shall have the meaning set forth in Section 12.2 hereof.

“Investor” shall mean any purchaser, transferee, assignee, Servicer, participant or investor in all or any portion of the Loan or any Securities.

“Land” shall have the meaning set forth in the Granting Clause of each Security Instrument with respect to each Individual Property.

“Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, executive order, injunction, writ, decree, bond judgment authorization or approval, Lien or award of or any settlement arrangement with any Governmental Authority.

“Lease” shall mean any lease, sublease or subsublease, letting, license, concession, occupancy agreement, 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 of the Land or any space in the Improvements at any Individual Property, and (a) every extension, renewal, replacement, modification, amendment, restatement or other agreement relating thereto (whether before or after the filing by or against Borrower of any petition for relief under any Creditors Rights Laws), and (b) all right title and interest of Borrower, its successors and assigns therein and thereunder, including, without limitation, any guaranty, letter of credit or other credit support given by any tenant or other Person to guarantee or secure the performance and observance of covenants to be performed by any other party thereto.

“Lease Termination Payments” shall mean all rents, additional rents and other payments made to Borrower in connection with any termination, rejection, cancellation, surrender, sale or other disposition of any Lease (including in any Bankruptcy Action), together with any unamortized tenant improvements or leasing commissions, lease buy-out or surrender payments, and any similar proceeds, and any settlement of claims of Borrower against third parties in connection with any Lease.

“Leasing Requirements” shall mean, with respect to any Lease that is not a Major Lease that such Lease (i) provides for rental rates reasonably comparable to existing local market rates for similar properties, (ii) is on commercially reasonable terms with unaffiliated third parties, and, (iii) does not contain any terms which would have a Material Adverse Effect.

“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 each Individual Property, or the construction, use, alteration or operation thereof, whether now or hereafter enacted and in force, and all Licenses 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 each Individual Property, including, without limitation,

ATLANTA 5579734.9

-11-

any which may (a) require repairs, modifications or alterations in or to any Individual Property, or (b) in any way limit the use and enjoyment thereof.

“Lender” shall have the meaning set forth in the introductory paragraph of this Agreement.

“Liabilities” shall mean any and all claims, demands, actions, proceedings, suits, judgments, awards, liabilities (including, without limitation, strict liabilities), losses, damages, fines, penalties, charges, fees, obligations, debts, disbursements, costs and expenses of any kind or nature whatsoever including, without limitation, amounts paid in settlement, punitive damages, foreseeable damages of whatever kind or nature, including litigation costs and reasonable attorneys’ fees and expenses, and reasonable attorneys’ fees and expenses imposed upon, incurred by, or asserted against any Indemnified Party or by the Underwriter Group, as applicable, in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not any such Indemnified Party or any member of the Underwriter Group, as applicable, shall be designated a party thereto.

“Licenses” shall have the meaning set forth in Section 4.1.25 hereof.

“Lien” shall mean, with respect to each Individual Property, any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting Borrower, such Individual Property, any portion thereof or any interest therein, whether voluntarily or involuntarily given, including, without limitation, any conditional sale or other title retention agreement, any financing lease, assignment or deposit arrangement 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 (including construction liens) and encumbrances (whether or not a lien or other encumbrance is created or exists at the time of filing).

“LLC” shall have the meaning set forth in Section 8.1(c) hereof.

“LLC Agreement” shall have the meaning set forth in Section 8.1(c) hereof.

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

“Loan Documents” shall mean, collectively, this Agreement, the Note, each Security Instrument, each Assignment of Leases, Assignment of Agreements, the Guaranty, the Environmental Indemnity, the Assignment of Management Agreement, the Lockbox Agreement, the Contribution Agreement, and all other documents executed and/or delivered by any Individual Borrower or Guarantor in connection with the Loan as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Loan to Value Ratio” shall mean a percentage calculated by Lender by multiplying (i) a fraction, the numerator of which is the outstanding principal balance of the Loan, and the denominator of which is the value of the Property taken as a whole based on a current Appraisal thereof, by (ii) one hundred percent (100%).

“Lockbox Account” shall have the meaning set forth in Section 3.1.1(a) hereof.

“Lockbox Address” shall have the meaning set forth in Section 3.1.1(a) hereof.

“Lockbox Agreement” shall have the meaning set forth in Section 3.1.1(a) hereof, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

ATLANTA 5579734.9

-12-

“Lockbox Bank” shall mean PNC Bank, National Association, provided that it remains an Eligible Institution, and any successor Eligible Institution or other Eligible Institution selected by Lender.

“Lockout Period” shall have the meaning set forth in Section 2.4.2 hereof.

“Major Lease” shall mean (a) any Single Tenant Lease, (b) any Lease which together with all other Leases to the same tenant and to any Affiliates of such tenant, (i) provides for gross annual rental income representing fifteen percent (15%) or more of the total annual rental income for any Individual Property, or (ii) covers fifteen percent (15%) or more of the total rentable space at any Individual Property, in the aggregate, or (iii) is with an Affiliate of Borrower, and (c) any instrument guaranteeing or providing credit support for any of the foregoing.

“Management Agreement” shall mean, collectively, (a) that certain Property Management and Leasing Agreement dated December 8, 2011 between Cole WG Reidsville NC, LLC and Manager; (b) that certain Property Management and Leasing Agreement dated March 15, 2013 between Cole DG Independence (23^rd ST.) MO, LLC and Manager; (c) that certain Property Management and Leasing Agreement dated April 29, 2013 between Cole KG Cedar Rapids IA, LLC and Manager; (d) that certain Property Management and Leasing Agreement dated May 2, 2013 between Cole NG Prescott AZ, LLC and Manager; (e) that certain Property Management and Leasing Agreement dated December 11, 2013 between Cole LO Fremont OH, LLC and Manager; (f) that certain Property Management and Leasing Agreement dated December 4, 2013 between Cole CV Wisconsin Rapids WI, LLC and Manager; (g) that certain Property Management and Leasing Agreement dated January 23, 2014 between Cole DG Gladwin MI, LLC and Manager; (h) that certain Property Management and Leasing Agreement dated January 23, 2014 between Cole DG Lexington MI, LLC and Manager; and (i) that certain Property Management and Leasing Agreement dated June 30, 2014 between ARCP MT Enid OK, LLC and Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms and conditions of this Agreement.

“Manager” shall mean (i) CREI ADVISORS, LLC, an Arizona limited liability company, or (ii) such other entities selected as the manager of any applicable Individual Property in accordance with the terms of this Agreement or the other Loan Documents.

“Material Action” shall mean, with respect to any entity, (i) to consolidate or merge such entity with or into any Person, except as expressly permitted by the Loan Documents, or (ii) to sell all or substantially all of the assets of such entity, except as expressly permitted by the Loan Documents, or (iii) to the fullest extent permitted by Law, to dissolve or liquidate such entity, or (iv) to amend the organizational documents of such entity with respect to any matter required to be set forth therein by Article VIII hereof, or (v) any Bankruptcy Action, or (vi) to take action in furtherance of any of the foregoing actions.

“Material Adverse Effect” shall mean a material adverse effect on (i) the Property, (ii) title to any Individual Property, (iii) the current ability of the Property to generate net cash flow sufficient to service the Loan, (iv) the business, profits, operations or financial condition of Borrower or Guarantor, taken as a whole, (v) the enforceability, validity, perfection or priority of the lien any Security Instrument or the other Loan Documents, (vi) the ability of Borrower to perform its obligations under any Security Instrument or the other Loan Documents, (vii) the current principal use of any Individual Property, or (viii) the ability of Guarantor to perform its obligations under the Guaranty.

“Material Agreements” shall mean, collectively, all contracts and agreements to which any Individual Borrower is a party relating to the ownership, management, development, use, operation, leasing,

ATLANTA 5579734.9

-13-

maintenance, repair or improvement of each Individual Property (other than the Management Agreement, the Leases and the REAs).

“Maturity Date” shall mean the Scheduled Maturity Date set forth in Section 2.4.2 hereof, 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 non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Debt 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 plus any additional rate of interest that is agreed to be paid by Borrower and resulting from any charges of interest or in the nature of interest paid or to be paid in connection with the Loan including, without limitation, all amounts paid by or on behalf of Borrower to Lender pursuant to the terms of the Loan Documents.

“Member” shall have the meaning set forth in Section 8.1(c)(i) hereof.

“Mezzanine Borrower(s)” shall have the meaning set forth in Section 11.6 hereof.

“Mezzanine Lender” shall mean PNC Bank, and any subsequent owner and holder of the Mezzanine Loan.

“Mezzanine Loan(s)” shall have the meaning set forth in Section 11.6 hereof.

“Monthly Debt Service Payment Amount” shall have the meaning set forth in Section 2.2.3 hereof.

“Monthly Insurance Premium Deposit” shall have the meaning set forth in Section 9.2 hereof.

“Monthly Reserve Fund Deposits” shall mean all deposits required to be made by Borrower to the Reserve Funds on a monthly basis pursuant to Article IX hereof.

“Monthly Tax Deposit” shall have the meaning set forth in Section 9.2 hereof.

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

“Mortgage Loan” shall have the meaning set forth in Section 11.6 hereof.

“Net Cash Flow” shall mean 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 Cash Flow Schedule” shall have the meaning set forth in Section 5.10(b) hereof.

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

“Net Proceeds” shall have the meaning set forth in Section 7.4(b) hereof.

“Net Proceeds Deficiency” shall have the meaning set forth in Section 7.4(b)(vi) hereof.

“Non-U.S. Entity” shall have the meaning set forth in Section 2.3.7(b) hereof.

ATLANTA 5579734.9

-14-

“Note” shall mean that certain Promissory Note dated as of the date hereof in the principal amount of TWENTY MILLION THREE HUNDRED FOUR THOUSAND AND NO/100 DOLLARS ($20,304,000.00), made by Borrower in favor of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Officers’ Certificate” shall mean a certificate delivered to Lender by Borrower or any Guarantor, as applicable, which is signed by a Responsible Officer of Borrower (or its manager) or any Guarantor, as applicable.

“Official Body” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

“Open Period Start Date” shall have the meaning set forth in Section 2.4.2 hereof.

“Operating Account” shall mean the operating account of Borrower (i) established in the name of Borrower (or established in the name of one or more Individual Borrowers) and (ii) maintained by Borrower (or maintained by Guarantor acting solely on behalf of Borrower), for the purposes set forth under this Agreement. For the avoidance of doubt, no funds other than funds belonging to Borrower shall be deposited into the Operating Account.

“Operating Expenses” shall mean the total of all cash expenditures of whatever kind incurred by or on behalf of Borrower (other than expenditures incurred by a tenant pursuant to its Lease) relating to the operation, maintenance and management of each Individual Property that are incurred on a regular monthly or other periodic basis, including without limitation, utilities, ordinary repairs and maintenance, insurance, License fees, property taxes and assessments, advertising expenses, 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, amortization (i.e., depreciation of lease assets), permitted prepayments of principal, Debt Service, Capital Expenditures, actual tenant improvement and leasing commission expenditures, and Monthly Reserve Fund Deposits.

“Optional Lender Forbearance” shall have the meaning set forth in Section 2.5 hereof.

“Other Charges” shall mean, with respect to each Individual Property, all 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 any Individual Property, now or hereafter levied or assessed or imposed against such Individual Property.

“Other Obligations” shall have the meaning set forth in Section 2.02 of each Security Instrument.

“Other Taxes” shall mean all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to this Agreement or any other Loan Document.

ATLANTA 5579734.9

-15-

“Payment Date” shall mean the first (1^st) day of each calendar month during the term of the Loan, or if such day is not a Business Day, the immediately succeeding Business Day.

“Permitted Encumbrances” shall mean, with respect to each Individual Property, collectively, (a) the Liens and security interests created by the Loan Documents, (b) all Liens and other matters disclosed in the Title Insurance Policy relating to such Individual Property, (c) Liens, if any, for Taxes 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 this Agreement and any liens that the tenants under such Leases are allowed to suffer, contest or create pursuant to the express terms of such Leases, but only to the extent and for the duration so expressly allowed; and (e) such other title and survey exceptions which do not have a Material Adverse Effect or which Lender has approved or may approve in writing in Lender’s sole discretion.

“Permitted Equipment Leases” shall mean equipment leases or other similar instruments entered into by Borrower or Manager with respect to the Personal Property; provided, that, in each case, such equipment leases or similar instruments (i) are entered into on commercially reasonable terms and conditions in the ordinary course of Borrower’s business and (ii) relate to Personal Property which is (A) used in connection with the operation and maintenance of the applicable Individual Property in the ordinary course of Borrower’s business and (B) readily replaceable without material interference or interruption to the operation of the applicable Individual Property.

“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:

(a)    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 (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, not have an “r” highlighter affixed to their rating, (iii) 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 (iv) not be subject to liquidation prior to their maturity;

(b)    Federal Housing Administration debentures;

(c)    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 Student Loan Marketing 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 (i) have a predetermined fixed dollar of principal due at maturity

ATLANTA 5579734.9

-16-

that cannot vary or change, (ii) if rated by S&P, not have an “r” highlighter affixed to their rating, (iii) 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 (iv) not be subject to liquidation prior to their maturity;

(d)    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 (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, not have an “r” highlighter affixed to their rating, (iii) 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 (iv) not be subject to liquidation prior to their maturity;

(e)    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 (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, not have an “r” highlighter affixed to their rating, (iii) 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 (iv) not be subject to liquidation prior to their maturity;

(f)    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 (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, not have an “r” highlighter affixed to their rating, (iii) 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 (iv) not be subject to liquidation prior to their maturity;

(g)    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 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 (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or

ATLANTA 5579734.9

-17-

change, (ii) if rated by S&P, not have an “r” highlighter affixed to their rating, (iii) 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 (iv) not be subject to liquidation prior to their maturity;

(h)    units of taxable money market funds or mutual funds, which funds are regulated investment companies, seek to maintain a constant net asset value per share, 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 or mutual funds; and

(i)    any other security, obligation or investment which has been approved as a Permitted Investment in writing by Lender and, in the event that the Loan or any interest therein is included in a Securitization, by Rating Agency Confirmation;

provided, however, that no obligation or security shall be a Permitted Investment if (i) such obligation or security evidences a right to receive only interest payments or (ii) 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 Transfer” shall mean each of the following:

(a)    Permitted Encumbrances;

(b)    All Transfers of worn out or obsolete furnishings, fixtures or equipment that are promptly replaced with property of equivalent value and functionality;

(c)    All Leases permitted pursuant to Section 5.17 hereof;

(d)    A Transfer of the Property and assumption of the Loan pursuant to Section 6.2 hereof; and

(e)    Any Transfer permitted by Section 6.6 hereof.

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

“Personal Property” shall have the meaning set forth in the Granting Clauses of the Security Instrument with respect to each Individual Property.

“Plan” shall have the meaning set forth in Section 4.1.10(a) hereof.

“Plan Assets” shall have the meaning set forth in Section 4.1.10(a) hereof.

“PNC Bank” shall mean PNC Bank, National Association, a national banking association.

“Policies” shall have the meaning specified in Section 7.1(b) hereof.

“Possible Release Property” shall mean any of the following Individual Properties:

ATLANTA 5579734.9

-18-

Individual Property

10601 East 23rd St., Independence, MO

30 Four Oaks Dr. SW, Cedar Rapids, IA

1470 Gail Gardner Way, Prescott, AZ

1105 N. State Street, Gladwin, MI

6908 Lakeshore Road, Lexington, MI

3828 West Owen K Garriott, Enid, OK

For purposes hereof, “Possible Release Properties” shall mean all of the Individual Properties listed above.

“Prepayment Consideration” shall have the meaning set forth in Section 2.4.2 hereof.

“Prepayment Date” shall have the meaning set forth in Section 2.4.1 hereof.

“Prohibited Governmental Transactions” shall have the meaning set forth in Section 4.1.10(b) hereof.

“Prohibited Transaction” shall have the meaning set forth in Section 4.1.10(a) hereof.

“Property” shall mean, collectively, each and every Individual Property which is subject to the terms of this Agreement, including each parcel of real property, the Improvements thereon and all Personal Property owned by Borrower and encumbered by each Security Instrument, and any part or portion thereof, together with all rights pertaining to such property and Improvements, as more particularly described in the Granting Clauses of each Security Instrument with respect to each Individual Property and referred to therein as the “Property”.

“Property Condition Report” shall mean the reports with respect to each Individual Property set forth on Schedule II attached hereto, or any new or updated report with respect to any Individual Property prepared by a company satisfactory to Lender regarding the physical condition of any Individual Property, satisfactory in form and substance to Lender in its sole discretion.

“Provided Information” shall have the meaning set forth in Section 11.1(a) hereof.

“Qualified Replacement Lease” shall mean a renewal of or a replacement for a then existing Lease for space in the Property or a Lease which is for vacant space in the Property, provided each such Lease must (i) be with a tenant reasonably satisfactory to Lender and (ii) comply with Section 5.17 hereof.

“Rating Agencies” shall mean (i) prior to the inclusion of the Loan or any interest therein in a Securitization, each of Moody’s and Fitch, and any other nationally-recognized statistical rating organization (as identified by the Securities and Exchange Commission) which has been designated by Lender, and (ii) if the Loan or any interest therein is included or is anticipated to be included in a Securitization, each of S&P, Moody’s, and Fitch, and any other nationally-recognized statistical rating organization (as identified by the Securities and Exchange Commission) to the extent any of the foregoing have been engaged by Lender or its designee in connection with, or in anticipation of, any Securitization.

ATLANTA 5579734.9

-19-

“Rating Agency Condition” shall be deemed to exist if (i) any Rating Agency fails to respond to any request for a Rating Agency Confirmation with respect to any applicable matter or otherwise elects (orally or in writing) not to consider any applicable matter or (ii) Lender (or its Servicer) is not required to and/or elects not to obtain (or cause to be obtained) a Rating Agency Confirmation with respect to any applicable matter, in each case, pursuant to and in compliance with any applicable pooling and servicing agreement(s) relating to the Loan.

“Rating Agency Confirmation” shall mean (i) prior to a Securitization or if the Rating Agency Condition exists, that Lender has (in consultation with the Rating Agencies (if required by Lender)) approved the matter in question in writing based upon Lender’s good faith determination of applicable Rating Agency standards and criteria and/or the servicing standard under any applicable pooling and servicing agreement(s) relating to the Loan, and (ii) from and after a Securitization (to the extent the Rating Agency Condition does not exist), a written affirmation from each of the Rating Agencies (obtained at Borrower’s sole cost and expense) that the credit rating of the Securities by such Rating Agency immediately prior to the occurrence of the event with respect to which such Rating Agency Confirmation is sought will not be qualified, downgraded or withdrawn as a result of the occurrence of such event, which affirmation may be granted or withheld in such Rating Agency’s sole and absolute discretion.

“REA” shall mean any reciprocal easement agreement or similar agreement now or hereafter benefiting or burdening any Individual Property.

“Real Property Value to Loan Ratio” shall mean the ratio (expressed as a percentage), in which (A) the numerator is the fair market value of the interests in real property which secure the Loan, and (B) the denominator is the adjusted issue price of the Loan. For purposes of this definition, (i) “interests in real property” and “real property” shall have the meanings assigned to such terms by 26 C.F.R. §§ 1.856-3(c) and (d), and (ii) “adjusted issue price” shall have the meaning assigned to such term by 26 C.F.R. § 1.1275-1(b). For purposes of this definition, the fair market value of the interests in real property which secure the Loan shall be determined by Lender, in Lender’s sole discretion, by any commercially reasonable method permitted to a REMIC Trust under the Code and, to the extent permitted to a REMIC Trust under the Code, the fair market value of the interests in real property for purposes of Section 7.4(d) hereof may take into account any planned Restoration. Notwithstanding the foregoing, unless Lender determines that applicable REMIC regulations or other applicable authority require a different valuation method, Lender shall determine clause (A) of the Real Property Value to Loan Ratio by capitalizing net operating income for the interests in real property which secure the Loan using a capitalization rate or range of capitalization rates that Lender has no reason to believe is incorrect.

“Registrar” shall have the meaning set forth in Section 11.5 hereof.

“Regulation AB” shall mean Regulation AB under the Securities Act and the Exchange Act, as such Regulation may be amended, modified or replaced.

“Release” shall have the meaning set forth in Section 2(e) of the Environmental Indemnity.

"Remaining Enid Repayment Amount" shall have the meaning set forth in Section 2.4.5 hereof.

“REMIC Opinion” shall mean an opinion of counsel in form and substance satisfactory to Lender and to the Rating Agencies, stating that the transaction which requires such opinion to be delivered will not (1) cause any REMIC Trust formed pursuant to a Securitization to fail to maintain its status as a REMIC Trust, or (2) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation

ATLANTA 5579734.9

-20-

Section 1.1001-3(b), or (3) cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code.

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

“Rent Roll” shall mean a written statement from Borrower, in form and substance satisfactory to Lender, detailing the names of all tenants of each Individual Property, the portion of each Individual Property occupied by each tenant, the base rent and any other charges payable under each Lease, the term of each Lease, the beginning date and expiration date of each Lease, whether any tenant is in monetary default under its Lease (and detailing the nature of such default), and any other information as is required by Lender.

“Rents” shall mean, with respect to each Individual Property all rents (including, without limitation percentage rents), ground rents, additional rents, rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents (including, without limitation, damages and other claims arising from any rejection by a tenant of its Lease under any Creditors Rights Law), revenues, issues, royalties and profits from the Land (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, deposits (including, without limitation, cash, letters of credit or securities deposited under any Lease to secure the performance by the lessee of its obligations thereunder, utility deposits and other deposits), accounts, cash, charges for services rendered, 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 any Individual Borrower (or to Manager for the account of any Individual Borrower), under any Lease, all Lease Termination Payments, all other consideration of whatever form or nature received by or paid to or for the account of or benefit of any Individual Borrower or its agents or employees from any and all sources arising from or attributable to the Land or the Improvements, all proceeds, if any, payable to any Individual Borrower from business interruption or other loss of income insurance relating to the use, enjoyment or occupancy of the Land and/or the Improvements (whether paid or accruing before or after the filing by or against any Individual Borrower of any petition for relief under any Creditors Rights Laws), and all proceeds or streams of payment payable to any Individual Borrower from the sale or other disposition of any Lease or any Rents.

“Reportable Compliance Event” shall mean that any Covered Entity becomes a Sanctioned Person, or is indicted, arraigned, investigated or custodially detained, or receives an inquiry from regulatory or law enforcement officials, in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or self-discovers facts or circumstances implicating any aspect of its operations with the actual or possible violation of any Anti-Terrorism Law.

“Required Disbursement Amounts” shall mean, for any given Disbursement Date, the amounts required to be disbursed under Section 3.3.1(a) through Section 3.3.1(e) hereof, or upon an Optional Lender Forbearance, the amounts required to be disbursed under Section 3.3.2(a) through Section 3.3.2(e) hereof.

“Reserve Accounts” shall mean the Tax and Insurance Escrow Account, the Early Lease Termination Reserve Account, or any other escrow or reserve Account established pursuant to Article IX hereof.

“Reserve Funds” shall mean the Tax and Insurance Escrow Fund, the Early Lease Termination Reserve Fund, or any other escrow or reserve fund established pursuant to Article IX hereof.

ATLANTA 5579734.9

-21-

“Responsible Officer” shall mean with respect to a Person, the chairman of the board, president, chief operating officer, chief financial officer, treasurer, or vice president of such Person (or of the manager, general partner or similar authorized party of such Person, as applicable) or such other similar officer of such Person reasonably acceptable to Lender and appropriately authorized by the applicable Person in a manner reasonably acceptable to Lender.

“Restoration” shall have the meaning set forth in Section 7.2 hereof.

“Restoration Threshold” shall mean, with respect to each Individual Property, an amount equal to five percent (5.0%) of the Allocated Loan Amount for such Individual Property.

“Restricted Party” shall mean collectively, each Individual Borrower, any SPC Party, any Guarantor and Sponsor.

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

“Sale or Pledge” shall mean a voluntary or involuntary (including, but not limited to, any levy, seizure or attachment) sale, conveyance, assignment, alienation, mortgage, hypothecation, encumbrance, grant of a Lien on, a security interest or option in, pledge, repurchase, reverse repurchase or other transfer or disposal of a legal or beneficial interest (directly or indirectly, whether by operation of Law or otherwise, and whether or not for consideration or of record) other than (i) Leases for actual occupancy by a space tenant thereunder, and (ii) utility easements granted in the ordinary course of business that have no Material Adverse Effect.

“Sanctioned Country” shall mean a country subject to a sanctions program maintained by any Compliance Authority.

“Sanctioned Person” shall mean any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person or entity, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any order or directive of any Compliance Authority or otherwise subject to, or specially designated under, any sanctions program maintained by any Compliance Authority.

“Scheduled Maturity Date” shall have the meaning set forth in Section 2.4.2 hereof.

“Secondary Market Transactions” shall have the meaning set forth in Section 11.1 hereof.

“Securities” shall have the meaning set forth in Section 11.1 hereof.

“Securities Act” shall have the meaning set forth in Section 11.2(a) hereof.

“Securitization” shall have the meaning set forth in Section 11.1 hereof.

“Security Instrument” shall mean, with respect to each Individual Property, the first priority Mortgage, or Open-end Mortgage, or Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of the date hereof, executed and delivered by each Individual Borrower in favor of Lender as security for the payment of the Debt and the performance of the Other Obligations and encumbering the each Individual Property, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Servicer” shall have the meaning set forth in Section 11.4 hereof.

ATLANTA 5579734.9

-22-

“Servicing Fee” shall have the meaning set forth in Section 11.4 hereof.

“Severed Loan Documents” shall have the meaning set forth in Section 10.2(c) hereof.

“Single Purpose Entity” shall have the meaning set forth in Section 8.1(d) hereof.

“Single Tenants” shall mean the following:

Property	Single Tenant
603 South Scales Street, Reidsville, NC	Walgreen Co.
10601 East 23rd St., Independence, MO	Dolgencorp, LLC
30 Four Oaks Dr. SW, Cedar Rapids, IA	Kum & Go, L.C.
1470 Gail Gardner Way, Prescott, AZ	Vitamin Cottage Natural Food Markets, Inc.
1952 North State Route 53, Fremont, OH	Lowe’s Home Centers, Inc.
2410 South 8th St., Wisconsin Rapids, WI	Wisconsin CVS Pharmacy, L.L.C.
1105 N. State Street, Gladwin, MI	Dolgencorp, LLC
6908 Lakeshore Road, Lexington, MI	Dolgencorp, LLC

“Single Tenant Lease” shall mean each of the following:

Property	Single Tenant Lease
603 South Scales Street, Reidsville, NC	That certain Lease dated February 12, 2008 between ADP REIDSVILLE, LLC, as landlord, and WALGREEN CO., as tenant, as amended by that certain First Amendment to Lease dated April 10, 2008, and that certain Second Amendment to Lease dated October 10, 2011.
10601 East 23rd St., Independence, MO	That certain Lease dated January 9, 2012 between CGP ACQUISITION & DEVELOPMENT, LLC, as landlord, and DOLGENCORP, LLC, as tenant, as amended by Lease Modification Agreement #1 dated January 29, 2013.
30 Four Oaks Dr. SW, Cedar Rapids, IA	That certain Lease dated December __, 2011 between BBR OIL II, LLC, as landlord, and KUM & GO, L.C., as tenant.

ATLANTA 5579734.9

-23-

Property	Single Tenant Lease
1470 Gail Gardner Way, Prescott, AZ	That certain Lease dated February 20, 2012 between VC PRESCOTT I, LLC, as landlord, and VITAMIN COTTAGE NATURAL FOOD MARKETS, INC., as tenant, as amended by that certain First Amendment to Lease dated April 4, 2013.
1952 North State Route 53, Fremont, OH	That certain Lease dated July 12, 1995 between FANGBONER ASSOCIATES LTD., as landlord, and LOWE'S HOME CENTERS, INC., as tenant, as amended by that certain First Amendment to Lease dated June 10, 2011.
2410 South 8th St., Wisconsin Rapids, WI	That certain Lease dated December 2, 2013 between COLE CV WISCONSIN RAPIDS WI, LLC as landlord, and WISCONSIN CVS PHARMACY, L.L.C., as tenant.
1105 N. State Street, Gladwin, MI	That certain Lease dated July 23, 2012 between MIDWEST V, LLC, as landlord, and DOLGENCORP, LLC, as tenant, as amended by that certain Lease Commencement Date Agreement – Lease Modification Agreement #1 dated September 3, 2013.
6908 Lakeshore Road, Lexington, MI	That certain Lease dated July 31, 2012 between MIDWEST V, LLC, as landlord, and DOLGENCORP, LLC, as tenant, as amended by that certain Lease Commencement Date Agreement – Lease Modification Agreement #1 dated September 3, 2013.

“SPC Party” shall have the meaning set forth in Section 8.1(b) hereof.

“Special Member” shall have the meaning set forth in Section 8.1(c)(i) hereof.

“Sponsor” shall mean Cole Real Estate Income Strategy (Daily NAV), Inc., a Maryland corporation.

“State” shall mean, with respect to each Individual Property the State or Commonwealth in which the Land (as defined in each Security Instrument with respect to each Individual Property) is located.

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

ATLANTA 5579734.9

-24-

“Tax and Insurance Escrow Account” shall have the meaning set forth in Section 9.2 hereof.

“Tax and Insurance Escrow Fund” shall have the meaning set forth in Section 9.2 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.

“TC Cap” shall have the meaning set forth in Section 7.1(l) hereof.

“Terminating Tenant” shall have the meaning set forth in Section 9.3 hereof.

“Terrorism Coverage” shall have the meaning set forth in Section 7.1(l) hereof.

“TILC Costs” shall mean (a) customary and reasonable third party tenant improvement costs and expenses actually incurred by Borrower and (b) customary and reasonable leasing commissions paid to any management or brokerage company in connection with any Qualified Replacement Lease.

“Title Insurance Policy” shall mean, with respect to each Individual Property, any ALTA mortgagee title insurance policy in form and substance satisfactory to Lender (or, if the State does not permit the issuance of such ALTA policy, such form as shall be permitted in the State and satisfactory to Lender) issued on or after the date hereof by a title insurance company satisfactory to Lender with respect to such Individual Property and insuring the Lien of each Security Instrument encumbering such Individual Property, with endorsements thereto as to such matters as Lender may designate (provided that such endorsements are available in the state where the applicable Individual Property is located).

“Transfer” shall mean any Sale or Pledge of the Property (or any Individual Property) or of any legal or beneficial interest therein, or any Sale or Pledge of an interest in any Restricted Party. Without limiting the generality of the foregoing, a Transfer is deemed to include: (a) an installment sales agreement wherein Borrower or any Individual Borrower agrees to sell the Property, or any Individual Property, for a price to be paid in installments; (b) an agreement by Borrower or any Individual Borrower leasing all or a substantial part of the Property or any Individual Property for other than actual occupancy by a space tenant thereunder; (c) a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s or any Individual Borrower’s right, title and interest in and to any Leases or any Rents (other than pursuant to the Assignment of Leases); (d) 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; (e) 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; (f) 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 (g) 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.

“Transferee” shall have the meaning set forth in Section 6.2(e) hereof.

ATLANTA 5579734.9

-25-

“Treasury Rate” shall mean the yield calculated by the linear interpolation of the yields, as reported in Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant Maturities for the week ending prior to the Prepayment Date, of U.S. Treasury constant maturities with maturity dates (one longer and one shorter) most nearly approximating the Open Period Start Date. (In the event Release H.15 is no longer published, Lender shall select a comparable publication to determine the Treasury Rate.) Lender shall notify Borrower of the amount and the basis of determination of the required Prepayment Consideration.

“TRIA” shall have the meaning set forth in Section 7.1(l) hereof.

“Triggering Event” shall mean the earlier to occur of: (a) an Event of Default, (b) the date on which the Debt Service Coverage Ratio for the immediately preceding two (2) calendar quarters is less than 1.20 to 1.00.

“Triggering Event Period” shall mean each period commencing upon the date on which a Triggering Event occurs and ending on the earlier to occur of (a) the Payment Date following the date on which a Triggering Event Termination occurs, or (b) the date upon which the Debt has been paid and satisfied in full and the Other Obligations have been performed (other than contingent obligations which survive such payment and satisfaction).

“Triggering Event Period Reserve Accounts” shall mean the Excess Cash Reserve Account.

“Triggering Event Period Reserve Funds” shall mean the Excess Cash Reserve Fund.

“Triggering Event Termination” shall mean, with respect to any Triggering Event Period, the earliest to occur of: (a) if such Triggering Event was triggered by an Event of Default, Borrower’s cure of such Event of Default and Lender’s acceptance of such cure (which cure Lender is not obligated to accept and may reject or accept in its sole and absolute discretion, unless required by Law), prior to Lender accelerating the Debt and exercising any of its remedies under the Loan Documents, (b) if such Triggering Event was triggered by a Debt Service Coverage Ratio calculation, the occurrence of the Debt Service Coverage Ratio being at least 1.25 to 1.00 for six (6) consecutive calendar months; provided, however, that any such Triggering Event Termination shall be subject to the condition that no Event of Default shall have occurred and be continuing.

“UCC” or “Uniform Commercial Code” shall mean, with respect to each Individual Property, the Uniform Commercial Code as in effect in the state where the Land is located; provided, however, the UCC in effect in the Commonwealth of Pennsylvania shall govern the Account Collateral.

“Underwriter Group” shall mean any and all of the following Persons: (i) Lender (and for purposes of this definition, Lender shall include its officers and directors), (ii) the Affiliate of PNC Bank that has filed any registration statement relating to any Securitization, if applicable, each of its directors, each of its officers who have signed any such registration statement and each Person who controls the Affiliate within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, (iii) PNC Capital Markets LLC, a Pennsylvania limited liability company, each of its directors and each Person who controls PNC Bank within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act and (iv) PNC Bank, each of its directors and each Person who controls PNC Bank within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act.

“Underwritten Net Cash Flow” shall mean Underwritten Net Operating Income, adjusted to reflect the following:

ATLANTA 5579734.9

-26-

(i)    normalized capital expenditures in an amount equal to the product obtained by multiplying $0.15 by the aggregate number of rentable square feet of space at the Property;

(ii)    normalized tenant improvement costs and leasing commissions equal to the product obtained by multiplying $0.55 by the aggregate number of square feet of space at the Property; and

(iii)    adjustments for non-recurring or extraordinary items.

“Underwritten Net Operating Income” shall mean for any period the amount obtained by subtracting Operating Expenses from Gross Income From Operations, and then applying the following adjustments:

(a)    Gross Income From Operations will be adjusted to exclude:

(i)    Rents from any tenant subject to any Bankruptcy Action that has not affirmed its Lease in the applicable bankruptcy proceeding pursuant to a final, non-appealable order of a court of competent jurisdiction;

(ii)    Rents from any tenant that is in arrears in the payment of Rent for more than ninety (90) days;

(iii)    [intentionally omitted];

(iv)    Rents from any tenant that is not in occupancy of, or not open for business at its demised premises (unless such tenant, or any entity which has guaranteed the obligations of such tenant under its Lease, has a long term issuer credit rating that is BBB- or better by S&P (or, if not rated by S&P, a comparable investment grade rating from another Rating Agency)), or from any tenant that has not commenced paying full unabated Rent pursuant to its Lease;

(v)    Rents from any temporary or month-to-month tenant;

(vi)    Rents from any tenant which is an Affiliate of Borrower;

(vii)    Rents paid more than one (1) month in advance;

(viii)    Lease Termination Payments;

(ix)    forfeited security deposits;

(x)    interest on credit accounts;

(xi)    rent concessions; and

(xii)    License fees.

(b)    Gross Income From Operations will be adjusted to reflect:

(i)    any contractual adjustments to Rent expected to occur within the twelve (12) month period following the date of calculation;

ATLANTA 5579734.9

-27-

(ii)    [intentionally omitted]; and

(iii)    adjustments for non-recurring or extraordinary items.

(c)    Operating Expenses will be adjusted to reflect:

(i)    [intentionally omitted];

(ii)    the greater of (x) the actual management fees paid to Manager for the most recent trailing twelve (12) calendar months and (y) two (2.0%) percent of Gross Income from Operations; and

(iii)    adjustments for non-recurring or extraordinary items.

“USA Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (October 26, 2001), as the same has been, or shall hereafter be amended, renewed, extended or replaced.

“U.S. Obligations” shall mean (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged and which are not subject to prepayment, call or early redemption, (ii) other non-callable “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended which (a) will not result in a reduction, downgrade or withdrawal of the ratings for the certificates or any class thereof issued in connection with a Securitization, (b) are then outstanding and (c) are then being generally accepted by the Rating Agencies without any reduction, downgrade or withdrawal of the ratings for the certificates or any class thereof issued in connection with a Securitization or (iii) other non-callable instruments, which (w) if a Securitization has occurred, will not cause the REMIC Trust formed pursuant to such Securitization to fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code, (x) will not result in a reduction, downgrade or withdrawal of the ratings for the certificates or any class thereof issued in connection with a certificate, (y) are then outstanding and (z) are then being generally accepted by the Rating Agencies without any reduction, downgrade or withdrawal of the ratings for the certificates or any class thereof issued in connection with a Securitization.

“Vacated Space” shall have the meaning set forth in Section 9.3.1 hereof.

“Yield Maintenance Premium” shall mean an amount determined by Lender equal to (a) the present value, as of the Prepayment Date, of the remaining scheduled payments of principal and interest from the Prepayment Date through March 31, 2021 (including any balloon payment that would be due pursuant to the terms hereof) determined by discounting such payments at a rate which, when compounded monthly, is equivalent to the Treasury Rate plus 50 basis points when compounded semi-annually, less (b) the principal portion of the Loan prepaid.

“Zoning Regulations” shall have the meaning set forth in Section 4.1.11 hereof.

“Zoning Reports” shall mean those certain zoning reports with respect to each Individual Property set forth on Schedule III attached hereto.

Section 1.2Principles of Construction.

All references to sections and exhibits are to sections and exhibits in or to this Agreement unless otherwise specified. All uses of the word “including” shall mean “including, without limitation” unless the

ATLANTA 5579734.9

-28-

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.

II.GENERAL TERMS

Section 2.1The Loan.

2.1.1.Agreement to Lend and Borrow. Subject to and upon the terms and conditions set forth in this Agreement, 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 borrowing hereunder in respect of the Loan and no amount borrowed and repaid hereunder in respect of the Loan may be reborrowed.

2.1.3.The Note, Security Instrument and Other Loan Documents. The Loan shall be evidenced by the Note and secured by each Security Instrument, each Assignment of Leases and the other Loan Documents.

2.1.4.Use of Proceeds. Borrower shall use the proceeds of the Loan to (a) acquire the Property or to repay and discharge any existing loans relating to the Property, (b) pay all past due Basic Carrying Costs, if any, in respect of the Property, (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 acquisition of the Property or the closing of the Loan, as approved by Lender, (e) fund any working capital requirements of the Property, as approved by Lender and (f) distribute the balance, if any, to Borrower.

Section 2.2Interest Rate and Payments.

2.2.1.Interest Generally; Usury.

(a)Except as herein provided with respect to interest accruing at the Default Rate, interest on the outstanding principal balance of the Loan shall accrue at the Applicable Interest Rate from (and including) the Closing Date to (but excluding) the Maturity Date.

(b)This Agreement and the Note 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 (but not subject to any 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

ATLANTA 5579734.9

-29-

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.

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 period for which the calculation is being made by (b) a daily rate based on a three hundred sixty (360) day year by (c) the outstanding principal balance of the Loan. The accrual period for calculating interest due on each Payment Date shall be the Interest Accrual Period immediately prior to such Payment Date. Borrower understands and acknowledges that such interest accrual requirement results in more interest accruing on the Loan than if either (i) a thirty (30) day month and a three hundred sixty (360) day year or (ii) the actual number of days in a month and a three hundred and sixty five (365) day year were used to compute the accrual of interest on the Loan.

2.2.3.Payments Before Maturity Date; Monthly Debt Service Payment Amount. Borrower shall pay to Lender: (a) unless the Closing Date occurs on the first (1^ST) day of a calendar month, on the Closing Date, an amount equal to interest only at the Applicable Interest Rate on the outstanding principal balance of the Loan from the Closing Date up to and including September 30, 2014, calculated by multiplying (i) the actual number of days elapsed during such period by (ii) a daily rate based on a three hundred sixty (360) day year by (iii) the outstanding principal balance of the Loan on the Closing Date and (b) on the Payment Date occurring in November, 2014 and on each Payment Date thereafter up to but not including the Maturity Date, an amount equal to interest only at the Applicable Interest Rate, calculated by multiplying (i) the actual number of days elapsed in each Interest Accrual Period by (ii) a daily rate based on a three hundred sixty (360) day year by (iii) the outstanding principal balance of the Loan during each Interest Accrual Period (the “Monthly Debt Service Payment Amount”).

2.2.4.Payment on Maturity Date. Borrower shall pay to Lender on the Maturity Date the Debt, including but not limited to, the outstanding principal balance of the Loan, all accrued and unpaid interest thereon through the end of the Interest Accrual Period immediately prior to the Maturity Date and all other amounts due hereunder and under the Note, each Security Instrument and the other Loan Documents.

2.2.5.Payments After Default. Upon the occurrence and during the continuance of an Event of Default (including, without limitation, failure to repay the Debt on the Maturity Date), interest on the outstanding principal balance of the Loan and, to the extent permitted by Law, overdue interest and other amounts due in respect of the Loan, shall accrue at the Default Rate, calculated from the date such payment was due without regard to any grace or cure periods contained herein. Interest at the Default Rate shall be computed from the occurrence of the Event of Default until the earlier of the date such Event of Default has ceased to exist or the date of actual receipt and collection of the Debt in full. To the extent permitted by applicable Law, interest at the Default Rate shall be added to the Debt, shall itself accrue interest at the same rate as the Loan and shall be secured by each Security Instrument. This paragraph shall not be construed as an agreement or privilege to extend the date of the payment of the Debt, nor as a waiver of any other right or remedy accruing to Lender by reason of the occurrence of any Event of Default. Anything herein to the contrary notwithstanding, all interest accrued at the Default Rate shall be immediately due and payable upon demand by Lender.

2.2.6.Late Payment Charge. If any principal, interest or any other sum due under the Loan Documents (other than the balloon payment due on the Maturity Date) is not paid by Borrower on or before the fifth (5^th) day after the date the same is due and payable, Borrower shall pay to Lender upon demand an amount equal to the lesser of five percent (5%) of such unpaid sum or the maximum amount permitted by applicable Law in order to defray the expense incurred by Lender in handling and processing

ATLANTA 5579734.9

-30-

such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment. Any such amount shall be secured by each Security Instrument and the other Loan Documents to the extent permitted by applicable Law.

2.2.7.Release on Payment in Full. Lender shall, upon the written request and at the sole cost and expense of Borrower, after payment in full of the Debt and the performance of the Other Obligations in accordance with the terms and provisions of each Security Instrument and the other Loan Documents, release the Lien of each Security Instrument and the other Loan Documents on the Property.

Section 2.3Manner of Making Payments.

2.3.1.Making of Payments. Subject to Section 3.7 hereof, each payment by Borrower hereunder or under the Note or any of the other Loan Documents shall be made in funds immediately available to Lender by 2:00 p.m., central time, on the date such payment is due, to Lender at PNC Bank, National Association, c/o Midland Loan Services, c/o Bank of Oklahoma, Lockbox #2585, 6242 East 41^st Street, Tulsa, OK 74135, or such other place as Lender may from time to time designate in writing. Whenever any payment hereunder or under the Note shall be stated to be due on a day which is not a Business Day, such payment shall be made on the first Business Day following such scheduled due date.

2.3.2.Credit for Payment Receipt. Subject to Section 3.7 hereof, no payment due under the Note, this Agreement or any of the other Loan Documents shall be deemed paid to Lender until received by Lender at its designated office on a Business Day prior to 2:00 p.m., central time. Subject to Section 3.7 hereof, any payment received after the time established by the preceding sentence shall be deemed to have been paid on the immediately succeeding Business Day. Each payment that is paid to Lender within ten (10) days prior to the date on which such payment is due, and prior to its scheduled Payment Date, shall not be deemed a prepayment and shall be deemed to have been received on the Payment Date solely for the purpose of calculating interest due.

2.3.3.Invalidated Payments. If any payment received by Lender is deemed by a court of competent jurisdiction to be a voidable preference or fraudulent conveyance under any Creditors Rights Laws, and is required to be returned by Lender, then the obligation to make such payment shall be reinstated, notwithstanding that the Note may have been marked satisfied and returned to Borrower or otherwise canceled, and such payment shall be immediately due and payable upon demand.

2.3.4.No Deductions, etc. All payments made by Borrower hereunder or under the Note or the other Loan Documents shall be made irrespective of, and without any deduction for, any setoff, defense, claim or counterclaims.

2.3.5.Application of Payments. Provided no Event of Default has occurred and is continuing, payments of principal and interest due from Borrower shall be applied (a) first, to the payment or reimbursement of any expenses (including but not limited to late charges), costs or obligations (other than the principal and interest) for which Borrower shall be obligated or Lender entitled pursuant to the provisions of the Loan Documents, (b) second, to the payment of accrued but unpaid interest, (c) third, to the payment of unpaid Reserve Funds required pursuant to the provisions of the Loan Documents, and (d) fourth, to the payment of principal then outstanding. If at any time Lender receives less than the full amount due and payable on a Payment Date or upon the occurrence and during the continuance of an Event of Default, Lender may apply all payments received to amounts then due and payable in any manner and in any order determined by Lender, in its sole discretion. Lender’s acceptance of a payment from Borrower in an amount that is less than the full amount then due and Lender’s application of such payments to amounts then due from Borrower shall not constitute or be deemed to constitute a waiver of the unpaid amounts or an accord and satisfaction.

ATLANTA 5579734.9

-31-

2.3.6.Increased Costs.

(a)Increased Costs Generally. If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, Lender;

(ii)subject Lender to any tax of any kind whatsoever with respect to this Agreement, or change the basis of taxation of payments to Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.3.7(c) hereof and the imposition of, or any change in the rate of, any Excluded Tax payable by Lender); or

(iii)impose on Lender any other condition, cost or expense affecting this Agreement;

and the result of any of the foregoing shall be to reduce the amount of any sum received or receivable by Lender hereunder (whether of principal, interest or any other amount) then, upon request of Lender, Borrower will pay to Lender such additional amount or amounts as will compensate Lender for such reduction suffered.

(b)Capital Requirements. If Lender determines that any Change in Law affecting Lender or any lending office of Lender or Lender’s holding company regarding capital requirements has or would have the effect of reducing the rate of return on Lender’s capital or on the capital of Lender’s holding company as a consequence of this Agreement, or the Loan to a level below that which Lender or Lender’s holding company could have achieved but for such Change in Law (taking into consideration Lender’s policies and the policies of Lender’s holding company with respect to capital adequacy), then from time to time Borrower will pay to Lender such additional amount or amounts as will compensate Lender or Lender’s holding company for any such reduction suffered.

2.3.7.Indemnified Taxes.

(a)All payments made by Borrower hereunder shall be made free and clear of, and without reduction for or on account of, Indemnified Taxes, excluding (i) Indemnified Taxes measured by Lender’s net income, and franchise taxes imposed on it, by the jurisdiction under the Laws of which Lender is resident or organized, or any political subdivision thereof, (ii) taxes measured by Lender’s overall net income, and franchise taxes imposed on it, by the jurisdiction of Lender’s lending office or any political subdivision thereof or in which Lender is resident or engaged in business, (iii) any branch profits taxes imposed by the United States of America or any similar taxes imposed by any other jurisdiction in which Borrower is located, and (iv) withholding taxes imposed by the United States of America, any state, commonwealth, protectorate territory or any political subdivision or taxing authority thereof or therein as a result of the failure of Lender which is a Non-U.S. Entity to comply with the terms of subsection (b) below (collectively, “Excluded Taxes”). If any non-excluded Indemnified Taxes are required to be withheld from any amounts payable to Lender hereunder, the amounts so payable to Lender shall be increased to the extent necessary to yield to Lender (after payment of all non-excluded Indemnified Taxes) interest or any such other amounts payable hereunder at the rate or in the amounts specified hereunder. Whenever any non-excluded Indemnified Tax is payable pursuant to applicable Law by Borrower, Borrower shall send to Lender an original official receipt showing payment of such non-excluded Indemnified Tax or other evidence of payment reasonably satisfactory to Lender. Borrower hereby indemnifies and hold harmless Lender for any incremental taxes, interest or penalties that may become payable by Lender which may result from any failure

ATLANTA 5579734.9

-32-

by Borrower to pay any such non-excluded Indemnified Tax when due to the appropriate taxing authority or any failure by Borrower to remit to Lender the required receipts or other required documentary evidence.

(b)In the event that any successor and/or assign of Lender is not incorporated under the Laws of the United States of America or a state thereof (a “Non-U.S. Entity”) Lender agrees that, prior to the first date on which any payment is due such entity hereunder, it will deliver to Borrower two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI or successor applicable form, as the case may be, certifying in each case that such entity is entitled to receive payments under the Note, without deduction or withholding of any United States federal income taxes. Each entity required to deliver to Borrower a Form W-8BEN or W-8ECI pursuant to the preceding sentence further undertakes to deliver to Borrower two further copies of such forms, or successor applicable forms, or other manner of certification, as the case may be, on or before the date that any such form expires (which, in the case of the Form W-8ECI, is the last day of each U.S. taxable year of the Non-U.S. Entity) or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it to Borrower, and such other extensions or renewals thereof as may reasonably be requested by Borrower, certifying in the case of a Form W-8BEN or W-8ECI that such entity is entitled to receive payments under the Note without deduction or withholding of any United States federal income taxes, unless in any such case an event (including, without limitation, any change in treaty, Law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such entity from duly completing and delivering any such form with respect to it and such entity advises Borrower that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.

(c)Without limiting the generality of this Section 2.3.7, Borrower shall timely pay to the relevant Official Body in accordance with applicable Law, or at the option of Lender timely reimburse Lender for, the payment of, any Other Taxes (other than Excluded Taxes).

Section 2.4Prepayments.

2.4.1.Voluntary Prepayments. Except as set forth in this Section 2.4 and Section 6.8 hereof, Borrower shall not have the right to prepay all or any portion of the Debt. After the Lockout Period, Borrower may prepay the Debt in whole, but not in part, on any Payment Date, provided the following conditions are satisfied: (a) no Event of Default shall be occurring on either the date the required prepayment notice is received by Lender or the Prepayment Date; (b) Borrower shall give a revocable written notice to Lender specifying the date on which a prepayment is to be made (the date of any prepayment hereunder, whether pursuant to such notice or not, and whether voluntary or involuntary, being herein referred to as the “Prepayment Date”) not more than sixty (60) days and not less than thirty (30) days prior to the Prepayment Date; and (c) the applicable Prepayment Consideration, if any, is paid by Borrower to Lender with such prepayment of the entire Debt in full. Additionally, any such prepayment not actually received by Lender before 2:00 p.m., central time, on the fifth (5^th) day of the month must also include the interest which would have accrued on the amount of such prepayment during the entire Interest Accrual Period in which the prepayment is made.

BORROWER HEREBY AGREES THAT IN THE EVENT BORROWER DELIVERS A PREPAYMENT NOTICE AND FAILS TO PREPAY THE LOAN IN ACCORDANCE WITH THE PREPAYMENT NOTICE AND THE TERMS OF THIS SECTION 2.4.1 (A “PREPAYMENT FAILURE”), BORROWER SHALL INDEMNIFY LENDER FROM AND AGAINST, AND SHALL BE RESPONSIBLE FOR, ALL LOSSES (INCLUDING ANY BREAKAGE COSTS) INCURRED BY LENDER WITH RESPECT TO ANY SUCH PREPAYMENT FAILURE, PROVIDED THAT SUCH INDEMNITY SHALL

ATLANTA 5579734.9

-33-

NOT BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NON-APPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE, ILLEGAL ACTS, BAD FAITH OR WILLFUL MISCONDUCT OF LENDER.

2.4.2.Prepayment Consideration. Lender shall not be obligated to accept any prepayment of the Debt unless it is accompanied by the applicable Prepayment Consideration. The “Prepayment Consideration” shall be calculated by Lender as follows:

From the date hereof through September 30, 2016 (the “Lockout Period”):	Not applicable; No prepayment permitted.
October 1, 2016 through March 31, 2021:	The greater of (i) one percent (1.0%) of the outstanding principal balance of the Loan on a Prepayment Date; or (ii) the Yield Maintenance Premium.
April 1, 2021 (the “Open Period Start Date”) through October 1, 2021 (the “Scheduled Maturity Date”):	No Prepayment Consideration (i.e., $0.00).
Prepayment After an Event of Default but before the Open Period Start Date:	The Prepayment Consideration set forth in Section 2.4.4 hereof.

Borrower acknowledges that the Prepayment Consideration is a bargained for consideration and is not a penalty. Borrower recognizes that Lender would incur substantial additional costs and expenses in the event of a prepayment of the Debt and that the Prepayment Consideration compensates Lender for such costs and expenses (including without limitation, the loss of Lender’s investment opportunity during the period from the Prepayment Date until the Maturity Date). Borrower agrees that Lender shall not, as a condition to receiving the Prepayment Consideration, be obligated to actually reinvest the amount prepaid in any treasury obligation or in any other manner whatsoever. Any Prepayment Consideration shall be subject to reduction if and to the extent characterized as interest under applicable law, by the amount, if any, which would cause the interest on the Note to exceed the Maximum Legal Rate.

2.4.3.Mandatory Prepayments. If Borrower receives any Net Proceeds and if Lender is not obligated to make, and does not make, such Net Proceeds available to Borrower for the Restoration of any Individual Property pursuant to the terms of this Agreement, then Borrower shall prepay the outstanding principal balance of the Loan in an amount equal to one hundred percent (100%) of such Net Proceeds. No Prepayment Consideration shall be due in connection with any prepayment made pursuant to this Section 2.4.3. Any partial prepayment under this Section 2.4.3 shall be applied to the last payments of principal due under the Loan; provided, however, if an Event of Default has occurred and is then continuing, Lender may apply such Net Proceeds to the Debt in any order or priority in its sole discretion.

2.4.4.Prepayments After Event of Default. If, during the continuance of any Event of Default (and prior to the Open Period Start Date), Borrower shall tender payment of an amount sufficient to satisfy the Debt, such tender by Borrower shall be deemed to be a voluntary prepayment in the amount tendered and in such case Borrower shall also pay to Lender, with respect to the amount tendered, Prepayment Consideration equal to the greater of (a) four percent (4.0%) of the outstanding principal balance of the Loan on the date of such tendered prepayment and (b) the Yield Maintenance Premium (provided that all references to the “Prepayment Date” contained in the definition of Yield Maintenance Premium shall mean the date of said tendered prepayment) which Prepayment Consideration shall be immediately due and payable. Lender shall not be obligated to accept any such tender unless it is accompanied by all Prepayment Consideration

ATLANTA 5579734.9

-34-

due in connection therewith. Any Prepayment Consideration shall be subject to reduction if and to the extent characterized as interest under applicable law, by the amount, if any, which would cause the interest on the Note to exceed the Maximum Legal Rate.

2.4.5.Voluntary Prepayment in Connection with Enid Property. If, in connection with a casualty or condemnation on the Enid Property, (i) Lender applies Net Proceeds against the Debt pursuant to Section 2.4.3 because the requirements of Section 7.4(b)(i) herein have not been satisfied, and (ii) no Event of Default then exists (other than an Event of Default caused solely by the related casualty or condemnation), then Borrower shall have the right to prepay a portion of the Debt in an amount (the "Remaining Enid Repayment Amount") equal to the difference of (A) the then outstanding Allocated Loan Amount applicable to the Enid Property, less (B) the Net Proceeds applicable to the Enid Property applied by Lender against the Debt pursuant to Section 2.4.3, and, so long as (1) Borrower delivers to Lender a notice of such prepayment no later than sixty (60) days after Lender’s application of Net Proceeds, and (2) Borrower actually repays the Remaining Enid Repayment Amount no later than one hundred eighty (180) days after Borrower’s delivery of such notice, then Lender shall release the Enid Property from the lien of the applicable Security Instrument (and related Loan Documents) and release the related Individual Borrower’s obligations under the Loan Documents with respect to the Enid Property (other than those expressly stated to survive). No Prepayment Consideration shall be due in connection with any prepayment made pursuant to this Section 2.4.5. Any prepayment received by Lender pursuant to this Section 2.4.5 on a date other than a Payment Date shall be held by Lender as Collateral for the Debt in an interest bearing Eligible Account at an Eligible Institution, with such interest accruing for the benefit of Borrower, and shall be applied by Lender on the next Payment Date, with any interest on such funds paid to Borrower on such Payment Date provided no Event of Default then exists (other than an Event of Default caused solely by the related casualty or condemnation).

Section 2.5Optional Lender Forbearance. Anything herein to the contrary notwithstanding, if Lender determines, in its sole discretion, at any time during the calendar month immediately preceding the Maturity Date that the Loan will not be paid as required on the Maturity Date, Lender shall have the option to forbear from exercising its rights under this Agreement, the Note, the Security Instrument and the other Loan Documents to foreclose upon the Property (an “Optional Lender Forbearance”). In such event, Lender shall notify Borrower of such decision and the following shall occur:

(a)On the first day of the month immediately following the Maturity Date and on the first day of each calendar month thereafter, Borrower shall pay to Lender an amount (each a “Property Cash Flow Payment”) equal to the amounts set forth in Section 3.3.2(i) through (k) hereof, which payment shall be effected by Lender withdrawing all funds on deposit in the Cash Management Account and applying such funds in accordance with Section 3.3.2 hereof.

(b)Interest accrued at the Adjusted Interest Rate and not paid shall be deferred and added to the indebtedness evidenced by the Note.

(c)Lender’s decision to forbear from exercising its rights under this Agreement, the Note, the Security Instrument and the other Loan Documents shall be revocable at any time by Lender without notice to Borrower. Upon any such revocation, Lender shall be entitled to pursue any and all remedies available to it under this Agreement, the Note, the Security Instrument, and the other Loan Documents, at law or in equity.

ATLANTA 5579734.9

-35-

(d)Nothing contained in this Section 2.5 shall prohibit Borrower from paying the Debt in full at any time during such Optional Lender Forbearance.

III.CASH MANAGEMENT

Section 3.1Establishment of Lockbox Account and Cash Management Account.

3.1.8.Establishment of Lockbox Account.

(d)Borrower shall simultaneously herewith (i) establish, and hereby covenants to maintain during the term of the Loan, a segregated account (the “Lockbox Account”) with Lockbox Bank directly into which each Individual Borrower shall deposit or cause to be deposited all Rents (including, without limitation all Lease Termination Payments) or other revenue of any kind from each Individual Property received by each Individual Borrower or Manager, in accordance with Section 3.1.1(b) hereof, and (ii) execute a deposit account control agreement, in form and substance acceptable to Lender, with Lender and Lockbox Bank providing for the sole dominion and control and security interest in the Lockbox Account by Lender (the “Lockbox Agreement”). The Lockbox Account shall be in the name of Borrower, for the benefit of Lender. The Lockbox Agreement shall require the Lockbox Bank to maintain the Lockbox Account as an Eligible Account, and shall provide that Borrower and Lender or its Servicer shall have the right to electronic access to information regarding balances, deposits into and withdrawals from the Lockbox Account and to receive periodic reports from the Lockbox Bank with respect thereto. Borrower shall not in any way alter, modify or change the Lockbox Account or Lockbox Agreement without the prior written consent of Lender. Simultaneously herewith, Borrower has also established, and hereby covenants to maintain with, Lockbox Bank a lockbox address at the Lockbox Bank (the “Lockbox Address”).

(e)Borrower represents, warrants and covenants that simultaneously herewith (i) Borrower shall, and shall cause Manager to, immediately deposit all Rents or other revenue of any kind from the Property received by Borrower or Manager directly into the Lockbox Account within two (2) Business Days of receipt, (ii) Borrower shall, or shall cause Manager to, send a notice, substantially in the form of Exhibit A, to all tenants now or hereafter under Leases directing them to pay all Rents and other sums due thereunder directly to the Lockbox Address (or to the Lockbox Account via wire transfer), and (iii) neither Borrower nor any other Person shall open any other such account with respect to the deposit of income in connection with the Property. Any Rents and any other revenue of any kind from the Property held by Borrower or Manager prior to being deposited into the Lockbox Account shall be deemed to be Collateral and shall be held in trust by Borrower or Manager, as applicable, for the benefit, and as the property, of Lender and shall not be commingled with any other funds or property of Borrower or Manager. Borrower warrants and covenants that it shall not rescind, withdraw or change any notices or instructions required to be sent by it pursuant to this Section 3.1.1(b) without Lender’s prior written consent.

(f)In the event the Lockbox Bank resigns or is otherwise terminated under the Lockbox Agreement, Borrower shall (i) cooperate with Lender in connection with the appointment of a replacement Lockbox Bank, and (ii) deliver to Lender a fully executed replacement Lockbox Agreement in form and substance acceptable to Lender within thirty (30) days of Lockbox Bank’s resignation or termination. In connection with any resignation or other termination of the Lockbox Bank, Borrower shall also cooperate with Lender to issue new notices or instructions to replace the notices and instructions required to be sent by it pursuant to Section 3.1.1(b) hereof.

3.1.9.Establishment of Cash Management Account. Upon the occurrence of a Triggering Event and during the continuance of any Triggering Event Period, Lender shall establish an Account (the “Cash Management Account”) with the Cash Management Bank (which may include one or

ATLANTA 5579734.9

-36-

more book-entry sub-accounts as deemed necessary by Lender). The Cash Management Account shall be in the name of Lender, as lender and secured party for Borrower.

3.1.10.Accounts Generally. The Lockbox Account and the Cash Management Account shall be subject to the additional terms and conditions set forth in Article 12 hereof.

Section 3.2Transfers from the Lockbox Account. The Lockbox Agreement shall provide that, so long as no Triggering Event Period is then continuing, on the last Business Day of each week on which available funds are on deposit in the Lockbox Account, Lockbox Bank shall transfer all such available funds (less a peg amount of $1,000 required by Lockbox Bank) to the Operating Account. Upon the occurrence of a Triggering Event and during the continuance of any Triggering Event Period, the Lockbox Agreement shall provide that all transfers from the Lockbox Account to the Operating Account shall immediately cease and the Lockbox Bank shall, on each Business Day on which available funds are on deposit in the Lockbox Account, transfer all such available funds (less a peg amount of $1,000 required by Lockbox Bank) to the Cash Management Account. Upon the occurrence of a Triggering Event Termination, Lender shall notify Lockbox Bank of same.

Section 3.3Monthly Disbursements from the Cash Management Account.

3.3.1.Disbursements Prior to Optional Lender Forbearance. Provided no Event of Default is then continuing, and except as set forth in Section 3.3.2 below with respect to disbursements upon an Optional Lender Forbearance, Lender shall withdraw all funds on deposit in the Cash Management Account on the Disbursement Date. Lender shall disburse any amounts transferred to the Cash Management Account representing any Lease Termination Payments to Lender for deposit into the Early Lease Termination Reserve, and Lender shall disburse the balance of such funds in the following order of priority:

(a)First, to Cash Management Bank and Lockbox Bank, for the payment of fees and expenses incurred in connection with the Cash Management Account and the Lockbox Account (to the extent not previously paid from the Lockbox Account or the Cash Management Account);

(b)Next, to Lender, funds sufficient to pay the Monthly Tax Deposit if required to be made under Section 9.2 hereof;

(c)Next, to Lender, funds sufficient to pay the Monthly Insurance Premium Deposit if required to be made under Section 9.2 hereof;

(d)Next, to Lender, funds sufficient to pay the Monthly Debt Service Payment Amount;

(e)Next, to Lender, funds sufficient to pay any interest accruing at the Default Rate, late payment charges, and any unpaid reimbursable costs and expenses incurred by Lender on Borrower’s behalf or in the enforcement of Lender’s rights under the Loan Documents, if any;

(f)Next, to Borrower, funds sufficient to pay all Operating Expenses due pursuant to an Annual Budget, or Approved Annual Budget, as applicable, for such calendar month to Borrower, together with other amounts incurred by Borrower in connection with the operation and maintenance of the Property and approved by Lender in its sole discretion;

ATLANTA 5579734.9

-37-

(g)Next, to Borrower, funds sufficient to pay for Extraordinary Expenses approved by Lender in its sole discretion, if any;

(h)Next, if the Triggering Event was an Event of Default, to Servicer, for the payment of the Servicing Fee; and

(i)Next, all amounts remaining in the Cash Management Account after deposits pursuant to clauses (a) through (h) above, as applicable, for the current month and all prior months to Lender for deposit into the Excess Cash Reserve Account. Notwithstanding the foregoing, so long as no Event of Default has occurred and is continuing, Lender agrees that the aggregate amounts deposited into the Excess Cash Reserve Account pursuant to this subsection (i) shall be limited to $2,424,000.00 (the “Excess Cash Reserve Cap”) and that if the amounts deposited into the Excess Cash Reserve Account at any time (other than during the continuance of an Event of Default) shall exceed the Excess Cash Reserve Cap, such excess shall be disbursed by Lender to Borrower.

Notwithstanding the foregoing or any other provision of this Agreement or of the other Loan Documents, during the continuance of an Event of Default, Lender reserves the right, exercisable at its sole option, to apply Rents and other sums on deposit in or deposited into the Cash Management Account (and any sub-account established thereunder) to the payment of the Debt, in such order, manner, amounts, times and priority as Lender in its sole discretion determines (including to the payment of the items for which the Reserve Funds or the Triggering Event Period Reserve Funds were established, if Lender so elects in its sole discretion), and such reserved rights shall be in addition to all other rights and remedies provided to Lender under this Agreement and the other Loan Documents.

3.3.2.Disbursements Upon Optional Lender Forbearance. Notwithstanding the foregoing, upon the occurrence of an Optional Lender Forbearance, disbursements shall be made as follows: Provided no Event of Default (other than the Event of Default that resulted in the Optional Lender Forbearance) is then continuing, Lender shall withdraw all funds on deposit in the Cash Management Account on the Disbursement Date, and Lender shall disburse such funds in the following order of priority:

(a)First, to Cash Management Bank and Lockbox Bank, for the payment of fees and expenses incurred in connection with the Cash Management Account and the Lockbox Account (to the extent not previously paid from the Lockbox Account or the Cash Management Account);

(b)Next, to Lender, funds sufficient to pay the Monthly Tax Deposit if required to be made under Section 9.2 below;

(c)Next, to Lender, funds sufficient to pay the Monthly Insurance Premium Deposit if required to be made under Section 9.2 below;

(d)Next, to Lender, funds sufficient to pay interest at the Initial Interest Rate;

(e)Next, to Lender, funds sufficient to pay interest (if any) accruing at the Default Rate, late payment charges, and any unpaid reimbursable costs and expenses incurred by Lender on Borrower’s behalf or in the enforcement of Lender’s rights under the Loan Documents, if any;

(f)Next, to Borrower, funds sufficient to pay all Operating Expenses due pursuant to an Annual Budget, or Approved Annual Budget, as applicable, for such calendar month to Borrower, together with other amounts incurred by Borrower in connection with the operation and maintenance of the Property and approved by Lender;

ATLANTA 5579734.9

-38-

(g)Next, to Borrower, funds sufficient to pay for Extraordinary Expenses approved by Lender in its sole discretion, if any;

(h)Next, to Servicer, for the payment of the Servicing Fee; and

(i)Next, the balance, if any, to Lender, to pay unpaid principal until reduced to zero;

(j)Next, the balance, if any, to Lender, to pay all other accrued and unpaid interest (including interest at the Adjusted Interest Rate);

(k)Next, the balance, if any, to Lender to pay all other amounts due and owing under the Loan Documents; and

(l)Next, the balance, if any, to the Operating Account.

Notwithstanding the foregoing or any other provision of this Agreement or of the other Loan Documents, if Lender exercises its right to revoke its decision to forbear as contemplated by Section 2.5(c) and during the continuance of any Event of Default, Lender reserves the right, exercisable at its sole option, to apply Rents and other sums on deposit in or deposited into the Cash Management Account (and any sub-account established thereunder) to the payment of the Debt, in such order, manner, amounts, times and priority as Lender in its sole discretion determines (including to the payment of the items for which the Reserve Funds or the Triggering Event Period Reserve Funds were established, if Lender so elects in its sole discretion), and such reserved rights shall be in addition to all other rights and remedies provided to Lender under this Agreement and the other Loan Documents.

Section 3.4Deposit and Disbursement of Funds Allocated for Payment of Monthly Reserve Fund Deposits. Provided no Event of Default is then continuing, all amounts disbursed to Lender pursuant to Section 3.3 hereof to pay Monthly Reserve Fund Deposits shall be deposited by Lender into the applicable Reserve Account established by Lender pursuant to Article IX hereof, and disbursed by Lender in accordance with the applicable provisions of Article IX hereof.

Section 3.5Deposit and Disbursement of Funds Allocated to Triggering Event Period Reserve Funds; Excess Cash Reserve Fund. All amounts disbursed to Lender pursuant to Section 3.3.1 (i) hereof shall hereinafter be referred to as the “Excess Cash Reserve Fund”. The Excess Cash Reserve Fund shall be held by Lender in an Eligible Account (the “Excess Cash Reserve Account”) at the Cash Management Bank. The Excess Cash Reserve Fund shall not constitute trust funds and, at Lender’s option, may be (1) commingled with other monies held by Lender, or (2) be established as a separate account at the Cash Management Bank. The Excess Cash Reserve Fund may be (x) applied by Lender to any of the items for which any Reserve Fund was established, as determined by Lender, or (y) held in the Excess Cash Reserve Account as additional Collateral for the Loan. If on any Payment Date no Triggering Event Period is continuing, Lender shall, after the application of amounts held in the Excess Cash Reserve Fund in accordance with subsection (x) above, disburse the balance of the Excess Cash Reserve Fund to the Operating Account. In the event that a Triggering Event Period is continuing solely as the result of clause (b) of the Triggering Event definition, then, to the extent that there are insufficient funds in the Cash Management Account to pay in full all amounts required to be paid from the Cash Management Account as and when due and payable or insufficient funds in the Cash Management Account to pay Operating Expenses or Extraordinary Expenses, Borrower may request that Lender allow funds then held in the Excess Cash Reserve Fund to be used to pay such shortfalls and Lender shall not unreasonably withhold its consent to such request.

ATLANTA 5579734.9

-39-

Section 3.6Borrower’s Obligation Not Affected. Subject to the last sentence of Section 3.5 and the provisions of Section 3.7, the failure of Borrower to pay the Monthly Debt Service Payment Amount, the Monthly Reserve Fund Deposits or any other amounts to Lender as and when the same become due pursuant to this Agreement and the other Loan Documents shall constitute an Event of Default, and the insufficiency of funds on deposit in the Accounts shall not absolve Borrower of the obligation to make any such payments, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever.

Section 3.7Payments Received Under this 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 Monthly Debt Service Payment Amount, the Monthly Reserve Fund Deposits, and any other escrows or reserves established pursuant to this Agreement or any other Loan Document, and Borrower’s obligations to pay Basic Carrying Costs shall (provided Lender is not prohibited from withdrawing or applying any funds in the Accounts by applicable Law or otherwise) be deemed satisfied to the extent sufficient amounts are deposited in the Lockbox Account or Cash Management Account to satisfy such obligations on or before the date each such payment is required, regardless of whether any of such amounts are so applied by Lender.

IV.REPRESENTATIONS AND WARRANTIES

Section 4.1Borrower Representations.

Each Individual Borrower represents and warrants as of the Closing Date that:

4.1.1.Organization. Borrower has been duly formed or organized, as applicable, and is validly existing and in good standing in the jurisdiction in which it is formed or organized, as applicable, with requisite power and authority to own its 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 properties, businesses and operations. Borrower possesses all rights, Licenses and authorizations, governmental or otherwise, necessary to entitle it to own its properties and to transact the businesses in which it is now engaged, and the sole business of each Individual Borrower is the ownership, management and operation of the respective Individual Property. Attached hereto as Exhibit B is a true and correct copy of the organizational structure chart of Borrower relating to Borrower and certain Affiliates and other parties, which is true, complete and correct on and as of the date hereof. Neither Guarantor, nor any managing member, general partner or similar controlling Person of Borrower, nor any Person that holds a ten percent (10%) or greater direct ownership interest in any Individual Borrower (a) is the subject of a Bankruptcy Action, (b) has a prior record of having been the subject of a Bankruptcy Action, or (c) has been convicted of a felony.

4.1.2.Proceedings. Borrower has full power, authority and legal right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the Property pursuant to the terms of the Loan Documents and to keep and observe all of the terms of this Agreement and the other Loan Documents on Borrower’s part to be performed. Borrower taken all necessary action to authorize the execution, delivery and performance of this Agreement and the other Loan Documents. This Agreement 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, except as such enforcement may be limited by applicable Creditors Rights Laws and similar Laws affecting rights of creditors generally, and general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

ATLANTA 5579734.9

-40-

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 Borrower’s property or 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 court or governmental agency or body 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 regulatory authority or other governmental agency or body 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 is no pending, filed or, to Borrower’s actual knowledge, threatened action, suit or proceeding, arbitration or governmental investigation, at law or in equity or by or before any Governmental Authority or other agency, involving Borrower, Guarantor, or the Collateral, an adverse outcome of which would reasonably be expected to have a Material Adverse Effect.

4.1.5.Agreements. No Individual Borrower is a party to any agreement or instrument or subject to any restriction which would have a Material Adverse Effect. No Individual Borrower is in default 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 such Individual Borrower or any Individual Property is bound. No Individual Borrower has any financial obligation under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Individual Borrower is a party or by which such Individual Borrower or any Individual Property is otherwise bound, other than (a) obligations incurred in the ordinary course of the operation of the applicable Individual Property as permitted pursuant to Section 8.1(d)(xi) hereof and (b) obligations under the Loan Documents.

4.1.6.Title. Each Individual Borrower has good, marketable and insurable fee simple title to the real property comprising part of each applicable Individual Property and good title to the balance of each Individual Property, free and clear of all Liens whatsoever except the Permitted Encumbrances. To Borrower’s actual knowledge, each Security Instrument, 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 each Individual Property, subject only to Permitted Encumbrances and (b) perfected first priority security interests in and to, and perfected collateral assignments of, all personalty (including the Leases of such Individual Property), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Encumbrances. To Borrower’s actual knowledge and except as set forth in the Title Insurance Policy and, there are no claims for payment for work, labor or materials affecting any Individual Property which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents. To Borrower’s actual knowledge, each Assignment of Leases, when properly recorded in the appropriate records will create perfected first priority security interests in and to, and perfected collateral assignments of, all applicable Leases and Rents for each Individual Property, all in accordance with the terms thereof, in each case subject only to any applicable Permitted Encumbrances.

4.1.7.Solvency; No Bankruptcy Filing. Borrower (a) has not entered into the transaction contemplated hereby or executed the Note, this Agreement or any other Loan Documents with the actual intent to hinder, delay or defraud any creditor and (b) has received reasonably equivalent value in exchange for its obligations under the 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,

ATLANTA 5579734.9

-41-

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 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). Neither any Individual Property nor any Single Tenant is the subject of any Bankruptcy Action. No Bankruptcy Action has been filed against any Restricted Party in the last seven (7) years, and no Restricted Party in the last seven (7) years has ever made an assignment for the benefit of creditors or taken advantage of any Creditors Rights Laws. No Restricted Party is contemplating either the filing of any Bankruptcy Action by it or the liquidation of all or a major portion of any Restricted Party’s assets or property, and Borrower has no knowledge of any Person contemplating the filing of any Bankruptcy Action against it or against any other Restricted Party.

4.1.8.Financial Information. All financial information prepared and submitted by Borrower or its agents and representatives to Lender including but not limited to all financial statements, statements of cash flow and income and operating statements, Rent Rolls, reports, certificates and other documents submitted in connection with the Loan (including the application therefor) 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 (a) true, complete and correct in all material respects, (b) accurately represent the financial condition of each Individual Property as of the date of such reports, and (c) to the extent prepared or audited by an independent certified public accounting firm, have been prepared in accordance with GAAP (or such other basis of accounting acceptable to Lender and consistently applied) throughout the periods covered, except as expressly disclosed therein.

4.1.9.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 has a Material Adverse Effect, nor as far as Borrower can foresee, would have a Material Adverse Effect. 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 would otherwise have a Material Adverse Effect. Borrower has disclosed to Lender all material facts and has not failed to disclose any material fact that could cause any representation or warranty made herein to be materially misleading.

4.1.10.No Plan Assets.

(a)(i) Borrower is not an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA (a “Plan”), (ii) 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. § 2510.3-101 (“Plan Assets”) and (iii) Borrower is not engaging 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, the Security Agreement or the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA (a “Prohibited Transaction”).

(b)(i) Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA (“Governmental Plan”) and (ii) transactions by or with Borrower are not subject to state statutes

ATLANTA 5579734.9

-42-

regulating investment of, and fiduciary obligations with respect to, governmental plans similar to the provisions of Section 406 of ERISA or Section 4975 of the Code currently in effect (“Prohibited Governmental Transactions”), which prohibit or otherwise restrict the transactions contemplated by this Agreement.

4.1.11.Compliance. To Borrower’s actual knowledge, except as disclosed in the Zoning Reports, the Environmental Reports and on Schedule 1 to the Environmental Indemnity, Borrower and each Individual Property and the use thereof comply in all material respects with all applicable Legal Requirements, including, without limitation, all Environmental Laws. To Borrower’s actual knowledge and except as may be disclosed in the Zoning Reports, the Improvements for each Individual Property are in compliance in all material respects with all applicable laws, building and zoning ordinances, codes, rules, covenants, and restrictions governing the occupancy, use and operation of each Individual Property (“Zoning Regulations”), or constitute a legal non-conforming use or structure, and any non-conformity with Zoning Regulations constitutes a legal non-conforming use or structure which does not materially and adversely affect the use, operation or value of such Individual Property. In the event of Casualty or destruction, (a) each Individual Property may be restored or repaired to the full extent necessary to maintain the use of the Improvements on such Individual Property immediately prior to such Casualty or destruction, or (b) “Ordinance or Law Coverage” has been obtained for such Individual Property in accordance with Section 7.1(a)(i) hereof, in amounts approved by Lender, that provides coverage for additional costs to rebuild and/or repair the Improvements on such Individual Property to current Zoning Regulations, or (c) the inability to restore the Improvements on such Individual Property to the full extent of the use or structure immediately prior to the Casualty or destruction would not materially and adversely affect the use, operation or value of such Individual Property. 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 any Individual Property any act or omission affording the federal government or any other Governmental Authority the right of forfeiture as against any Individual Property or any monies paid in performance of Borrower’s obligations under any of the Loan Documents.

4.1.12.Compliance with Anti-Terrorism Laws, Anti-Money Laundering/ International Trade Law Compliance. Each Individual Borrower represents and warrants to Lender, as of the date hereof, the date of any renewal, extension or modification of the Loan, and at all times until the Debt has been indefeasibly paid in full and the Other Obligations have been performed, that: (a) no Covered Entity (i) is a Sanctioned Person; (ii) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person; or (iii) does business in or with, or derives any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority; (b) the proceeds of the Loan will not be used to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority; (c) the funds used to repay the Loan are not derived from any unlawful activity; and (d) each Covered Entity is in compliance with, and no Covered Entity engages in any dealings or transactions prohibited by, any laws of the United States, including but not limited to any Anti-Terrorism Laws. With respect to parties owning direct or indirect interests in Sponsor or Guarantor, Lender acknowledges that Borrower has relied exclusively on its transfer agent and/or U.S. broker-dealer network to implement the normal and customary investor screening practices mandated by applicable law and FINRA regulations in making the foregoing representations. Furthermore, Borrower makes no representation or warranty under this Section 4.1.12 with respect to indirect owners of any Individual Borrower whose indirect ownership derives from ownership in publicly traded companies, and each Individual Borrower’s

ATLANTA 5579734.9

-43-

representations and warranties with respect to brokers and other agents of such Individual Borrower are limited to such Individual Borrower’s actual knowledge.

4.1.13.Reliance. To Borrower’s actual knowledge, no Individual Property is relied upon by, and does not rely upon, any building or improvement not part of such Individual Property to fulfill any zoning, building code or other governmental or municipal requirement for structural support or the furnishing of any essential building systems or utilities, except to the extent of any valid and existing reciprocal easement agreements shown in the Title Insurance Policy for such Individual Property.

4.1.14.No Contingent Liabilities. 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 Material Adverse Effect, except as expressly referred to or reflected in said financial statements.

4.1.15.Condemnation. There is no proceeding pending or, to Borrower’s actual knowledge, threatened, including any Condemnation or other proceeding, for the total or partial condemnation of any Individual Property or for the relocation of roadways providing access to any Individual Property.

4.1.16.Federal Reserve Regulations. Borrower executed and delivered the Loan Documents and received and applied the proceeds of the Loan for its own account (and for the account of its direct and indirect owners) and not as an agent, nominee or trustee for any other party or entity that is not a direct or indirect owner of Borrower. 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 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.

4.1.17.Access; Utilities. Each Individual Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sanitary sewer (or well and septic), storm drainage facilities, and all required utilities, all of which are appropriate for the current use of such Individual Property. All public utilities necessary or convenient for the full use and enjoyment of each Individual Property are located either in the public right of way abutting such Individual Property (which are connected as to serve such Individual Property without passing over other property) or in recorded easements servicing such Individual Property. All roads necessary for the use of each Individual Property for its current purposes have been completed and dedicated to public use and accepted by all Governmental Authorities.

4.1.18.Not a Foreign Person. No Individual Borrower nor Guarantor, nor any Person who Controls any Individual Borrower or Guarantor, is a “foreign person”, “foreign corporation”, “foreign partnership”, “foreign trust”, or “foreign estate” under the provisions of Section 1445 of the Code.

4.1.19.Separate Lots. To Borrower’s actual knowledge, each Individual Property is comprised of one (1) or more separate tax parcels which do not include any property which is not part of such Individual Property.

4.1.20.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

ATLANTA 5579734.9

-44-

otherwise affecting any Individual Property, nor are there any contemplated improvements to any Individual Property that may result in such special or other assessments.

4.1.21.Enforceability. To Borrower’s actual knowledge, the Loan Documents are not subject to any right of rescission, set off, counterclaim or defense by Borrower, 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, and Borrower has not asserted any right of rescission, set off, counterclaim or defense with respect thereto.

4.1.22.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.

4.1.23.Insurance. Borrower has obtained and has delivered to Lender certified copies of all Policies (or other evidence 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 under any such Policy, and no Person, including Borrower, has done, by act or omission, anything which would impair the coverage of any such Policy.

4.1.24.Use of Property. Each Individual Property is used exclusively for purposes and other appurtenant and related uses disclosed to Lender on or prior to the Closing Date.

4.1.25.Certificate of Occupancy; Licenses. To Borrower’s actual knowledge, all certifications, permits, licenses, franchises, consents and other approvals, including without limitation, certificates of completion, certificates of occupancy and occupancy permits necessary for the legal use, occupancy and operation of each Individual Property as it is currently used (collectively, the “Licenses”), have been obtained and are in full force and effect. Borrower shall keep and maintain (or cause to be kept and maintained) all Licenses necessary for the operation of each Individual Property 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.

4.1.26.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 any portion of the Improvements on any Individual Property are located in such an area, the Flood Insurance Policies required by Section 7.1(a)(vii) hereof are in full force and effect with respect to such Individual Property. To Borrower’s actual knowledge and except as may be set forth on any Surveys or Phase I environmental assessments delivered to Lender in connection with the Loan, no part of the Property consists of or is classified at wetlands, tidelands or swamp and overflow lands.

4.1.27.Physical Condition.

(a)To Borrower’s actual knowledge and except as may be disclosed in the Property Condition Reports, each Individual Property, including, without limitation, all buildings, building systems for the Improvements, 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 working order. To Borrower’s actual knowledge and except as disclosed in the Property Condition Reports, each Individual Property is (i) free of any material damage, (ii) in good repair and condition, and (iii) free of structural defects, or any other material defects or damages (whether latent or otherwise) except as follows: (A) any damage or deficiencies that would not materially and adversely affect the use, operation or value of such

ATLANTA 5579734.9

-45-

Individual Property or the security intended to be provided by the Security Instrument with respect to such Individual Property or repairs with respect to such damage or deficiencies estimated to cost less than $200,000 in the aggregate for all Property; (B) repairs that have been completed. Borrower has not received notice from any insurance company or bonding company of any structural or other defects or inadequacies in any Individual Property 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.

(b)To Borrower’s actual knowledge: (i) all existing Improvements on each Individual Property have been fully completed and all costs and expenses of construction have been fully paid; and (ii) complete and final payment has been made for all construction, repairs or new Improvements made to each Individual Property within the applicable period for filing Lien claims in the State.

4.1.28.Boundaries. To Borrower’s actual knowledge and except as may be set forth on any Surveys, 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 any Individual Property, and none of the Improvements encroach upon any easements, and no easements or other encumbrances upon any Individual Property encroach upon any of the Improvements, so as to affect the value, current use or marketability of any Individual Property except those which are insured against by the Title Insurance Policy.

4.1.29.Leases. No Individual Property is subject to any Leases other than the Leases described in the Rent Roll for such Individual Property attached hereto as Exhibit C, which Rent Roll for each Individual Property is accurate and complete in all material respects as of the date hereof. Borrower is the sole owner of the entire lessor’s interest in the Leases for each Individual Property. 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 for such Individual Property. The Leases for each Individual Property are valid and enforceable and have not been altered, modified or amended in any manner since copies of same were last delivered to Lender. None of the Rents (including security deposits) have been collected for more than one (1) month in advance. To Borrower’s actual knowledge and except as may be disclosed in any tenant estoppel certificates delivered to Lender or as disclosed on Schedule IV hereto, all work to be performed by Borrower under each Lease for each Individual Property 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 have already been received by such tenant. The current Leases for each Individual Property are in full force and effect and, to Borrower’s actual knowledge and except as may be disclosed in any tenant estoppel certificates delivered to Lender or as disclosed on Schedule IV hereto, 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. There has been no prior Transfer of any Lease or of the Rents received therein for any Individual Property, other than to Borrower and 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 may be disclosed in any tenant estoppel certificates delivered to Lender or as disclosed on Schedule IV hereto, no tenant listed on Exhibit C 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 may be set forth in the Leases, no tenant under any Lease for any Individual Property 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. Except as may be set forth in the Leases, no tenant under any Lease for any Individual Property has any right or option for additional space in the Improvements. To Borrower’s actual knowledge no tenant intends to use its leased premises on any

ATLANTA 5579734.9

-46-

Individual Property for any activity which, directly or indirectly, involves the use, generation, treatment, storage, transportation or Release of any Hazardous Materials in violation of Environmental Law. True and correct copies of all Leases for each Individual Property in existence as of the Closing Date were delivered to Lender prior to the execution of this Agreement.

4.1.30.Survey. To Borrower’s actual knowledge, no Survey for any Individual Property fails to reflect any material matter affecting such Individual Property or the title thereto.

4.1.31.[Reserved].

4.1.32.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 currently in effect in connection with 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, each Security Instrument and each Assignment of Leases, have been paid, and, under current Legal Requirements, each Security Instrument is enforceable in accordance with its terms by Lender (or any subsequent holder thereof), except as such enforcement may be limited by applicable Creditors Rights Laws and similar Laws affecting rights of creditors generally, and general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

4.1.33.Management Agreement. The Management Agreement is in full force and effect and there is no default thereunder by any party thereto and, to Borrower’s actual knowledge, 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.

4.1.34.Illegal Activity. To Borrower’s actual knowledge, no portion of any Individual Property has been or will be purchased, improved, equipped or furnished with proceeds of any illegal activity and, to Borrower’s actual knowledge, there are no illegal activities or activities relating to controlled substances at any Individual Property.

4.1.35.Investment Company Act. No Individual Borrower is (a) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; or (b) subject to any other federal or state Law or regulation which purports to restrict or regulate its ability to borrow money.

4.1.36.Bank Holding Company. No Individual Borrower is a “bank holding company” or a direct or indirect subsidiary of a “bank holding company” as defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y thereunder of the Board of Governors of the Federal Reserve System.

4.1.37.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 and each Individual Borrower’s organizational identification number is set forth below:

COLE WG REIDSVILLE NC, LLC- 5046689

COLE DG INDEPENDENCE (23^RD ST.) MO, LLC- 5281224

COLE KG CEDAR RAPIDS IA, LLC- 5325142

ATLANTA 5579734.9

-47-

COLE NG PRESCOTT AZ, LLC- 5324203

COLE LO FREMONT OH, LLC- 5441264

COLE CV WISCONSIN RAPIDS WI, LLC- 5165393

COLE DG GLADWIN MI, LLC- 5465699

COLE DG LEXINGTON MI, LLC- 5465693

ARCP MT ENID OK, LLC- 5530432

4.1.38.Taxpayer Identification Number. Each Individual Borrower’s United States taxpayer identification number is 27-3147975 (which is the Guarantor’s United States taxpayer identification number).

4.1.39.Business Purposes. The Loan is solely for the business purpose of Borrower, and is not for personal, family, household, or agricultural purposes.

4.1.40Taxes. Borrower and each Guarantor has filed all federal, state, county, municipal, and city income and other tax returns required to have been filed by it and has paid all taxes and related liabilities which have become due pursuant to such returns or pursuant to any assessments received by it. Borrower knows of no basis for any additional assessment in respect of any such taxes and related liabilities for prior years.

4.1.41.Forfeiture. Neither Borrower nor, to Borrower’s actual knowledge, any other Person in occupancy of or involved with the operation or use of any Individual Property has committed any act or omission affording the federal government or any state or local government the right of forfeiture as against any Individual or any monies paid in performance of Borrower’s obligations under the Note, this Agreement or the other Loan Documents. Borrower hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture.

4.1.42.Accounts.

(a)This Agreement and the Lockbox Agreement create valid and continuing security interests (as defined in the UCC) in the Lockbox Account, the Cash Management Account, each Reserve Account, and each Triggering Event Period Reserve Account, and any sub-accounts established under any of the foregoing, in favor of Lender, which security interests are prior to all other Liens, other than Permitted Encumbrances, and are enforceable as such against creditors of and purchasers from Borrower, and other than in connection with the Loan Documents and except for Permitted Encumbrances, Borrower has not sold or otherwise conveyed the Accounts;

(b)Borrower and Lender agree that the Lockbox Account is and shall be maintained (i) as a “deposit account” (as such term is defined in Section 9-102(a)(29) of the UCC), (ii) in such a manner that Lender shall have control (within the meaning of Section 9-104(a)(2) of the UCC) over the Lockbox Account and (iii) such that neither Borrower nor Manager shall have any right of withdrawal from the Lockbox Account and except as set forth in Section 3.2 hereof, no Account Collateral shall be released to Borrower or Manager from the Lockbox Account. Without limiting Borrower’s obligations under the immediately preceding sentence, Borrower shall only establish and maintain the Lockbox Account with an Eligible Institution that has executed the Lockbox Agreement;

ATLANTA 5579734.9

-48-

(c)Borrower acknowledges that Lender intends to maintain each Account (other than the Lockbox Account), as follows: (i) as a “securities account” (as such term is defined in Section 8-501(a) of the UCC), (ii) in such a manner that Lender shall have control (within the meaning of Section 8-106(d)(2) of the UCC) over such Account, (iii) such that neither Borrower nor Manager shall have any right of withdrawal from such Account and, except as provided herein, no Account Collateral shall be released to Borrower or Manager from such Account, (iv) in such a manner that the applicable Eligible Institution shall agree to treat all property credited to such Account as “financial assets” and (v) such that all securities or other property underlying any financial assets credited to such Accounts shall be registered in the name of the applicable Eligible Institution, indorsed to the applicable Eligible Institution or in blank or credited to another securities account maintained in the name of the applicable Eligible Institution and in no case will any financial asset credited to such Account be registered in the name of Borrower, payable to the order of Borrower or specially indorsed to Borrower except to the extent the foregoing have been specially indorsed to the applicable Eligible Institution or in blank;

(d)Borrower owns good and marketable title to the Lockbox Account free and clear of any Lien or claim of any Person, other than Permitted Encumbrances;

(e)Other than the security interests granted to Lender pursuant to this Agreement and the Lockbox Agreement, Borrower has not pledged, assigned, or sold, granted a security interest in, or otherwise conveyed, any Account Collateral; and

(f)The Lockbox Account is not in the name of any Person other than Borrower for the benefit of Lender. Borrower has not consented to the Lockbox Bank complying with instructions of any Person other than Lender.

4.1.43.Reciprocal Easement Agreements. With respect to each REA, Borrower hereby represents that to Borrower’s actual knowledge (a) each REA is in full force and effect and has not been amended, restated, replaced or otherwise modified (except, in each case, as expressly set forth herein or in the Title Insurance Policy), (b) there are no defaults under any REA by any party thereto and, to Borrower’s actual knowledge, no event has occurred which, but for the passage of time, the giving of notice, or both, would constitute a default under any REA, (c) all payments and other sums due and payable under any REA have been paid in full, (d) no party to any REA has commenced any action or given or received any notice for the purpose of terminating any REA, and (e) the representations made in any estoppel or similar document delivered with respect to any REA in connection with the Loan are true, complete and correct.

4.1.44.Material Agreements. With respect to each Material Agreement, Borrower hereby represents that to Borrower’s actual knowledge (a) each Material Agreement is in full force and effect and has not been amended, restated, replaced or otherwise modified (except, in each case, as expressly set forth herein), (b) there are no defaults under any Material Agreement by any party thereto and, to Borrower’s actual knowledge, no event has occurred which, but for the passage of time, the giving of notice, or both, would constitute a default under any Material Agreement, (c) all payments and other sums due and payable under any Material Agreement have been paid in full, (d) no party to any Material Agreement has commenced any action or given or received any notice for the purpose of terminating any Material Agreement, and (e) the representations made in any estoppels or similar document delivered with respect to any Material Agreement in connection with the Loan are true, complete and correct.

Section 4.2Survival 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

ATLANTA 5579734.9

-49-

of the other Loan Documents by Borrower. All representations, warranties, covenants and agreements made in this Agreement or in the other 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.

V.BORROWER COVENANTS

From the date hereof and until payment and performance in full of all obligations of Borrower under the Loan Documents in accordance with the terms of this Agreement and the other Loan Documents, or, solely with respect to any Individual Borrower that obtains the earlier release of the Lien of the Security Instrument affecting such Individual Borrower’s Individual Property (and all related obligations) pursuant to Section 6.8 hereof, then exclusive of such Individual Borrower and such Individual Property so released, each Individual Borrower hereby covenants and agrees with Lender that:

Section 5.1Existence; Compliance with Legal Requirements; Insurance. 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 and comply with all Legal Requirements applicable to it and each Individual Property. There shall never be committed by Borrower and Borrower shall not permit any other Person in occupancy of or involved with the operation or use of any Individual Property to commit any act or omission affording the federal government or any state or local government the right of forfeiture as against the Property or any Individual Property 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 its property used or useful in the conduct of its business and shall keep each Individual Property 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 to allow each Individual Property to remain consistently competitive in its market. Borrower shall cause each Individual Property to be insured at all times in accordance with the terms and conditions of Article VII hereof. 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 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.

Notwithstanding the foregoing, to the extent any Lease with a tenant remains in effect and such tenant remains liable for the obligations under its Lease, such tenant shall have the right to exercise any contest rights explicitly set forth in such Lease in accordance with the express terms thereof and, to the

ATLANTA 5579734.9

-50-

extent such rights conflict or are inconsistent with the provisions of this Section 5.1, the provisions set forth in such Lease shall govern and control.

Section 5.2Taxes 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 each Individual Property prior to delinquency; provided, however, Borrower’s obligation to directly pay Taxes shall be suspended for so long as Borrower complies with the terms and provisions of Section 9.2 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, that (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 9.2 hereof, and (ii) if the tenant under a Lease is required to pay such Taxes or Other Charges directly to the applicable Governmental Authority and Borrower timely requests and diligently pursues evidence of such payment, and further provided that no enforcement action has been commenced by the applicable Governmental Authority resulting from any tenant’s failure to pay Taxes or Other Charges, then 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 Property or any Individual Property (other than Permitted Encumbrances), and shall promptly pay for or cause to be paid all utility services provided to the Property. After prior written notice to Lender, Borrower, 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 Lien, Taxes or Other Charges with respect to any Individual Property, provided that the following conditions are satisfied: (a) no Event of Default has occurred and remains uncured; (b) Borrower is permitted to contest under the provisions of any document or agreement affecting such Individual Property; (c) 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; (d) neither such Individual Property nor any interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (e) Borrower shall promptly upon final determination thereof pay the amount of any such Lien, Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; (f) intentionally omitted; and (g) 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 Lien, Taxes or Other Charges, together with all interest and penalties thereon. Lender may pay over any such security 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 the Individual Property (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 Security Instrument for such Individual Property or the other Loan Documents being primed by any related Lien.

Notwithstanding the foregoing, to the extent any Lease with a tenant remains in effect and such tenant remains liable for the obligations under its Lease, such tenant shall have the right to exercise any contest rights explicitly set forth in such Lease in accordance with the express terms thereof and, to the extent such rights conflict or are inconsistent with the provisions of this Section 5.2, the provisions set forth in such Lease shall govern and control.

Section 5.3Litigation. Borrower shall give prompt written notice to Lender of any litigation or governmental proceedings pending or threatened against Borrower which might have a Material Adverse Effect.

ATLANTA 5579734.9

-51-

Section 5.4Access to Property. Subject to the rights of tenants under the Leases, Borrower shall permit agents, representatives and employees of Lender to conduct physical inspections of each Individual Property to ensure Borrower is appropriately maintaining each Individual Property. Following any such inspection, should Lender determine that any Individual Property has not been maintained as required herein, Lender shall have the right to demand that the applicable Individual Borrower complete corrective measures reasonably satisfactory to Lender within a thirty (30) day period of time; provided, however, that if Borrower shall notify Lender in writing prior to the expiration of such thirty (30) day period that such default is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and that the applicable Individual Borrower has commenced to cure such default within such thirty (30) day period, and if the applicable Individual Borrower 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 the applicable Individual Borrower in the exercise of due diligence to cure such failure, such additional period not to exceed ninety (90) days or such longer period of time upon which Borrower and Lender mutually agree in writing (provided, however, Lender shall not unreasonably withhold its consent to such longer period of time if the failure is the responsibility of the tenant of such Individual Property and Borrower, in its reasonable business judgment, does not want to declare a default under the corresponding Lease).

Section 5.5Notice of Default. Borrower shall promptly advise Lender of any material adverse change in Borrower’s condition, financial or otherwise, or of the occurrence of any Default or Event of Default of which Borrower has knowledge.

Section 5.6Cooperate in Legal Proceedings. Borrower shall cooperate 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.

Section 5.7Performance Under 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, 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.

Section 5.8Award 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 each Individual Property, and Lender shall be reimbursed for any 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) out of such Award or Insurance Proceeds.

Section 5.9Further Assurances. Each Individual 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 reasonably requested by Lender in connection therewith;

ATLANTA 5579734.9

-52-

(b)execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, 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 including, without limitation, the execution and delivery of all such writings necessary to transfer any Licenses, as required by Lender, into the name of Lender or its designee after the occurrence of any Event of Default; 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 and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to execute such documents and instruments in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest; provided, however, unless an Event of Default has occurred and is then continuing, Lender shall not exercise its right under such power of attorney until ten (10) Business Days after notice has been given by Lender to Borrower of Lender’s intent to exercise its rights under such power of attorney.

Section 5.10Financial Reporting.

(a)Borrower will keep and maintain or will cause to be kept and maintained on a Fiscal Year basis, in accordance with GAAP (or such other accounting basis acceptable to Lender), 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 each Individual Property. 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 other Person maintaining such books, records and accounts and to make such copies or extracts thereof as Lender shall desire. During the continuance of an Event of Default, Borrower shall pay on demand any costs and expenses incurred by Lender to examine Borrower’s accounting records with respect to each Individual Property, as Lender shall determine to be necessary or appropriate in the protection of Lender’s interest.

(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 annual financial statements covering all of the Property on a combined basis as well as each Individual Property for such Fiscal Year and containing statements of profit and loss for Borrower and for all of the Property on a combined basis as well as each Individual Property, and a balance sheet for Borrower. Such statements shall set forth the financial condition and the results of operations for all of the Property on a combined basis as well as each Individual Property for such Fiscal Year, and shall include, but not be limited to, amounts representing annual Net Operating Income, Gross Income From Operations and Operating Expenses. Borrower’s annual financial statements shall be accompanied by a certificate executed by a Responsible Officer of Borrower or SPC Party, as applicable, stating that each such annual financial statement presents fairly the financial condition and the results of operations of Borrower and the Property being reported upon and has been prepared in accordance with GAAP (or such other accounting basis acceptable to Lender). To the extent that Borrower consists of more than one Person, such annual financial statements shall include an annual combined balance sheet of the Persons constituting Borrower (and no other Persons), together with the related combined statements of operations, and member’s capital, including a combining balance sheet and statement of income for the Property on a combined basis. Together with Borrower’s annual financial statements, Borrower shall furnish to Lender an Officer’s Certificate certifying as of the date thereof whether there exists a Default or Event of Default under the Loan Documents executed and delivered by, or applicable to, Borrower, and if

ATLANTA 5579734.9

-53-

such Default or Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same.

(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 of Borrower or SPC Party, as applicable, stating that such items are true, correct, accurate, and complete and fairly present the financial condition and results of the operations of Borrower and all of the Property on a combined basis as well as each Individual Property (subject to normal year-end adjustments): (i) a Rent Roll for each Individual Property for the subject quarter; and (ii) quarterly and year-to-date operating statements (including Capital Expenditures) prepared for each calendar quarter, noting Net Operating Income, Gross Income From Operations, and Operating Expenses, and other information necessary and sufficient to fairly represent the financial position and results of operation of all of the Property on a combined basis as well as each Individual Property during such calendar quarter, all in form satisfactory to Lender. In addition, such Officer’s Certificate shall certify that the representations and warranties of Borrower, and SPC Party if applicable, set forth in Section 8.1(d)(xi) are true and correct as of the date of such Officer’s Certificate and that there are no trade payables outstanding for more than sixty (60) days.

(d)Intentionally Deleted.

(e)On the Closing Date, Borrower shall submit to Lender an Annual Budget for the partial year period commencing on the Closing Date in form and substance reasonably satisfactory to Lender. Borrower shall submit to Lender an Annual Budget not later than sixty (60) days prior the commencement of each Fiscal Year in form reasonably satisfactory to Lender. During the continuance of a Triggering Event Period, the Annual Budget shall be subject to Lender’s prior written approval (each such Annual Budget, an “Approved Annual Budget”). In the event that Lender objects to a proposed Annual Budget submitted by Borrower which requires the approval of Lender hereunder, Lender shall advise Borrower of such objections within fifteen (15) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise such Annual Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Annual Budget within ten (10) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise the same in accordance with the process described in this Section 5.10(e) until Lender approves the Annual Budget. Until such time that Lender approves a proposed Annual Budget which requires the approval of Lender hereunder, the most recently Approved Annual Budget or Annual Budget (as the case may be) shall apply; provided that, such Approved Annual Budget shall be adjusted to reflect actual increases in Basic Carrying Costs. During the continuance of any Triggering Event Period, in the event that Borrower must incur an Extraordinary Expense, then Borrower shall promptly deliver to Lender a reasonably detailed explanation of such proposed Extraordinary Expense for Lender’s prior written approval.

(f)Borrower will furnish or cause to be furnished to Lender annually, within one hundred twenty (120) days following the end of each Fiscal Year of each Guarantor, a complete copy of each Guarantor’s annual financial statements containing statements of profit and loss and a balance sheet for each Guarantor. Each Guarantor’s annual financial statements shall be accompanied by a certificate executed by such Guarantor (if Guarantor is a natural person) or by the chief financial officer of such Guarantor (if such Guarantor is not a natural person) stating that each such annual financial statement presents fairly the financial condition and the results of operations of such Guarantor being reported upon, and has been prepared in accordance with GAAP (or such other accounting basis acceptable to Lender). Together with each Guarantor’s annual financial statements, Borrower will furnish or cause such Guarantor to furnish to Lender an Officer’s Certificate certifying as of the date thereof whether there exists a Default or Event of Default under the Loan Documents executed and delivered by, or applicable to, such Guarantor, and if such Default or Event of

ATLANTA 5579734.9

-54-

Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same.

(g)In addition to the other requirements of this Section 5.10, if Lender intends to effectuate a Securitization of the entire Loan, then, prior to such Securitization, Borrower shall deliver, or cause to be delivered to Lender, within thirty (30) days after the close of each calendar month (except for the months of January and the last month of the quarter), the following items, accompanied by an Officer’s Certificate of Borrower or SPC Party, as applicable, stating that such items are true, correct, accurate, and complete and fairly present the financial condition and results of the operations of Borrower and all of the Property on a combined basis as well as each Individual Property (subject to normal year-end adjustments): (i) a Rent Roll for each Individual Property for the subject month; and (ii) monthly and year-to-date operating statements (including Capital Expenditures) prepared for each calendar month, noting Net Operating Income, Gross Income From Operations, and Operating Expenses, and other information necessary and sufficient to fairly represent the financial position and results of operation of all of the Property on a combined basis as well as each Individual Property during such calendar month, all in form satisfactory to Lender. In addition, such Officer’s Certificate shall certify that the representations and warranties of Borrower, and SPC Party if applicable, set forth in Section 8.1(d)(xi) are true and correct as of the date of such Officer’s Certificate and that there are no trade payables outstanding for more than sixty (60) days.

(h)Intentionally Omitted.

(i)Borrower shall furnish to Lender, within ten (10) Business Days after request, such further detailed information with respect to the operation of the Property and each Individual Property and the financial affairs of Borrower or any Guarantor as may be reasonably requested by Lender (including a certified copy of each of Borrower’s and each Guarantor’s federal, state and local income tax returns).

(j)Any reports, statements or other information required to be delivered under this Agreement shall be delivered (i) in paper form, or (ii) via electronic mail, FTP upload, website submission or any future commonly available technology acceptable to Lender in its sole discretion, and prepared using Microsoft Word or Excel, Adobe PDF, an XML file or any future industry standard or commonly available technology acceptable to Lender in is sole discretion.

(k)Subject to Section 13.20 hereof, Borrower agrees that Lender may forward to each Investor or any Rating Agency, and each prospective Investor, all documents and information which Lender now has or may hereafter acquire relating to the Debt and to Borrower, any Guarantor, and the Property, whether furnished by Borrower, any Guarantor, or otherwise, as Lender reasonably determines necessary. Borrower irrevocably waives any and all rights it may have under any applicable Laws to prohibit such disclosure, including, but not limited, to any right of privacy.

(l)Upon request, Borrower shall furnish to Lender from time to time such financial, statistical and operating data and financial statements with respect to Borrower or Guarantor (including, to the extent applicable, financial statements prepared in accordance with GAAP and audited by an Approved Accountant), in each case, as Lender reasonably determines to be required in order to comply with any applicable Legal Requirements (including those applicable to Lender or any Servicer (including, without limitation and to the extent applicable, Regulation AB)), within the time frames necessary in order to comply with such Legal Requirements.

Section 5.11Business and Operations. Borrower shall 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 each Individual Property, and shall continue to operate each Individual Property

ATLANTA 5579734.9

-55-

for such purposes. Borrower will qualify to do business and will remain in good standing under the Laws of the jurisdiction as and to the extent the same are required for the ownership, maintenance, management and operation of each Individual Property.

Section 5.12Title to the Property. Borrower will warrant and defend (a) the title to each Individual Property, subject only to Permitted Encumbrances and (b) the validity and priority of the Lien of each Security Instrument, each Assignment of Leases and the other Loan Documents on each Individual Property, subject only to Permitted Encumbrances, in each case against the claims of all Persons whomsoever. Borrower shall reimburse Lender on demand for any losses, costs, damages or expenses (including reasonable attorneys’ fees and court costs) incurred by Lender if an interest in any Individual Property, other than as permitted hereunder, is claimed by another Person.

Section 5.13Costs of Enforcement. In the event (a) that any Security Instrument is foreclosed in whole or in part or that any Security Instrument or any other Loan Document is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage prior to or subsequent to any Security Instrument in which proceeding Lender is made a party or (c) of any Bankruptcy Action in respect of Borrower or any Restricted Party, Borrower, its successors or assigns, shall pay (and reimburse Lender accordingly) all costs of collection and defense, including reasonable attorneys’ fees and costs, 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. The attorneys’ fee due hereunder shall include reasonable attorneys’ fees: (i) incurred by lender both before and after a judgment is obtained, (ii) incurred by Lender during any levy or execution proceedings, and (iii) incurred during or as a result of any appeal.

Section 5.14Estoppel Statements.

(a)After request by Lender, Borrower shall within ten (10) Business Days furnish Lender with a statement, duly acknowledged and certified, setting forth (i) the amount of 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) that no Default or Event of Default has occurred and is continuing, (vi) any offsets or defenses to the payment of the Debt, if any and (vii) that the Note, this Agreement, the Security Instrument 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, estoppel certificates, in form and content satisfactory to Lender, from all tenants specified by Lender. If any tenant fails to provide such estoppel certificate, Borrower shall provide a landlord estoppel certificate to Lender with respect to the tenancy of such tenant, in form and substance satisfactory to Lender. Notwithstanding the foregoing, to the extent that any Lease provides for a specific form of estoppels or limits the matters to which a tenant is required to certify, Lender shall accept such estoppels set forth in or contemplated by such Lease to satisfy this Section 5.14(b), and Lender shall not exercise its right pursuant to this Section 5.14(b) more than two (2) times during any calendar year unless there is an Event of Default.

Section 5.15Loan 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.

Section 5.16No 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 such Individual Property and (b) which constitutes real property with any portion of such Individual Property which may be deemed to constitute Personal Property, or any other procedure whereby the Lien of any taxes

ATLANTA 5579734.9

-56-

which may be levied against such Personal Property shall be assessed or levied or charged to such real property portion of such Individual Property.

Section 5.17Leasing Matters.

(a)With respect to all Leases, Borrower shall: (i) observe and perform in all material respects the obligations imposed upon Borrower as landlord; (ii) not do or permit to be done anything to impair the value of any of the Leases as security for the Debt (including, without limitation, relocating or moving any tenant under any Lease to any other property owned by any Guarantor or any Affiliate of Borrower, SPC Party or any Guarantor); (iii) promptly send to Lender copies of all notices of default which Borrower shall send or receive thereunder; (iv) enforce, in a commercially reasonable manner, all of the terms, covenants and conditions which are to be performed by any tenant, short of termination thereof; (v) not collect any of the Rents more than one (1) month in advance; (vi) not execute any other assignment of Borrower’s interest in any of the Leases or the Rents; and (vii) execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with each Individual Property as Lender shall from time to time reasonably require.

(b)Without obtaining Lender’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed, Borrower shall not:

(i)extend any Lease or enter into any new or renewal Lease affecting any Individual Property (except for extension or renewal that may be exercised in the tenant’s discretion); provided, however, so long as there exists no Event of Default, no such approval of Lender shall be required if: (A) such Lease is not a Major Lease, (B) such Lease complies with the Leasing Requirements; (C) an executed copy of such Lease shall be furnished to Lender within ten (10) Business Days after its execution; and (D) such Lease provides that upon Borrower’s request the tenant thereunder shall subordinate such Lease to the Security Instrument for the applicable Individual Security Instrument and shall agree to attorn to Lender and such subordination and attornment shall be evidenced by a written agreement executed by such tenant in form and substance satisfactory to Lender (such subordination and attornment may be conditioned on Lender entering into a nondisturbance agreement with respect to such Lease);

(ii)consent to any assignment of or subletting by any tenant under any of the Major Leases (except in accordance with the terms of such tenant’s Lease);

(iii)alter, modify, change, cancel or terminate any guaranty of any of the Major Leases;

(iv)alter, modify, change the terms of, cancel, terminate or accept a surrender of any of the Major Leases; or

(v)transfer or permit a transfer of the Property, or any Individual Property, or of any interest therein, even if such a transfer is permitted under the applicable Security Instrument for such Individual Property, if such transfer would effect a merger of the estates and rights of, or a termination or diminution of the obligations of, tenants under any of the Major Leases.

(c)Whenever Lender’s approval or consent is required pursuant to the provisions of this Section 5.17, Lender shall use good faith efforts to respond within ten (10) Business Days after Lender’s receipt of Borrower’s written request for approval or consent, accompanied by the applicable Lease or other item for which consent is sought. If Lender fails to respond to such request within ten (10) Business Days, and Borrower sends a second request containing a legend clearly marked in not less than fourteen (14) point

ATLANTA 5579734.9

-57-

bold face type, underlined, in all capital letters “REQUEST DEEMED APPROVED IF NO RESPONSE WITHIN 10 BUSINESS DAYS”, Lender shall be deemed to have approved or consented to such Lease or other item for which consent is sought if Lender fails to respond to such second written request before the expiration of such ten (10) Business Day period.

(d)Borrower shall provide Lender with written notice of any tenant “going dark” under such tenant’s lease within five (5) Business Days after Borrower learns that such tenant “goes dark”.

Section 5.18Alterations; Repairs.

(a)Lender’s prior approval shall be required in connection with any alterations to any Improvements (i) that may have a Material Adverse Effect, (ii) the cost of which (including any related alteration, improvement or replacement) is reasonably anticipated to exceed the Alteration Threshold with respect to any Individual Property, or (iii) that are structural in nature; provided, however, that with respect to items (i) and (ii) above, such approval may be granted or withheld in Lender’s reasonable discretion, and with respect to item (iii) above, such approval may be granted or withheld in Lender’s sole discretion. If the total unpaid amounts incurred and to be incurred with respect to any alterations to the Improvements at any Individual Property (other than such amounts to be paid or reimbursed by tenants under the Leases) shall at any time exceed the Alteration Threshold, Borrower shall promptly deliver to Lender as security for the payment of such amounts (the “Alteration Security”) and as additional security for Borrower’s obligations under the Loan Documents any of the following as determined by Borrower: (i) cash, (ii) U.S. Obligations, (iii) other securities acceptable to Lender, (provided that Lender shall have received a Rating Agency Confirmation as to the form and issuer of same if the Loan or any interest therein is included in a Securitization), or (iv) a completion bond (provided that Lender shall have received a Rating Agency Confirmation as to the form and issuer of same if the Loan or any interest therein is included in a Securitization) or an irrevocable letter of credit (payable on sight draft only) issued by an Eligible Institution. Such security shall be in an amount equal to the excess of the total unpaid amounts incurred and to be incurred with respect to such alterations to the Improvements (other than such amounts to be paid or reimbursed by tenants under the Leases) over the Alteration Threshold. All alterations by Borrower to any Improvements shall be made lien-free and in a good and workmanlike manner in accordance with all Legal Requirements.

Notwithstanding the foregoing provisions of this Section 5.18(a), to the extent the Lease with a tenant remains in effect and such tenant remains liable for the obligations under its Lease, such tenant shall have the right to perform any alterations permitted by such Lease (which do not require Borrower’s consent or for which such consent was obtained from Borrower prior to the Closing Date and Borrower has advised Lender in writing of such consent) in accordance with the express terms thereof and, to the extent such rights conflict or are inconsistent with the provisions of this Section 5.18(a), the provisions set forth in such Lease shall govern and control.

(b)Borrower shall promptly repair, replace or rebuild (or cause same to be done) any part of any Individual Property which may become damaged, worn or dilapidated, and shall also complete and pay for (or cause to be completed and paid for) any structure at any time in the process of construction or repair on any Individual Property.

Section 5.19Access Laws.

(a)Borrower agrees that each Individual Property shall at all times comply in all material respects with the requirements of the Access Laws.

ATLANTA 5579734.9

-58-

(b)Notwithstanding any provisions set forth herein or in any other document regarding Lender’s approval of alterations of any Individual Property, Borrower shall not alter any Individual Property in any manner which would increase Borrower’s responsibilities for compliance with the applicable Access Laws without the prior written approval of Lender. The foregoing shall apply to tenant improvements constructed by Borrower or by any of its tenants to the extent Borrower’s consent to such improvements is required under the terms of the applicable Leases. Lender may condition any such approval upon receipt of a certificate of an architect, engineer or other person acceptable to Lender regarding compliance with applicable Access Laws.

(c)Borrower covenants and agrees to give prompt notice to Lender of the receipt by Borrower of any complaints related to any violations of any Access Laws and of the commencement of any proceedings or investigations which relate to compliance with applicable Access Laws.

Section 5.20Property Management.

(a)For so long as a Management Agreement remains in effect, Borrower shall cause the Manager to manage the Property in a first class manner. For so long as a Management Agreement remains in effect, Borrower shall (i) pay all sums required to be paid by Borrower under the Management Agreement, (ii) diligently perform, observe and enforce all of the terms, covenants and conditions of the Management Agreement on the part of Borrower to be performed, observed and enforced and (iii) promptly notify Lender of the giving of any notice to Borrower of any default by Borrower in the performance or observance of any of the terms, covenants or conditions of the Management Agreement on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice. For so long as a Management Agreement remains in effect, Borrower shall comply with all obligations of Borrower under the Assignment of Management Agreement.

(b)Except as otherwise required by Section 5.20(d) or permitted by Section 6.6.1 hereof, Borrower shall not remove or replace the Manager (which, with respect to an Affiliated Manager, shall be deemed to occur upon a change of Control of the Manager) or terminate, cancel, modify, change, supplement, alter or amend the Management Agreement in any respect as it relates to any Individual Property (collectively, a “Management Change”) without (i) Lender’s prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned and (ii) in the event that the Loan or any interest therein is included in a Securitization, a Rating Agency Confirmation if required by Lender. As conditions precedent to any replacement of the Manager, Borrower shall (i) cause the new property manager of the Property to execute an Assignment of Management Agreement in form and substance acceptable to Lender, (ii) cause the new Manager to assume each and every other obligation of Manager under the Loan Documents, (iii) pay all of Lender’s and any Rating Agency costs and expenses incurred in connection with such replacement (including, without limitation, all reasonable attorney’s fees) and (iv) if an Insolvency Opinion was required to be delivered pursuant to Section 11.1(b)(i) hereof, deliver an Additional Insolvency Opinion to Lender if such new Manager is an Affiliated Manager.

(c)Except as otherwise required by Section 5.20(d) or permitted by Section 6.6.1 hereof, Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Agreement, all the rights, privileges and prerogatives of Borrower to surrender the Management Agreement as it relates to any Individual Property or to terminate, cancel, modify, change, supplement, alter or amend the Management Agreement in any respect as it relates to any Individual Property; provided that, Borrower shall not be required to obtain Lender’s consent with respect to any non-material changes, supplements, alterations or amendments to the Management Agreement. Any such surrender of the Management Agreement or termination,

ATLANTA 5579734.9

-59-

cancellation, modification, change, supplement, alteration or amendment of the Management Agreement without the prior consent of Lender (if required pursuant to the preceding sentence) shall be void and of no force and effect. If Borrower shall default in the performance or observance of any term, covenant or condition of the Management Agreement, then, without limiting the generality of the other provisions of this Agreement, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of the Management Agreement on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under the Management Agreement shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, subject to the terms and conditions of, and the rights of tenants under the Leases, the right to enter upon the any Individual Property at any time and from time to time for the purpose of taking any such action. If Manager shall deliver to Lender a copy of any notice sent to Borrower of default under the Management Agreement, such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, cause Manager to deliver such certificates of estoppel with respect to compliance by Borrower with the terms of the Management Agreement as may be reasonably requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of the Management Agreement upon demand by Lender made at any time within one (1) year of the last day upon which any such option may be exercised, and Borrower hereby expressly authorizes and appoints Lender as its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest. Any sums expended by Lender pursuant to this paragraph shall bear interest at the Applicable Interest Rate from the date such cost is incurred to the date of payment to Lender, shall be deemed to constitute a portion of the Debt, shall be secured by the Lien of each Security Instrument and the other Loan Documents, and shall be immediately due and payable upon demand by Lender therefor.

(d)Borrower covenants and agrees, that, if (i) an Event of Default exists, (ii) a default or event of default exists under the Management Agreement with respect to any Individual Property beyond any applicable grace or cure period, or (iii) Manager becomes insolvent, Borrower shall, at the request of Lender, terminate the Management Agreement, and require Manager to transfer its responsibility for the management of the Property to a management company selected by, or otherwise acceptable to, Lender.

Section 5.21Compliance with Anti-Terrorism Laws.

(a)Borrower covenants and agrees that it shall immediately notify Lender in writing upon the occurrence of a Reportable Compliance Event of which Borrower has actual knowledge.

(b)Borrower shall perform reasonable due diligence to ensure that at all times throughout the term of the Loan, including after giving effect to any Permitted Transfers, that the representations and warranties set forth in Section 4.1.12 hereof remain true, correct and complete.

(c)To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each Borrower that opens an account. What this means: when Borrower opens an account, Lender will ask for the business name, business address, taxpayer identifying number and other information that will allow Lender to identify Borrower, such as organizational documents. For some businesses and organizations, Lender may also need to ask for identifying information and documentation relating to certain individuals associated with the business or organization.

ATLANTA 5579734.9

-60-

Section 5.22Liens. Borrower shall not, without the prior written consent of Lender, create, incur, assume or suffer to exist any Lien on any Individual Property or permit any such action to be taken, except for the Permitted Encumbrances.

Section 5.23Dissolution. Borrower shall not (a) to the fullest extent permitted by applicable law, engage in any dissolution, liquidation or consolidation or merger with or into any other business entity, or (b) without the prior written consent of Lender, (i) engage in any business activity not related to the ownership and operation of the Property, (ii) 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 expressly permitted by the Loan Documents, (iii) unless required by applicable law, modify, amend, waive or terminate its organizational documents or its qualification and good standing in any jurisdiction or (iv) cause the SPC Party to (x) to the fullest extent permitted by applicable law, dissolve, wind up or liquidate or take any action, or omit to take an action, as a result of which the SPC Party would be dissolved, wound up or liquidated in whole or in part, or (y) unless required by applicable law, amend, modify, waive or terminate the certificate of incorporation or bylaws of the SPC Party.

Section 5.24Change In Business. Borrower shall not enter into any line of business other than the ownership and operation of the Property, or make any 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.

Section 5.25Debt 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.

Section 5.26Affiliate Transactions. Borrower shall not enter into, or be a party to, any transaction with any Affiliate of Borrower (including, without limitation, the payment of any fees or commissions to any such Affiliate) except in the ordinary course of business and on terms which are fully disclosed to Lender in writing and in advance and are no less favorable to Borrower or such Affiliate than would be obtained in a comparable arm’s length transaction with an unrelated third party.

Section 5.27Zoning. Without the prior written consent of Lender, Borrower shall not initiate or consent to (a) any change, modification or alteration of the existing access to any Individual Property; or (b) any change in any private restrictive covenant, replat, easement, zoning Law or other public or private restriction, limiting or defining the uses which may be made of any Individual Property. If under applicable zoning provisions the use of any Individual Property is or shall become a nonconforming use, Borrower will not cause or permit such nonconforming use to be discontinued or abandoned without the prior written consent of Lender.

Section 5.28Name, Identity, Structure, or Principal Place of Business. Borrower shall not change its name, identity (including its trade name or names), or principal place of business set forth in the introductory paragraph of this Agreement, without, in each case, first giving Lender thirty (30) days prior written notice. Borrower shall not change its corporate, partnership or other structure, or the place of its organization, without, in each case, the prior written consent of Lender. Upon Lender’s request, Borrower shall 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 Property as a result of such change of principal place of business or place of organization.

ATLANTA 5579734.9

-61-

Section 5.29ERISA.

(a)Borrower shall not engage in any Prohibited Transaction or Prohibited Governmental Transactions subjecting Lender to liability for a violation of ERISA, the Code, a state statute or other similar Law.

(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, that (i) Borrower is not and does not maintain a Plan or a Governmental Plan, (ii) Borrower is not engaging in a Prohibited Transaction or any Prohibited Governmental Transactions; and (iii) 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).

Section 5.30Reciprocal Easement Agreements. Borrower agrees that without the prior consent of Lender, Borrower shall not execute modifications to any REA if such modifications will have a Material Adverse Effect on any Individual Property. Without limiting the generality of the foregoing, Borrower shall not, without the prior written consent of Lender, take (and hereby assigns to Lender any right it may have to take) any action to terminate, surrender, or accept any termination or surrender of, any REA. Borrower shall pay (or cause to be paid) all charges and other sums to be paid by Borrower pursuant to the terms of any REA as the same shall become due and payable and prior to the expiration of any applicable grace period therein provided. Borrower shall comply, in all material respects, with all of the terms, covenants and conditions on Borrower’s part to be complied with pursuant to terms of any REA. Borrower shall take all actions as may be reasonably necessary from time to time to preserve and maintain all REAs in accordance with applicable Laws, rules and regulations. Borrower shall enforce, in a commercially reasonable manner, the obligations to be performed by the parties to each REA (other than Borrower). Borrower shall promptly furnish to Lender any notice of default or other communication delivered to Borrower in connection with any REA by any party to any such REA or any third party other than routine correspondence and invoices. Borrower shall not assign (other than to Lender) or encumber its rights under any REA.

Section 5.31Specific Environmental Obligations. The Individual Borrower owning the Individual Property located in Rockingham County, North Carolina shall comply and shall cause any tenant under a Lease of the applicable Individual Property to comply with the requirements and restrictions set forth in that certain Notice of Residual Petroleum recorded in Book 1390, Page 831 in the office of the Register of Deeds of Rockingham County, North Carolina.

VI.TRANSFERS

Section 6.1Borrower Acknowledgement. Borrower acknowledges that Lender has examined and relied on the creditworthiness and experience of Borrower and its stockholders, general partners, members and principals in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership of the Property as a means of maintaining the value of the

ATLANTA 5579734.9

-62-

Property as security for repayment of the Debt. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt, Lender can recover the Debt by a sale of the Property.

Section 6.2Prohibition on Transfers. Borrower shall not directly or indirectly permit or allow any Transfer to be undertaken or cause any Transfer to occur, other than a Permitted Transfer, unless Lender shall have expressly approved, in its reasonable discretion, such request in writing, subject to satisfaction of all of the following conditions:

(a)Lender shall receive Borrower’s written request for a Transfer at least sixty (60) days prior to the proposed date of closing of such Transfer;

(b)The date of closing of such Transfer is on a date other than during the period that is sixty (60) days prior to the anticipated closing date of a Securitization and the period that is sixty (60) days after the actual closing date of a Securitization;

(c)No Event of Default has occurred and is continuing under this Agreement, any Security Instrument, the Note or the other Loan Documents;

(d)Borrower or Transferee shall pay any and all reasonable out-of-pocket costs incurred in connection with the transfer (including, without limitation, Lender’s reasonable attorneys’ fees and disbursements, third party report fees, all fees and expenses of the Rating Agencies and their counsel, and all recording fees, transfer taxes, title insurance premiums and mortgage and intangible taxes), regardless of whether the transfer is consummated;

(e)The identity, experience (including, without limitation, demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property), financial condition, creditworthiness (including, without limitation, no history of any Bankruptcy Action within the preceding 7 years, no pending regulatory action or litigation and no existing defaults under any other permitted indebtedness), single purpose nature and bankruptcy remoteness of the transferee (“Transferee”) shall be satisfactory to Lender;

(f)The identity, experience (including, without limitation, demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property), financial condition and creditworthiness (including, without limitation, no history of any Bankruptcy Action within the preceding 7 years) of the sponsor(s) or principals(s) of Transferee and of any party proposed to become a substitute Guarantor, as evidenced by financial statements and other information requested by Lender, shall be satisfactory to Lender;

(g)Transferee, the sponsor(s) or principal(s) of Transferee, and any party approved by Lender as set forth above to become a substitute Guarantor shall comply with the provisions of Section 5.21 hereof;

(h)The organizational documents of the Transferee and its sponsor(s) or principal(s) shall be in form and substance satisfactory to Lender;

(i)Transferee shall assume all of the obligations of Borrower under the Loan Documents, and any party approved by Lender as set forth in subsection (f) above to become a substitute Guarantor shall assume all of the obligations of each Guarantor under the Guaranty and the Environmental Indemnity, in each case pursuant to documentation required by Lender and by the Rating Agencies, including,

ATLANTA 5579734.9

-63-

without limitation, an assumption agreement in form and substance satisfactory to Lender and the Rating Agencies;

(j)The Property shall be managed by a property manager with sufficient experience in the management of properties similar to the Property and otherwise satisfactory to Lender in all respects following such transfer, and such manager shall enter into an assignment of management agreement and subordination of management fees satisfactory to Lender;

(k)if required by Lender, receipt of Rating Agency Confirmation;

(l)Transferee shall deliver, at Lender’s election, either a new title insurance policy or an endorsement to the existing Title Insurance Policy insuring each Security Instrument as modified by the assumption agreement, as a valid first Lien on each Individual Property and naming Transferee as owner of each Individual Property, which endorsement shall insure that as of the recording of the assumption agreement no Individual Property is subject to any additional exceptions or Liens other than Permitted Encumbrances, and otherwise in form and substance satisfactory to Lender;

(m)Borrower shall pay to Lender a non-refundable application fee of $10,000.00, together with an assumption fee equal to one percent (1.0%) of the outstanding principal balance of the Loan; and

(n)Transferee shall deliver to Lender each of the following opinions: (i) if the Loan or any interest therein is included in a Securitization and if required by Lender, a REMIC Opinion; (ii) if an Insolvency Opinion was required to be delivered pursuant to Section 11.1(b)(i) hereof, an Additional Insolvency Opinion; and (iii) any other applicable opinions reasonably required by Lender and the Rating Agencies, in form and substance and delivered by counsel satisfactory to Lender and the Rating Agencies.

(o)Borrower’s obligations under the contract of sale pursuant to which the Transfer is proposed to occur shall expressly be subject to the satisfaction of the terms and conditions of this Section 6.2.

Any Transfer made in violation of this Agreement shall be null and void ab initio. If Borrower complies with the foregoing conditions to sale, assignment, or other transfer of the Property, the number of such transfers made in accordance with this Section 6.2 shall be unlimited. A consent by Lender with respect to a transfer of the Property in its entirety to, and the related assumption of the Loan by, a Transferee pursuant to this Section 6.2 shall not be construed to be a waiver of the right of Lender to consent to any subsequent transfer of the Property. No Transfer shall be permitted under this Section 6.2 unless such Transfer includes a Transfer of all of the Property, including each Individual Property, then serving as collateral for the Loan, in a single transaction.

Section 6.3Transfer Documentation. Upon the effective date of any Permitted Transfer, Borrower shall deliver to Lender copies of all documents evidencing any such transfer and shall provide Lender an updated organizational structure chart, certified pursuant to an Officer’s Certificate as true, complete and correct.

Section 6.4No Impairment. 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 any Transfer, which is not a Permitted Transfer, consummated without Lender’s prior written consent or upon any Permitted Transfer not consummated in accordance with the terms and conditions of this Agreement. This Section 6.4 shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.

ATLANTA 5579734.9

-64-

Section 6.5Death or Incapacity of Individual Guarantor. Within sixty (60) days after the death, incarceration, indictment or legal incapacity of any Guarantor who is an individual, Borrower shall cause a substitute Guarantor approved by Lender to deliver to Lender a substitute Guaranty and Environmental Indemnity in form and substance identical to the Guaranty and Environmental Indemnity delivered on the Closing Date, a legal opinion with respect to the enforceability of such Guaranty and Environmental Indemnity in form and substance similar to the enforceability opinion delivered on the Closing Date and otherwise satisfactory to Lender and such other certificates, opinions, documents or instruments as Lender may require including, without limitation, an Additional Insolvency Opinion (if an Insolvency Opinion was required to be delivered pursuant to Section 11.1(b)(i) hereof). Lender’s approval of any proposed substitute Guarantor shall be made in Lender’s sole and absolute discretion, and can be based on any number of factors, including, without limitation, Rating Agency Confirmation if required by Lender, receipt of a credit report and credit check and other due diligence with respect to the substitute Guarantor satisfactory to Lender.

Section 6.6Additional Permitted Transfers.

6.6.1.Permitted Transfers of Interests in Guarantor. For the avoidance of doubt and notwithstanding the restrictions contained in Section 6.2 hereof or in the Security Instrument, the following Transfers shall be permitted without Lender’s consent: So long as Cole Real Estate Income Strategy (Daily NAV) Operating Partnership, LP is the Guarantor, (i) the sale, transfer or issuance of shares in Sponsor in accordance with applicable Law or the subsequent Sale or Pledge (for estate planning purposes or otherwise) of such shares (provided no Person, together with any Affiliates of such Person, owns or holds a security interest in, or pledge of, more than forty-nine percent (49%) of the legal and/or beneficial interests in Sponsor), or (ii) the listing of shares in Sponsor on a public exchange and the transfer of publicly traded shares in Sponsor; (iii) the acquisition of the shares of Sponsor or the partnership interests in Guarantor by American Realty Capital Properties, Inc. (NASDAQ: ARCP) (“ARCP”) or by any Affiliate of ARCP, provided that, at all times, ARCP continues to control Sponsor (if Sponsor continues to exist) and Guarantor; (iv) any replacement of the non-member manager of Borrower; (v) the determination by the Board of Sponsor to become internally managed; and (vi) transfers of ownership interests in any Restricted Party and ownership interests in any member, partner or shareholder of any Restricted Party to ARCP or to any Affiliate of a Restricted Party or ARCP, provided that, at all times, ARCP, Sponsor or Guarantor continues to control the Restricted Party.

In connection with the matter described in clause (iv) above, Borrower shall be permitted to amend its operating agreement to reflect such replacement, notwithstanding anything in the Loan Documents to the contrary, and in connection with the matters described in clause (v) above, Borrower shall be entitled to terminate the Management Agreement and shall not be obligated to enter into any replacement Management Agreement.

6.6.2.Permitted Transfers of Non-Controlling Interests; UPREIT Transactions. For the avoidance of doubt and notwithstanding the restrictions contained in Section 6.2 hereof or in the Security Instrument, the following Transfers shall be permitted without Lender’s consent: (1) the transfer (but not the pledge), in one or a series of transactions, of limited partnership interests, non-managing membership interests or shares (as the case may be) in any Restricted Party, or (2) the issuance of limited partnership interests in Guarantor; provided, however, with respect to such transfers:

(a)Lender shall receive not less than thirty (30) days prior written notice of such transfers;

(b)no such transfers shall result in a change in Control of Guarantor or any Restricted Party;

ATLANTA 5579734.9

-65-

(c)after giving effect to such transfers, (A) Sponsor and Guarantor shall own at least a fifty-one percent (51%) direct or indirect legal and beneficial ownership interest in Borrower and any SPC Party; (B) Sponsor and Guarantor shall Control Borrower and any SPC Party; and (C) Sponsor and Guarantor shall control the day-to-day operation of the Property;

(d)the Property shall continue to be managed by Manager or a replacement property manager in accordance with Section 5.20 hereof;

(e)in the case of the transfer of any direct equity ownership interests in Borrower or any SPC Party, such transfers shall be conditioned upon continued compliance with the relevant provisions of Article VIII hereof;

(f)such transfers shall be conditioned upon each Borrower’s and Guarantor’s ability to, after giving effect to the equity transfer in question, (A) remake the representations contained herein relating to ERISA matters, the Patriot Act, OFAC and matters concerning Sanctioned Persons (and, upon Lender’s request, Borrower and Guarantor shall deliver to Lender (1) an Officer’s Certificate containing such updated representations effective as of the date of the consummation of the applicable equity transfer, and (2) searches, acceptable to Lender, for any entity or individual owning, directly or indirectly, 20% or more of the interests in Borrower as a result of such transfer), and (B) continue to comply with the covenants contained herein relating to ERISA matters, the Patriot Act, and OFAC and matters concerning Sanctioned Persons.

6.6.3.Additional Insolvency Opinion. Notwithstanding (and without limiting) the foregoing, if an Insolvency Opinion was required to be delivered pursuant to Section 11.1(b)(i) hereof, no transfer of any direct or indirect ownership interests in Borrower may be made such that the transferee owns, in the aggregate with the ownership interests in Borrower of transferee’s Affiliates, more than a forty-nine percent (49%) interest in Borrower unless such transfer is conditioned upon the delivery of an Additional Insolvency Opinion. An Additional Insolvency Opinion shall be not be required in connection with the transfer of direct or indirect ownership interests in Borrower to a transferee who owns, in the aggregate with the ownership interests in Borrower of transferee’s Affiliates, more than a forty-nine percent (49%) interest in Borrower if an Insolvency Opinion or Additional Insolvency Opinion has previously been delivered to Lender with respect to such transferee.

Section 6.7Sanctioned Persons. Notwithstanding anything to the contrary contained in this Article VI, no transfer of the Property, or of any interest therein, and no transfer of any interest in a Restricted Party (whether or not such transfer shall constitute a Transfer) shall be made to any Sanctioned Person.

Section 6.8Partial Releases. Commencing on October 1, 2016, and on any Business Day thereafter through the Maturity Date, Borrower may obtain the release of any Possible Release Property from the lien of the applicable Security Instrument (and related Loan Documents) and the release of the related Individual Borrower’s obligations under the Loan Documents with respect to such Possible Release Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:

(a)Borrower shall pay Lender 110% of the Allocated Loan Amount (as such amount may be reduced pursuant to Sections 6.8(h), 6.8(i), 7.4(c) or 7.4(d) hereof) for such Possible Release Property (the “Release Price”) together with the applicable Prepayment Consideration calculated based on the Release Price;

(b)No Default or Event of Default shall have occurred and be continuing;

ATLANTA 5579734.9

-66-

(c)Subsequent to such release, each remaining Individual Borrower shall continue to be a single purpose entity pursuant to, and in accordance with, the requirements of Article VIII of this Agreement;

(d)if the Loan or any interest therein is included in a Securitization, Borrower shall deliver a REMIC Opinion;

(e)Borrower shall submit to Lender, not less than ten (10) days prior to the date of prepayment, a release of Lien (and related Loan Documents) for such Possible Release Property for execution by Lender. Such release shall be in a form appropriate in each jurisdiction in which the Possible Release 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;

(f)After giving effect to the release of the applicable Individual Borrower and Possible Release Property, the Debt Service Coverage Ratio for the Individual Properties then remaining subject to the Liens of the Security Instruments based on the trailing twelve (12) month period immediately preceding the release of the applicable Possible Release Property shall be equal to or greater than 1.40 to 1.00;

(g)Borrower shall reimburse Lender and Servicer for any reasonable costs and expenses Lender and 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 then current fee being assessed by such Servicer to effect such release; provide, however, such fee shall not exceed $5,000.00;

(h)Notwithstanding the foregoing provisions, if the Loan or any interest therein is included in a REMIC Trust and the Real Property to Loan Value Ratio is less than 80% immediately after the release of the applicable Possible Release Property, no release will be permitted unless the principal balance of the Loan is paid down by the greater of (i) the Release Price or (ii) the least of one of the following amounts: (A) only if the released Possible Release Property is sold, the net proceeds of an arm’s length sale of the released Possible Release Property to an unrelated Person, (B) the fair market value of the released Possible Release Property at the time of the release, or (C) an amount such that the Real Property to Loan Value Ratio (as so determined by Lender) after the release of the applicable Possible Release Property is not less than the Real Property to Loan Value Ratio of the Property immediately prior to such release, unless the Lender receives an opinion of counsel that, if (ii) is not followed, the Securitization will not fail to maintain its status as a REMIC Trust as a result of the release of the applicable Possible Release Property; and

(i)Payment of the Release Amount shall be applied to the outstanding principal balance of the Note.

VII.INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

Section 7.1Insurance.

(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 Security Instrument affecting such Individual Borrower’s Individual Property (and all related obligations) pursuant to Section 6.8 hereof, then exclusive of such Individual Borrower and

ATLANTA 5579734.9

-67-

such Individual Property so released, Borrower shall obtain and maintain, or cause to be obtained and maintained, Policies for Borrower and each Individual Property providing at least the following coverages:

(i)insurance with respect to the Improvements and the Personal Property insuring against any peril now or hereafter included within the classification “Risk of Direct Physical Loss” or “Special Cause of Loss” (including, without limitation, fire, lighting, windstorm, hail, and terrorism, in each case, (A) in an amount equal to 100% of the “Full Replacement Cost” for each Individual Property, which for purposes of this Agreement shall mean actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings); (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; (C) in cases where the applicable tenant is not required under the terms and conditions of its Lease to obtain insurance, providing for no deductible in excess of 5% of the net cash flow of each Individual Property up to a maximum deductible of $100,000 for each Individual Property (except when a separate wind-loss or earthquake deductible applies, then the amount must not exceed 5% of the replacement cost value of such Individual Property); (D) in cases whether the applicable tenant is required under the terms and conditions of its Lease to obtain insurance, providing for no tenant deductible that exceeds the amount permitted pursuant to the terms and conditions of such tenant’s Lease; (E) if any of the Improvements or the use of any Individual Property shall at any time constitute legal non-conforming structures or uses, the policy of insurance must include ordinance and law protection including replacement of undamaged building value, increased cost of repairs or reconstruction, or additional demolition and removal costs. The Full Replacement Cost shall be redetermined from time to time (but not more frequently than once in any twelve (12) calendar months) at the request of Lender by an appraiser or contractor designated and paid by Borrower and approved by Lender, or by an engineer or appraiser in the regular employ of the insurer. After the first appraisal, additional appraisals may be based on construction cost indices customarily employed in the trade. No omission on the part of Lender to request any such ascertainment shall relieve Borrower of any of its obligations under this Section 7.1(a)(i);

(ii)commercial general liability insurance against claims for personal injury, bodily injury, death or property damage occurring upon, in or about each Individual Property, such insurance (A) to be on the so-called “occurrence” form with a combined single limit of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate, per location; (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 and oral contracts; (5) contractual liability covering the indemnities contained in Article 10 of each Security Instrument to the extent the same is available; and (6) acts of terrorism and similar acts of sabotage. If Borrower is the holder of a liquor license with respect to any Individual Property, commercial general liability insurance shall include “Dram Shop” or other liquor liability coverage in amounts equal to or greater than the general liability requirements set forth above. If a party other than Borrower is the holder of a liquor license with respect to all or any portion of such Individual Property, Borrower shall require the holder of such license to maintain the foregoing Policy and to name Borrower and lender as an additional insured thereunder.;

(iii)business interruption and/or loss of rents insurance (A) with loss payable to Lender; (B) covering all risks required to be covered by the insurance provided for in Section 7.1(a)(i); (C) in an amount equal to 100% of the projected net operating income plus fixed expenses for each Individual Property (on an actual loss sustained basis) for a period continuing until the Restoration of each Individual Property is completed; the amount of such business interruption and/or loss of rents insurance shall be determined prior to the Closing Date and at least once each year thereafter based on Lender’s determination

ATLANTA 5579734.9

-68-

of the projected net operating income plus fixed expenses for each Individual Property for a eighteen (18) month period and, if the business interruption and/or loss of rents insurance includes extra expense coverage, the amount of insurance required must include a reasonable additional amount for extra expenses; and (D) containing an extended period of indemnity endorsement which provides that after the physical loss to the Improvements and the 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. All insurance proceeds payable to Lender, as Lender Loss Payee, pursuant to this Section 7.1(a)(iii) shall be held by Lender and shall be applied to the obligations secured hereunder from time to time due and payable hereunder and under the Note and this Agreement; provided, however, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations secured hereunder on the respective dates of payment provided for in the Note and this Agreement except to the extent such amounts are actually paid out of the proceeds of such business interruption and/or loss of rents insurance;

(iv)at all times during which structural construction, repairs or alterations are being made with respect to the Improvements on any Individual Property (A) owner’s contingent or protective liability insurance covering claims not covered by or under the terms or provisions of the insurance provided for in Section 7.1(c)(ii); and (B) the insurance provided for in Section 7.1 (a)(i) shall be written in a so-called builder’s risk completed value form (1) on a non-reporting basis, (2) against all risks insured against pursuant to Section 7.1(a)(i), (3) shall include permission to occupy such Individual Property, and (4) shall contain an agreed amount endorsement waiving co-insurance provisions;

(v)if Borrower has any employees, workers’ compensation, subject to the statutory limits of the State where each Individual Property is located, and employer’s liability insurance with a limit of at least $500,000 per accident and per disease per employee, and $500,000 for disease aggregate in respect of any work or operations on or about any Individual Property, or in connection with any Individual Property or its operation (if applicable);

(vi)comprehensive boiler and machinery / mechanical breakdown insurance, if applicable, in amounts as shall be required by Lender on terms consistent with the commercial property insurance policy required under Section 7.1 (a)(i) hereof;

(vii)if any portion of the Improvements on any Individual Property is at any time located in an area identified by the Secretary of Housing and Urban Development or any successor thereto as an area having special flood hazards pursuant to 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 any successor Law (the “Flood Insurance Acts”), flood hazard insurance of the following types and in the following amounts: (A) coverage under Policies issued pursuant to the Flood Insurance Acts (the “Flood Insurance Policies”) in an amount equal to the maximum limit of coverage available for such Individual Property under the Flood Insurance Acts, subject only to customary deductibles under such Policies and (B) coverage under supplemental private Policies in an amount, which when added to the coverage provided under the Flood Insurance Policies, is not less than the Full Replacement Cost of such Individual Property;

(viii)if any Individual Property is located in seismic zones 3 or 4, earthquake insurance in amounts not less than 150% of the probable maximum loss of such Individual Property as determined by an architectural or engineering consultant selected by Lender, provided that the insurance

ATLANTA 5579734.9

-69-

pursuant to this Section 7.1(a)(viii) shall be on terms consistent with the insurance required under Section 7.1(a)(i) hereof; and

(ix)motor vehicle liability coverage for all owned (if any) and non-owned vehicles, including rented and leased vehicles utilized by Borrower in the service or support of any Individual Property containing minimum limits per occurrence, including umbrella coverage, of $1,000,000; and

(x)Umbrella or Excess Liability Insurance in an amount no less than $25,000,000 each occurrence, and in the aggregate written in excess of the insurance required in (ii), (v) and (ix) above in terms consistent with those paragraphs; and

(xi)such other insurance and in such amounts as Lender from time to time may request against such other insurable hazards which at the time are commonly insured against for property similar to the applicable Individual Property located in or around the region in which the applicable Individual Property is located.

(b)All insurance provided for in Section 7.1(a) hereof shall be obtained under valid and enforceable policies (the “Policies” or in the singular, the “Policy”), in such forms and, from time to time after the date hereof, in such amounts as may be satisfactory to Lender, issued by financially sound and responsible insurance companies authorized to do business in the State where each Individual Property is located approved by Lender and having a claims paying ability/financial strength rating of A-, Class VIII or better by Best’s Key Rating Guide as well as a rating of A- or higher from Standard & Poor’s or the equivalent rating from Fitch or Moody’s. Earthquake (if required) must be covered by an insurance company having a rating of A-, Class VIII by Best’s Key Rating Guide or a rating of A3 (or equivalent) from Moody’s or A- by Standard & Poor’s. Borrower shall provide to Lender copies or other evidence satisfactory to Lender of all insurance required to be maintained pursuant to Section 7.1(a) hereof. Notwithstanding the above, any insurance company with an AM Best's Rating of A-, shall have an outlook, as determined by AM Bests, of either "Stable" or "Positive". Not less than five (5) Business Days prior to the expiration dates of the Policies theretofore furnished to Lender, Borrower shall deliver evidence satisfactory to Lender of the renewal of all of the Policies or that the Policies have been replaced by other Policies. Not less than five (5) Business Days prior to delinquency of payment of the premiums or assessments due under the Policies (the “Insurance Premiums”), Borrower shall deliver to Lender evidence of such payment; provided, however, that Borrower is not required to furnish such evidence of payment of Insurance Premiums to the extent that such Insurance Premiums have been paid by Lender pursuant to the terms of Section 9.2 hereof.

(c)Borrower shall not obtain (i) any umbrella or blanket liability or casualty Policy unless, in each case, such Policy is approved in advance in writing by Lender and Lender’s interest is included therein as provided in this Agreement and such Policy is issued by an insurance company satisfying the requirements of Section 7.1(b) or (ii) separate insurance concurrent in form or contributing in the event of loss with that required in Section 7.1(a) hereof to be furnished by, or which may be required to be furnished by, Borrower. In the event Borrower obtains separate insurance or an umbrella or a blanket policy, Borrower shall notify Lender of the same and shall cause certified copies of each Policy to be delivered as required in Section 7.1(a) hereof. Any blanket insurance Policy shall specifically allocate to the 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 Property in compliance with the provisions of Section 7.1(a) hereof.

(d)All Policies provided for or contemplated by Section 7.1(a) hereof, shall name Borrower as Named Insured and, except for the Policy referenced in Section 7.1(a)(v) hereof, shall name Lender as an additional insured on a form acceptable to Lender; and in the case of property damage, boiler

ATLANTA 5579734.9

-70-

and machinery, earthquake and flood insurance, shall contain a non-contributing standard mortgagee clause acceptable to Lender in favor of Lender providing that the loss thereunder shall be payable to Lender.

(e)Upon five Business Days written request by Lender, Borrower shall provide full copies of all Policies required hereunder to Lender;

(f)All Policies provided for in Section 7.1(a) hereof shall contain clauses or endorsements to the effect that:

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

(ii)the Policy shall not be materially changed (other than to increase the coverage provided thereby) or cancelled without at least thirty (30) days’ written notice to Lender and any other party named therein as an insured. Notwithstanding the foregoing, if liability insurance is provided by a separate Policy, then the foregoing endorsement shall not be required and in such event Borrower (and not the insurer) shall give Lender the notice required by this subsection.

(g)If at any time Lender is not in receipt of written evidence, in the form of a Policy or Acord Certificate and supporting documentation acceptable to Lender, that all insurance required hereunder is in full force and effect, Lender shall have the right, after five (5) Business Days prior notice to Borrower (unless Lender has a reasonable belief that one or more of the Policies is not in full force and effect or will expire in less than five (5) Business Days) to take such action as Lender deems necessary to protect its interest in each Individual Property, including, without limitation, the obtaining of such insurance coverage as Lender in its sole discretion deems appropriate, and all expenses (including reasonable attorneys’ fees) 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 each Security Instrument and shall bear interest at the Default Rate. In the event Lender obtains insurance coverage on behalf of Borrower pursuant to this subsection (f), Borrower shall be permitted to cancel such insurance coverages provided Borrower has delivered to Lender evidence of Borrower’s compliance with this Article 7.

(h)In the event of a foreclosure of any Security Instrument, or other transfer of title to any Individual Property in extinguishment in whole or in part of the Debt, all right, title and interest of Borrower in and to the Policies then in force (other than (i) those Policies that are not solely covering the Property, (ii) liability Policies or (iii) Policies maintained by a tenant) 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.

(i)Intentionally Omitted.

(j)If insurance for earthquake or special hazards is obtained by Borrower in its sole discretion and without requirement of Lender, then Borrower, when obtaining such insurance coverage, shall meet the insurance requirements hereof except as to matters requiring Lender’s further approval, and such insurance coverage: (A) shall be within the meaning of a “Policy” or “Policies”; and (B) shall be for the benefit of Lender and all proceeds thereof constitute additional security for the Debt, and Lender shall have all rights with respect to and be entitled to receive all proceeds in the same manner it would receive any Insurance Proceeds in the event any Individual Property is damaged or destroyed by a Casualty or by any risk or loss insured against.

ATLANTA 5579734.9

-71-

(k)Any failure by Lender to insist on full compliance with all of the above insurance requirements at closing does not constitute a waiver of Lender’s right to subsequently require full compliance with these requirements.

(l)As an alternative to the Policies required to be maintained pursuant to the preceding provisions of this Section 7.1, Borrower will not be in default under this Section 7.1 if Borrower maintains (or causes to be maintained) Policies which (i) have coverages, deductibles and/or other related provisions other than those specified above and/or (ii) are provided by insurance companies not meeting the credit ratings requirements set forth above (any such Policy, a “Non-Conforming Policy”), provided, that, prior to obtaining such Non-Conforming Policies (or permitting such Non-Conforming Policies to be obtained), Borrower shall have (1) received Lender’s prior written consent thereto and (2) if required by Lender, confirmed that Lender has received a Rating Agency Confirmation with respect to any such Non-Conforming Policy.

(m)Borrower hereby represents that, as of the date hereof, none of the insurance policies required in this Section 7.1 which require coverage for terrorism, except those required under clauses (viii) and (ix) of Section 7.1(a) (such insurance policies, the “Applicable Policies”) exclude coverage for Acts of Terror (defined below). Notwithstanding anything to the contrary contained herein, in the event that, after the date hereof, any Applicable Policy (other than those required under clauses (viii) and (ix) of Section 7.1(a)) excludes coverage for Acts of Terror, Borrower shall obtain and maintain (or cause to be obtained and maintained) coverage for such excluded Acts of Terror (the “Terrorism Coverage”), which such Terrorism Coverage shall comply with each of the applicable requirements for Policies set forth above (including, without limitation, those relating to deductibles); provided, that, Lender, at Lender’s option, may reasonably require Borrower to obtain or cause to be obtained the Terrorism Coverage with higher deductibles than set forth above. Notwithstanding the foregoing, in no event shall Borrower be required to pay annual premiums in excess of the TC Cap (defined below) in order to obtain the Terrorism Coverage (but Borrower shall be obligated to purchase such portion of the Terrorism Coverage as is obtainable by payment of annual premiums equal to the TC Cap). As used above, “Acts of Terror” shall mean acts of terror or similar acts of sabotage; provided, that, for so long as the Terrorism Risk Insurance Act of 2002, as extended and modified by the Terrorism Risk Insurance Program Authorization Act of 2007 (as the same may be further modified, amended, or extended, “TRIA”) (i) remains in full force and effect and (ii) continues to cover both foreign and domestic acts of terror, the provisions of TRIA shall determine what is deemed to be included within this definition of “Acts of Terror”. As used above, “TC Cap” shall mean two times the amount of the Insurance Premiums that are payable at such time in respect of the casualty and business interruption/rental loss insurance required hereunder (without giving effect to the cost of terrorism and earthquake components of such casualty and business interruption/rental loss insurance).

(n)Lender hereby agrees that the Policies maintained by Borrower as of the date hereof (including any Non-Conforming Policies) are acceptable and satisfy the requirements set forth in this Article 7.

Section 7.2Casualty. If any Individual Property shall be damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall give prompt notice of such damage to Lender (provided that such notice shall not be required if the estimated cost to restore are less than $100,000) and shall promptly commence and diligently prosecute the completion of the repair and restoration of such Individual Property as nearly as possible to the condition such Individual Property was in immediately prior to such Casualty, with such alterations as may be approved by Lender (a “Restoration”) and otherwise in accordance with Section 7.4 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

ATLANTA 5579734.9

-72-

of loss if not made promptly by Borrower. Lender shall have the right, at its option, to participate in any settlement discussions with respect to any claims under any Policy and Borrower shall promptly deliver to Lender all instruments required by Lender to permit such participation. Lender shall have the right, at its option, to approve the final settlement with respect to any Casualty in which Net Proceeds or the costs to complete the Restoration are equal to or greater than the Restoration Threshold. If an Event of Default exists, Lender shall have the exclusive right, at its option, to settle or adjust any claims made under the Policies in the event of a Casualty.

Section 7.3Condemnation. Borrower shall promptly give Lender notice of the actual or threatened commencement of any proceeding for the Condemnation of all or any part 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 promptly deliver to Lender all instruments requested by it to permit such participation. Lender shall have the right, at its option, to approve the final settlement with respect to any Condemnation in which Net Proceeds or the costs to complete the Restoration are equal to or greater than the Restoration Threshold. If a an Event of Default exists, Lender shall have the exclusive right, at its option, to settle any Award in the event of a Condemnation. Borrower shall, at its expense, 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 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 Individual Property is taken by a condemning authority, Borrower shall promptly commence and diligently prosecute the Restoration of such Individual Property and otherwise comply with the provisions of Section 7.4 hereof. If any 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 7.4Restoration. The following provisions shall apply in connection with the Restoration of any Individual Property:

(a)Subject to Section 7.4(d) hereof, if the Net Proceeds shall be less than the Restoration Threshold and the costs of completing the Restoration shall be less than the Restoration Threshold, then the Net Proceeds will be disbursed by Lender to Borrower upon receipt, provided that all of the conditions set forth in Section 7.4(b)(i) are met and Borrower delivers to Lender a written undertaking to expeditiously commence and to satisfactorily complete with due diligence the Restoration in accordance with the terms of this Agreement.

(b)Subject to Section 7.4(d) hereof, if the Net Proceeds are equal to or greater than the Restoration Threshold or the cost of completing the Restoration is equal to or greater than the Restoration Threshold, then Lender shall make the Net Proceeds available for the Restoration in accordance with the provisions of this Section 7.4. The term “Net Proceeds” shall mean: (1) the net amount of all insurance proceeds payable to or for the benefit of Borrower as a result of a Casualty to any Individual Property, after deduction of Lender’s reasonable costs and expenses (including, but not limited to, reasonable attorneys’ fees), if any, in collecting such insurance proceeds (“Insurance Proceeds”), or (2) the net amount of the Award, after deduction of Lender’s reasonable costs and expenses (including, but not limited to, attorneys’

ATLANTA 5579734.9

-73-

fees and expenses), if any, in collecting such Award (“Condemnation Proceeds”), whichever the case may be.

(i)Subject to Section 7.4(d) hereof, the Net Proceeds shall be made available to Borrower for Restoration of an Individual Property 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 each of the (i) fair market value of such Individual Property immediately prior to the applicable Casualty as reasonably determined by Lender and (ii) rentable area of the Improvements 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 fifteen percent (15%) of each of the (i) fair market value of the Individual Property as reasonably determined by Lender and (ii) rentable area of 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 ninety (90%) of the total rentable space in the affected 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 furnishes to Lender evidence satisfactory to Lender that all tenants under Major Leases shall continue to operate their respective space at the affected Individual Property after the completion of the Restoration without rent abatement;

(D)Borrower shall commence the Restoration as soon as reasonably practicable (but in no event later than thirty (30) days after the issuance of a building permit with respect thereto) and shall diligently pursue the same to satisfactory completion in compliance with all applicable Laws, including, without limitation, all applicable Environmental Laws;

(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 7.1(a)(iii) or (3) by other funds of Borrower;

(F)unless Lender is satisfied that, upon completion of the Restoration, the Individual Property shall be restored to substantially the same or better condition than prior to the Casualty or Condemnation, Lender shall be satisfied that, upon the completion of the Restoration, the Loan to Value Ratio of the Property taken as a whole shall be no greater than 60% and the Debt Service Coverage Ratio for the Property taken as a whole shall be 1.40 or greater;

(G)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 Maturity Date, or (2) the earliest date required for such completion under the terms of any Leases which are required in accordance with the provisions of this Section 7.4(b) to remain in effect subsequent to the occurrence of such Casualty

ATLANTA 5579734.9

-74-

or Condemnation and the completion of the Restoration, or (3) such time as may be required under Applicable Law, in order to repair and restore the Individual Property to the condition it was in immediately prior to such Casualty or Condemnation, or (4) the expiration of the insurance coverage referred to in Section 7.1(a)(iii);

(H)Borrower and Guarantor shall execute and deliver to Lender a completion guaranty in form and substance satisfactory to Lender pursuant to the provisions of which Borrower and Guarantor shall jointly and severally guaranty to Lender the Lien-free completion by Borrower of the Restoration in accordance with the provisions of this Section 7.4(b);

(I)the Individual Property and the use thereof after the Restoration will be in material compliance with and permitted under all applicable Laws;

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

(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 acceptable to Lender;

(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; and

(M)the Management Agreement in effect as of the date of the occurrence of such Casualty or Condemnation, whichever the case may be, shall (1) remain in full force and effect during the Restoration and shall not otherwise terminate as a result of the Casualty or Condemnation or the Restoration or (2) if terminated, shall have been replaced with a manager acceptable to Lender, prior to the opening or reopening of the Individual Property for business with the public.

(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 7.4(b), shall constitute additional security for the payment of the Debt and the performance of the Other Obligations. Subject to Section 7.4(d) hereof, the Net Proceeds (except for Insurance Proceeds from the insurance coverage referred to in Section 7.1(a)(iii)) 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 materialmen’s Liens, construction Liens, or notices of intention to file same, or any other Liens or encumbrances of any nature whatsoever on the Individual 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 with respect to such Individual Property.

(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 Licenses required or obtained in connection with the Restoration. The identity of the contractors, subcontractors and

ATLANTA 5579734.9

-75-

materialmen engaged in the Restoration as well as the contracts under which they have been engaged, shall be subject to prior review and acceptance 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 attorneys’ 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 such time as the Casualty Consultant certifies to Lender that Net Proceeds representing 50% of the required Restoration have been disbursed. There shall be no Casualty Retainage with respect to costs actually incurred by Borrower for work in place in completing the last 50% of the required Restoration. The Casualty Retainage shall in no event, and notwithstanding anything to the contrary set forth above in this Section 7.4(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 7.4(b) and that all approvals necessary for the re-occupancy and use of the Individual Property have been obtained from all appropriate 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, subject to Section 7.4(d) hereof, 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 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 for the Individual Property, and Lender receives an endorsement to such Title Insurance Policy insuring the continued priority of the Lien of the Security Instrument for such Individual Property 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 reasonable opinion of Lender in consultation with the Casualty Consultant, if any, 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 7.4(b) shall constitute additional security for the payment of the Debt and the performance of the Other Obligations.

ATLANTA 5579734.9

-76-

(vii)Subject to Section 7.4(d) hereof, 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 7.4(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, and provided no Event of Default shall have occurred and shall be continuing under the Note, this Agreement or any of the other Loan Documents, shall be remitted by Lender to Borrower within five (5) Business Days thereafter.

(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 7.4(b)(vii) may be retained and applied by Lender toward the payment of the Debt whether or not then due and payable in such order, priority and proportions as Lender in its sole discretion shall deem proper, 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. If Lender shall receive and retain Net Proceeds, the Lien of the Security Instrument for such Individual Property and the other Loan Documents shall be reduced only by the amount thereof received and retained by Lender and actually applied by Lender in reduction of the Debt.

(d)Notwithstanding anything to the contrary contained in Section 7.4 hereof, in the event that the Loan or any interest therein is included in a Securitization, and if immediately following the release of any Individual Property from the Lien of any Security Instrument as a result of any Condemnation, the Real Property Value to Loan Ratio is not at least eighty percent (80%), then all of the net proceeds realized by Borrower for purposes of computing gain or loss under Section 1001 of the Code as a result of such Condemnation shall be applied to the principal amount of the Debt if and to the extent necessary for the Loan to remain a “qualified mortgage” in accordance with the requirements of Section 860(G)(a)(3) of the Code, and any then applicable U.S. Department of Treasury regulations or revenue procedures issued pursuant thereto, including, without limitation, to the extent then applicable to any REMIC Trust, Revenue Procedure 2010-30. In Lender’s discretion, Lender may require a REMIC Opinion in connection with any such Condemnation. Lender shall, solely for purposes of determining the “Allocated Loan Amount” for each Individual Property and to the extent permitted by the requirements of Section 860(G)(a)(3) of the Code, and any then applicable U.S. Department of Treasury regulations or revenue procedures issued pursuant thereto, including, without limitation, to the extent then applicable to any REMIC Trust, Revenue Procedure 2010-30, allocate any amount applied to the principal amount of the Debt pursuant to Section 7.4(c) hereof or this Section 7.4(d) to the Allocated Loan Amount with respect to the Individual Property that is the subject of any Casualty or Condemnation.

(e)Notwithstanding the provisions of this Article 7 (but subject in all events to Section 7.4(d) hereof in the event of any Condemnation), so long as a Single Tenant Lease remains in effect and neither the Individual Borrower nor the tenant thereunder has elected to terminate such Single Tenant Lease as a result of any Casualty or Condemnation, and such Single Tenant Lease requires the leased premises to be restored as a result of any Casualty or Condemnation, the provisions of Section 7.4(b)(i)(B), (C),(F) and G(1) hereof shall not apply.

VIII.SINGLE PURPOSE ENTITY PROVISIONS

Section 8.1Single Purpose Entity Separateness.

(a)Until the Debt has been paid in full, each Individual Borrower hereby represents, warrants and covenants that:

(i)Borrower is, and shall continue to be a Single Purpose Entity; and

ATLANTA 5579734.9

-77-

(ii)SPC Party is and shall continue to be a Single Purpose Entity.

(b)For the purposes of this Agreement, a “SPC Party” shall mean the Single Purpose Entity that is the sole general partner of Borrower, if Borrower is a limited partnership, or the sole managing member of Borrower, if Borrower is a limited liability company that is not an Acceptable Limited Liability Company.

(c)For the purposes of this Agreement, “Acceptable Limited Liability Company” shall mean a limited liability company (“LLC”) formed under the Laws of the state of Delaware having a limited liability company agreement (the “LLC Agreement”) which satisfies the Rating Agency criteria then applicable to such entities, and which LLC Agreement:

(i)Provides that (A) upon the occurrence of any event that causes the last remaining member of such LLC (“Member”) to cease to be a member of such LLC (other than upon (1) an assignment by Member of all of its limited liability company interest in such LLC and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (2) the resignation of Member and the admission of an additional member of such LLC in accordance with the terms of the Loan Documents and the LLC Agreement), any Person acting as a springing member of the LLC shall, without any action of any other Person and simultaneously with Member ceasing to be the member of such LLC, automatically be admitted to such LLC (individually or collectively, “Special Member”) and shall continue such LLC without dissolution and (B) the Special Member may not resign from such LLC or transfer its rights as Special Member unless a successor Special Member has been admitted to such LLC as Special Member in accordance with requirements of Delaware Law. The LLC Agreement shall further provide that (A) the Special Member shall automatically cease to be a member of such LLC upon the admission to such LLC of a substitute Member, (B) the Special Member shall be a member of such LLC that has no interest in the profits, losses and capital of such LLC and has no right to receive any distributions of such LLC’s assets, (C) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), the Special Member shall not be required to make any capital contributions to such LLC and shall not receive a limited liability company interest in such LLC, (D) the Special Member, in its capacity as Special Member, may not bind such LLC and (E) except as required by any mandatory provision of the Act, the Special Member, in its capacity as Special Member, shall not have the right to vote on, approve or otherwise consent to any action by, or matter relating to, such LLC, including, without limitation, the merger, consolidation or conversion of such LLC. In order to implement the admission to such LLC of the Special Member, the LLC Agreement shall also provide that the Special Member shall execute a counterpart to the LLC Agreement, and that prior to its admission to such LLC as Special Member, the Special Member shall not be a member of such LLC; and

(ii)Provides that, upon the occurrence of any event that causes the Member to cease to be a member of such LLC, to the fullest extent permitted by Law, the personal representative of Member shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of Member in such LLC, agree in writing (A) to continue such LLC and (B) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of such LLC, effective as of the occurrence of the event that terminated the continued membership of Member of such LLC in such LLC. Any Bankruptcy Action with respect to a member or Special Member shall not cause a member or Special Member to cease to be a member of such LLC and upon the occurrence of such an event, the business of such LLC shall continue without dissolution. The LLC Agreement shall provide that each member of such LLC and Special Member waives any right it might have to agree in writing to dissolve such LLC upon the occurrence of any Bankruptcy Action with respect to any member or Special Member, or the occurrence of an event that causes any member or Special Member to cease to be a member of such LLC.

ATLANTA 5579734.9

-78-

(d)For the purposes of this Agreement, a “Single Purpose Entity” means a corporation, limited partnership or limited liability company that shall at all times on and after the date hereof shall comply with, and its organizational documents shall include, the following requirements unless it has received (1) prior written consent to do otherwise from Lender and (2) following any Securitization, a Rating Agency Confirmation (it being understood that the use of the term “Borrower” and “Property” in this subsection shall mean a reference to each “Individual Borrower” as to its “Individual Property”):

(i)with respect to Borrower, Borrower shall not engage in any business or activity other than the acquisition, development, ownership, operation, leasing, managing and maintenance of the Property, and entering into the Loan, and activities incidental thereto, and with respect to SPC Party, SPC Party shall not engage in any business or activity other than the ownership of its interest in Borrower, and activities incidental thereto;

(ii)with respect to Borrower, Borrower shall not acquire or own any assets other than (A) the Property, (B) such incidental Personal Property as may be necessary for the operation of the Property, as the case may be, and (C) Cash and U.S. Obligations, and with respect to SPC Party, SPC Party shall not acquire or own any material asset other than its interest in Borrower;

(iii)neither Borrower nor SPC Party (with respect to itself or with respect to Borrower) shall engage in, seek, consent or permit any (A) merger into or consolidation with any Person, or, to the fullest extent permitted by applicable Law, any dissolution, termination or liquidation in whole or in part, or (B) any sale or other transfer or disposition of all or substantially all of its assets, or any sale of its assets outside of the ordinary course of its business, except, with respect to Borrower, as specifically permitted by this Agreement or the other Loan Documents, or (C) change its legal structure, or (D) with respect to SPC Party, transfer any of its equity interests in Borrower without the prior written consent of Lender and, to the extent any such action constitutes a Material Action, without the other consents of partners, members and directors (including the Independent Director, if one has been required at the request of Lender after Closing) required by this Agreement;

(iv)neither Borrower nor SPC Party shall (A) fail to observe its organizational formalities or preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the Laws of the jurisdiction of its organization or formation, and qualification to do business in the State, if applicable or (B) except as permitted under the Loan Documents or unless required by law, without the prior written consent of Lender, cause, consent to or permit any amendment, modification, termination or failure to comply with the provisions of Borrower’s partnership agreement, articles of organization, limited liability company agreement or similar organizational documents, as the case may be, or of SPC Party’s certificate of incorporation, articles of organization or similar organizational documents, as the case may be, whichever is applicable;

(v)if such entity is a limited partnership, has and shall have as its sole general partner, a Single Purpose Entity which (A) is a corporation or an Acceptable Limited Liability Company, and (B) holds a direct interest as general partner in such limited partnership of not less than one-half of one percent (0.5%) (or a 0.1% direct equity ownership interest if such entity is a Delaware limited partnership); and (C), if requested by Lender after Closing, has one (1) Independent Director; and such limited partnership shall not cause or permit its partners to take any Material Action, and its limited partnership agreement shall provide that no Material Action may be taken, without the unanimous consent of all partners of such limited partnership including the Independent Director of its general partner who shall have consented in writing to any such Material Action;

ATLANTA 5579734.9

-79-

(vi)if such entity is a corporation, shall not cause or permit the board of directors of such corporation to take any Material Action, and such corporation’s organizational documents shall not permit such corporation or its board of directors to take any Material Action, either with respect to itself or, if the corporation is an SPC Party, with respect to Borrower, without the unanimous consent of all members of such corporation’s board of directors, which corporation’s board of directors shall, if requested by Lender after Closing, include one (1) director, which shall be Independent Director who shall have consented in writing to any such Material Action;

(vii)if such entity is a limited liability company other than an Acceptable Limited Liability Company, has and shall have as its sole managing member a Single Purpose Entity that (A) is a corporation or an Acceptable Limited Liability Company; and (B) directly owns at least one-half of one percent (0.5%) of the equity of such limited liability company (or a 0.1% direct equity ownership interest if such entity is a Delaware limited liability company); and (C), if requested by Lender after Closing, has at least one (1) Independent Director;

(viii)if such entity is an Acceptable Limited Liability Company, shall not take any Material Action, shall not cause or permit the members or managers of such limited liability company to take any Material Action, and the LLC Agreement shall not permit the members or managers of such limited liability company to take any Material Action, either with respect to itself or, if such Acceptable Limited Liability Company is an SPC Party, with respect to Borrower, in each case without the unanimous written consent of its members. If such entity is an Acceptable Limited Liability Company, such Acceptable Limited Liability Company shall, if requested by Lender after Closing, have one (1) Independent Director then serving as manager of such Acceptable Limited Liability Company, shall not take any Material Action, shall not cause or permit the members or managers of such limited liability company to take any Material Action, and the LLC Agreement shall not permit the members or managers of such limited liability company to take any Material Action, either with respect to itself or, if such Acceptable Limited Liability Company is an SPC Party, with respect to Borrower, in each case without the unanimous written consent of its members, unless one (1) Independent Director then serving as manager of such Acceptable Limited Liability Company shall have consented in writing to such Material Action;

(ix)with respect to Borrower, Borrower shall not own any subsidiary or make any investment in any Person, and with respect to SPC Party, SPC Party shall not own, other than SPC Party’s ownership interest in Borrower, any subsidiary or make any investment in, any Person;

(x)except with respect to any other Borrower as set forth in this Agreement or the other Loan Documents, neither Borrower nor SPC Party shall commingle its assets with the assets of any of its members, general partners, Affiliates, principals, shareholders or of any other Person or entity, participate in a cash management system with any other entity or Person or fail to use its own separate invoices and checks bearing its name and not bearing the name of any other entity;

(xi)with respect to Borrower, Borrower shall not incur any Indebtedness, other than the Debt, except for (A) trade payables in the ordinary course of its business of owning and operating the Property, provided that such debt (i) is not evidenced by a note, (ii) is paid within sixty (60) days of the date incurred, (iii) is payable to trade creditors, and (iv) is in amounts as are normal and reasonable under the circumstances, and (B) Indebtedness associated with Permitted Encumbrances or Permitted Equipment Leases; provided, however the aggregated amount of the indebtedness described in (A) and (B) shall not exceed at any time two percent (2.0%) of the outstanding principal amount of the Debt; and with respect to SPC Party, SPC Party shall not incur any Indebtedness;

ATLANTA 5579734.9

-80-

(xii)neither Borrower nor SPC Party shall become insolvent and fail to pay its debts and liabilities (including, as applicable, a fairly allocated portion of any shared personnel and overhead expenses) from its assets as the same shall become due; provided, however, this clause (xii) shall not require any member of Borrower or SPC Party to make any capital contributions to Borrower or to SPC Party, and provided further that (1) this subsection (xii) shall not be deemed to be violated if the Property declines in value as a result of market or economic conditions, and (ii) this subsection (xii) shall not be deemed to be violated if Borrower is unable to make any required payment of principal or interest including, without limitation, repayment of the Debt on the Maturity Date;

(xiii)except with respect to any other Borrower as set forth in this Agreement or the other Loan Documents, neither Borrower nor SPC Party shall (A) fail to maintain its books and records (including financial statements), books of account and bank accounts separate and apart from those of the members, general partners, principals, shareholders and Affiliates of Borrower or of SPC Party, as the case may be, the Affiliates of a member, general partner, shareholders or principal of Borrower or of SPC Party, as the case may be, and any other Person, (B) permit its assets or liabilities to be listed as assets or liabilities on the financial statement of any other Person or (C) include the assets or liabilities of any other Person on its financial statements or (D) permit any Affiliate independent access to its bank accounts (other than any Affiliated Manager, acting solely in its capacity as Manager pursuant to the Management Agreement); provided, however, that Borrower’s assets may be included in a consolidated financial statement of its affiliates provided that such assets shall be listed on Borrower’s own separate balance sheet.

(xiv)neither Borrower nor SPC Party shall enter into any contract or agreement with any member, general partner, principal or Affiliate of Borrower or of SPC Party, as the case may be, any Guarantor or any member, general partner, principal or Affiliate thereof (other than a business management services agreement with an Affiliate of Borrower, provided that (A) such agreement is acceptable to Lender, (B) the manager, or equivalent thereof, under such agreement holds itself out as an agent of Borrower or SPC Party, as the case may be, and (C) the agreement meets the standards set forth in this subsection (xiv) following this parenthetical), except in the ordinary course of business and upon terms and conditions that are commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any member, general partner, principal or Affiliate of Borrower or of SPC Party, as the case may be, any Guarantor or any member, general partner, principal or Affiliate thereof;

(xv)to the fullest extent permitted by applicable law, neither Borrower nor SPC Party (with respect to itself or with respect to Borrower) shall engage in, seek, consent or permit the dissolution or winding up in whole, or in part, of Borrower or of SPC Party, as the case may be without the prior written consent of Lender and, to the extent any such action constitutes a Material Action, without the other consents of partners, members and directors (including the Independent Director, if one has been required at the request of Lender after Closing) required by this Agreement;

(xvi)neither Borrower nor SPC Party shall fail to correct any known misunderstanding regarding the separate identity of Borrower, or of SPC Party, as the case may be, from any member, general partner, principal, shareholders or Affiliate thereof or any other Person;

(xvii)except with respect to any other Borrower as set forth in this Agreement or the other Loan Documents, neither Borrower nor SPC Party shall guarantee, assume or become obligated for the debts of any other Person or hold itself or its credit or assets out to be responsible for the debts of another Person (other than with respect to the general partner of any Borrower that is a limited partnership, as such general partner may be liable under applicable law for the obligations of such Borrower as the general partner thereof);

ATLANTA 5579734.9

-81-

(xviii)neither Borrower nor SPC Party shall make any loans or advances to any Person, including any member, general partner, principal, shareholders or Affiliate of Borrower or of SPC Party, as the case may be, or any member, general partner, principal, shareholders or Affiliate thereof, and neither Borrower nor SPC Party shall acquire obligations or securities of any other Person, including any member, general partner, principal or Affiliate of Borrower or SPC Party, as the case may be, or any member, general partner, shareholders or Affiliate thereof; and neither Borrower nor SPC Party shall hold evidence of indebtedness of any other Person (other than cash or investment grade securities issued by a Person that is not an Affiliate of Borrower or SPC Party);

(xix)neither Borrower nor SPC Party shall fail to file its own tax returns (to the extent Borrower is required to file its own tax returns by applicable Law) or be included on the tax returns of any other Person except as required by applicable Law; provided, however, this clause (xix) shall not require any member of Borrower or SPC Party to make any capital contributions to Borrower or SPC Party;

(xx)except with respect to any other Borrower as set forth in this Agreement or the other Loan Documents and any business management services agreement permitted under subsection (xiv), neither Borrower nor SPC Party shall fail either to hold itself out to the public and identify itself as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name or a name franchised or licensed to it by an entity other than an Affiliate of Borrower or of SPC Party, as the case may be, and not as a division or part of any other Person (other than adoption by any Individual Borrower of a logo graphic common to the entire corporate enterprise to which such Individual Borrower belongs), and shall not identify its partners, members or shareholders, or any Affiliate of any of them, as a division or part of Borrower or SPC Party, in order not (A) to mislead others as to the identity with which such other party is transacting business or (B) to suggest that Borrower or SPC Party, as the case may be, or its assets, is responsible for the debts of any other Person (including any member, general partner, principal, shareholders or Affiliate of Borrower, or of SPC Party, as the case may be, or any member, general partner, principal or Affiliate thereof);

(xxi)neither Borrower nor SPC Party shall fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (to the extent there exists sufficient cash flow from the applicable Individual Property to do so); provided, however, this subsection (xxi) shall not be deemed to be violated if Borrower is unable to make any required payment of principal or interest, including, without limitation, repayment of the Debt on the Maturity Date and shall not be deemed to require any member of Borrower or SPC Party to make any capital contributions to Borrower or SPC Party;

(xxii)except with respect to any other Borrower as set forth in this Agreement or the other Loan Documents, neither Borrower nor SPC Party shall maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any general partner, managing member, shareholder, principal or Affiliate of Borrower, or any general partner, managing member, shareholder, principal or Affiliate thereof or any other Person;

(xxiii)neither Borrower nor SPC Party shall fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;

(xxiv)neither Borrower nor SPC Party shall pledge its assets to secure the obligations of, or otherwise for the benefit of, any other Person, and with respect to Borrower, other than with respect to the Loan;

ATLANTA 5579734.9

-82-

(xxv)neither Borrower nor SPC Party shall fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations;

(xxvi)neither Borrower nor SPC Party shall fail to provide in its (A) articles of organization, certificate of formation and/or operating agreement, as applicable, if it is a limited liability company, (B) limited partnership agreement, if it is a limited partnership or (C) certificate of incorporation, if it is a corporation, that for so long as the Loan is outstanding pursuant to the Note, this Agreement and the other Loan Documents, a Bankruptcy Action by or against any member of a limited liability company or by or against any partner of a partnership, as applicable, shall not cause any such member or partner, as applicable, to cease to be a member or partner of such limited liability company or partnership, as applicable, and upon the occurrence of any such Bankruptcy Action, such limited liability company or partnership, as applicable, shall continue without dissolution;

(xxvii)neither Borrower nor SPC Party shall fail to hold its assets in its own name;

(xxviii)if Borrower or SPC Party is a corporation, neither Borrower nor SPC Party shall fail to consider the interests of its creditors in connection with all corporate actions to the extent permitted by applicable Law;

(xxix)neither Borrower nor SPC Party shall have any of its obligations guaranteed by an Affiliate except by any other Borrower or Guarantor in connection with the Loan;

(xxx)if Borrower or SPC Party is treated as a “disregarded entity” for tax purposes, shall not have any obligation to reimburse its equity holders or any of their Affiliates for any taxes that such equity holders or any of their Affiliates may incur as a result of any profits or losses of Borrower or SPC Party;

(xxxi)any indemnification obligation of Borrower to any equity holder shall be fully subordinated to the Loan, and shall not constitute a claim against Borrower or its assets until such time as the Loan has been indefeasibly paid in accordance with its terms and otherwise has been fully discharged; and

(xxxii)neither Borrower nor SPC Party shall violate or cause to be violated the factual assumptions made relating to the conduct of Borrower and SPC Party in the Insolvency Opinion or any Additional Insolvency Opinion.

(e)To the fullest extent permitted by applicable Law, and notwithstanding any duty otherwise existing at law or in equity, any Independent Director (if one has been required at the request of Lender after Closing) shall consider, and the organizational documents of any Single Purpose Entity shall require that each Independent Director shall consider, only the interests of such entity (and, in the case of an SPC Party, of Borrower), including its creditors, in exercising such person’s authority as Independent Director. Except for duties to such entity (and, in the case of an SPC Party, duties to Borrower) as set forth in the immediately preceding sentence (including duties to creditors solely to the extent of their respective economic interest in Borrower or an SPC Party, but excluding (i) all other interests of such entity, (ii) the interests of other Affiliates of such entity, and (iii) the interests of any group of Affiliates of which such entity is a part), no Independent Director (if one has been required at the request of Lender after Closing) shall have a fiduciary duty to the entity, any other member or director of such entity, or to Borrower or any other Person; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing.

ATLANTA 5579734.9

-83-

(f)To the fullest extent permitted by applicable Law, no Independent Director (if one has been required at the request of Lender after Closing) shall resign or be removed or replaced, and the organizational documents of any Single Purpose Entity shall state that no Independent Director (if one has been required at the request of Lender after Closing) shall resign or be removed or replaced, in each case unless Lender and the Rating Agencies receive not less than five (5) Business Days’ prior written notice of (i) any proposed resignation or removal or replacement of such Independent Director, and (ii) the identity of the proposed replacement Independent Director, together with evidence satisfactory to Lender that such replacement satisfies the applicable requirements to be an Independent Director, in each case except for removal of an Independent Director by reason of (y) acts or omissions by such Independent Director that constitute willful disregard of such Independent Director’s duties, in accordance with the standards set forth herein, or (z) such Independent Director having engaged in or having been charged with, or having been convicted of, fraud or other acts constituting a crime under any applicable Law, in which case a replacement Independent Director shall be identified and elected or appointed within five (5) Business Days after Borrower (or, if applicable, such SPC Party) knew thereof.

Section 8.2Single Purpose Entity and Cash Management Compliance.

(a)Borrower covenants and agrees that within ten (10) Business Days after written request by Lender, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s and SPC Party’s continued compliance with the terms of Article VIII hereof as of the date of such Officer’s Certificate and stating that the representations and warranties of Borrower and SPC Party, as applicable, set forth in Section 8.1 hereof are true and correct as of the date of such Officer’s Certificate, and confirming Borrower’s continued compliance with the Cash Management Covenants. In addition, within ten (10) Business Days after written request by Lender, Borrower shall provide Lender with such other evidence of Borrower’s compliance with Article VIII hereof and the Cash Management Covenants as Lender may reasonably request from time to time.

(b)Borrower covenants and agrees that within ten (10) Business Days after written request by Lender, Borrower shall cause the Independent Director (if one has been required at the request of Lender after Closing) of Borrower and SPC Party, as applicable, to certify in writing to Lender (a) the name and address of each Independent Director and (b) that each Independent Director has complied with, and shall continue to comply with the requirements set forth in Section 8.1 hereof.

Section 8.3Recycled Entity Representations. Each Individual Borrower further represents and warrants to Lender as follows:

(a)No Individual Borrower has owned any real property other than its Individual Property and personal property necessary or incidental to its ownership and operation of its Individual Property;

(b)No Individual Borrower has engaged in any business unrelated to the ownership and operation of its Individual Property;

(c)Except as expressly disclosed to Lender in connection with the closing of the Loan, no Individual Borrower has amended, modified, supplemented, restated, replaced or terminated its organizational documents (or consented to any of the foregoing);

(d)Each Individual Borrower is and always has been duly formed, validly existing, and in good standing in the state of its formation and in all other jurisdictions where it is qualified to do business;

ATLANTA 5579734.9

-84-

(e)No Individual Borrower has had any judgments or liens of any nature against it (except for tax liens not yet delinquent and Liens contested and resolved in good faith in accordance with applicable Law);

(f)No Individual Borrower has failed to be in compliance with in all material respects with all laws, regulations and orders applicable to it and each Individual Borrower has received all necessary permits for it to operate;

(g)No Individual Borrower has been involved in any unresolved dispute with any taxing authority and each Individual Borrower has paid all taxes owed by it prior to delinquency;

(h)No Individual Borrower has been party to any lawsuit, arbitration, summons or legal proceeding that is still pending or that resulted in a judgment against it that has not been paid in full;

(i)No Individual Borrower has failed to provide Lender with complete financial statements that reflect a fair and accurate view of its financial condition;

(j)No Individual Borrower has had any material contingent or actual obligation unrelated to its Individual Property; and

(k)No Individual Borrower has incurred any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) in connection with the Credit Line and (B) liabilities in the ordinary course of its business that are related to the ownership and operation of its Individual Property and, in each case, permitted under the Credit Line Documents, and no other Indebtedness has been secured (senior, subordinate or pari passu) by its Individual Property. With respect to the Credit Line, each Individual Borrower hereby represents and warrants that no Individual Borrower has any remaining liabilities or obligations in connection with the Credit Line (other than environmental and other limited and customary indemnity obligations which, in each case and by their express terms, survive the repayment of the Credit Line).

For purposes hereof, the “Credit Line” shall mean the loans made to Guarantor pursuant to the Credit Line Documents, and the “Credit Line Documents” shall mean the Borrowing Base Revolving Line of Credit Agreement dated as of December 8, 2011, among Guarantor and the lenders and administrative agent identified therein, as modified, and all other loan documents entered into pursuant to or in connection with such Borrowing Base Revolving Line of Credit Agreement including, without limitation, various repayment guaranties, mortgages and deeds of trust executed by some of the Individual Borrowers.

IX.RESERVE FUNDS

Section 9.1Reserve Funds and Reserve Accounts Generally.

(a)On the Closing Date, each of the Reserve Accounts shall be established by Lender in an Eligible Account at an Eligible Institution. The Reserve Funds shall not constitute trust funds and, at Lender’s option, the Reserve Funds may be (i) commingled with other monies held by Lender, or (ii) established as one or more separate accounts at an Eligible Institution (which may include one or more book-entry sub-accounts as deemed necessary by Lender).

(b)Borrower shall pay Lender the Disbursement Fee as a condition to each disbursement from the Reserve Accounts (other than the Tax and Insurance Escrow Account), as compensation for Lender’s review, analysis and processing of such disbursement.

ATLANTA 5579734.9

-85-

(c)Each Reserve Fund and each Reserve Account shall be subject to the additional terms and conditions set forth in Article XII hereof.

Section 9.2Tax and Insurance Escrow Fund. Borrower shall pay to Lender on each Payment Date (a) a percentage of the Taxes (the “Monthly Tax Deposit”) that Lender estimates will be payable during the next ensuing twelve (12) months in order to ratably accumulate with Lender sufficient funds to pay all such Taxes at least thirty (30) days prior to their respective delinquency dates and (b) a percentage of the Insurance Premiums (the “Monthly Insurance Premium Deposit”) that Lender estimates will be payable for the renewal of the coverage afforded by the Policies upon the expiration thereof in order to ratably 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”), which Tax and Insurance Escrow Fund shall be deposited by Lender into an Account established to hold such fund (the “Tax and Insurance Escrow Account”). 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 5.2 and 7.1(b) hereof. 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 and Insurance Premiums pursuant to Sections 5.2 and 7.1(b) hereof, respectively, Lender shall credit such excess against future payments to be made to the Tax and Insurance Escrow Fund. In allocating such excess, Lender may communicate with the Person shown on the records of Lender to be the owner of the Property. Any amount remaining in the Tax and Insurance Escrow Fund after the Debt has been paid in full shall be returned to Borrower. If at any time Lender reasonably determines that the Tax and Insurance Escrow Fund is not or will not be sufficient to pay Taxes and Insurance Premiums by the dates set forth 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 delinquency of the Taxes and/or thirty (30) days prior to expiration of the Policies, as the case may be.

Notwithstanding the foregoing, Lender agrees to waive the Monthly Tax Deposit and the Monthly Insurance Deposit so long as no Triggering Event has occurred and is continuing. Upon the occurrence of any Triggering Event, the foregoing waiver shall terminate (until the Triggering Event Period terminates) and Borrower shall deposit with Lender, within thirty (30) days after the occurrence of any Triggering Event, a lump sum amount into the Tax and Insurance Escrow Fund, which amount, together with future Monthly Tax Deposits and future Monthly Insurance Deposits, shall be sufficient to pay all Taxes prior to delinquency and all Insurance Premiums when the same next become due.

Section 9.3Early Lease Termination Reserve. If any tenant (a “Terminating Tenant”) gives notice to Borrower that it is exercising an early termination option set forth in its Lease with Borrower, or if Borrower agrees to allow any tenant to reduce or terminate its obligations under its Lease (subject, in each case, to the restrictions of Section 5.17 hereof), Borrower shall direct such tenant that any Lease Termination Payment in connection therewith, which exceeds $100,000.00, is to be remitted to Lender or, if a Triggering Event Period shall then be in effect, such Lease Termination Payment in excess of $100,000.00 shall be deposited in the Lockbox Account), for application as set forth below. If such tenant remits the Lease Termination Payment in excess of $100,000.00 directly to Borrower, Borrower shall remit the Lease Termination Payment to Lender, for application as set forth below. Amounts so deposited shall hereinafter be referred to as the “Early Lease Termination Reserve Fund”, which Early Lease Termination Reserve Fund shall be deposited by Lender in an Account established by Lender to hold such funds (the “Early Lease

ATLANTA 5579734.9

-86-

Termination Reserve Account”). A separate Early Lease Termination Reserve Account shall be maintained with respect to each Lease so terminated. Funds deposited in an Early Lease Termination Reserve Account shall be disbursed as follows:

9.3.1.Disbursements for Qualified Replacement Lease for Entire Vacated Space. If Borrower enters into a Qualified Replacement Lease for the entire premises previously demised under the Lease so terminated (the “Vacated Space”), and the tenant under such Lease accepts such demised premises, takes occupancy thereof and commences the payment of base rent under its Lease, then all funds in the applicable Early Lease Termination Reserve Account shall be used first to pay TILC Costs with respect to such Qualified Replacement Lease upon satisfaction of the conditions set forth in Section 5.17 hereof; any funds remaining in the applicable Early Lease Termination Reserve Account after payment of all TILC Costs with respect thereto shall be disbursed to Borrower as follows: (x) if the monthly net rent payable under the Qualified Replacement Lease is greater than or equal to the monthly rent payable by the Terminating Tenant under its Lease as of the date of such termination, then provided no Default or Event of Default is then continuing, such funds remaining in the Early Lease Termination Reserve shall be disbursed to Borrower; and (y) if the monthly net rent payable under the Qualified Replacement Lease is less than the monthly rent payable by the Terminating Tenant under its Lease as of the date of such termination, then, provided no Default or Event of Default is then continuing, all funds remaining in the Early Lease Termination Reserve shall be disbursed to Borrower in equal monthly installments over the remaining term of the Qualified Replacement Lease, until such time as all funds have been disbursed from the applicable Early Lease Termination Reserve.

9.3.2.Disbursements for Qualified Replacement Lease for Less Than Entire Vacated Space. If Borrower enters into one or more Leases each for less than the entire Vacated Space, no disbursements shall be permitted from the Early Lease Termination Reserve except as follows:

(a)Until such time as the entire Vacated Space has been re-leased pursuant to one or more Qualified Replacement Leases, and the tenant under each such Qualified Replacement Lease accepts such demised premises, takes occupancy thereof, is open for business and commences the payment of base rent under its Lease, Lender shall from time to time, within ten (10) days after receipt of written request from Borrower, make disbursements on account of TILC Costs with respect to the Vacated Space, provided, however, that the disbursements with respect to any portion of the Vacated Space on a per-square foot basis shall not exceed the amount of the Early Lease Termination Payment on a per-square-foot basis; and

(b)At such time as the entire Vacated Space has been re-leased pursuant to one or more Qualified Replacement Leases and the tenant under each such Qualified Replacement Lease accepts such demised premises, takes occupancy thereof, opens for business and commences the payment of base rent under its Lease, then after payment of all TILC Costs with respect to the re-leasing of such Vacated Space, the funds remaining in the Early Lease Termination Reserve shall be disbursed as follows: (x) if the monthly aggregate net rents payable under all such Qualified Replacement Leases is greater than or equal to the monthly rent payable by the Terminating Tenant, and the term of all such Qualified Replacement Leases extends to or beyond the scheduled expiration date of the Lease with the Terminating Tenant, then provided no Default or Event of Default is then continuing such funds remaining in the Early Lease Termination Reserve Account shall be disbursed to Borrower; and (y) if the conditions of clause (x) are not satisfied, then provided no Default or Event of Default is then continuing such funds remaining in the Early Lease Termination Reserve Account shall be disbursed to Borrower in equal monthly installments over the period that would have remaining in the term of the Lease with the Terminating Tenant.

ATLANTA 5579734.9

-87-

X.DEFAULTS

Section 10.1Event of Default.

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

(i)if any portion of the Debt is not paid (or deemed paid pursuant to Section 3.7 hereof) on or before the fifth (5^th) day after the date the same is due and payable;

(ii)if any of the Basic Carrying Costs are not paid (or deemed paid pursuant to Section 3.7 hereof) prior to delinquency except to the extent Borrower or any tenant is contesting Taxes or Other Charges in accordance with the terms of Section 5.2 hereof;

(iii)if the Policies are not kept in full force and effect (except to the extent any such Policy is not in effect solely as a result of the failure to pay Insurance Premiums and such Insurance Premiums are deemed to have been paid pursuant to Section 3.7 hereof but have not actually been paid by Lender); or if Borrower fails to comply with any other term or provision of Article VII hereof, not specified in this subsection (iii) or the immediately preceding subsection (ii) and such failure continues for ten (10) Business Days after written notice thereof from Lender;

(iv)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;

(v)if any representation made by Borrower in Section 4.1.12 hereof is or becomes false or misleading at any time;

(vi)if any representation or warranty made by Borrower, SPC Party, or any Guarantor 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 adverse respect as of the date the representation or warranty was made;

(vii)if Borrower or SPC Party shall make an assignment for the benefit of creditors;

(viii)if a receiver, liquidator or trustee shall be appointed for Borrower, or SPC Party, or if Borrower or SPC Party shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to the Bankruptcy Code, or any similar federal or state Law, shall be filed by or against, consented to, or acquiesced in by, Borrower or SPC Party, or if any proceeding for the dissolution or liquidation of Borrower or SPC Party shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by Borrower or SPC Party, upon the same not being discharged, stayed or dismissed within one hundred twenty (120) days;

(ix)only upon the declaration by Lender that the same constitutes an Event of Default (which declaration may be made by Lender in its sole discretion), if (A) any Guarantor shall make an assignment for the benefit of creditors, or if (B) a receiver, liquidator or trustee shall be appointed for any Guarantor, or if any Guarantor shall be adjudicated a bankrupt or insolvent, or if (C) any petition for bankruptcy, reorganization or arrangement pursuant to the Bankruptcy Code, or any similar federal or state Law, shall be filed by or against, consented to, or acquiesced in by, any Guarantor, or if (D) any proceeding for the dissolution or liquidation of any Guarantor shall be instituted; provided, however, if such appointment,

ATLANTA 5579734.9

-88-

adjudication, petition or proceeding was involuntary and not consented to by any Guarantor, upon the same not being discharged, stayed or dismissed within one hundred twenty (120) days;

(x)if Borrower fails to comply with the terms and provisions of Section 5.21 hereof or Article VI hereof;

(xi)if Borrower or SPC Party fails to comply with the terms and provisions of Section 8.1 hereof; provided, however, any such failure shall not be deemed to be an Event of Default hereunder if (i) such failure was inadvertent and immaterial and would not be reasonably likely to result in a Material Adverse Effect and (ii) within fifteen (15) days of Borrower obtaining knowledge thereof, Borrower cures such failure and provides Lender with satisfactory evidence thereof; provided, however it is acknowledged and agreed that any failure to comply with the terms and conditions of Section 8.1 hereof is and shall result in recourse by Lender for any damages incurred by Lender as a result of any such failure pursuant to Section 11.3(a) hereof notwithstanding the foregoing cure period;

(xii)if Borrower fails to comply with the terms and provisions of any of the Cash Management Covenants within ten (10) Business Days after request by Lender;

(xiii)if Borrower fails to comply with the terms and provisions of Section 5.10 or Section 5.29(a) hereof and such failure continues for ten (10) Business Days after notice from Lender;

(xiv)if Borrower fails to deliver to Lender the written certification and evidence required pursuant to the terms of Section 5.29(b) hereof within thirty (30) days after request by Lender;

(xv)if Borrower fails to comply with the terms and provisions of Section 5.22 hereof (except for any Liens being contested in accordance with the terms hereof), and any Lien that is not being contested in accordance with Section 5.2 hereof shall remain undischarged of record (by payment, bonding or otherwise) for a period of sixty (60) days after Borrower obtains actual or constructive knowledge thereof from any source whatsoever;

(xvi)if any federal tax Lien or state or local income tax Lien is filed against Borrower, SPC Party, any Guarantor or the Property or any Individual Property and same is not discharged of record (by payment, bonding or otherwise) for a period of sixty (60) days after Borrower obtains actual or constructive knowledge thereof from any source whatsoever;

(xvii)if Borrower fails to comply with the terms and provisions of Section 5.17, Section 5.23, Section 5.25, Section 5.26, Section 5.27 or Section 5.28 hereof; provided, however, any such failure shall not be an Event of Default hereunder if (i) such failure was inadvertent and would not be reasonably likely to result in a Material Adverse Effect and (ii) within fifteen (15) days of the occurrence thereof, Borrower cures such failure and provides Lender with satisfactory evidence of the same;

(xviii)if Borrower fails to comply with the terms and provisions of Section 11.2 hereof and such Default continues after ten (10) Business Days notice from Lender;

(xix)if Borrower fails to comply with the terms and provisions of Section 11.1 or Section 11.6 hereof within ten (10) Business Days after request by Lender, provided, however, if such failure is susceptible of cure but cannot reasonably be cured within such period and

ATLANTA 5579734.9

-89-

provided further that Borrower shall have commenced to cure such failure within such period and thereafter diligently and expeditiously proceeds to cure the same, such ten (10) Business Day period shall be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such failure, such additional period not to exceed thirty (30) days;

(xx)if Borrower is a Plan or a Governmental Plan, or if its assets constitute Plan Assets;

(xxi)if a final judgment is entered against Borrower or SPC Party or Guarantor which would have a Material Adverse Effect, and such party fails to discharge the same or cause it to be discharged or vacated within sixty (60) days from the entry thereof, or does not appeal therefrom or from the order, decree or process upon which or pursuant to which said judgment was granted, based or entered, and does not secure a stay of execution pending such appeal within sixty (60) days after the entry thereof;

(xxii)if any Security Instrument fails to have a first priority Lien on any Individual Property, subject only to the Permitted Encumbrances, unless such failure is the result of Lender’s acts;

(xxiii)if foreclosure or attachment proceedings are instituted against any Individual Property upon any other Lien or claim, whether alleged to be superior or junior to the Lien of any Security Instrument or the other Loan Documents;

(xxiv)if an uninsured material loss, theft, damage, or destruction to the Property occurs and Borrower does not, within thirty (30) days of the occurrence thereof, provide evidence reasonably satisfactory to Lender that Borrower has access to the funds necessary to consummate the applicable Restoration;

(xxv)if Borrower, SPC Party, any Guarantor, any Affiliate of Borrower, SPC Party or any Guarantor, or any of their respective agents or representatives shall commit any intentional act of physical waste or arson with respect to any Individual Property;

(xxvi)if Borrower, SPC Party, any Guarantor, any Affiliate of Borrower, SPC Party or any Guarantor, or any of their respective agents or representatives shall commit any criminal act which results in the seizure, forfeiture or loss of any Individual Property;

(xxvii)if Borrower misappropriates or misapplies any (A) Insurance Proceeds, (B) Awards or other amounts received in connection with the Condemnation of all or a portion of any Individual Property, (C) Rents (including, but not limited to security deposits, advance deposits or any other deposits and Lease Termination Payments) or (D) funds disbursed by Lender from any of the Reserve Funds;

(xxviii)if Borrower fails to permit on-site inspections of any Individual Property after written notice thereof from Lender in accordance with the terms of this Agreement and such failure continues for ten (10) Business Days after notice from Lender;

(xxix)if Borrower fails to appoint a new Manager within thirty (30) days after request by Lender as required under this Agreement;

ATLANTA 5579734.9

-90-

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

(xxxi)if there shall be a default under any Security Instrument, any of the other Loan Documents or any guaranty or indemnity executed in connection herewith (including, without limitation, the Guaranty and the Environmental Indemnity) and such default continues beyond any applicable notice and cure periods contained in such documents (provided, if such documents do not specify an applicable notice and cure period, the provisions of clause (xxxvi) below shall apply);

(xxxii)if a default by Borrower under the Management Agreement has occurred with respect to any Individual Property and continues beyond any applicable cure period thereunder and such default permits the Manager thereunder to terminate or cancel the Management Agreement with respect to such Individual Property;

(xxxiii)if a default by Borrower under any REA has occurred and continues beyond any applicable cure period thereunder and such default permits any party thereto to terminate or cancel such REA;

(xxxiv)if any Guarantor revokes or attempts to revoke any Guaranty;

(xxxv)if any of the factual assumptions relating to the conduct of Borrower contained in the Insolvency Opinion, or in any Additional Insolvency Opinion, is or shall become untrue in any material respect;

(xxxvi)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 (xxxv)above, for ten (10) Business 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.

(b)Subject to the terms of Section 11.3, upon the occurrence of an Event of Default (other than an Event of Default described in clauses (vii), (viii) or (ix) 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, Lender may take such action, without notice or demand, that Lender deems advisable to protect and enforce its rights against Borrower and in and to the Property, 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 the Property 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 (vii), (viii) or (ix) above, the Debt 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.

Section 10.2Remedies.

ATLANTA 5579734.9

-91-

(a)Subject to the terms of Section 11.3 andsubject to applicable Law, upon the occurrence and during the continuance of an Event of Default, 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 the Property, any Individual Property or any other Collateral. Subject to the terms of Section 11.3 andsubject to applicable Law, any such actions taken by Lender shall be cumulative and concurrent and may be pursued separately and independently, singly, 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 the Property, or any Individual Property, and the other Collateral and each Security Instrument has been foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or the Debt has been paid in full.

(b)With respect to Borrower and the Property and each Individual Property, subject to applicable Law, nothing contained herein or in any other Loan Document shall be construed as requiring Lender to resort to the Property, or any Individual Property or any other Collateral for the satisfaction of any of the Debt in preference or priority to the Property, any Individual Property, or any other Collateral, and Lender may seek satisfaction out of the Property, or any Individual Property, or all of the other Collateral or any part thereof, in its 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 any Security Instrument in any manner and for any amounts secured by any Security Instrument 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 any Security Instrument 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 any Security Instrument to recover so much of the principal balance of the Loan as Lender may accelerate and such other sums secured by any Security Instrument as Lender may elect. Notwithstanding one or more partial foreclosures, each Individual Property shall remain subject to each Security Instrument to secure payment of sums secured by each Security Instrument and not previously recovered, to the fullest extent permitted by Law.

(c)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 11.3 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. Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or

ATLANTA 5579734.9

-92-

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. Provided no Event of Default shall then exist, Borrower shall be not obligated to pay any costs or expenses incurred in connection with the preparation, execution, recording or filing of the Severed Loan Documents, other than Borrower’s attorneys fees.

Section 10.3Remedies Cumulative; Waivers.

The rights, powers and remedies of Lender under this Agreement shall be cumulative and, subject to Section 11.3, 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 singly, concurrently or otherwise, at such time and in such order as Lender may determine in its 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.

XI.SPECIAL PROVISIONS

Section 11.1Sale of Notes and Securitization.

Lender shall have the right (i) to sell, pledge, assign or otherwise transfer the Loan or any portion thereof as a whole loan or any or all servicing rights with respect thereto, (ii) to sell participation interests in the Loan or to syndicate the Loan, (iii) to securitize the Loan or any portion thereof in a single asset securitization or a pooled loan securitization or (iv) to further divide the Loan into two or more separate notes or components. (The transactions referred to in clauses (i), (ii), (iii) and (iv) shall hereinafter be referred to collectively as “Secondary Market Transactions” and the transactions referred to in clause (iii) shall hereinafter be referred to as a “Securitization”. Any certificates, notes or other securities issued in connection with a Securitization are hereinafter referred to as “Securities”). At the request of the holder of the Note and, to the extent not already required to be provided by Borrower under this Agreement, Borrower and each Guarantor at the sole cost and expense of Lender, shall assist Lender in satisfying the market standards to which the holder of the Note customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Secondary Market Transaction, including, without limitation:

(a)(i) provide such updated financial information with respect to each Individual Property, Borrower, each Guarantor and Manager (to the extent such information is actually available to Borrower with respect to any Manager that is not an Affiliated Manager) (“Financial Information”), (ii) provide such updated non-financial information with respect to each Borrower, each Guarantor and Manager (to the extent such information is actually available to Borrower with respect to any Manager that is not an Affiliated Manager), (iii) provide updated budgets relating to each Individual Property (“Updated Budgets”) and (iv) perform or permit or cause to be performed or permitted such site inspection, appraisals, market studies, environmental reviews and reports (Phase I’s and, if appropriate, Phase II’s), engineering reports and other due diligence investigations of the Property, as may be reasonably requested by the holder of the Note or the Rating Agencies or as may be necessary or appropriate in connection with a Secondary Market Transaction and provide such updated non-financial information with respect to each Individual Property (collectively, the “Property Information”) (items (i) through (iv) being collectively, the “Provided

ATLANTA 5579734.9

-93-

Information” and items (i) through (iii) being the “Borrower Provided Information”), together, if customary, with appropriate verification and/or consents of the Provided Information through letters of auditors or opinions of counsel of independent attorneys reasonably satisfactory to Lender and the Rating Agencies;

(b)deliver (i) an Insolvency Opinion, (ii) the Deferred Delaware Opinion (subject to making such amendments or modifications to the organizational documents for Borrower and any SPC Party as may be reasonably required by counsel issuing such opinions, including, without limitation to provide for an Independent Director, which amendments or modifications shall be reasonably acceptable to Lender), (iii) additional or revised opinions of counsel as to due execution and enforceability with respect to each Individual Property, Borrower and each Guarantor and their respective Affiliates and the Loan Documents, (iv) revised organizational documents for Borrower and any SPC Party (including, without limitation, such revisions as are necessary to comply with the provisions of Article VIII hereof) and (v) good standing and qualification certificates issued by the relevant Governmental Authorities for each of Borrower, any SPC Party, Manager (to the extent such information is actually available to Borrower with respect to any Manager that is not an Affiliated Manager) and each Guarantor as of the date of the Secondary Market Transaction, which opinions, organizational documents and certificates shall be reasonably satisfactory to Lender and the Rating Agencies;

(c)deliver Officer’s Certificates containing updated representations and warranties as of the closing date of the Secondary Market Transaction with respect to each Individual Property, Borrower, each Guarantor and the Loan Documents as are customarily provided in the Secondary Market Transaction and as may be reasonably requested by the holder of the Note, any Investor or the Rating Agencies and consistent with the facts covered by such representations and warranties as they exist on the date thereof, including the representations and warranties made in the Loan Documents (in the event Borrower or any Guarantor fails to comply with this subsection (c), Borrower and each Guarantor hereby acknowledges and agrees that each of the representations and warranties made by Borrower and each Guarantor contained in the Loan Documents shall be deemed to have been re-made as the closing date of the Secondary Market Transaction);

(d)within thirty (30) days after request by Lender, use commercially reasonable efforts to obtain, after written request from Lender, additional tenant estoppels letters, subordination agreements or other agreements from parties to agreements that affect the Property, which estoppels letters, subordination agreements or other agreements shall be reasonably satisfactory to Lender and satisfactory to the Rating Agencies;

(e)execute such amendments to the Loan Documents and organizational documents as may be requested by the holder of the Note or the Rating Agencies or otherwise to effect the Secondary Market Transaction; provided, however, that Borrower shall not be required to modify or amend any Loan Document if such modification or amendment would (except for modifications and amendments required to be made pursuant to Section 11.1(f) hereof) (i) change the interest rate, the stated maturity or the amortization of principal set forth in the Note or (ii) modify or amend any other material economic term of the Loan;

(f)if Lender elects, in its sole discretion, prior to or upon a Secondary Market Transaction, to split the Loan into two or more parts, or the Note into multiple component notes or tranches which may have different interest rates, amortization payments, principal amounts, payment priorities and maturities (which election Borrower agrees Lender may make), Borrower and each Guarantor agree to cooperate with Lender in connection with the foregoing and to execute the required modifications and amendments to the Note, this Agreement and the Loan Documents and to provide opinions necessary to

ATLANTA 5579734.9

-94-

effectuate the same provided that (1) the initial weighted average of the stated interest rates under such component notes does not exceed the Applicable Interest Rate, (2) the aggregate amount of any scheduled amortization payments under such component notes does not exceed the aggregate of any scheduled amortization payments required under this Agreement, (3) the amount of the scheduled monthly amortization payments under such component notes does not exceed the amount of any scheduled monthly amortization payments required under this Agreement, (4) the stated interest rate under such component notes are fixed rates, and (5) the stated maturity date under such component notes are the Scheduled Maturity Date;

(g)cooperate with Lender in obtaining, at Lender’s expense, updated reports from each applicable Governmental Authority or a third party report provider confirming, as close as possible to the closing date of the Secondary Market Transaction, that the representations made by Borrower in Article IV are true and correct including, without limitation, reports from Governmental Authorities or third party reports providers confirming that the representations made by Borrower in Section 4.1.1 (Organization), Section 4.1.4 (Litigation), Section 4.1.7 (No Bankruptcy Filing), Section 4.1.11 (Zoning Compliance), Section 4.1.12 (Compliance with Anti-Terrorism Laws), Section 4.1.15 (Condemnation), Section 4.1.25 (Certificates of Occupancy; Licenses), Section 4.1.27 (Physical Condition), are true and correct;

(h)supply to Lender, at Lender’s expense, an endorsement to each Title Insurance Policy insuring that no Security Instrument is subject to any exceptions or Liens other than Permitted Encumbrances, and otherwise in form and substance satisfactory to Lender; and

(i)deliver an Officer’s Certificate certifying that there exists no Default or Event of Default under the Loan and that Borrower or any Guarantor, as applicable, is in compliance with the terms and conditions of the Loan Documents to which it is a party and any other matters reasonably required by Lender, any Investor or the Rating Agencies.

Anything in this Section 11.1 to the contrary notwithstanding, any amendment, agreement or indemnification or other action required pursuant to this Section 11.1 shall not (a) increase the interest rate payable hereunder (except as specifically set forth in Section 11.1(e) hereof); (b) modify the Maturity Date; (c) require any principal amortization payments on the Note; (d) decrease the time periods during which Borrower is permitted to perform Borrower’s obligations under the Loan Documents; (e) modify any other material term or provision of the Loan Documents; (f) increase Borrower’s obligations under the Loan Documents or decrease Borrower’s rights under the Loan Documents; or (g) result in any other economic charge or other change, adverse in any respect, other than out-of-pocket costs for Borrower’s legal fees relating to any such transaction. Borrower shall not be obligated to incur any out-of-pocket costs and expenses in connection with Borrower’s compliance with this Section 11.1 (other than Borrower’s attorney’s fees and expenses) and Lender shall be responsible for paying for all such out-of-pocket costs and expenses.

Section 11.2Securitization Indemnification. Lender shall be permitted to share all Provided Information with any actual or potential purchaser, transferee, assignee, Servicer, participant or Investor in a Secondary Market Transaction, Rating Agencies, investment banking firms, accounting firms, law firms and other third-party advisory firms involved with the Loan Documents or the applicable Secondary Market Transaction. It is understood that the Provided Information may ultimately be incorporated into any offering document (“Disclosure Document”) for the Secondary Market Transaction, and also may be included in filings (an “Exchange Act Filing”) with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and thus any actual or potential purchaser, transferee, assignee, Servicer, participant or Investor in a Secondary Market Transaction may also see some or all of the Provided Information. Subject to Section 13.20 hereof, each of Borrower and each Guarantor irrevocably waives any and all rights it may

ATLANTA 5579734.9

-95-

have under any applicable Laws (including, without limitation, any right of privacy) to prohibit such disclosure. Lender and all of the aforesaid third-party advisors and professional firms shall be entitled to rely on the information supplied by, or on behalf of, Borrower or any Guarantor. Borrower and each Guarantor hereby indemnify the Underwriter Group as to any Liabilities to which the Underwriter Group may become subject in connection with any Disclosure Document and/or any Covered Rating Agency Information, in each case, insofar as such Liabilities arise out of or are based upon any untrue statement of any material fact in the Borrower Provided Information and/or arise out of or are based upon the omission to state a material fact in the Borrower Provided Information required to be stated therein or necessary in order to make the statements in the applicable Disclosure Document and/or Covered Rating Agency Information in light of the circumstances under which they were made, not misleading; provided, however, such indemnity shall only apply to the extent that any such Liability arises out of or is based upon any such untrue statement or omission made therein in reliance upon and in conformity with the Borrower Provided Information or information (other than the Property Information unless Borrower has actual knowledge that any such Property Information is inaccurate in any material respect) supplied by, or on behalf of, Borrower or any Guarantor or any Affiliate of Borrower and furnished to Lender in connection with the preparation of any Disclosure Document or in connection with underwriting or closing of the Loan. The aforesaid indemnity will be in addition to any liability which Borrower or Guarantor may otherwise have; provided, however, such indemnification shall only be effective to the extent Lender accurately states the information supplied by, or on behalf of, Borrower or any Guarantor, or any Affiliate of Borrower or any Guarantor, in the Disclosure Document. Lender may publicize the existence of the Debt in connection with its marketing for a Secondary Market Transaction.

Section 11.3Exculpation.

(a)Notwithstanding anything to the contrary herein or in any of the other Loan Documents but subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or any Individual Borrower to perform and observe the obligations contained in the Note, this Agreement, any Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any Individual Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, manager, trustee, agent, or Affiliate of Borrower (but specifically excluding Guarantor subject to the terms of the Guaranty) or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), 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, each Security Instrument and the other Loan Documents, or in any Individual Property, 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 and any Individual Borrower only to the extent of Borrower’s and any Individual Borrower’s interest in the Property, in the Rents and in any other Collateral given to Lender, and Lender, by accepting the Note, this Agreement, each Security Instrument and the other Loan Documents, agrees that it shall not sue for, seek or demand any deficiency judgment against Borrower or any Individual Borrower or any of the Exculpated Parties in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, any Security Instrument or the other Loan Documents. The provisions of this Section 11.3 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 or any Individual Borrower as a party defendant in any action or suit for foreclosure and sale under any Security Instrument; (c) affect the validity or enforceability of any of the Loan Documents or any guaranty or indemnity (including, without limitation, the Guaranty and the Environmental Indemnity) or similar instrument made in connection with the Loan or any of the rights and remedies of Lender thereunder;

ATLANTA 5579734.9

-96-

(d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of any Assignment of Leases; (f) impair the right of Lender to enforce the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower or any Individual Borrower in order to fully realize the Collateral granted by any of the Loan Documents, including, without limitation, by any Security Instrument, or by any Assignment of Leases, or by this Agreement (including with respect to the Accounts Collateral) or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Collateral (but not to impose personal liability upon Borrower contrary to this Section 11.3); or (h) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower or any Individual 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 costs reasonably incurred) arising out of or in connection with the following:

(i)Borrower or any Individual Borrower, SPC Party, any Guarantor, or any Affiliate or Borrower, SPC Party or Guarantor, or any of their respective agents or representatives, misappropriates or misapplies (based on limitations contained in the Loan Documents) any (A) Insurance Proceeds, (B) Awards or other amounts received in connection with the Condemnation of all or a portion of the Property or any Individual Property, (C) Rents, or (D) funds disbursed by Lender from the Reserve Funds;

(ii)criminal acts of Borrower or any Individual Borrower, SPC Party, any Guarantor, any Affiliate of Borrower or any Individual Borrower, SPC Party or any Guarantor, or any of their respective agents or representatives resulting in the seizure, forfeiture or loss of the Property or any Individual Property;

(iii)Borrower’s failure to pay, or the failure of any Individual Borrower to pay, Taxes or Other Charges prior to delinquency in accordance with the terms of this Agreement except to the extent that (A) sums sufficient to pay such amounts have been deposited into escrow with Lender and such amounts are deemed paid pursuant to Section 3.7 hereof; or (B) the Property has not generated over the immediately preceding twelve (12) months sufficient revenue to pay the same; or (C) Borrower or any tenant is contesting Taxes or Other Charges in accordance with the terms of Section 5.2 hereof; or (D) such failure occurs during a period in which Lender has the right to receive Rent from the Property (either via deposit to the Cash Management Account or otherwise) in connection with exercising remedies under this Agreement or the other Loan Documents;

(iv)Borrower’s failure to (A) obtain and maintain (or cause the applicable tenant to obtain and maintain) the Policies in accordance with Section 7.1 hereof, or (B) pay Insurance Premiums prior to delinquency except to the extent that (i) sums sufficient to pay Insurance Premiums have been deposited into escrow with Lender and Insurance Premiums are deemed paid pursuant to Section 3.7 hereof; or (ii) the Property has not generated over the immediately preceding twelve (12) months sufficient revenue to pay Insurance Premiums; or (iii) such failure occurs during a period in which Lender has the right to receive Rent from the Property (either via deposit to the Cash Management Account or otherwise) in connection with exercising remedies under this Agreement or the other Loan Documents;

(v)Borrower’s failure to pay, or the failure of any Individual Borrower to pay, charges for labor or materials or other charges that can create Liens on any Individual Property, in accordance with the terms of this Agreement, to the extent such Liens are not bonded over, discharged or contested in accordance with this Agreement or the other Loan Documents, except to the extent that such failure occurs during a period in which Lender has the right to receive Rent from the Property (either via deposit to the Cash Management Account or otherwise) in connection with exercising remedies under this Agreement or the other Loan Documents;

ATLANTA 5579734.9

-97-

(vi)the removal or disposal of any portion of the Personal Property by Borrower or any Individual Borrower, SPC Party, any Guarantor, any Affiliate of Borrower, SPC Party or any Guarantor, after an Event of Default without replacing such Personal Property with Personal Property of the same utility and of the same or greater value;

(vii)any intentional act of physical waste or arson by Borrower or any Individual Borrower, SPC Party, any Guarantor, any Affiliate of any of the foregoing or any of their respective agents or representatives with respect to any Individual Property;

(viii)any fees or commissions being paid by Borrower or any Individual Borrower to SPC Party, any Guarantor or any Affiliate of Borrower, SPC Party or any Guarantor in violation of the terms of this Agreement;

(ix)the breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity or in the Loan Documents concerning Environmental Laws and Hazardous Substances and any indemnification of Lender with respect thereto in any Loan Document;

(x)Borrower’s, SPC Party’s or any Guarantor’s intentional failure to comply with the terms and provisions of Section 11.1 or Borrower’s, SPC Party’s or any Guarantor’s failure to comply with the indemnification provisions set forth in Section 11.2 hereof;

(xi)Borrower or any Individual Borrower or SPC Party violates or breaches any of the terms and conditions of Section 8.1 hereof (provided, however, it shall not be deemed a violation of Section 8.1(d)(xxi) giving rise to liability under this clause (xi) solely if Borrower or SPC Party becomes insolvent);

(xii)Borrower’s failure to comply with the Cash Management Covenants;

(xiii)the failure of the Enid Property to have an appurtenant easement for vehicular and pedestrian access and egress and parking over all of that adjacent property that is identified as Lot 5 on that certain survey prepared by Harold D. Rodgers, Jr., of Design Surveys, LLC dated August 5, 2014 with a last revised date of August 8, 2014 ("Lot 5"), but only to the extent Lender is not otherwise reimbursed for such losses (including but not limited to actual losses related to diminution in the value of the Enid Property to a value that is less than the Allocated Loan Amount of the Enid Property, to the extent such diminution in value results from such failure), damages, costs and expenses by the title company pursuant to the applicable Title Insurance Policy after Lender has made commercially reasonable efforts to obtain reimbursement and payment under such Title Insurance Policy; provided however that this clause (xiii) shall be of no further force and effect from and after the date that Lender confirms in writing that it has received evidence that an acceptable appurtenant easement agreement has been properly executed and recorded in the real estate records applicable to the Enid Property in order to provide the Enid Property with vehicular and pedestrian access and egress and parking over Lot 5; and

(xiv)Borrower's failure to complete the floor and roof repairs on the Enid Property as identified in that certain tenant estoppel certificate delivered to Lender by PETSMART, Inc., dated August 18, 2014; provided however that this clause (xiv) shall be of no further force and effect from and after the date that Borrower delivers to Lender a fully executed tenant estoppel certificate executed by PETSMART, Inc. in substantially the same form as the August 18, 2014 estoppel certificate but without any exceptions in Section 6 thereof.

(b)Notwithstanding the foregoing or anything to the contrary in this Agreement or any of the other Loan Documents, (A) nothing herein shall be deemed to be a waiver of any right which Lender

ATLANTA 5579734.9

-98-

may have under Section 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all Collateral shall continue to secure all of the Debt owing to Lender in accordance with this Agreement, the Note, any Security Instrument and the other Loan Documents and (B) the agreement of Lender not to pursue recourse liability as set forth above SHALL BECOME NULL AND VOID and shall be of no further force and effect, and the Debt shall be fully recourse to Borrower and each Individual Borrower, in the event that:

(1)in connection with the Loan or the Property or any Individual Property (including, without limitation, any Lease, or the execution and delivery of this Agreement, the Note, any Security Instrument, or the other Loan Documents or at any time during the term of the Loan) Borrower or any Individual Borrower, SPC Party, any Guarantor, any Affiliate of any of the foregoing, or any of their respective agents or representatives, engages in any action constituting fraud, willful misrepresentation or willful misconduct;

(2)Borrower, or any Individual Borrower, fails to obtain Lender’s prior consent to any Transfer of the Property or any Individual Property, or any Transfer of any direct or indirect interest in Borrower or any Individual Borrower or any other Restricted Party, in either case to the extent required by this Agreement or any Security Instrument;

(3)Borrower or any Individual Borrower fails to obtain Lender’s prior consent to any subordinate financing or other voluntary Lien encumbering any Individual Property; and

(4)(A) Borrower or any Individual Borrower or SPC Party files a voluntary petition under the Bankruptcy Code or any other Creditors Rights Laws, (B) an Affiliate, officer, director, or representative which controls Borrower or any Individual Borrower or SPC Party directly or indirectly, files, or joins in the filing of, an involuntary petition against Borrower or any Individual Borrower or SPC Party under the Bankruptcy Code or any other Creditors Rights Laws, or solicits or causes to be solicited, or otherwise colludes with, petitioning creditors for any involuntary petition against Borrower or any Individual Borrower or SPC Party from any Person, (C) Borrower or any Individual Borrower or SPC Party files 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 Creditors Rights Laws, or solicits or causes to be solicited, or otherwise colludes with, petitioning creditors for any involuntary petition from any Person, (D) any Affiliate, officer, director, or representative which controls Borrower or any Individual Borrower or SPC Party consents to, or acquiesces in, or joins in, an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any Individual Borrower or SPC Party or the Property (other than a receiver requested by Lender in connection with enforcement of its rights under the Loan Documents), (E) Borrower or any Individual Borrower or SPC Party makes an assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due, (F) there is a substantive consolidation of Borrower with Sponsor or any of its subsidiaries under the Bankruptcy Code or any other Creditors Rights Laws (unless the same results from Lender bringing an involuntary petition against Borrower or Lender seeks any such substantive consolidation); and (G) any Restricted Party contests or opposes any motion made by Lender to obtain relief from the automatic stay or seeking to reinstate the automatic stay in the event of any proceeding under the Bankruptcy Code or any other Creditors Rights Laws involving any Guarantor or its subsidiaries.

(5)Borrower, SPC Party, any Guarantor, or any Affiliate of Borrower, SPC Party or any Guarantor institutes a judicial action which contests Lender’s exercise of remedies provided under the Loan Documents after the occurrence of an Event of Default (except to the extent that a court of competent jurisdiction makes a final determination that Borrower, SPC Party, any Guarantor or any Affiliate of Borrower, SPC Party or any Guarantor had a valid legal basis for any such action).

ATLANTA 5579734.9

-99-

Section 11.4Servicer.

(a)At the option of Lender, the Loan may be serviced by a master servicer, primary servicer, special servicer or trustee (any such master servicer, primary servicer, special servicer or trustee, together with their respective agents, nominees or designees, are collectively referred to as “Servicer”) selected by Lender and Lender may delegate all or any portion of its rights and responsibilities under this Agreement and the other Loan Documents to the Servicer. Upon the appointment of a Servicer, to the extent of the delegation to such Servicer, the term “Lender” shall be deemed to include the “Servicer”. Borrower shall not be responsible for (i) any set-up fees, or any other initial costs relating to the appointment of any Servicer, or (ii) payment of the monthly servicing fee due to Servicer. Notwithstanding the foregoing, Borrower shall pay (i) all reasonable consent, review and processing fees of Servicer and any related third party costs, (ii) any liquidation fees that may be due Servicer in connection with the exercise of any or all remedies permitted under the Loan Documents, (iii) upon the occurrence and during the continuance of an Event of Default, any workout fees and special servicing fees that may be due to Servicer, which fees may be due on a periodic or continuing basis and (iv) upon the occurrence and during the continuance of an Event of Default, the costs of all property inspection and/or appraisals of each Individual Property (or any updates to any existing inspection or appraisal) required under this Agreement or that a Servicer may otherwise require under the Servicing Agreement (other than the cost of annual inspections required to be borne by Servicer under the Servicing Agreement) (the “Servicing Fee”).

(b)Borrower acknowledges that, as part of a Securitization, the parties to a Securitization may, in their sole discretion, elect to impose certain requirements as conditions precedent to certain actions by one or more of the Servicers (including, without limitation, that such Servicer obtain either or both of the approval of one or more Investors (or representatives of one or more Investors) as to certain proposed actions, and/or Rating Agency Confirmation). No requirement or condition imposed upon such Servicer pursuant to any Securitization as a condition precedent to the granting or denying of any consent or approval, or the taking or refusal to take of any action, pursuant to this Agreement (except only for any action required of Lender hereunder) shall give rise to any claim or cause of action by Borrower against Lender, or give Borrower any defense for failure to perform its obligations under the Loan Documents.

Section 11.5Conversion to Registered Form. At the request of Lender, Borrower shall appoint, as its agent, a registrar and transfer agent (the “Registrar”) reasonably acceptable to Lender which, subject to such reasonable regulations as Lender shall provide, shall maintain such books and records as are necessary for the registration and transfer of the Note in a manner that shall cause the Note to be considered to be in registered form for purposes of Section 163(f) of the Code. The option to convert the Note into registered form once exercised may not be revoked. Any agreement setting out the rights and obligations of the Registrar shall be subject to the reasonable approval of Lender. Borrower may revoke the appointment of any person as Registrar, effective upon the effectiveness of the appointment of a replacement Registrar, which shall also be reasonably acceptable to Lender. The Registrar shall not be entitled to any fee from Borrower or Lender or any other lender in respect of transfers of the Note and other Loan Documents.

Section 11.6Mezzanine Financing. In connection with any Secondary Market Transaction, Lender shall have the right at any time to divide the Loan into two or more parts: a mortgage loan (the “Mortgage Loan”) and one or more mezzanine loans (the “Mezzanine Loan(s)”). The principal amount of the Mortgage Loan plus the principal amount of the Mezzanine Loan(s) shall equal the outstanding principal balance of the Loan immediately prior to the creation of the Mortgage Loan and the Mezzanine Loan(s). In effectuating the foregoing, Mezzanine Lender will make a loan to borrower(s) (the “MezzanineBorrower(s)”) and Mezzanine Borrower(s) will contribute the amount of the Mezzanine Loan(s) to Borrower and Borrower will apply the contribution to pay down the Mortgage Loan. The Mortgage Loan and the Mezzanine

ATLANTA 5579734.9

-100-

Loan(s) will be on the same terms and subject to the same conditions set forth in this Agreement, the Note, each Security Instrument and the other Loan Documents except as follows:

(a)Lender shall have the right to establish different interest rates and debt service payments for the Mortgage Loan and the Mezzanine Loan(s) and to require the payment of the Mortgage Loan and the Mezzanine Loan(s) in such order of priority as may be designated by Lender; provided, that (i) the total loan amounts for the Mortgage Loan and the Mezzanine Loan(s) shall equal the amount of the Loan immediately prior to the creation of the Mortgage Loan and the Mezzanine Loan(s), (ii) the weighted average interest rate of the Mortgage Loan and the Mezzanine Loan(s) shall initially on the date created equal the interest rate which was applicable to the Loan immediately prior to creation of the Mortgage Loan and the Mezzanine Loan(s), (iii) the aggregate amount of any scheduled amortization payments under such component notes does not exceed the aggregate of any scheduled amortization payments required under this Agreement, (iv) the amount of the scheduled monthly amortization payments under such component notes does not exceed the amount of any scheduled monthly amortization payments required under this Agreement, (v) the stated interest rate under such component notes are fixed rates, and (vi) the stated maturity date under such component notes are the Scheduled Maturity Date.

The Mezzanine Loan(s) will be made pursuant to Lender’s standard mezzanine loan documents, subject to such changes as Borrower may reasonably require. The Mezzanine Loan(s) will be subordinate to the Mortgage Loan and will be governed by the terms of an intercreditor agreement between the holders of the Mortgage Loan and the Mezzanine Loan(s).

(b)Mezzanine Borrower(s) shall (i) be a special purpose, bankruptcy remote entity which conforms to applicable Rating Agency criteria and is otherwise acceptable to Lender and (ii) own directly or indirectly one hundred percent (100%) of Borrower. The security for the Mezzanine Loan shall be a pledge of one hundred percent (100%) of the direct and indirect ownership interests in Borrower.

(c)Mezzanine Borrower(s) and Borrower shall cooperate with all reasonable requests of Lender in order to divide the Loan into a Mortgage Loan and one or more Mezzanine Loan(s) and shall execute and deliver such documents as shall be reasonably required by Lender and any Rating Agency in connection therewith, including, without limitation, (i) the delivery of non-consolidation opinions, (ii) the modification of organizational documents and Loan Documents (including, without limitation, opting into Article 8 of the Uniform Commercial Code of the state of organization of Borrower and the certification of any collateral securing the Mezzanine Loan(s), (iii) authorize Lender to file any financing statements required by the Uniform Commercial Code of the state of Borrower’s organization required to perfect its security interest in the collateral pledged as security for the Mezzanine Loan(s), (iv) execute such other documents reasonably required by Lender in connection with the creation of the Mezzanine Loan(s), including, without limitation, a guaranty substantially similar in form and substance to the Guaranty delivered on the date hereof in connection with the Loan, an environmental indemnity substantially similar in form and substance to the Environmental Indemnity delivered on the date hereof in connection with the Loan and a conditional assignment of management agreement substantially similar in form and substance to the Assignment of Management Agreement delivered on the date hereof in connection with the Loan, (v) deliver appropriate authorization, execution and enforceability opinions with respect to the Mezzanine Loan(s) and amendments to the Mortgage Loan, and (vi) deliver an “Eagle 9” or equivalent Uniform Commercial Code title insurance policy, satisfactory to Lender, insuring the perfection and priority of the Lien on the collateral pledged as security for the Mezzanine Loan(s).

ATLANTA 5579734.9

-101-

(d)All third party costs and expenses incurred by Lender, Borrower or any Guarantor in connection with Borrower’s or each Guarantor’s complying with requests made under this Section 11.6, including, without limitation, Uniform Commercial Code title insurance premiums, shall be paid by Lender.

(e)Anything in this Section 11.6 to the contrary notwithstanding, any amendment, agreement or indemnification or other action required pursuant to this Section 11.6 shall not (i) increase the interest rate payable hereunder (except as specifically set forth in Section 11.6(a) hereof); (ii) modify the Maturity Date; (iii) require any principal amortization payments on the Note (except as specifically set forth in the first paragraph of this Section 11.6); (iv) decrease the time periods during which Borrower is permitted to perform Borrower’s obligations under the Loan Documents; (v) modify any other material term or provision of the Loan Documents; (vi) increase Borrower’s obligations under the Loan Documents or decrease Borrower’s rights under the Loan Documents; or (vii) result in any other economic charge or other change, adverse in any respect, other than out-of-pocket costs for Borrower’s legal fees relating to any such transaction.

XII.ACCOUNTS AND ACCOUNT COLLATERAL

Section 12.1Permitted Investments. Sums on deposit in any Account (other than the Lockbox Account) may be invested by or at the direction of Lender in Permitted Investments provided (a) such investments are then regularly offered by the applicable Eligible Institution for accounts of this size, category and type, (b) such investments are permitted by applicable Law, (c) the maturity date of the Permitted Investment is not later than the date on which sums in the applicable Account are anticipated by Lender to be required for payment of an obligation for which such Account was created, and (d) no Event of Default shall have occurred and be continuing. No other investments of the sums on deposit in the Accounts shall be permitted except as set forth in this Section 12.1. As long as any funds constituting Account Collateral are invested in investments that constitute Permitted Investments at the time such investments are made, Lender shall not be liable for any loss sustained on any such investment of any funds constituting Account Collateral.

Section 12.2Income From Permitted Investments. Lender agrees that during any period when no Event of Default exists, all earnings or interest on the Permitted Investments (other than Permitted Investments of the Tax and Insurance Escrow Account) (the “Interest Bearing Accounts”) shall be added to and become part of each such Interest Bearing Account; provided, however, that Lender does not warrant or guarantee any rate of return on such Permitted Investments and the provisions of this Agreement relating to Lender’s liability in Section 12.1 hereof remain in full force and effect. Borrower agrees that (a) its federal taxpayer identification number shall be used to create each Interest Bearing Account, (b) all earnings or interest on the Permitted Investments of Interest Bearing Accounts shall be reported for federal and state income tax purposes as Borrower’s income and (c) Borrower shall be fully liable for all taxes applicable to the Interest Bearing Accounts. Borrower hereby authorizes Lender to provide Borrower’s federal taxpayer identification number to any applicable depository institution and federal and state agencies to ensure that such income with respect to the Interest Bearing Accounts is attributed to Borrower for taxation purposes. Borrower agrees that it will promptly take any actions and execute any instruments requested by Lender to facilitate the reporting of such income as Borrower’s income. All earnings or interest on the Permitted Investments of the Tax and Insurance Escrow Account shall be the sole property of and shall be paid to Lender, unless otherwise required by applicable Law or otherwise expressly provided in this Agreement.

Section 12.3Sole Dominion and Control. Borrower acknowledges and agrees that the Accounts are subject to the sole dominion, control and discretion of Lender, its authorized agents or designees, subject to the terms hereof; and Borrower shall have no right of withdrawal with respect to any Account.

ATLANTA 5579734.9

-102-

Section 12.4Grant of Security Interest. Borrower hereby grants to Lender a first-priority perfected security interest in each of the Accounts and the Account Collateral, as additional security for the payment of the Debt and the performance of the Other Obligations. Until expended or applied in accordance herewith, the Accounts shall constitute additional security for the payment of the Debt and the performance of the Other Obligations.

Section 12.5No Other Security Interest. Borrower shall not, without obtaining the prior written consent of Lender, further pledge, assign or grant any security interest in any Account Collateral or permit any Lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC Financing Statement, except those naming Lender as the secured party, to be filed with respect thereto.

Section 12.6Change of Account Names. In the event Lender transfers or assigns the Loan, Borrower acknowledges that each applicable Eligible Institution at which any Account has been established, at Lender’s request, shall change the name of such Account to the name of the transferee, beneficiary or assignee, as applicable. In the event Lender retains a Servicer to service the Loan, Borrower acknowledges that each such Eligible Institution, at Lender’s request, shall change the name of each Account to the name of the Servicer, as agent for Lender.

Section 12.7Rights on Default. Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, upon the occurrence and during the continuance of an Event of Default, Lender shall promptly notify each Eligible Institution at which any Account has been established, in writing of such Event of Default and, without notice from Lender or any such Eligible Institution to Borrower, (a) Borrower shall have no rights in respect of (including, without limitation, the right to instruct any such Eligible Institution to transfer from) the Accounts, (b) Lender may direct any such Eligible Institution to liquidate and transfer any amounts then invested in Permitted Investments to the Accounts or reinvest such amounts in other Permitted Investments as Lender may determine is necessary to perfect or protect any security interest granted or purported to be granted hereby or pursuant to the other Loan Documents or to such Eligible Institution, as agent for Lender, or Lender, to exercise and enforce Lender’s rights and remedies hereunder or under any other Loan Document with respect to any Account or any Account Collateral, (c) Lender shall have all rights and remedies with respect to Account Collateral as described in this Agreement and in the Security Instrument, in addition to all of the rights and remedies available to a secured party under the UCC and (d) Lender may apply the Account Collateral to the payment of the Debt, in such order, manner, amounts, times and priority as Lender in its sole discretion determines (including to the payment of the items for which the Reserve Funds or the Triggering Event Period Reserve Funds were established, if Lender so elects in its sole discretion), and such reserved rights shall be in addition to all other rights and remedies provided to Lender under this Agreement and the other Loan Documents.

Section 12.8Limitations on Liability of Lender.

(a)Beyond the exercise of reasonable care in the custody thereof or as otherwise expressly provided herein, Lender shall have no duty with respect to any Account Collateral in its possession or control, or any income thereon or the preservation of rights against any Person or otherwise with respect thereto. Lender shall be deemed to have exercised reasonable care in the custody and preservation of any such Account Collateral if such Account Collateral is accorded treatment substantially equal to that which Lender accords its own property, it being understood and agreed that Lender shall not be liable or responsible for any loss or damage to any Account Collateral, or for any diminution in value thereof, by reason of any act or omission of Lender, its Affiliates, agents, employees or bailees, except to the extent such loss or damage results from Lender’s gross negligence, willful misconduct or bad faith, provided that nothing in this Section 12.8(a) shall be deemed to relieve Lender from the duties and standard of care which, as a commercial

ATLANTA 5579734.9

-103-

bank, it generally owes to depositors. Without limiting the generality of the foregoing, Lender shall have no liability to any Person based upon its errors in judgment, its performance of its duties with respect to any of the Account Collateral under this Agreement, any claimed failure to perform such duties, any action taken or omitted in good faith or any mistake of fact or Law; provided that Lender shall be liable for damages arising out of its gross negligence, willful misconduct or bad faith.

(b)The duties of Lender in its capacity as the holder of any Account Collateral in its possession or control pursuant to this Agreement are purely ministerial. In such capacity, Lender is acting as a stakeholder for the accommodation of Borrower and is not responsible or liable in any manner whatsoever related to any signature, notice, resolution, request, waiver, consent, receipt, order, certificate, report, opinion, bond or other paper or document pursuant to which Lender may act with respect to any such Account Collateral, including, without limitation, terms and conditions, sufficiency, correctness, genuineness, validity, form of execution, or the identity, authority or right of any person executing or depositing the same. Without limiting the generality of the foregoing, Lender shall be protected in acting upon any signature, notice, resolution, request, waiver, consent, receipt, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine, and Lender may assume that any Person purporting to act on behalf of Borrower giving any of the foregoing in connection with any Account Collateral in Lender’s possession or control has been duly authorized to do so. Lender may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any such action taken or suffered by Lender in good faith in accordance herewith.

(c)Lender shall not be responsible for the validity or sufficiency of any cash, instruments, wire transfer or any other property delivered to it hereunder, for the value or collectability of any check or other instrument so delivered or for any representation made or obligations assumed by Borrower or any other party to the Loan Documents. Nothing herein contained shall be deemed to obligate Lender to deliver any cash or any other funds or property referred to herein, unless the same shall have first been received by Lender pursuant to this Agreement.

Section 12.9Indemnity. Borrower hereby indemnifies and holds the Indemnified Parties harmless against any Liabilities which any Indemnified Party may incur arising from or related in any way to:

(a)any and all actions taken by Lender with respect to any Account Collateral in its possession or control, and any claims or demands asserted against Lender arising out of any such Account Collateral, excepting only any such claims or demands arising out of Lender’s gross negligence, willful misconduct or bad faith.

The amount of any such Liabilities shall bear interest at the Applicable Interest Rate, unless an Event of Default has occurred and is continuing, in which case the amount of any such Liabilities shall bear interest at the Default Rate, from the date any such Liabilities are incurred to the date of payment to the Indemnified Party, shall be deemed to constitute a portion of the Debt, shall be secured by the Lien of the Security Instrument and the other Loan Documents, and shall be immediately due and payable upon demand therefor.

Section 12.10Disbursement of Disputed Funds. In the event any adverse claims are made upon the funds in any Account Collateral in the possession or control of Lender, then, at Lender’s option: (a) Lender shall not deliver such Account Collateral to any Person, shall refuse to comply with any claims on it and shall continue to hold such Account Collateral until (i) Lender, Borrower and any other Person who may have asserted a claim upon any such Account Collateral shall agree in writing to a delivery of such Account Collateral, in which event Lender shall then deliver such Account Collateral in accordance with

ATLANTA 5579734.9

-104-

such written agreement, or (ii) Lender receives a certified copy of a final and non-appealable judgment or order of a court of competent jurisdiction directing the delivery of such Account Collateral, in which event Lender shall then deliver such Account Collateral in accordance with such judgment or order; or (b) if Lender shall receive a written notice advising that litigation over any Account Collateral has been commenced, Lender may deposit such Account Collateral with the Clerk of the Court in which such litigation is pending; or (c) Lender may take affirmative steps to (i) substitute for itself an impartial party reasonably satisfactory to Lender and Borrower, (ii) deposit such Account Collateral with a court of competent jurisdiction, or (iii) commence an action for interpleader, the costs thereof to be borne by Borrower. The provisions of this Section 12.10 shall not apply to any dispute between Borrower and Lender.

Section 12.11Disbursement Upon Payment in Full. Upon payment in full of the Debt, and the performance of the Other Obligations, any funds remaining in the Accounts shall be disbursed to Borrower pursuant to the written instructions of Borrower.

XIII.MISCELLANEOUS

Section 13.1Survival. 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 Borrower, shall inure to the benefit of the legal representatives, successors and assigns of Lender.

Section 13.2Lender’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 and absolute discretion of Lender and shall be final and conclusive. Prior to a Securitization, whenever pursuant to this Agreement the Rating Agencies are given any right to approve or disapprove, or any arrangement or term is to be satisfactory to the Rating Agencies, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory, based upon Lender’s determination of Rating Agency criteria, shall be substituted therefor.

Section 13.3Governing Law.

(a)THE PARTIES AGREE THAT THE STATE OF ARIZONA HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY. IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS AGREEMENT 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 ARIZONA 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, PRIORITY AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN

ATLANTA 5579734.9

-105-

DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH EACH 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 ARIZONA SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF THIS AGREEMENT AND THE OTHER 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 OR ANY OF THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ARIZONA.

(b)NOTWITHSTANDING THE FOREGOING, THE UCC IN EFFECT IN THE COMMONWEALTH OF PENNSYLVANIA SHALL GOVERN THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED IN THE ACCOUNT COLLATERAL.

Section 13.4Modification, Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision of this Agreement, the Note, or any other Loan Document, nor consent to any departure by Borrower 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 herein, 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 13.5Nonwaiver. Neither any failure nor any delay on the part of Lender 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 any other Loan Document 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 13.6Notices.

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 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 13.6):

If to Lender:

ATLANTA 5579734.9

-106-

PNC Bank, National Association10851 MastinOverland Park, KS 66210Attention: Harry J. FunkFacsimile No.: 913-253-9718

If to Borrower:    c/o American Realty Capital Properties, Inc.

2325 East Camelback Road, Suite 1100Phoenix, AZ 85016Attention: General Counsel, Real EstateFacsimile No.: 480-449-7012

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.

Section 13.7Financing Statements. Borrower hereby authorizes Lender to file, and upon Lender’s request, shall deliver to Lender for filing, an initial financing statement or statements under the UCC with respect to any portion of the Collateral which is or may be subject to any security interest within the meaning of the UCC in the form required to properly perfect Lender’s security interest therein. At any time and from time to time, at the expense of Borrower, Borrower shall promptly execute and deliver all further instruments and documents, and take all further action that may be necessary or that Lender may reasonably request (including, without limitation, all initial financing statements, and any restatements, extensions, continuations, renewals or amendments thereof), in order to perfect, or continue the perfection of, and to protect any security interest granted or purported to be granted hereby or by the other Loan Documents (including, without limitation, any security interest in and to any Permitted Investments), or to enable Lender, or any agent of Lender, to exercise and enforce its rights and remedies hereunder or under any of the other Loan Documents with respect to any portion of the Collateral which is or may be subject to any security interest within the meaning of the UCC, and if Borrower fails to promptly execute and deliver such further instruments and documents, Borrower hereby expressly authorizes and appoints Lender as its attorney-in-fact to execute such further instruments and documents in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest. With respect to any of the Collateral in which a security interest is not perfected by the filing of a financing statement, Borrower consents and agrees to undertake, and to cooperate fully with Lender, to perfect the security interest granted to Lender in such Collateral. Without limiting the foregoing, if and to the extent any of the Collateral is held by a bailee for the benefit of Borrower, Borrower shall promptly notify Lender thereof and, if required by Lender, promptly obtain an acknowledgment from such bailee that is reasonably satisfactory to Lender and confirms that such bailee holds such Collateral for the benefit of Lender as secured party and shall only act upon instructions from Lender with respect to such Collateral.

Section 13.8Waiver of Trial by Jury. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM OF ANY NATURE, WHETHER IN CONTRACT OR TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN, THE APPLICATION FOR THE LOAN, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY ACTS OR OMISSIONS OF LENDER, OR ANY OF ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH RESPECT TO ANY OF THE FOREGOING. THIS WAIVER OF RIGHT TO TRIAL BY JURY

ATLANTA 5579734.9

-107-

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. BORROWER CONFIRMS THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) BY INDEPENDENT LEGAL COUNSEL FREELY CHOSE BY BORROWER CONCERNING THE LOAN, THE LOAN DOCUMENTS AND SPECIFICALLY THE WAIVER OF JURY TRIAL CONTAINED HEREIN AND THAT BORROWER HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH SUCH COUNSEL. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY SUCH ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.

Section 13.9Headings. 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 13.10Severability. 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 13.11Preferences. 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 same is done 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 Creditors Rights 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 13.12Waiver of Automatic or Supplemental Stay. In the event of the filing of any voluntary or involuntary petition under the Bankruptcy Code by or against Borrower (other than an involuntary petition filed by or joined by Lender), Borrower shall not assert, or request any other party to assert, that the automatic stay under Section 362 of the Bankruptcy Code shall operate or be interpreted to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any rights it has by virtue of this Agreement, or any other rights that Lender has, whether now or hereafter acquired, against any Guarantor. Further, Borrower shall not seek a supplemental stay or any other relief, whether injunctive or otherwise, pursuant to Section 105 of the Bankruptcy Code or any other provision therein to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any rights it has by virtue of this Agreement against any Guarantor. The waivers contained in this paragraph are a material endorsement to Lender’s willingness to make the Loan, and Borrower acknowledges and agrees that no grounds exist for equitable relief which would bar, delay or impede the exercise by Lender of its rights and remedies against Borrower or any Guarantor.

Section 13.13Bankruptcy Acknowledgment. In the event the Property, any Individual Property or any interest therein becomes property of any bankruptcy estate or subject to any state or federal insolvency proceeding, then Lender shall immediately become entitled, in addition to all other relief to which Lender may be entitled under any Security Instrument or any other Loan Document, to obtain: (a) an order from the

ATLANTA 5579734.9

-108-

Bankruptcy Court or other appropriate court granting immediate relief from any automatic stay laws (including Section 362 of the Bankruptcy Code) so to permit Lender to pursue its rights and remedies against Borrower as provided under this Agreement and any Security Instrument and all other rights and remedies of Lender at law and in equity under applicable state law; and (b) an order from the Bankruptcy Court prohibiting Borrower’s use of all “cash collateral” as defined under Section 363 of the Bankruptcy Code. In connection with any such orders, Borrower shall not contend or allege in any pleading or petition that Lender does not have sufficient grounds for relief from the automatic stay. Any bankruptcy petition or other action taken by Borrower to stay, condition, or inhibit Lender from exercising its remedies are hereby admitted by Borrower to be in bad faith and Borrower further admits that Lender would have just cause for relief from the automatic stay in order to take such actions authorized by state Law.

Section 13.14Waiver 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 13.15Remedies 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.

Section 13.16Expenses; 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 disbursements) 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 requested by Lender as to any legal matters arising under this Agreement or the other Loan Documents with respect to any Individual Property); (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) the negotiation, preparation, execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents requested by Borrower or otherwise required hereunder and any other documents or matters requested by Borrower or otherwise required hereunder; (iv) securing Borrower’s compliance with any requests made pursuant to the provisions of this Agreement; (v) 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 and any amendment thereof; (vi) subject to Section 11.3 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

ATLANTA 5579734.9

-109-

Loan Documents, any Individual Property, or any other security given for the Loan; and (vii) subject to Section 11.3 hereof, enforcing any obligations of or collecting any payments due from Borrower under this Agreement, the other Loan Documents or with respect to any Individual Property 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.

(b)Subject to Section 11.3 hereof, Borrower shall indemnify, defend and hold harmless the Indemnified Parties from and against any and all Liabilities that may be imposed on, incurred by, or asserted against any Indemnified Party in any manner relating to or arising out of (i) any material breach by Borrower of its obligations under, or 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; provided, however, that Borrower shall not have any obligation to Lender hereunder to the extent that such Liabilities arise from the gross negligence, illegal acts, fraud or willful misconduct of Lender. 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 Liabilities incurred by the Indemnified Parties.

Section 13.17Exhibits Incorporated. The Exhibits 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 13.18Offsets, 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 13.19No Joint Venture or Partnership; No Third Party Beneficiaries.

(a)Borrower and Lender intend that the relationships created hereunder and under the other Loan Documents between Borrower and Lender be solely that of debtor and creditor, and that Lender shall have no fiduciary or other special relationship with Borrower. Nothing herein or therein is intended to, nor shall anything contained herein or therein be construed to, constitute Lender as a joint venturer, partner, tenant in common, joint tenant or agent of Borrower, nor to grant Lender any interest in the Property or any Individual Property other than that of mortgagee, beneficiary or lender, nor to render Lender liable for any debts, obligations, acts, omissions, representations or contracts of Borrower.

(b)This Agreement and the other Loan Documents are solely for the benefit of Lender, Borrower and each Guarantor and nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Lender, Borrower and each Guarantor 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 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 Lender deems it advisable or desirable to do so.

ATLANTA 5579734.9

-110-

Section 13.20Disclosure of Information.

(a)Notwithstanding anything to the contrary contained herein or in any other Loan Document, each of Borrower and Lender shall be permitted to make disclosures regarding the Loan (including, without limitation, any information obtained and/or provided in connection therewith) to the extent required in connection with their respective ordinary course reporting under applicable Laws (including, without limitation, applicable securities laws), to their respective investors or regulators and/or as may be required by applicable Law, in each case, without the approval of the other Person.

(b)Except as otherwise provided by applicable Law, Lender shall utilize all information identified by Borrower or Guarantor to Lender as being confidential or proprietary (“Identified Information”) in accordance with its customary procedure for handling confidential information of this nature and in accordance with safe and sound banking practices but, notwithstanding the foregoing, in no event shall Lender or Servicer be prohibited from disclosing, or consenting to the disclosure of any information (including, without limitation, any Identified Information) (1) in connection with any Secondary Market Transaction (including, without limitation, to any Investor and/or any accountants, legal counsel and other similar agents of any Investor, or any Rating Agencies (which, for the purposes of this Section 13.20(b), shall include any non-hired Rating Agency)(provided that, in ease case, they shall be notified of the confidential nature of the information), or as otherwise required by any applicable legal or regulatory requirement, (2) to any of its Affiliates (provided any such Affiliate shall agree to keep such information confidential in accordance with the terms of this Section); (3) as required by any Governmental Authority or representative thereof or pursuant to legal process or in connection with any legal proceedings; (4) to Lender’s independent auditors and other professional advisors (provided they shall be notified of the confidential nature of the information); (5) if an Event of Default exists, to any other Person, in connection with the exercise by Lender of rights hereunder or under any of the other Loan Documents; and


(6) to the extent such information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to Lender on a nonconfidential basis from a source other than the Borrower or any Affiliate that is not known by Lender to be subject to a confidentiality restriction with respect thereto.

Section 13.21Waiver of Marshalling of Assets.

(a)Borrower acknowledges that Lender has made the Loan to Borrower upon the security of its collective interest in each Individual Property and in reliance upon the aggregate of the Individual Properties taken together being of greater value as collateral security than the sum of each Individual Property taken separately. Borrower agrees that each Security Instrument is and will be cross collateralized and cross defaulted with each other so that (i) an Event of Default under any Security Instrument shall constitute an Event of Default under each other Security Instrument; (ii) an Event of Default under the Note or this Agreement shall constitute an Event of Default under each Security Instrument; (iii) each Security Instrument shall constitute security for the Debt as if a single blanket lien were placed on all of the Property as security for the Debt; 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 Property or any Individual Property, 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 Property or any Individual Property for the collection of the Debt without any prior or different resort for collection or of the right of Lender to the

ATLANTA 5579734.9

-111-

payment of the Debt out of the net proceeds of the Property or any Individual Property in preference to every other claimant whatsoever. In addition, Borrower, for itself and its successors and assigns, waives in the event of foreclosure of any or all of the Security Instruments, any equitable right otherwise available to Borrower which would require the separate sale of any Individual Property or require Lender to exhaust its remedies against any Individual Property or any combination of the Individual Properties before proceeding against any other Individual Property or combination of Individual Properties; and further in the event of such foreclosure Borrower does hereby expressly consent to and authorize, at the option of Lender, the foreclosure and sale either separately or together of any combination of the Individual Properties.

Section 13.22Waiver 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 13.23Conflict; 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 13.24Brokers and Financial Advisors. Borrower hereby 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. Borrower hereby agrees to indemnify, defend and hold Lender harmless from and against any and all claims, liabilities, costs and expenses of any kind (including Lender’s 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 Borrower or Lender in connection with the transactions contemplated herein. The provisions of this Section 13.24 shall survive the expiration and termination of this Agreement and the payment of the Debt.

Section 13.25Prior 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 13.26Assignments. None of Borrower, SPC Party or any Guarantor may Transfer this Agreement or any other Loan Document or any of their respective rights or obligations hereunder or thereunder, except as expressly permitted pursuant to the terms and provisions of Section 6.2 and Section 6.6 hereof. If Borrower is a partnership, the agreements contained herein and in the other Loan Documents shall remain in force and be applicable, notwithstanding any changes in the individuals or entities comprising the partnership, and the term “Borrower” as used herein, shall include any alternate or successor partnership,

ATLANTA 5579734.9

-112-

but any predecessor partnership and their partners shall not thereby be released from any liability. If Borrower is a corporation, the agreements contained herein and in the other Loan Documents shall remain in full force and be applicable notwithstanding any changes in the shareholders comprising, or the officers and directors relating to, the corporation, and the term “Borrower” as used herein, shall include any alternate or successor corporation, but any predecessor corporation shall not be relieved of liability hereunder. If Borrower is a limited liability company, the agreements contained herein and in the other Loan Documents shall remain in force and be applicable, notwithstanding any changes in the members comprising the limited liability company, and the term “Borrower” as used herein, shall include any alternate or successor limited liability company, but any predecessor limited liability company and their members shall not thereby be released from any liability. (Nothing in the foregoing sentences shall be construed as a consent to, or a waiver of, any prohibition or restriction on transfers of interests in such partnership, corporation or limited liability company which may be set forth in the Loan Agreement, any Security Instrument or any other Loan Document.)

Section 13.27Joint 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 hereto acknowledge that the defined term “Borrower” has been defined to collectively include each Individual Borrower. It is the intent of the parties hereto in determining whether (a) a breach of a representation, a covenant or any other provision hereof 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 11.3 of this Agreement, that any such breach, occurrence or event with respect to any Individual Borrower shall be deemed to be such a breach, occurrence or event with respect to every Individual Borrower 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. In any provision of this Agreement where an obligation, duty or liability is imposed upon “Borrower”, such obligation, duty or liability shall be deemed to be imposed upon each Individual Borrower. The obligations and liabilities of each Individual Borrower shall be joint and several.

Section 13.28Duplicate Originals; Counterparts. This Agreement and each of the other Loan Documents may be executed in any number of duplicate originals, and each duplicate original shall be deemed to be an original. This Agreement and each of the other Loan Documents (and each duplicate original) also may be executed in any number of counterparts, each of which shall be deemed an original and all of which together constitute a fully executed agreement even though all signatures do not appear on the same page. The failure of any party hereto to execute each counterpart of this Agreement shall not relieve the other signatories from their obligations hereunder.

PURSUANT TO THE TERMS OF SECTION 13.8 OF THIS AGREEMENT, EACH BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS ANY SUCH BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

Each Borrower acknowledges that it has read and understood all the provisions of this Agreement, including the Waiver of Trial by Jury, and has been advised by counsel as necessary or appropriate.

ATLANTA 5579734.9

-113-

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 WG REIDSVILLE NC, LLC,

COLE DG INDEPENDENCE (23^rd ST.) MO, LLC,

COLE KG CEDAR RAPIDS IA, LLC,

COLE NG PRESCOTT AZ, LLC,

COLE LO FREMONT OH, LLC,

COLE CV WISCONSIN RAPIDS WI, LLC,

COLE DG GLADWIN MI, LLC,

COLE DG LEXINGTON MI, LLC,

ARCP MT ENID OK, LLC,

each a Delaware limited liability company

By: /s/ Todd J. Weiss

Name: Todd J. Weiss

Title: Officer

ATLANTA 5579734.9

-114-

LENDER:

PNC BANK, NATIONAL ASSOCIATION

By:    /s/ Harry J. Funk

Name: Harry J. Funk

Title: Executive Vice President

ATLANTA 5579734.9

-115-

WITH RESPECT TO SECTIONS 4.1.12, 5.21, 11.1 AND 11.2 HEREOF ONLY:

GUARANTOR:

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV) OPERATING PARTNERSHIP, LP,a Delaware limited partnership

By: Cole Real Estate Income Strategy (Daily NAV), Inc., a Maryland corporation, its General Partner

By:/s/ Todd J. Weiss

Name: Todd J. Weiss

Title: Authorized Officer

ATLANTA 5579734.9

-116-

EX-10.2

Exhibit 10.2

Published CUSIP Number:

Revolver CUSIP Number:

Term Loan CUSIP Number:

AMENDED AND RESTATED

CREDIT AGREEMENT

Dated as of September 12, 2014

among

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV) OPERATING PARTNERSHIP, LP,

as the Borrower,

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer,

U.S. BANK NATIONAL ASSOCIATION,

as Syndication Agent,

U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agent

and

THE OTHER LENDERS PARTY HERETO

Arranged By:

J.P. MORGAN SECURITIES LLC

as Lead Arranger and Bookrunner

QB\033578.02011\28349393.9

TABLE OF CONTENTS

Section		Page
Article I. DEFINITIONS AND ACCOUNTING TERMS		1
1.01	Defined Terms	1
1.02	Other Interpretive Provisions	33
1.03	Accounting Terms	34
1.04	Rounding.	35
1.05	Times of Day	35
1.06	Letter of Credit Amounts	35
Article II. the COMMITMENTS and Credit Extensions		35
2.01	Commitments	35
2.02	Borrowings, Conversions and Continuations of Committed Loans	36
2.03	Letters of Credit	37
2.04	Swing Line Loans	45
2.05	Prepayments	48
2.06	Termination or Reduction of Commitments	48
2.07	Repayment of Loans	49
2.08	Interest	49
2.09	Fees	50
2.10	Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate	50
2.11	Evidence of Debt	51
2.12	Payments Generally; Administrative Agent’s Clawback	51
2.13	Sharing of Payments by Lenders	53
2.14	Increase in Commitments	53
2.15	Cash Collateral	55
2.16	Defaulting Lenders	56
2.17	Extension of Maturity Date	58
2.18	Initial Security and Unsecured Conversion	59
Article III. TAXES, YIELD PROTECTION AND ILLEGALITY		60
3.01	Taxes	60
3.02	Illegality	63
3.03	Inability to Determine Rates	64
3.04	Increased Costs	64
3.05	Compensation for Losses	65
3.06	Mitigation Obligations; Replacement of Lenders	66
3.07	Survival	66
Article IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS		66
4.01	Conditions of Initial Credit Extension	66
4.02	Conditions to all Credit Extensions	68
Article V. REPRESENTATIONS AND WARRANTIES		69
5.01	Existence, Qualification and Power	69
5.02	Authorization; No Contravention	69
5.03	Governmental Authorization; Other Consents	69
5.04	Binding Effect	69
5.05	Financial Statements; No Material Adverse Effect; Secured Debt	70
5.06	Litigation	70

i

QB\033578.02011\28349393.9

5.07	No Default	70
5.08	Ownership of Property; Liens	70
5.09	Environmental Compliance	71
5.10	Insurance	71
5.11	Taxes	71
5.12	ERISA Compliance	71
5.13	Subsidiaries; Equity Interests	72
5.14	Margin Regulations; Investment Company Act	72
5.15	Disclosure	72
5.16	Compliance with Laws	72
5.17	Intellectual Property; Licenses, Etc	72
5.18	Sanctions Laws and Regulations	73
5.19	Solvency	73
5.20	REIT Status	73
Article VI. AFFIRMATIVE COVENANTS		74
6.01	Financial Statements	74
6.02	Certificates; Other Information	74
6.03	Notices	76
6.04	Payment of Obligations	77
6.05	Preservation of Existence, Etc	77
6.06	Maintenance of Properties	77
6.07	Maintenance of Insurance	77
6.08	Compliance with Laws	77
6.09	Books and Records	78
6.10	Inspection Rights	78
6.11	Use of Proceeds	78
6.12	Environmental Matters	78
6.13	Addition of Qualified Unencumbered Properties/Additional Subsidiary Guarantors	79
6.14	Removal of Qualified Unencumbered Properties	80
Article VII. NEGATIVE COVENANTS		81
7.01	Liens	81
7.02	Investments	82
7.03	Indebtedness	83
7.04	Fundamental Changes	84
7.05	Dispositions	85
7.06	Dividend Payout Ratio	85
7.07	Change in Nature of Business	86
7.08	Transactions with Affiliates	86
7.09	Burdensome Agreements	86
7.10	Use of Proceeds	86
7.11	Financial Covenants	87
7.12	Additional Restricted Actions	87
7.13	Organizational Matters	88
7.14	Ownership and Creation of Foreign Subsidiaries	88
7.15	Prohibition on Additional Equity Interests and New Members or Partners	88

ii

QB\033578.02011\28349393.9

7.16	Sanctions Law and Regulations	88
Article VIII. EVENTS OF DEFAULT AND REMEDIES		88
8.01	Events of Default	88
8.02	Remedies Upon Event of Default	90
8.03	Application of Funds	91
Article IX. ADMINISTRATIVE AGENT		92
9.01	Appointment and Authority	92
9.02	Rights as a Lender	92
9.03	Exculpatory Provisions	92
9.04	Reliance by Administrative Agent	93
9.05	Delegation of Duties	93
9.06	Resignation of Administrative Agent	93
9.07	Non-Reliance on Administrative Agent and Other Lenders	94
9.08	No Other Duties, Etc	95
9.09	Administrative Agent May File Proofs of Claim	95
9.10	Collateral and Guaranty Matters	95
9.11	Swap Contracts	96
9.12	Enforcement	96
Article X. MISCELLANEOUS		96
10.01	Amendments, Etc	96
10.02	Notices; Effectiveness; Electronic Communication	98
10.03	No Waiver; Cumulative Remedies; Enforcement	100
10.04	Expenses; Indemnity; Damage Waiver	100
10.05	Payments Set Aside	102
10.06	Successors and Assigns	103
10.07	Treatment of Certain Information; Confidentiality	109
10.08	Right of Setoff	110
10.09	Interest Rate Limitation	111
10.10	Counterparts; Integration; Effectiveness	111
10.11	Survival of Representations and Warranties	111
10.12	Severability	111
10.13	Replacement of Lenders	111
10.14	Governing Law; Jurisdiction; Etc	112
10.15	Waiver of Jury Trial	113
10.16	No Advisory or Fiduciary Responsibility	113
10.17	USA PATRIOT Act Notice	114
10.18	Electronic Execution of Assignments and Certain Other Documents	114
10.19	Time of the Essence	114
10.20	Entire Agreement	114

iii

QB\033578.02011\28349393.9

SCHEDULES

2.01Commitments and Applicable Percentages

5.06Litigation

5.08Real Property Assets and Qualified Unencumbered Properties

5.09Environmental Matters

5.13Loan Party Jurisdiction and Taxpayer Identification

5.17Intellectual Property Matters

7.01Existing Liens

7.03Existing Indebtedness

10.02Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

Form of

ACommitted Loan Notice

BSwing Line Loan Notice

C-1Revolving Note

C-2 Term Note

C-3Swing Line Note

D-1Compliance Certificate

D-2Borrowing Base Compliance Certificate

E-1Form of Assignment and Assumption

E-2Administrative Questionnaire

FGuaranty

GOpinion Matters

HEnvironmental Investigations

IU.S. Tax Compliance Certificates

iv

QB\033578.02011\28349393.9

AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into, as of September 12, 2014,among Cole Real Estate Income Strategy (Daily NAV) Operating Partnership, LP, a Delaware limited partnership (the “Borrower”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and JPMorgan Chase Bank, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

This Agreement amends and restates the Borrowing Base Revolving Line of Credit Agreement dated December 8, 2011 (as the same has been amended or otherwise modified prior to the date hereof), among Borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the "Existing Credit Agreement").

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

1.01Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

“Addition Date” has the meaning specified in Section 6.13.

“Adjusted Annual EBITDA” means, with respect to the Consolidated Group for any period, an amount equal to the Consolidated Net Income for the most recently ended Measurement Period, as adjusted by (a) adding or deducting for, as appropriate, any adjustment made under GAAP during such Measurement Period for straight lining of rents, gains or losses from sales of assets, extraordinary items, impairment of real estate assets, taxes, depreciation, amortization, interest expenses, other non-cash items, fees and expenses associated with the transactions contemplated by this Agreement and real estate acquisition costs and expenses, and the Consolidated Group Pro Rata Share of any adjustment made under GAAP during such Measurement Period for straight lining of rents, gains or losses from sales of assets, interest, taxes, depreciation, amortization, other non‑cash items, extraordinary items, impairment of real estate assets and real estate acquisition costs and expenses for the Investment Affiliates; (b) deducting an annual amount for capital expenditures for such Measurement Period equal to (i) $0.25 per square foot for office Projects, and (ii) $0.15 per square foot for retail Projects and (iii) $0.10 per square foot for industrial, distribution and warehouse Projects, in each case, multiplied by the weighted average gross leasable area for such Projects (including only the square footage, FF&E, or units in (i) — (iii) above which is owned by the Consolidated Group during such Measurement Period and excluding the square footage, FF&E, or units of the buildings on the ground leased portion of any Project for which one of the members of the Consolidated Group is the lessor); and (c) adding the Advisor Fee Adjustment for such Measurement Period; provided, however, Adjusted Annual EBITDA attributable to Excluded Tenants shall be excluded for purposes of the definition of Adjusted Annual EBITDA. To the extent previously adjusted, all of the above described modifiers to such Consolidated Net Income are as derived from CREIS’ books and records, which books and records are to be maintained in accordance with GAAP.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Rate Loan for the relevant Interest Period, or for any Base Rate Loan, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate).

1

QB\033578.02011\28349393.9

“Adjusted Unencumbered NOI” means, with respect to Projects owned by the Borrower and Subsidiary Guarantors for any period, Unencumbered NOI for the most recently ended Measurement Period less an amount for capital expenditures equal to (a) $0.25 per square foot for office Projects, and (b)  $0.15 per square foot for retail Projects and (c) $0.10 per square foot for industrial, distribution and warehouse Projects, in each case, multiplied by the weighted average gross leasable area for such Projects (including only the square footage or units in (a) — (c) above which is or are owned by the Borrower and Subsidiary Guarantors during such Measurement Period and excluding the square footage or units of the buildings on the ground leased portion of any Project for which one of the members of the Borrower and Subsidiary Guarantors is the lessor).

“Administrative Agent” means JPMC in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit E-2 or any other form approved by the Administrative Agent.

“Advisors” means Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC and its Affiliates, together with its successors, if any.

“Advisor Fee” means, collectively, (a) an asset management fee based upon the aggregate value of the Projects plus costs and expenses incurred by Advisors in providing asset management services and (b) property management fees based upon gross revenues plus costs and expenses incurred by Advisors in providing property management services.

“Advisor Fee Adjustment” means, for any period, the aggregate Advisor Fees paid to the Advisors that were deducted in determining Consolidated Net Income for such period less an amount equal to four and one half of one percent (4.5%) of aggregate Consolidated Net Income from all Projects during such period; provided that, any such Advisor Fee in an amount in excess of four and one half of one percent (4.5%) of such aggregate Consolidated Net Income for such period is subject to an Advisor Fee Subordination Agreement (in form and substance reasonably satisfactory to Administrative Agent).

“Advisor Fee Subordination Agreement” means that certain Advisor Fee Subordination Agreement (in form and substance reasonably satisfactory to Administrative Agent), dated as of the Closing Date, as amended, restated, supplemented or modified from time to time, by and among Advisors, the Borrower, CREIS and the Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Aggregate Revolving Commitments” means the Revolving Commitments of all the Revolving Lenders. The aggregate principal amount of the Aggregate Revolving Commitments in effect on the Closing Date is SEVENTY‑FIVE MILLION and No/100 DOLLARS ($75,000,000.00).

2

QB\033578.02011\28349393.9

“Aggregate Term Loan Amount” means the aggregate amount of Term Loans of all the Term Lenders. The aggregate principal amount of the Aggregate Term Loan Amount in effect on the Closing Date is TWENTY‑FIVE MILLION and No/100 DOLLARS ($25,000,000.00).

“Agreement” means this Credit Agreement, as amended, restated, supplemented or modified from time to time.

“Anti‑Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Affiliates from time to time concerning or relating to bribery or corruption.

“Applicable Percentage” means, (a) with respect to each Revolving Lender, the percentage (carried out to the ninth decimal place) of the Aggregate Revolving Commitments represented by such Revolving Lender’s Revolving Commitment at such time; provided that if the commitment of each Revolving Lender to make Revolving Loans and the obligation of the L/C Issuer to make L/C Credit Extensions has been terminated pursuant to Section 8.02 or if the Aggregate Revolving Commitments have expired or been terminated pursuant to Section 2.06, then the Applicable Percentage of each Revolving Lender shall be determined based on the Applicable Percentage of such Revolving Lender most recently in effect, giving effect to any subsequent assignments and (b) with respect to each Term Lender, the percentage (carried out to the ninth decimal place) of the Outstanding Amount of the Committed Term Loans represented by such Term Lender’s Term Loans at such time. The Applicable Percentage of each Lender, after giving effect to this Agreement (along with any amendments made hereto and any increases in the Aggregate Revolving Commitments pursuant to Section 2.14 hereof), is set forth opposite the name of such Lender on Schedule 2.01, as it may change from time to time in accordance with the terms hereof.

“Applicable Rate” means, from time to time the applicable rate per annum set forth in the applicable table below opposite the Leverage Ratio, as determined as of the last day of the immediately preceding fiscal quarter.

PRIOR TO AN UNSECURED CONVERSION

Pricing Level	Leverage Ratio	Applicable Rate for Eurodollar Rate Loans and Letters of Credit	Applicable Rate for Base Rate Loans (including Swing Line Loans)	Unused Fee
I	< 50%	1.90%	0.90%	0.30%
II	> 50% and < 55%	2.05%	1.05%	0.30%
III	> 55% and < 60%	2.20%	1.20%	0.30%
IV	> 60%	2.45%	1.45%	0.30%

FROM AND AFTER THE EFFECTIVE DATE OF AN UNSECURED CONVERSION

Pricing Level	Leverage Ratio	Applicable Rate for Eurodollar Rate Loans and Letters of Credit	Applicable Rate for Base Rate Loans (including Swing Line Loans)	Unused Fee
I	< 40%	1.70%	0.70%	0.25%
II	> 40% and < 45%	1.80%	0.80%	0.25%
III	> 45% and < 50%	1.90%	0.90%	0.30%

3

QB\033578.02011\28349393.9

IV	> 50% and < 55%	2.05%	1.05%	0.30%
V	> 55% and < 60%	2.20%	1.20%	0.30%
VI	> 60%	2.45%	1.45%	0.30%

Initially, on the Closing Date, the Applicable Rate shall be determined based upon the Leverage Ratio specified in the certificate delivered pursuant to Section 4.01(b)(xii). Any increase or decrease in the Applicable Rate resulting from a change in the Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(a); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then, the "greatest" Pricing Level in the applicable table above shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered (until such time as such delinquent Compliance Certificate is delivered). As used herein, the "greatest" Pricing Level means (i) prior to an Unsecured Conversion, Pricing Level IV, and (ii) from and after the effective date of an Unsecured Conversion, Pricing Level VI.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Approved Subordinated Debt” means debt provided to any Loan Party by Series C, LLC (or any successor thereto), an Affiliate of such Loan Party or American Realty Capital Properties, Inc. (or any successor thereto or Affiliate thereof), which is (i) subject to approval by Administrative Agent in its sole, but reasonable, discretion, (ii) unsecured, (iii) subordinate to the Obligations pursuant to an Approved Subordination Agreement, (iv) has been documented in a manner reasonably satisfactory to Administrative Agent, and (v) not in excess of the aggregate principal amount of $10,000,000.00.

“Approved Subordination Agreement” means, with respect to any Approved Subordinated Debt, a subordination agreement in form and substance reasonably satisfactory to Administrative Agent.

“Arranger” means severally and collectively, J.P. Morgan Securities LLC in its capacity as lead arranger and book runner, and any other entities designated in writing by the then acting Arranger(s) as a co-lead arranger and/or joint bookrunner, as applicable.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E-1 or any other form approved by the Administrative Agent.

“Assignors” means the then effective Assignors as defined in and pursuant to the Collateral Assignment Agreement, after giving effect to all Joinder Agreements.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.

4

QB\033578.02011\28349393.9

“Audited Financial Statements” means the audited consolidated balance sheet of the Consolidated Group for the fiscal year ended December 31, 2013, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Consolidated Group, including the notes thereto.

“Availability Period” means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Revolving Commitments pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

“Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1%, and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%. Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.

“Base Rate Loan” means a Loan that bears interest at a rate determined by reference to the Base Rate.

“Blackrock Investments” means assets of the Consolidated Group that are held and invested pursuant to that certain Discretionary Investment Management Agreement with Blackrock Investment Management, LLC, as Investment Manager, including all Investments made or held pursuant thereto.

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the context may require.

“Borrowing Base” means the lesser of

(a) an amount equal to (i) sixty‑five percent (65%) of the Unencumbered Asset Value until the First Anniversary Date, and (ii) sixty percent (60%) thereafter; and

(b) the Unencumbered Mortgageability Amount.

“Borrowing Base Compliance Certificate” means a certificate substantially in the form of Exhibit D‑2.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Rate Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

5

QB\033578.02011\28349393.9

“Capitalization Rate” means seven and one‑quarter percent (7.25%).

“Capitalized Lease Obligation” means the monetary obligation of a Person under any lease of any property by such Person as lessee which would, in accordance with GAAP, be required to be accounted for as a capital lease on the balance sheet of such Person.

“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent, Swing Line Lender or the L/C Issuer (as applicable) and the Lenders, as collateral for L/C Obligations, Obligations in respect of Swing Line Loans or obligations of Lenders to fund participations in respect thereof (as the context may require), cash or deposit account balances or, if the L/C Issuer or Swing Line Lender benefitting from such collateral and the Borrower shall agree, other credit support, in each case pursuant to documentation in form and substance satisfactory to (a) the Administrative Agent and (b) the L/C Issuer or the Swing Line Lender, as applicable. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Equivalents” means, as of any date:

(a)securities issued or directly and fully guaranteed or insured by the United States Government or any agency or instrumentality thereof having maturities of not more than one (1) year from such date;

(b)mutual funds organized under the United States Investment Company Act rated AAm or AAm-G by S&P and P-1 by Moody’s;

(c)certificates of deposit or other interest-bearing obligations of a bank or trust company which is a member in good standing of the Federal Reserve System having a short term unsecured debt rating of not less than A-1 by S&P and not less than P-1 by Moody’s (or in each case, if no bank or trust company is so rated, the highest comparable rating then given to any bank or trust company, but in such case only for funds invested overnight or over a weekend) provided that such investments shall mature or be redeemable upon the option of the holders thereof on or prior to a date one (1) month from the date of their purchase;

(d)certificates of deposit or other interest-bearing obligations of a bank or trust company which is a member in good standing of the Federal Reserve System having a short term unsecured debt rating of not less than A-1+ by S&P, and not less than P-1 by Moody’s and which has a long term unsecured debt rating of not less than A1 by Moody’s (or in each case, if no bank or trust company is so rated, the highest comparable rating then given to any bank or trust company, but in such case only for funds invested overnight or over a weekend) provided that such investments shall mature or be redeemable upon the option of the holders thereof on or prior to a date three (3) months from the date of their purchase;

(e)bonds or other obligations having a short term unsecured debt rating of not less than A-1+ by S&P and P-1+ by Moody’s and having a long term debt rating of not less than A1 by Moody’s issued by or by authority of any state of the United States, any territory or possession of the United States, including the Commonwealth of Puerto Rico and agencies thereof, or any political subdivision of any of the foregoing;

6

QB\033578.02011\28349393.9

(f)repurchase agreements issued by an entity rated not less than A-1+ by S&P, and not less than P-1 by Moody’s which are secured by U.S. Government securities of the type described in clause (i) of this definition maturing on or prior to a date one (1) month from the date the repurchase agreement is entered into;

(g)short term promissory notes rated not less than A-1+ by S&P, and not less than P-1 by Moody’s maturing or to be redeemable upon the option of the holders thereof on or prior to a date one (1) month from the date of their purchase; and

(h)commercial paper (having original maturities of not more than three hundred sixty-five (365) days) rated at least A-1+ by S&P and P-1 by Moody’s and issued by a foreign or domestic issuer who, at the time of the investment, has outstanding long-term unsecured debt obligations rated at least A1 by Moody’s.

“C Corporation” means a corporation that is taxed under Subchapter C of Chapter 1 of the Code.

“Change in Law” means the occurrence after the date of this Agreement or, with respect to any Lender, such later date on which such Lender becomes a party to this Agreement, of:  (a) the adoption of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority or (c) compliance by any Lender or the L/C Issuer (or, for purposes of Section 3.04(b), by any Lending Office of such Lender or by such Lender’s or the L/C Issuer’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

“Change of Control” means an event or series of events by which:

(a)CREIS fails to own, directly or indirectly, more than fifty percent (50%) of the Equity Interests of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right);

(b)during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of CREIS cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period or (ii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.

“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 4.01 or 10.01, as applicable, which shall be the date of this Agreement.

“CMBS Securities” means, any investment securities that represent an interest in, or are secured by, one or more pools of commercial mortgage loans or synthetic mortgages.

7

QB\033578.02011\28349393.9

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

“Collateral” has the meaning specified in the Collateral Assignment Agreement.

“Collateral Assignment Agreement” means the Collateral Assignment of Equity Interest and Security Agreement, and all related Joinder Agreements thereto, in form and content reasonably acceptable to Administrative Agent.

“Commitments” means the Revolving Commitments or the Term Commitments or both as the context requires.

“Committed Borrowing” means a Committed Revolving Borrowing or a Committed Term Borrowing or both as the context requires.

“Committed Loan” is a Committed Revolving Loan or a Committed Term Loan or both as the context requires.

“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

“Committed Revolving Borrowing” means a borrowing consisting of simultaneous Committed Revolving Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.02.

“Committed Revolving Loan” has the meaning specified in Section 2.01(a).

“Committed Term Borrowing” means a borrowing consisting of simultaneous Committed Term Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.02.

“Committed Term Loan” has the meaning specified in Section 2.01(b).

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Compliance Certificate” means a certificate substantially in the form of Exhibit D‑1.

“Consolidated Debt Service” means, with respect to the Consolidated Group for any period, without duplication, (a) Consolidated Interest Expense for such period plus (b) the aggregate amount of scheduled principal payments attributable to Consolidated Outstanding Indebtedness (excluding optional prepayments and scheduled principal payments in respect of any such Indebtedness which is not amortized through equal periodic installments of principal and interest over the term of such Indebtedness) required to be made during such period by any member of the Consolidated Group plus (c) a percentage of all such scheduled principal payments required to be made during such period by any Investment Affiliate on Indebtedness taken into account in calculating Consolidated Interest Expense (excluding optional prepayments and scheduled principal payments in respect of any such Indebtedness which is not amortized through equal periodic installments of principal and interest over the term of such Indebtedness), equal to the greater of (x) the percentage of the principal amount of such Indebtedness for which any member of the Consolidated Group is liable (to the extent not already included pursuant to clause (b) above) and (y) the Consolidated Group

8

QB\033578.02011\28349393.9

Pro Rata Share of such Investment Affiliate, excluding in each case and prior to the Second Anniversary Date, Approved Subordinated Debt.

“Consolidated Group” means CREIS and all Persons whose financial results are consolidated with CREIS for financial reporting purposes under GAAP.

“Consolidated Group Pro Rata Share” means, with respect to any Investment Affiliate, the percentage of the total equity ownership interests held by the Consolidated Group, in the aggregate, in such Investment Affiliate determined by calculating the greater of (a) the percentage of the issued and outstanding stock, partnership interests or membership interests in such Investment Affiliate held by the Consolidated Group in the aggregate and (b) the percentage of the total book value of such Investment Affiliate that would be received by the Consolidated Group in the aggregate, upon liquidation of such Investment Affiliate, after repayment in full of all Indebtedness of such Investment Affiliate; provided, that to the extent a given calculation includes liabilities, obligations or Indebtedness of any Investment Affiliate and the Consolidated Group, in the aggregate, is or would be liable for a portion of such liabilities, obligations or Indebtedness in a percentage in excess of that calculated pursuant to clauses (a) and (b) above, the “Consolidated Group Pro Rata Share” with respect to such liabilities, obligations or Indebtedness shall be equal to the percentage of such liabilities, obligations or Indebtedness for which the Consolidated Group is or would be liable.

“Consolidated Interest Expense” means, for any period without duplication, the sum of (a) the amount of interest expense, determined in accordance with GAAP, of the Consolidated Group for such period attributable to Consolidated Outstanding Indebtedness during such period plus (b) the Consolidated Group Pro Rata Share of any interest expense, determined in accordance with GAAP, of any Investment Affiliate, for such period, whether recourse or non‑recourse, excluding, in each case prior to the Second Anniversary Date, Approved Subordinated Debt.

“Consolidated Net Income” means, for any period, consolidated net income of the Consolidated Group as determined in accordance with GAAP.

“Consolidated Net Operating Income” means the aggregate NOI for the applicable period for all Projects.

“Consolidated Net Worth” means, as of any date of determination, an amount equal to (a) Total Asset Value as of such date minus (b) Consolidated Outstanding Indebtedness as of such date, plus (c) only until the Second Anniversary Date, Approved Subordinated Debt.

“Consolidated Outstanding Indebtedness” means, as ofany date of determination, without duplication, the sum of (a) all Indebtedness of the Consolidated Group outstanding as of such date, as determined on a consolidated basis in accordance with GAAP (whether recourse or non‑recourse), plus, (b) the applicable Consolidated Group Pro Rata Share of any Indebtedness of each Investment Affiliate as of such date, other than, in either case, Indebtedness of such member of the Consolidated Group or Investment Affiliate owed to a member of the Consolidated Group, excluding, in each case prior to the Second Anniversary Date, Approved Subordinated Debt.

“Construction in Progress” means, as of any date, the book value (determined in accordance with GAAP) of any Projects then under development; provided that a Project shall no longer be included in Construction in Progress and shall be deemed to be a stabilized project upon the earlier of (a) the expiration of the second full fiscal quarter after substantial completion (the earlier of receipt of a temporary certificate of occupancy or a final certificate of occupancy) of such Project and (b) the last day of the fiscal quarter in

9

QB\033578.02011\28349393.9

which the annualized Consolidated Net Operating Income attributable to such Project divided by the Capitalization Rate exceeds the book value of such Project.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling,” “Controls” and “Controlled” have meanings correlative thereto.

“Conversion Requirement” has the meaning specified in Section 2.18.

“Credit Extension” means each of the following:  (a) a Borrowing and (b) an L/C Credit Extension.

“CREIS” means Cole Real Estate Income Strategy (Daily NAV), Inc., a Maryland corporation, together with its successors.

“Daily Undrawn Amount” means, for each day during the term hereof, an amount equal to (a) the Aggregate Revolving Commitments existing as of the end of such day, less (b) the aggregate Outstanding Amount of Committed Revolving Loans and L/C Obligations (but specifically excluding Swing Line Loans (other than to the extent the risk participation in a Swing Line Loan has been funded in cash by a Revolving Lender)) as of the end of such day.

“Daily Unused Fee” means, for each day during any Availability Period, an amount equal to (a) the Daily Undrawn Amount for such day, multiplied by (b) a per annum percentage for such day (as determined for a three hundred sixty (360) day year) equal to the applicable percentage set forth for Unused Fees in the table set forth in the definition of Applicable Rate.

“Dark Qualified Unencumbered Property” means any Project that is not one hundred percent (100%) occupied (or if such Project is a multi-tenant Project, is not eighty five percent (85%) occupied) but is leased in its entirety (or if such Project is a multi-tenant Project, is at least eighty five percent (85%) leased) (in either case, ignoring subleases) to one or more investment grade (BBB- or above from S&P or Baa3 or above by Moody’s) tenants, or to one or more tenants whose lease obligations are guaranteed by an investment grade (BBB- or above from S&P or Baa3 or above by Moody’s) entity (so long as such guaranty is in effect), with a minimum of five (5) years left on such lease, payments under such lease are current and such tenant has no present right to terminate such lease.

“Debt Rating” means, as of any date of determination, the rating as determined by either S&P or Moody’s of a Person’s non‑credit‑enhanced, senior unsecured long‑term debt. The Debt Rating in effect at any date is the Debt Rating that is in effect at the close of business on such date.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

10

QB\033578.02011\28349393.9

“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate applicable to Base Rate Loans plus (iii) two percent (2.0%) per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus two percent (2.0%) per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus two percent (2.0%) per annum.

“Defaulting Lender” means, subject to Section 2.16(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such

Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower) or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided, that, a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interests in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.16(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower and each other Lender promptly following such determination.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any Sale and Leaseback Transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Dividend Payout Ratio” means, for any Measurement Period, the ratio of (a) an amount equal to (i) one hundred percent (100%) of all dividends or other distributions paid, direct or indirect, on account of any Equity Interests in CREIS (except dividends or distributions payable solely in shares of that class of

11

QB\033578.02011\28349393.9

Equity Interest to the holders of such class) during such Measurement Period, less (ii) any amount of such dividends or distributions constituting Dividend Reinvestment Proceeds, to (b) Funds From Operations of the Consolidated Group for such Measurement Period.

“Dividend Reinvestment Proceeds” means all dividends or other distributions, direct or indirect, on account of any shares of any Equity Interests in CREIS which any holder(s) of such Equity Interests direct to be used, concurrently with the making of such dividend or distribution, for the purpose of purchasing for the account of such holder(s) additional Equity Interests in the Consolidated Group.

“Documentation Agent” means U.S. BANK NATIONAL ASSOCIATION in its capacity as a documentation agent under any of the Loan Documents, or any successor or additional documentation agent(s) designated by JPMC.

“Dollar” and “$” mean lawful money of the United States.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.06(b)(iv), (v) and (vi) (subject to such consents, if any, as may be required under Section 10.06(b)(iii)); provided, that it is understood and agreed that no Defaulting Lender shall be an Eligible Assignee.

“Eligible Real Estate Investments” means any of the following investments held by or owed to any Loan Party, any Subsidiary thereof or any Investment Affiliate:  (a) any Secured Debt, including any “Tranche B” loans thereunder or participation interests therein; provided, however, if such Secured Debt is evidenced by a promissory note, such promissory note is properly assigned and/or endorsed payable to such Loan Party, such Subsidiary or such Investment Affiliate or if the investment is a participation interest, to the Person granting such participation interest, (b) CMBS Securities, (c) any mezzanine debt, including any participation interests therein, (d) any preferred equity and (e) any REIT common stock.

“Environmental Laws” means any and all Federal, state and local statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

“Environmental Liability” means any liability (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or (to the extent any such liability is recourse to a Loan Party) any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law with respect to any Project, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials on any Project, (c) exposure of any Project to any Hazardous Materials, (d) the release of any Hazardous Materials originating from any Project into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of, membership interests in or partnership interests in (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of, membership interests in or partnership interests in (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of, membership interests in or

12

QB\033578.02011\28349393.9

partnership interests in (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) the determination that any Pension Plan is considered an at-risk plan or a notification that a Multiemployer Plan is endangered or in critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (g) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“Eurodollar Rate” means, for any Interest Period, a per annum rate of interest equal to the Adjusted LIBO Rate for such Interest Period.

“Eurodollar Rate Loan” means a Committed Loan that bears interest at a rate determined by reference to the Eurodollar Rate (and not the Base Rate).

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of such Swap Obligation is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 21 of the Guaranty and any other “keepwell, support or other agreement” for the benefit of such Guarantor and any and all guarantees of such Guarantor’s Swap Obligations by other Loan Parties) at the time the Guaranty of such Guarantor becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes excluded in accordance with the first sentence of this definition.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of

13

QB\033578.02011\28349393.9

any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Commitment (other than pursuant to an assignment request by the Borrower under Section 10.13) or (ii) such Lender changes its Lending Office, except in each case to the extent that pursuant to Section 3.01(a)(ii), (a)(iii) or (c), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding taxes imposed under FATCA.

“Excluded Tenants” means, as of any date, any anchor tenant or non‑anchor with a total square footage of greater than 15,000 square feet at one of the Projects that either (a) is subject to a voluntary or involuntary petition for relief under any Debtor Relief Laws or (b) is not operating its business in its demised premises at such Project, unless such tenant’s lease obligations are guaranteed by an entity whose then current long‑term, unsecured debt obligations are rated BBB‑ or above by S&P and Baa3 or above by Moody’s.

“Extended Maturity Date” has the meaning specified in Section 2.17.

“Extension Effective Date” has the meaning specified in Section 2.17.

“Extension Period” means each period of 12-months that the Maturity Date is extended pursuant to Section 2.17.

“Facility” means the credit facilities provided by the Lenders pursuant to this Agreement.

“Facility Amount” means the sum of the Aggregate Revolving Commitments and the Aggregate Term Loan Amount, as adjusted from time to time pursuant to the terms and conditions of this Agreement.

"Facility Loan Party" means each Loan Party and each Assignor, Company, Joinder Affiliate and Joinder Company, as each term is defined in the Collateral Assignment Agreement.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Fee Letter” means an Amended and Restated Fee Letter, dated as of August 13, 2014 (as the same may be amended, modified, restated, supplemented, extended, renewed or replaced from time to time), among the Borrower, the Administrative Agent, and J.P. Morgan Securities LLC.

14

QB\033578.02011\28349393.9

“FF&E” means Furniture, Fixtures & Equipment, as determined in accordance with GAAP.

“First Anniversary Date” means the first anniversary date of the date of this Agreement.

“Fixed Charge Coverage Ratio” means, with respect to any Measurement Period, a ratio equal to:

(a)Adjusted Annual EBITDA for such Measurement Period, divided by

(b)the sum of (i) Consolidated Debt Service for such Measurement Period, plus (ii) all Preferred Dividends, if any, payable with respect to such Measurement Period.

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender, with respect to such Borrower, that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender, with respect to such Borrower, that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

“Fully Satisfied” means, with respect to the Obligations as of any date, that, as of such date, (a) all principal of and interest accrued to such date which constitute Obligations shall have been irrevocably paid in full in cash, (b) all fees, expenses and other amounts then due and payable which constitute Obligations shall have been irrevocably paid in cash, (c) all outstanding Letters of Credit shall have been (i) terminated, (ii) fully irrevocably Cash Collateralized or (iii) secured by one or more letters of credit on terms and conditions, and with one or more financial institutions, reasonably satisfactory to the L/C Issuer and (d) the Commitments shall have expired or been terminated in full (in each case, other than inchoate indemnification liabilities arising under the Loan Documents).

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“Funds From Operations” shall have the meaning determined, as of the Closing Date (or, if acceptable to the Borrower and the Administrative Agent, as it may be updated from time to time), by the National Association of Real Estate Investment Trusts to be the meaning most commonly used by its members, as adjusted by adding back (a) real estate acquisition costs and expenses for acquisitions that were consummated and impairment of real estate assets for the Consolidated Group and (b) the Consolidated Group’s Pro Rata Share of real estate acquisition costs and expenses for acquisitions that were consummated and impairment of real estate assets for the Investment Affiliates.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public

15

QB\033578.02011\28349393.9

Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Granting Lender” has the meaning specified in Section 10.06(f).

“Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“Guarantors” means, collectively, (a) CREIS, (b) each of the Subsidiary Guarantors and (c) with respect to the payment and performance by each Specified Loan Party of its obligations under its Guaranty with respect to all Swap Obligations, the Borrower.

“Guaranty” means the Guaranty made by the Guarantors in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit F.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“Impacted Interest Period” has the meaning assigned to it in the definition of “LIBO Rate”.

“Improved Land Value” means, as of any date, the book value of any Projects which have been developed for any type of commercial, industrial, residential or other income-generating use, regardless of whether or not such Projects are under development as of such date.

16

QB\033578.02011\28349393.9

“Indebtedness” means, as to any Person, as of any date, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a)all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b)all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c)net obligations of such Person under any Swap Contract;

(d)all obligations of such Person to pay the deferred purchase price of property or services, in each case, other than trade accounts payable in the ordinary course of business and provided that such obligations are not past due for more than sixty (60) days after the date on which such trade account payable was created;

(e)indebtedness (excluding prepaid interest thereon) secured by a Lien (other than a Lien for taxes not yet due and payable) on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f)Capitalized Lease Obligations and Synthetic Lease Obligations;

(g)all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment (other than dividends) in respect of any Mandatorily Redeemable Stock issued by such Person or any other Person, valued at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

(h)all Guarantees of such Person in respect of any of the foregoing (excluding in any calculation of consolidated Indebtedness of the Consolidated Group, Guarantees of one member of the Consolidated Group in respect of primary obligations of any other member of the Consolidated Group).

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capitalized Lease Obligations or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

17

QB\033578.02011\28349393.9

“Initial Maturity Date” means September 12, 2017.

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three (3) months, the respective dates that fall every three (3) months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date.

“Interest Period” means with respect to any Eurodollar Rate Loan, the period commencing on the date of such Eurodollar Rate Loan and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Eurodollar Rate Loan initially shall be the date on which such Eurodollar Rate Loan is made and thereafter shall be the effective date of the most recent conversion or continuation of such Eurodollar Rate Loan and (iii) any Interest Period may not extend beyond the then applicable Maturity Date.

“Interpolated Rate” means, at any time, for the applicable interest period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period for which the LIBO Screen Rate is available that is shorter than the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period (for which that Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time.

“Investment” means any investment made in cash or by delivery of property by any Person (a) in any Person, whether by (i) acquisition of assets, shares of Equity Interests, bonds, notes, mortgage instruments (including deeds of trust, deeds to secure debt and mortgages), debentures, partnership, joint ventures or other ownership interests or other securities of any Person or (ii) any deposit with, or advance, loan or other extension of credit to, any Person (other than deposits made in connection with the purchase of equipment or other assets in the ordinary course of business) or (iii) any other capital contribution to or investment in such Person, including, without limitation, any guaranty obligations (including any support for a letter of credit issued on behalf of such Person) incurred for the benefit of such Person, or (b) in any Project. Investments which are loans, advances, extensions of credit or Guarantees shall be valued at the principal amount of such loan, advance or extension of credit outstanding as of the date of determination or, as applicable, the principal amount of the loan or advance outstanding as of the date of determination actually guaranteed by such Guarantees. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Investment Affiliate” means any Person in which the Consolidated Group, directly or indirectly, has a ten percent (10%) or greater ownership interest, whose financial results are not consolidated under GAAP with the financial results of the Consolidated Group.

“Investment Grade Rating” means a Debt Rating of BBB- or better from Standard & Poor’s, or Baa3 or better from Moody’s.

18

QB\033578.02011\28349393.9

“IP Rights” has the meaning specified in Section 5.17.

“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to such Letter of Credit.

“JPMC” means JPMorgan Chase Bank, N.A., its successors.

“Joinder Agreement” means each Joinder Agreement executed in connection with the Collateral Assignment Agreement, in form and content reasonably acceptable to Administrative Agent.

“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage.

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Committed Revolving Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“L/C Issuer” means JPMC in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the Revolving Lenders, the Term Lenders, if any, and the Swing Line Lender.

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

19

QB\033578.02011\28349393.9

“Letter of Credit” means any standby letter of credit issued hereunder.

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

“Letter of Credit Expiration Date” means the day that is thirty (30) days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

“Letter of Credit Fee” has the meaning specified in Section 2.03(h).

“Letter of Credit Sublimit” means, as of any date of calculation, an amount equal to fifteen percent (15.0%) of the Aggregate Revolving Commitments. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments.

“Leverage Ratio” means, with respect to the Consolidated Group as of any date of calculation, (a) Consolidated Outstanding Indebtedness as of such date, divided by (b) Total Asset Value as of such date.

“LIBO Rate” means, with respect to any Eurodollar Rate Loan for any Interest Period, London interbank offered rate administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for U.S. Dollars) for a period equal in length to such Interest Period as displayed on Pages LIBO01 or LIBO02 of Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that published such rate from time to time as selected by the Administrative Agent in its reasonable discretion, in each case the “LIBO Screen Rate”) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits in the London interbank market with a maturity comparable to such Interest Period; provided that, is the LIBO Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement and provided, further, if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”) then the LIBO Rate shall be the Interpolated Rate, provided, that, if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“LIBO Screen Rate” has the meaning assigned to it in the definition of “LIBO Rate”.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit in the form of a Revolving Loan, a Swing Line Loan or a Term Loan.

“Loan Documents” means this Agreement, each Note, each Issuer Document, the Fee Letter, the Guaranty, the Advisor Fee Subordination Agreement and any and all documents, instruments or agreements executed and delivered to evidence, secure or in connection with all Letters of Credit, and such other documents evidencing, securing or pertaining to the Loans as shall, from time to time, be executed and/or delivered by the Borrower, any Guarantor, or any other party to the Administrative Agent pursuant to this Agreement or any other Loan Document (in each case as the same may be amended, modified, restated, supplemented, extended, renewed or replaced from time to time).

20

QB\033578.02011\28349393.9

“Loan Parties” means, collectively, the Borrower and each Guarantor.

“London Banking Day” means any Business Day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“Management Fees” means, with respect to each Project for any period, an amount equal to the greater of (a) actual Advisor Fee payable with respect thereto and (b) an imputed management fee in an amount equal to 2% of the gross revenues directly attributable to such Project for such Measurement Period.

“Mandatorily Redeemable Stock” means, with respect to any Person, any Equity Interest of such Person which by the terms of such Equity Interest (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), upon the happening of any event or otherwise, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than an Equity Interest to the extent redeemable in exchange for common stock or other equivalent common Equity Interests), (b) is convertible into or exchangeable or exercisable for Indebtedness or Mandatorily Redeemable Stock, or (c) is redeemable at the option of the holder thereof, in whole or part (other than an Equity Interest which is redeemable solely in exchange for common stock or other equivalent common Equity Interests).

“Marketable Securities” means Investments in Equity Interests or debt securities issued by any Person (other than an Investment Affiliate) which are publicly traded on a national exchange, excluding Cash Equivalents.

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities or condition (financial or otherwise) of the Borrower or the Consolidated Group taken as a whole; (b) a material impairment of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

“Maturity Date” means the later to occur of (a) the Initial Maturity Date; and (b) to the extent maturity is extended pursuant to Section 2.17, the Extended Maturity Date; provided, however, that, in each case, if such date is not a Business Day, the Maturity Date shall be the immediately preceding Business Day.

“Measurement Period” means, as of any date, the four Quarterly Periods ending on or next preceding such date.

“Moody’s” means Moody’s Investors Service, Inc. and any successor or assignee of the business of such company in the business of rating debt.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five (5) plan years, has made or been obligated to make contributions.

21

QB\033578.02011\28349393.9

“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including the Borrower or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

"NAIC" means the National Association of Insurance Commissioners or any successor thereto.

“Negative Pledge” means with respect to a given asset, any provision of a document, instrument or agreement (other than any Loan Document) which prohibits or purports to prohibit the creation or assumption of any Lien on such asset as security for Indebtedness of the Person owning such asset or any other Person; provided, however, that an agreement that conditions a Person’s ability to encumber its assets upon the maintenance of one or more specified ratios that limit such Person’s ability to encumber its assets but that do not generally prohibit the encumbrance of its assets, or the encumbrance of specific assets, shall not constitute a Negative Pledge.

“New Term Loan” has the meaning specified in Section 2.14(a).

“NOI” means, with respect to any Project for any Measurement Period (a) “property rental and other income” (as determined by GAAP) attributable to such Project accruing for such Measurement Period, plus (b) all master lease income (except master lease income relating to multiple property master leases pursuant to which any member of the Consolidated Group is the lessor), not to exceed five percent (5%) of Consolidated Net Operating Income), less (c) the amount of all expenses (as determined in accordance with GAAP) incurred in connection with and directly attributable to the ownership and operation of such Project for such period, including, without limitation, Management Fees and amounts accrued for the payment of real estate taxes and insurance premiums, but excluding any general and administrative expenses related to the operation of the Borrower or the applicable Subsidiary Guarantor, any interest expense, or other debt service charges, any real estate acquisition costs and expenses, any amortization related to above-market or below-market leases and any non-cash charges such as impairment of real estate assets and depreciation or amortization of financing costs; provided, however, if such Project has been owned by the Borrower or a Subsidiary Guarantor, as applicable, for less than twelve (12) months then the NOI for such Project will be calculated as specified in clauses (a), (b) and (c) above based upon the income and expenses for the most recently ended Quarterly Period multiplied by four (4); provided further, however, if the Project has been owned by a Subsidiary Guarantor for twelve (12) months or more but has not generated property rental and other income for four (4) complete Quarterly Periods, the NOI for such Project will be calculated as specified in clauses (a), (b) and (c) above but on an annualized basis, provided, that once such Project has generated property rental and other income for four (4) complete Quarterly Periods, it is agreed that the NOI for such Project will be calculated as specified in clauses (a), (b) and (c) above based on the Measurement Period most recently ended.

“Note” means a Revolving Note, a Swing Line Note or a Term Note.

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. The foregoing shall also include any Swap Contract and any Treasury Management Agreement between any Loan Party and any Lender or Affiliate of a Lender;provided that the “Obligations” shall exclude any Excluded Swap Obligations.

22

QB\033578.02011\28349393.9

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Off-Balance Sheet Arrangement” means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Borrower is a party, under which the Borrower has:

(a)any obligation under a guarantee contract that has any of the characteristics identified in paragraph 3 of FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (November 2002) (“FIN 45”), as may be modified or supplemented, and that is not excluded from the initial recognition and measurement provisions of FIN 45 pursuant to paragraphs 6 or 7 of that Interpretation;

(b)a retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets;

(c)any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, except that it is both indexed to the Borrower’s own stock and classified in stockholders’ equity in the Borrower’s statement of financial position, and therefore excluded from the scope of FASB Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (June 1998), pursuant to paragraph 11(a) of that Statement, as may be modified or supplemented; or

(d)any obligation, including a contingent obligation, arising out of a variable interest (as referenced in FASB Interpretation No. 46, Consolidation of Variable Interest Entities (January 2003), as may be modified or supplemented) in an unconsolidated entity that is held by, and material to, the Borrower, where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with, the Borrower.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non‑U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).

23

QB\033578.02011\28349393.9

“Outstanding Amount” means (a) with respect to Committed Revolving Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Committed Revolving Loans and Swing Line Loans, as the case may be, occurring on such date; (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts; and (c) with respect to any Committed Term Loans on any date, the aggregate outstanding principal amount thereof after giving effect to the borrowings, prepayments or repayments of Committed Term Loans, as the case may be, occurring on such date.

“Participant” has the meaning specified in Section 10.06(d).

“Participant Register” has the meaning specified in Section 10.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Pension Act” means the Pension Protection Act of 2006.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by the Borrower and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.

“Permitted Liens” means, at any time, Liens in respect of Equity Interests in the Borrower or any Subsidiary Guarantor permitted pursuant to Section 7.01(b) and Liens in respect of Qualified Unencumbered Properties constituting:

(a)Liens, if any, existing pursuant to any Loan Document;

(b)Liens (other than Liens imposed under ERISA) for taxes, assessments (including private assessments and charges) or governmental charges or levies not yet delinquent or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP, or which have been insured over without qualification, condition or assumption by title insurance or otherwise in a manner acceptable to Administrative Agent in its reasonable discretion;

(c)statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and suppliers and other Liens imposed by law or pursuant to customary reservations or retentions of title arising in the ordinary course of business, provided that such Liens secure only amounts not yet due and payable or, if due and payable, are unfiled and no other action has been taken to enforce the same or are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established;

24

QB\033578.02011\28349393.9

(d)zoning restrictions, easements, rights‑of‑way, restrictions and other encumbrances affecting real property which, in the aggregate, do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

(e)leases or subleases to third parties;

(f)any interest of title of a lessor (and its mortgagees) under, and Liens arising from UCC financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases not prohibited by this Agreement under which a Subsidiary Guarantor is a lessee;

(g)Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h);

(h)Liens existing on the Closing Date and identified on Schedule 7.01;

(i)Liens incurred in the ordinary course of business in connection with workers compensation, unemployment insurance or other social security obligations; and

(j)any Lien on the assets of a Subsidiary Guarantor in favor of a Wholly-Owned Subsidiary securing the obligations under tax incremental financing notes or other similar obligations of an industrial development authority so long as (i) the obligations secured by the Lien are owed to a Wholly-Owned Subsidiary, (ii) the obligations secured by the Lien are incurred solely as a means of implementing government tax or economic incentive programs, (iii) the obligations secured by the Lien are not guaranteed by a Loan Party or a Wholly‑Owned Subsidiary, (iv) the aggregate amount of Indebtedness secured by such Liens shall not exceed $40,000,000 at any one time and (v) any Wholly-Owned Subsidiary holding such Lien, shall, at the time such Lien is granted, agree in writing, for the benefit of the Administrative Agent and the Lenders, that (A) such Wholly-Owned Subsidiary shall not have the right to foreclose on such Lien or accept a deed-in-lieu of foreclosure with respect to such Lien as long as any of the Obligations are outstanding and (B) such Wholly-Owned Subsidiary shall agree, at the request of the Administrative Agent, to fully subordinate its Lien to any future Lien securing the Obligations.

“Permitted Unsecured Debt” means, at any time, Unsecured Debt (excluding the Obligations) that CREIS or any of its Subsidiaries (a) incurred during a time that CREIS or the Borrower has (i) an Investment Grade Rating or (ii) any outstanding indebtedness issued by CREIS or the Borrower that has an NAIC rating of 2 or better or (b) that is rated BBB‑ or better from Standard & Poor’s, or Baa3 or better from Moody’s, or has an NAIC rating of 2 or better.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (other than a Multiemployer Plan), maintained for employees of the Borrower or any ERISA Affiliate or any such Plan to which the Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.

25

QB\033578.02011\28349393.9

“Platform” has the meaning specified in Section 6.02.

“Preferred Dividends” means, with respect to the Consolidated Group, dividends or other distributions which are payable to holders of any Equity Interests in the Consolidated Group which entitle the holders of such Equity Interests to be paid on a preferred basis prior to dividends or other distributions to the holders of other types of Equity Interests in the Consolidated Group.

“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMC as its prime rate in effect at its office located at 270 Park Avenue, New York, New York; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“Project” means any real estate asset directly owned by any member of the Consolidated Group, any of its Subsidiaries or any Investment Affiliate.

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

“Public Lender” has the meaning specified in Section 6.02.

“Qualified Unencumbered Properties” means, as of any date, Projects that are:  (a) one hundred percent (100%) fee owned by a Wholly-Owned Subsidiary that is a Subsidiary Guarantor or leased by such Wholly‑Owned Subsidiary under a ground lease approved by Administrative Agent in its sole but reasonable discretion; (b) not subject to any Liens other than Permitted Liens and the owner thereof has the power to (i) provide a Negative Pledge and (ii) agree not to guarantee or otherwise become liable for any Indebtedness; (c) located in the United States; (d) one hundred percent (100%) occupied (or if such Project is a multi-tenant Project, is at least eighty‑five percent (85%) occupied), unless (i) such Project is being repositioned for a period not more than six (6) months provided that if such Project is a multi‑tenant Project, such Project is at least thirty percent (30%) occupied or (ii) such Project is a Dark Qualified Unencumbered Property; (e) for the period (i) prior to an Unsecured Conversion, is not subject to any material issue or problem related to environmental, title, structure, lease, assignment of lease or estoppels certificate that adversely effects the value, use or marketability of the Project and (ii) from and after an Unsecured Conversion, is not subject to any material environmental, title or structural problem; (f) for which all Required Items (to the extent required by Administrative Agent) have been delivered to Administrative Agent; (g) not subject to any leases that are in default, after giving effect to any notice or cure periods set forth therein; provided that, in the case of multi-tenant Projects, the qualification in this clause (g) shall be limited to leases in default (i) on anchor tenants or (ii) that constitute ten percent (10%) or more of such Project’s net rental revenue; (h) is not a hotel or motel Project, and (i) is covered by insurance as required in accordance with Section 6.07. The Qualified Unencumbered Properties as of the Closing Date are listed on Schedule 5.08. Projects may be added to and/or removed from the pool of Qualified Unencumbered Properties in accordance with Sections 6.13 and 6.14.

“Quarterly Period” means the most recently-ended three (3) calendar month period for which the Borrower has provided financial information pursuant to Sections 6.01(a) or (b).

“Recipient” means the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder.

26

QB\033578.02011\28349393.9

“Recourse Debt” means any Indebtedness of any member of the Consolidated Group for which such Person has personal liability (excluding Indebtedness with respect to which the liability of the applicable obligor is limited to the obligor’s interest in specified assets securing such Indebtedness, subject to customary nonrecourse carve-outs, including, without limitation, exclusions for claims that (a) are based on fraud, intentional misrepresentation, misapplication of funds, gross negligence or willful misconduct, (b) result from intentional mismanagement of or waste at the applicable Project securing such Indebtedness, (c) arise from the presence of Hazardous Substances on the Project securing such Indebtedness; or (d) are the result of any unpaid real estate taxes and assessments, in each case, to the extent no claim of liability has been made pursuant to any such carve-outs).

“Register” has the meaning specified in Section 10.06(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty (30) day notice period has been waived.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

“Required Items” means, with respect to any Project to be included as a Qualified Unencumbered Property, the items required to be delivered to the Administrative Agent pursuant to Section 4.01 or Section 6.13, as applicable.

“Required Lenders” means, as of any date of determination, if there are less than three Lenders, then all Lenders (other than Defaulting Lenders), and otherwise Lenders having greater than fifty percent (50%) of the sum of (a) the Revolving Commitments then in effect or, if the Aggregate Revolving Commitments have been terminated pursuant to Section 2.06 or Section 8.02, the Total Revolving Outstandings (with the aggregate amount of each Revolving Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Revolving Lender for purposes of this definition), and (b) the Aggregate Term Loan Amount; provided that the Commitment of, and the Outstanding Amount held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“Required Revolving Lenders” means, as of any date of determination, if there are less than three Revolving Lenders, then all Revolving Lenders (other than Defaulting Lenders), and otherwise Lenders having greater than fifty percent (50%) of the Revolving Commitments then in effect or, if the Aggregate Revolving Commitments have been terminated pursuant to Section 2.06 or Section 8.02, the Total Revolving Outstandings (with the aggregate amount of each Revolving Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Revolving Lender for purposes of this definition); provided that the Commitment of, and the Outstanding Amount held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders.

“Responsible Officer” means the chief executive officer, president, chief financial officer, secretary, treasurer, assistant treasurer or controller of a Loan Party or of any general partner, member or manager thereof, as applicable, and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable Loan Party or of any general partner, member or manager thereof, as applicable,

27

QB\033578.02011\28349393.9

so designated by any of the foregoing officers in a notice to the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to the Equity Interests of the Borrower or any Subsidiary Guarantor, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Borrower’s stockholders, partners or members (or the equivalent Person thereof).

“Revolving Commitment” means, as to each Lender, its obligation to (a) make Committed Revolving Loans to the Borrower pursuant to Section 2.01(a), (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Revolving Lender” means each Lender who has a Revolving Commitment greater than zero.

“Revolving Loan” means an extension of credit by a Revolving Lender to the Borrower under Article II in the form of a Committed Revolving Loan.

“Revolving Note” means a promissory note made by the Borrower in favor of a Lender evidencing Revolving Loans made by such Lender, substantially in the form of Exhibit C‑1.

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw‑Hill Companies, Inc., or any successor or assignee of the business of such division in the business of rating debt.

“Sale and Leaseback Transaction” means any arrangement pursuant to which any Loan Party, directly or indirectly, becomes liable as lessee, guarantor or other surety with respect to any lease, whether an operating lease or a capital lease, of any Qualified Unencumbered Property (a) which such Person has sold or transferred (or is to sell or transfer) to another Person which is not a Loan Party or (b) which such Person intends to use for substantially the same purpose as any other Qualified Unencumbered Property which has been sold or transferred (or is to be sold or transferred) by such Person to another Person which is not a Loan Party in connection with such lease.

“Sanctioned Country” means, at any time, a country or territory which is itself the subject or target of any Sanctions.

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC or the U.S. Department of State, (b) any Person operating, organized or resident in a Sanctioned Country, or (c) any Person Controlled by any such Person.

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government, including those administered by OFAC or the U.S. Department of State.

28

QB\033578.02011\28349393.9

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Second Anniversary Date” means the second anniversary date of the date of this Agreement.

“Secured Debt” means Indebtedness secured by mortgages (or other real estate security instruments) or by mortgage-backed receivables or notes or other instruments supported by direct real estate security.

“Shareholder Equity” means an amount equal to shareholders’ equity or net worth of the Borrower and its Subsidiaries on a consolidated basis, as determined in accordance with GAAP.

“Short Term Unsecured Debt” means, as of any date, Unsecured Debt with a maturity (including for the avoidance of doubt, the mandatory redemption date of any Mandatorily Redeemable Stock) of less than seven years, as of such date.

“SPC” has the meaning specified in Section 10.06(f).

“Specified Loan Party” means any Loan Party that is not an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 21 of the Guaranty).

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Rate Loans shall be deemed to constitute eurocurrency fundings and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a, direct or indirect, Subsidiary or Subsidiaries of CREIS.

“Subsidiary Guarantors” means each Subsidiary that owns all or any portion of a Qualified Unencumbered Property; provided, however, upon release of such Project from the pool of Qualified Unencumbered Properties, such Subsidiary shall, to the extent provided herein and in the Guaranty, cease to be a Subsidiary Guarantor.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any

29

QB\033578.02011\28349393.9

combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Obligations” means with respect to any Guarantor any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

“Swing Line Lender” means JPMC in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit B.

“Swing Line Note” means a promissory note made by the Borrower in favor of the Swing Line Lender evidencing Swing Line Loans made by the Swing Line Lender, substantially in the form of Exhibit C‑3.

“Swing Line Sublimit” means an amount equal to the lesser of (a) Fifty Million and No/100 Dollars ($50,000,000.00), and (b) ten percent (10.0%) of the then effective Aggregate Revolving Commitments. The Swing Line Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments.

“Syndication Agent” means, severally and collectively, U.S. Bank National Association and any other entity designated as a Syndication, or Co-Syndication Agent by either JPMC or the then serving Syndication Agent or Co-Syndication Agents, as applicable, each in its capacity as co-syndication agent under any of the Loan Documents, or any successor syndication agent(s).

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

30

QB\033578.02011\28349393.9

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term Commitment” means, as to each Lender, its obligation to make Committed Term Loans to the Borrower pursuant to Section 2.01(b), in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Term Lender” means each Lender with outstanding Term Loans.

“Term Loan” means an extension of credit by a Term Lender to the Borrower under Article II in the form of a Committed Term Loan and any New Term Loan.

“Term Note” means a promissory note made by the Borrower in favor of a Lender evidencing Term Loans made by such Lender, substantially in the form of Exhibit C‑2.

“Total Asset Value” or “TAV” means, as of any date, the sum of (without duplication) (a) Consolidated Net Operating Income during the Measurement Period most recently ended attributable to Projects owned by a member of the Consolidated Group for eighteen (18) months or more divided by the Capitalization Rate, plus (b) one hundred percent (100%) of the actual price paid for any Projects owned by any member of the Consolidated Group for less than eighteen (18) months, plus (c) cash, Cash Equivalents and Marketable Securities owned by the Consolidated Group as of the last day of the most recently ended fiscal quarter, plus (d) the Consolidated Group Pro Rata Share of (i) Consolidated Net Operating Income during such Measurement Period attributable to Projects owned by Investment Affiliates for eighteen (18) months or more (provided, that the value of such assets shall, at all times, be subject to the terms of Section 7.02(f)(i)), divided by (ii) the Capitalization Rate, plus (e) the Consolidated Group Pro Rata Share of the greater of (i) the price paid for Projects owned by an Investment Affiliate for less than eighteen (18) months , (ii) the GAAP-determined value of any such Projects, and (iii) the annualized Consolidated Net Operating Income attributable to any such Projects, based the immediately preceding Quarterly Period (provided, that the value of such assets shall, at all times, be subject to the terms of Section 7.02(f)(i)) divided by the Capitalization Rate, plus (f) the sum of (i) Construction in Progress and Improved Land Value for Projects owned by the Consolidated Group and (ii) the Consolidated Group Pro Rata Share of Construction in Progress and Improved Land Value for Projects owned by Investment Affiliates (provided, that the book value of Construction in Progress and Improved Land Value shall, at all times, be subject to the terms of Section 7.02(f)(ii)), plus (g) the sum of (i) the GAAP-determined value of Eligible Real Estate Investments owned or held by the Consolidated Group and (ii) the Consolidated Group Pro Rata Share of the GAAP-determined value of Eligible Real Estate Investments owned or held by Investment Affiliates (provided, that the aggregate value of Eligible Real Estate Investments held shall, at all times, be subject to the terms of Section 7.02(f)(iv)) plus (h) the sum of (i) the Unimproved Land Value of Projects owned by the Consolidated Group and (ii) the Consolidated Group Pro Rata Share of the Unimproved Land Value of Projects owned by Investment Affiliates (provided that the value of such undeveloped land shall, at all times, be subject to the terms of Section 7.02(f)(iii)), and (iii) the GAAP‑determined value of Blackrock Investments owned or held by Consolidated Group.

“Total Outstandings” means the aggregate Outstanding Amount of all Term Loans, Revolving Loans, Swing Line Loans and all L/C Obligations.

31

QB\033578.02011\28349393.9

“Total Revolving Outstandings” means the aggregate Outstanding Amount of all Revolving Loans, Swing Line Loans and all L/C Obligations.

“Total Term Outstandings” means the aggregate Outstanding Amount of all Term Loans.

“Treasury Management Agreements” means any and all agreements governing the provision of treasury or cash management services, including, without limitation, deposit accounts, overdraft, credit or debit cards, purchase cards, corporate cards, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.

“Type” means, with respect to a Committed Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

“Unencumbered Asset Value” means, as of any date of calculation, the sum of:  (a) for Qualified Unencumbered Properties owned eighteen (18) months or more, an amount equal to (i) Consolidated Net Operating Income during the Measurement Period most recently ended for such Qualified Unencumbered Properties divided by (ii) the Capitalization Rate, plus (b) 100% of the actual purchase price paid for Qualified Unencumbered Properties owned less than eighteen (18) months (excluding any costs and expenses incurred in connection therewith that were added to the purchase price, all as reasonably calculated and suggested by the Borrower and approved by the Administrative Agent in its reasonable discretion); provided, however, that (A) no tenant will account for greater than twenty percent (20%) of Unencumbered Asset Value without Administrative Agent’s reasonable approval, (B) no Qualified Unencumbered Property will account for greater than twenty percent (20%) of Unencumbered Asset Value without Administrative Agent’s reasonable approval, (C) Qualified Unencumbered Properties that are multi‑tenant Projects shall not account for more than twenty‑five percent (25%) of Unencumbered Asset Value, (D) the aggregate sum of repositioning Projects shall not account for more than ten percent (10%) of the Unencumbered Asset Value, (E) Dark Qualified Unencumbered Properties will not account for greater than five percent (5%) of Unencumbered Asset Value without Administrative Agent's reasonable approval, and (F) a minimum of thirty percent (30%) of the Consolidated Net Operating Income generated by Qualified Unencumbered Properties used to calculate Unencumbered Asset Value shall be derived from investment grade (BBB- or above by S&P or Baa3 or above by Moody’s) tenants or tenants whose lease obligations are guaranteed by an investment grade (BBB- or above from S&P or Baa3 or above by Moody’s) entity (so long as such guaranty is in effect).

“Unencumbered Mortgageability Amount” means the maximum amount that provides debt service coverage equal to the following amounts, where the debt service coverage calculation is based on the Adjusted Unencumbered NOI attributable to all Qualified Unencumbered Properties on an aggregate basis for the most recently ended Measurement Period, as underwritten by the Administrative Agent assuming debt service based on a thirty (30) year, mortgage-style principal amortization at an annual interest rate equal to the greater of (i) the ten (10) year Treasury Bill yield as of the end of such Measurement Period plus two hundred fifty (250) basis points and (ii) six and one half percent (6.5%):

(a)1.35x at all times.

“Unencumbered NOI” means, for any Measurement Period, NOI for such Measurement Period from Qualified Unencumbered Properties; provided, that to the extent a Qualified Unencumbered Property is acquired during any such Measurement Period, the calculation of Unencumbered NOI for such Measurement Period shall include such Qualified Unencumbered Property’s as-leased pro forma NOI for an entire Measurement Period, as reasonably calculated and suggested by the Borrower and approved by the Administrative Agent in its reasonable discretion.

32

QB\033578.02011\28349393.9

“Unimproved Land Value” means, as of any date, the book value of any Projects as determined in accordance with GAAP, which have not been developed for any type of commercial, industrial, residential or other income-generating use and is not, as of such date, under development.

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“Unsecured Conversion” has the meaning specified in Section 2.18.

“Unsecured Debt” means Indebtedness of the Consolidated Group that is not Secured Debt, including the Obligations following an Unsecured Conversion.

“Unsecured Debt Service” means, for any date of calculation and for any Measurement Period ending on or next preceding such date, actual interest and principal paid on Unsecured Debt during such Measurement Period.

“Unsecured Debt Service Coverage Ratio” means, for any Measurement Period, the ratio of (a) Adjusted Unencumbered NOI during such Measurement Period, to (b) Unsecured Debt Service during such Measurement Period, as of the end of any fiscal quarter of the Consolidated Group.

“Unused Fees” has the meaning specified in Section 2.09(a).

“Wholly-Owned Subsidiary” means (a) any Subsidiary all of the outstanding voting securities and any Mandatorily Redeemable Stock of which shall at the time be owned or controlled, directly or indirectly, by the Borrower and/or CREIS or one or more Wholly-Owned Subsidiaries of the Borrower and/or CREIS, or by the Borrower and/or CREIS and one or more Wholly-Owned Subsidiaries of the Borrower and/or CREIS, or (b) any partnership, limited liability company, association, joint venture or similar business organization one hundred percent (100%) of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled, directly or indirectly, by the Borrower and/or CREIS.

“Variable Rate Debt” means Consolidated Outstanding Indebtedness that accrues interest at a floating rate of interest minus the notional amount of any Swap Contract that provides protection against fluctuation of interest rates under such Consolidated Outstanding Indebtedness.

1.02Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a)The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and

33

QB\033578.02011\28349393.9

Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (vii) definitions given in singular form shall, when used in their plural form, mean a collective reference to each such person, place or thing and definitions given in plural form shall, when used in their singular form, mean an (or the applicable) individual person place or thing among the group of persons, places or things defined.

(b)In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c)Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

1.03Accounting Terms. (a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (i) any election under Accounting Standards Codification 825 (or any other Financial Accounting Standard or Accounting Standards Codification having a similar result or effect) to value any Indebtedness or other liabilities of the Consolidated Group or any Investment Affiliate at “fair value,” as defined therein and (ii) any change to lease accounting rules from those in effect pursuant to FASB ASC 840 and other related lease accounting guidance as in effect on the Closing Date.

(a)Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); providedthat, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

(b)Consolidation of Variable Interest Entities. All references herein to consolidated financial statements of the Borrower and its Subsidiaries or to the determination of any amount for the Borrower and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that the Borrower is required to consolidate pursuant to FASB Interpretation No. 46 – Consolidation of Variable Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such variable interest entity were a Subsidiary as defined herein.

34

QB\033578.02011\28349393.9

1.04Rounding. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.05Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

1.06Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II.THE COMMITMENTS AND CREDIT EXTENSIONS

2.01Commitments.

(a)Committed Revolving Loans. Subject to the terms and conditions set forth herein, each Revolving Lender severally agrees to make revolving loans (each such loan, a “Committed Revolving Loan”) to the Borrower in Dollars from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Revolving Lender’s Revolving Commitment; provided, however, that after giving effect to any Committed Revolving Borrowing, (i) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments and the Total Outstandings shall not exceed the lesser of (A) the Facility Amount and (B) the Borrowing Base then in effect and after the Unsecured Conversion, less any Permitted Unsecured Debt, and (ii) the aggregate Outstanding Amount of the Revolving Committed Loans of any Revolving Lender, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Commitment. Within the limits of each Revolving Lender’s Revolving Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01(a), prepay under Section 2.05, and reborrow under this Section 2.01(a). Committed Revolving Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein; provided, however, all Borrowings made on the Closing Date shall be made as Base Rate Loans.

(b)Term Loans. Subject to the terms and conditions set forth herein, each Term Lender severally agrees to make a single loan to the Borrower in Dollars on the Closing Date, in an amount not to exceed such Term Lender’s Term Commitment (each such Loan, a “Committed Term Loan”); provided, however, that after giving effect to the borrowing of the Committed Term Loans, the Total Outstandings shall not exceed the lesser of (A) the Facility Amount as of the Closing Date and (B) the Borrowing Base in effect on the Closing Date. Amounts repaid on the Term Loans may not be reborrowed. The Term Loans may consist of Base Rate Loans or Eurodollar Rate Loans or a combination thereof, as further provided herein, provided, however, all Borrowings made on the Closing Date shall be made as Base Rate Loans.

2.02Borrowings, Conversions and Continuations of Committed Loans.

(a)Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice

35

QB\033578.02011\28349393.9

to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three (3) Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Committed Loans, and (ii) one (1) Business Day prior to the requested date of any Borrowing of Base Rate Committed Loans. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of Five Million and No/100 Dollars ($5,000,000.00) or a whole multiple of One Million and No/100 Dollars ($1,000,000.00) in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Committed Loans shall be in a minimum principal amount of Five Hundred Thousand and No/100 Dollars ($500,000.00) or a whole multiple of One Hundred Thousand and No/100 Dollars ($100,000.00) in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted and whether such Committed Loan is a Revolving Loan, a Term Loan, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one (1) month. If the most recent Borrowing Base Compliance Certificate delivered to the Administrative Agent does not demonstrate a Borrowing Base sufficient for any Committed Borrowing requested by the Borrower, then as a condition to such Committed Borrowing the Borrower shall deliver to the Administrative Agent an updated Borrowing Base Compliance Certificate covering the current pool of Qualified Unencumbered Properties that demonstrates a Borrowing Base sufficient for such requested Committed Borrowing.

(b)Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each applicable Lender of the amount of its Applicable Percentage of the applicable Committed Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each such Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection. In the case of a Committed Borrowing, each applicable Lender shall make the amount of its Committed Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of JPMC with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided, however, that if, on the date the Committed Loan Notice with respect to such Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to the Borrower as provided above.

36

QB\033578.02011\28349393.9

(c)Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.

(d)The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in the Prime Rate used in determining the Base Rate promptly following the public announcement of such change.

(e)After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than ten (10) Interest Periods in effect with respect to Eurodollar Rate Loans.

(f)With respect to Borrowings made on the Closing Date, any Lender holding loans under the Existing Credit Agreement may exchange, continue or rollover all or a portion of such loans into Loans applicable to the Commitments held by such Lender hereunder, pursuant to a cashless settlement mechanism approved by the Borrower, the Administrative Agent and such Lender.

2.03Letters of Credit.

(a)The Letter of Credit Commitment.

(i)Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the any member of the Consolidated Group, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Revolving Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower or its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Revolving Outstandings shall not exceed the lesser of (I) the Aggregate Revolving Commitments and (II) the Borrowing Base then in effect, (y) without duplication, the aggregate Outstanding Amount of the Committed Revolving Loans of any Revolving Lender, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

37

QB\033578.02011\28349393.9

(ii)The L/C Issuer shall not issue any Letter of Credit, if:

(A)subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve (12) months after the date of issuance or last extension, unless the Required Revolving Lenders have approved such expiry date; or

(B)the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Revolving Lenders have approved such expiry date.

(iii)The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

(A)any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer reasonably deems material to it;

(B)the Letter of Credit is a commercial letter of credit or the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;

(C)except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than Five Hundred Thousand and No/100 Dollars ($500,000.00);

(D)such Letter of Credit is to be denominated in a currency other than Dollars;

(E)any Revolving Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or such Revolving Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.16(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion;

(F)the Letter of Credit contains any provisions for automatic restatement of the stated amount after any drawing thereunder; or

(G)any proceeds of the Letter of Credit would be made to any Person (i) to fund any activity or business of or with any Sanctioned Person, or in any country or territory, that at the time of such funding is the subject of any Sanctions, or (ii) in any manner that would result in a violation of any Sanctions by a party to this Agreement, in any material respect.

38

QB\033578.02011\28349393.9

(iv)The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

(v)The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(vi)The L/C Issuer shall act on behalf of the Revolving Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.

(b)Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

(i)Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two (2) Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require. Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require. If the most recent Borrowing Base Compliance Certificate delivered to the Administrative Agent does not demonstrate a Borrowing Base sufficient for the issuance of any Letter of Credit requested by the Borrower, then as a condition to the issuance of such Letter of Credit the Borrower shall deliver to the Administrative Agent an updated Borrowing Base Compliance Certificate covering the current pool of Qualified Unencumbered Properties that demonstrates a Borrowing Base sufficient for the issuance of such requested Letter of Credit.

(ii)Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received

39

QB\033578.02011\28349393.9

a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Revolving Lender, the Administrative Agent or any Loan Party, at least one (1) Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Lender’s Applicable Percentage times the amount of such Letter of Credit.

(iii)If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve (12) month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non‑Extension Notice Date”) in each such twelve (12) month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Revolving Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clauses (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Revolving Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Revolving Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.

(iv)Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c)Drawings and Reimbursements; Funding of Participations.

(i)Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Revolving Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed

40

QB\033578.02011\28349393.9

Amount”), and the amount of such Revolving Lender’s Applicable Percentage thereof. In such event, the Borrower shall be deemed to have requested a Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Revolving Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii)Each Revolving Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral for this purpose) to the Administrative Agent for the account of the L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Revolving Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer.

(iii)With respect to any Unreimbursed Amount that is not fully refinanced by a Committed Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Revolving Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Revolving Lender in satisfaction of its participation obligation under this Section 2.03.

(iv)Until each Revolving Lender funds its Committed Revolving Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Revolving Lender’s Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.

(v)Each Revolving Lender’s obligation to make Committed Revolving Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Revolving Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Lender’s obligation to make Committed Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrower of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.

41

QB\033578.02011\28349393.9

(vi)If any Revolving Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Revolving Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover from such Revolving Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Effective Rate and a rate determined by the L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing. If such Revolving Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Revolving Lender’s Committed Revolving Loan included in the relevant Committed Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

(d)Repayment of Participations.

(i)At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Lender such Revolving Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Revolving Lender its Applicable Percentage thereof in the same funds as those received by the Administrative Agent.

(ii)If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Revolving Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Revolving Lender, at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect. The obligations of the Revolving Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e)Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i)any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

(ii)the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions

42

QB\033578.02011\28349393.9

contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii)any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv)waiver by the L/C Issuer of any requirement that exists for the L/C Issuer’s protection and not the protection of the Borrower or any waiver by the L/C Issuer which does not in fact materially prejudice the Borrower;

(v)honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;

(vi)any payment made by the L/C Issuer in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under such Letter of Credit if presentation after such date is authorized by the UCC, the ISP or the UCP, as applicable;

(vii)any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(viii)any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any Subsidiary.

The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will promptly notify the L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.

(f)Role of L/C Issuer. Each Revolving Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Revolving Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Revolving Lenders or the Required Revolving Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee

43

QB\033578.02011\28349393.9

at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. The L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.

(g)Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit. Notwithstanding the foregoing, the L/C Issuer shall not be responsible to the Borrower for, and the L/C Issuer’s rights and remedies against the Borrower shall not be impaired by, any action or inaction of the L/C Issuer required under any Law that is required to be applied to any Letter of Credit, including the Law or any order of a jurisdiction where the L/C Issuer or the beneficiary is located, the practice stated in the ISP or in the decisions, opinions, practice statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade — International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such Law or practice.

(h)Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the account of each Revolving Lender in accordance with its Applicable Percentage a Letter of Credit fee (the “Letter of Credit Fee”)for each Letter of Credit equal to the Applicable Rate for Eurodollar Rate Loans times the daily amount available to be drawn under such Letter of Credit; provided, however, any Letter of Credit Fees otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit as to which such Defaulting Lender has not provided Cash Collateral satisfactory to the L/C Issuer pursuant to this Section 2.03 shall be payable, to the maximum extent permitted by applicable Law, to the other Lenders in accordance with the upward adjustments in their respective Applicable Percentages allocable to such Letter of Credit pursuant to Section 2.16(a)(iv), with the balance of such fee, if any, payable to the L/C Issuer for its own account. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. Letter of Credit Fees shall be (i) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Revolving Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

44

QB\033578.02011\28349393.9

(i)Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a fronting fee with respect to each Letter of Credit, at the rate per annum specified in the Fee Letters, computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended Quarterly Period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. In addition, the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(j)Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

(k)Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, any member of the Consolidated Group, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of any member of the Consolidated Group inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such member of the Consolidated Group.

2.04Swing Line Loans.

(a)The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line Lender agrees, in reliance upon the agreements of the other Revolving Lenders set forth in this Section 2.04, to make loans (each such loan, a “Swing Line Loan”) to the Borrower from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of the Committed Revolving Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Revolving Lender’s Revolving Commitment; provided, however, that after giving effect to any Swing Line Loan, (i) the Total Revolving Outstandings shall not exceed the lesser of (A) Aggregate Revolving Commitments and (B) the Borrowing Base then in effect, and (ii) the aggregate Outstanding Amount of the Committed Revolving Loans of any Revolving Lender, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Commitment, and provided, further, that the Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Lender’s Applicable Percentage times the amount of such Swing Line Loan.

45

QB\033578.02011\28349393.9

(b)Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of One Hundred Thousand and No/100 Dollars ($100,000.00), and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower. If the most recent Borrowing Base Compliance Certificate delivered to the Administrative Agent does not demonstrate a Borrowing Base sufficient for any Swing Line Borrowing requested by the Borrower, then as a condition to such Swing Line Borrowing the Borrower shall deliver to the Administrative Agent an updated Borrowing Base Compliance Certificate covering the current pool of Qualified Unencumbered Properties that demonstrates a Borrowing Base sufficient for such requested Swing Line Borrowing.

(c)Refinancing of Swing Line Loans.

(i)The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Revolving Lender make a Base Rate Committed Loan in an amount equal to such Revolving Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Aggregate Revolving Commitments and the conditions set forth in Section 4.02. The Swing Line Lender shall furnish the Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Revolving Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.

(ii)If for any reason any Swing Line Loan cannot be refinanced by such a Committed Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Committed Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Lender’s payment to the Administrative Agent for the account of the

46

QB\033578.02011\28349393.9

Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii)If any Revolving Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Revolving Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Revolving Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Effective Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. If such Revolving Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Revolving Lender’s Committed Revolving Loan included in the relevant Committed Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv)Each Revolving Lender’s obligation to make Committed Revolving Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Revolving Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Lender’s obligation to make Committed Revolving Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02. No such funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein.

(d)Repayment of Participations.

(i)At any time after any Revolving Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Lender its Applicable Percentage thereof in the same funds as those received by the Swing Line Lender.

(ii)If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Effective Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Revolving Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e)Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Revolving Lender funds its Base Rate Committed Loan or risk participation pursuant to this Section 2.04 to refinance such Revolving

47

QB\033578.02011\28349393.9

Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swing Line Lender.

(f)Payments Directly to Swing Line Lender. The Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.

(g)Maturity of and Limit on Swing Line Loans. Notwithstanding anything contained herein to the contrary, Swing Line Loans may not, during the term hereof, be outstanding for more than ten (10) days in any calendar month.

2.05Prepayments.

(a)The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Committed Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 11:00 a.m. (A) three (3) Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of Five Million and No/100 Dollars ($5,000,000.00) or a whole multiple of One Million and No/100 Dollars ($1,000,000.00) in excess thereof; and (iii) any prepayment of Base Rate Committed Loans shall be in a principal amount of Five Hundred Thousand and No/100 Dollars ($500,000.00 or a whole multiple of One Hundred Thousand and No/100 Dollars ($100,000.00) in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Committed Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Each such prepayment shall be applied to the Committed Loans of the Lenders in accordance with their respective Applicable Percentages.

(b)The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of One Hundred Thousand and No/100 Dollars ($100,000.00). Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

(c)If for any reason the Total Outstandings at any time exceed the Borrowing Base then in effect, including as a result of any Disposition of a Qualified Unencumbered Property in accordance with Section 7.05(c) or the removal of a Qualified Unencumbered Property in accordance with Section 6.14, the Borrower shall immediately (i) prepay Loans and/or Cash Collateralize the L/C Obligations or (ii) add new Qualified Unencumbered Properties pursuant to Section 6.13 in an aggregate amount equal to such excess; provided, however, that the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless after the prepayment in full of the Loans the Total Outstandings exceed the Borrowing Base then in effect.

2.06Termination or Reduction of Commitments. The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Revolving Commitments, or from time to time permanently

48

QB\033578.02011\28349393.9

reduce the Aggregate Revolving Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five (5) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of Ten Million and No/100 Dollars ($10,000,000.00) or any whole multiple of One Million and No/100 Dollars ($1,000,000.00) in excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate Revolving Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Outstandings would exceed the Aggregate Revolving Commitments, and (iv) if, after giving effect to any reduction of the Aggregate Revolving Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate Revolving Commitments, such Sublimit shall be automatically reduced by the amount of such excess. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Revolving Commitments. Any reduction of the Aggregate Revolving Commitments shall be applied to the Revolving Commitment of each Revolving Lender according to its Applicable Percentage. All fees accrued until the effective date of any termination of the Aggregate Revolving Commitments shall be paid on the effective date of such termination.

2.07Repayment of Loans.

(a)The Borrower shall repay to the Lenders on the Maturity Date the aggregate outstanding principal amount of Committed Loans and all other Obligations outstanding on such date.

(b)The Borrower shall repay the outstanding principal amount of each Swing Line Loan on the earlier to occur of (i) the date five (5) Business Days after such Loan is made, (ii) the Maturity Date and (iii) the date on which any such Swing Line Loan is required to be repaid in order for the Borrower to remain in compliance with the provisions of Section 2.04(g) hereof.

2.08Interest.

(a)Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each Base Rate Committed Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.

(b)(i)    If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(i)If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii)Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

49

QB\033578.02011\28349393.9

(iii)Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

(c)Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

2.09Fees. In addition to certain fees described in subsections (h) and (i) of Section 2.03:

(a)Unused Fees. For each day during the term hereof that the Applicable Rate is determined pursuant to clause (a) of the definition of Applicable Rate, the Borrower shall pay a fee to the Administrative Agent for the pro rata benefit of the Revolving Lenders in an amount equal to the Daily Unused Fee for such day (all such fees incurred during any given calendar quarter constituting the “Unused Fees” for such quarter). The Unused Fees shall be payable quarterly in arrears on the first Business Day of each calendar quarter and on the Maturity Date.

(b)Other Fees.

(i)The Borrower shall pay to the Arrangers and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letters. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(ii)The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

2.10Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.

(a)All computations of interest for Base Rate Loans shall be made on the basis of a year of three hundred sixty-five (365) or three hundred sixty-six (366) days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a three hundred sixty (360) day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a three hundred sixty-five (365) day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one (1) day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(b)If, as a result of any restatement of or other adjustment to the financial statements of the Consolidated Group or for any other reason, the Borrower or the Lenders reasonably determine that (i) the Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Leverage Ratio would have resulted in higher pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders, the L/C Issuer or the Swing Line Lender, as the case may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or the L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually

50

QB\033578.02011\28349393.9

paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the L/C Issuer, as the case may be, under Section 2.03(c)(iii), 2.03(h) or 2.08(b) or under Article VIII. The Borrower’s obligations under this paragraph shall survive the termination of the Aggregate Revolving Commitments and the repayment of all other Obligations hereunder.

2.11Evidence of Debt.

(a)The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note or Notes, which shall evidence such Lender’s Loans (Revolving Loans, Term Loans or Swing Line Loans) in addition to such accounts or records. Each Lender may attach schedules to its Note(s) and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

(b)In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

2.12Payments Generally; Administrative Agent’s Clawback.

(a)General. All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(b)(i)    Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Committed Borrowing of Eurodollar Rate Loans (or, in the case of any Committed Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Committed Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Committed Borrowing, the Administrative Agent may

51

QB\033578.02011\28349393.9

assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Committed Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Committed Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Committed Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Committed Loan included in such Committed Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(i)Payments by the Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

(c)Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(d)Obligations of Lenders Several. The obligations of the Lenders hereunder to make Committed Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Committed Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no

52

QB\033578.02011\28349393.9

Lender shall be responsible for the failure of any other Lender to so make its Committed Loan, to purchase its participation or to make its payment under Section 10.04(c).

(e)Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

2.13Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Committed Loans made by it, or the participations in L/C Obligations or in Swing Line Loans held by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Committed Loans or participations and accrued interest thereon greater than its prorata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Committed Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Committed Loans and other amounts owing them, provided that:

(ii)if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(iii)the provisions of this Section shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (y) the application of Cash Collateral provided for in Section 2.15 or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Committed Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

2.14Increase in Commitments.

(a)Request for Increase. Provided there exists no Default, the Borrower may request increases in the Facility Amount so long as the Facility Amount (after giving effect thereto) shall not exceed, in the aggregate, Seven Hundred Fifty Million and No/100 Dollars ($750,000,000). The Borrower may either (i) request an increase in the Aggregate Revolving Commitment or (ii) request an increase in the principal amount of any existing Term Loan or a new tranche or tranches of term loans (each request for a new tranche, a “New Term Loan”); provided that (A) any such request for an increase shall be in a minimum amount of Twenty-Five Million and No/100 Dollars ($25,000,000.00) and (B) such written request shall be delivered to the Administrative Agent not more than twenty-four (24) calendar months following the Closing Date. At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the Lenders) and the Borrower may also invite prospective lenders to respond.

53

QB\033578.02011\28349393.9

(b)Lender Elections to Increase. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Revolving Commitment or agrees to increase its existing Term Loan or participate in a New Term Loan, as applicable, and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage of such requested increase or New Term Loan. Any Lender not responding within such time period shall be deemed to have declined to increase its Revolving Commitment or increase its existing Term Loan or participate in a New Term Loan, as applicable. Each prospective lender shall notify the Administrative Agent within such time period whether or not it agrees to fund any portion of the requested increase in the Aggregate Revolving Commitments or to fund any portion of the increased Term Loan or the New Term Loan, as applicable, and, if so, by what amount. Any prospective lender not responding within such time period shall be deemed to have declined to fund any portion of the requested increase in the Aggregate Revolving Commitments or to fund any portion of an increase in any Term Loan or a New Term Loan, as applicable.

(c)Notification by Administrative Agent; Additional Lenders. The Administrative Agent shall notify the Borrower and each Lender of the Lenders’ and prospective lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase and subject to the approval of the Administrative Agent and, in the case of an increase in the Aggregate Revolving Commitments, the L/C Issuer (which approvals shall not be unreasonably withheld), the Borrower may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel. If any prospective lender agrees to fund any portion of the requested increase in the Aggregate Revolving Commitments or to fund any portion of an increase in any Term Loan or a New Term Loan, as applicable (an “Additional Lender”), such Additional Lender shall become a Lender hereunder pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(d)Effective Date and Allocations. If the Aggregate Revolving Commitments are increased, any existing Term Loan is increased or a New Term Loan is added in accordance with this Section, the Administrative Agent and the Borrower shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase which, for any existing Lender participating in such increase, need not be ratable in accordance with their respective Revolving Commitments or Term Commitments prior to such increase. The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Increase Effective Date.

(e)Conditions to Effectiveness of Increase. As a condition precedent to such increase, the Borrower shall pay any fees agreed to in connection therewith and deliver to the Administrative Agent a certificate of each Facility Loan Party dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Facility Loan Party (i) certifying and attaching the resolutions adopted by such Facility Loan Party approving or consenting to such increase (or confirming that the resolutions previously adopted remain in effect), and (ii) in the case of the Borrower, certifying that, before and after giving effect to such increase:

(A) the representations and warranties contained in Article V and the other Loan Documents are true and correct, in all material respects, on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct, in all material respects, as of such earlier date, and except that for purposes of this Section 2.14, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01,

(B) no Default or Event of Default exists,

54

QB\033578.02011\28349393.9

(C) in the event of a New Term Loan, after giving effect to such New Term Loan, the Total Outstandings do not exceed:

(1) Prior to an Unsecured Conversion, the Borrowing Base and,

(2) after an Unsecured Conversion, the Borrowing Base minus Permitted Unsecured Debt, and

(D) the Borrower is in compliance, on a pro forma basis, with the financial covenants in Section 7.11.

In the event of an increase in the Aggregate Revolving Commitments, the Borrower shall prepay any Committed Revolving Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to Section 3.05) to the extent necessary to keep the outstanding Committed Revolving Loans ratable with any revised Applicable Percentages arising from any nonratable increase in the Revolving Commitments under this Section. In the event of any increase in any existing Term Loan or any New Term Loan, the Borrower and the Lenders providing such increase in the existing Term Loan or New Term Loan, as applicable, shall enter into an amendment to this Agreement as is necessary to evidence such increase or New Term Loan and all issues related thereto, including but not limited to, amount, pricing and maturity of such increase or New Term Loan, as applicable, and all Lenders not providing such increase or New Term Loan hereby consent to such limited scope amendment without future consent rights.

(f)Conflicting Provisions. This Section shall supersede any provisions in Sections 2.13 or 10.01 to the contrary.

2.15Cash Collateral.

(a)Certain Credit Support Events. Upon the request of the Administrative Agent or the L/C Issuer (i) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Borrower shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations. At any time that there shall exist a Defaulting Lender, immediately upon the request of the Administrative Agent, the L/C Issuer or the Swing Line Lender, the Borrower shall deliver to the Administrative Agent Cash Collateral in an amount sufficient to cover all Fronting Exposure (after giving effect to Section 2.16(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

(b)Grant of Security Interest. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at the Administrative Agent. The Borrower, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders (including the Swing Line Lender), and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.15(c). If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure and other obligations secured thereby, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (unless provided by the applicable Defaulting Lender).

55

QB\033578.02011\28349393.9

(c)Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.15 or Sections 2.03, 2.04, 2.16 or 8.02 in respect of Letters of Credit or Swing Line Loans shall be held and applied to the satisfaction of the specific L/C Obligations, Swing Line Loans and the Lenders’ obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation).

(d)Release. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure L/C Obligations or Swing Line Loans shall be released promptly following (i) the elimination of the applicable Fronting Exposure or such other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 10.06(b)(vii))) or (ii) the Administrative Agent’s good faith determination that there exists excess Cash Collateral; provided, however, (x) that Cash Collateral furnished by or on behalf of a Loan Party shall not be released during the continuance of an Event of Default (and following application as provided in this Section 2.15 may be otherwise applied in accordance with Section 8.03 to the extent that Administrative Agent exercises remedies set forth in Section 8.02(b)), and (y) the Person providing Cash Collateral and the L/C Issuer or Swing Line Lender, as applicable, may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

2.16Defaulting Lenders.

(a)Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

(i)Waivers and Amendments. That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 10.01.

(ii)Reallocation of Payments. Any payment of principal, interest, fees or other amount received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise, or received by the Administrative Agent by that Defaulting Lender pursuant to Section 10.08), shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to the L/C Issuer or Swing Line Lender hereunder; third, if so determined by the Administrative Agent or requested by the L/C Issuer or Swing Line Lender, to be held as Cash Collateral for future funding obligations of that Defaulting Lender of any participation in any Letter of Credit; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy that Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; sixth, to the payment of any amounts owing to the Lenders, the L/C Issuer or the Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuer or Swing Line Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s

56

QB\033578.02011\28349393.9

breach of its obligations under this Agreement; and eighth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loans or L/C Borrowings were made at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Borrowings owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Borrowings owed to, that Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments hereunder. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.16(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)Certain Fees.

(A)No Defaulting Lender shall be entitled to receive an Unused Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(B)No Defaulting Lender shall be entitled to receive any Letter of Credit Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender); provided, however, notwithstanding the above, each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which such Lender is a Defaulting Lender to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.15.

(C)(1) With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (B) above, the Borrower shall (x) pay to each Non‑Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the L/C Issuer the remaining amount of any such fee otherwise payable to such Defaulting Lender after giving effect to the amount paid in clause (x) to the extent allocable to such L/C Issuer’s Fronting Exposure to such Defaulting Lender and (z) not be required to pay the remaining amount of any such fee. (2) With respect to any fee payable under Section 2.09(a) not required to be paid to any Defaulting Lender pursuant to clause (A) above, the Borrower shall (x) pay to the L/C Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer’s Fronting Exposure to such Defaulting Lender, and (y) not be required to pay the remaining amount of any such fee.

(iv)Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 4.02 are satisfied at the time of such reallocation

57

QB\033578.02011\28349393.9

(and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non‑Defaulting Lender to exceed such Non‑Defaulting Lender’s Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v)Cash Collateral, Repayment of Swing Line Loans. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to the Swing Line Lenders’ Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in Section 2.15.

(b)Defaulting Lender Cure. If the Borrower, the Administrative Agent, the Swing Line Lender and the L/C Issuer agree in writing in their respective sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender (or if a Defaulting Lender takes such action so that it can no longer be characterized as a Defaulting Lender), the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.16(a)(iv)), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

2.17Extension of Maturity Date.

The Borrower may elect to extend the Initial Maturity Date for up to two (2) successive twelve (12) month periods, but in no event beyond the fifth anniversary of the date of this Agreement (the “Extended Maturity Date”). Each of the twelve (12) month extensions shall be subject to the satisfaction of the following conditions:

(a)the Borrower must provide written notice to the Administrative Agent of such election to extend the maturity at least thirty (30) days but no more than ninety (90) days prior to the then effective Maturity Date;

(b)no Default or Event of Default shall exist on the date of such notice of extension or on the Extension Effective Date;

(c)the representations and warranties contained in Article V and the other Loan Documents are true and correct, in all material respects, on and as of the Extension Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct, in all material respects, as of such earlier date, and except that for purposes

58

QB\033578.02011\28349393.9

of this Section 2.17, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01;

(d)on, or on a Business Day no more than five (5) Business Days prior to, the then effective Maturity Date, the Borrower shall pay to the Administrative Agent, for the pro rata benefit of the Lenders (based on their share of the Facility Amount outstanding on the Extension Effective Date), an extension fee equal to twenty hundredths of one percent (0.20%) of the Facility Amount;

(e)Administrative Agent shall have received reasonably satisfactory documentation evidencing the extension executed by the Borrower and consented to by the Guarantors; and

Only as to the second twelve (12) month extension, the following additional condition shall apply:

(f)The Unsecured Conversion has occurred prior to expiration of the first 12‑month Extension Period.

If the above conditions are satisfied, the extension of the Maturity Date shall be effective upon the date that the extension fee is paid to the Administrative Agent pursuant to clause (d) above (the “Extension Effective Date”).

2.18Initial Security and Unsecured Conversion.

(a)Equity Interests as Initial Security. Prior to an Unsecured Conversion pursuant to subsection (b) below, the Obligations will be secured by a first priority security interest in 100% of the Equity Interests in each of the Subsidiary Guarantors, pursuant to the Collateral Assignment Agreement.

(b)Unsecured Conversion. The Borrower may convert the Facility to an unsecured Facility (an “Unsecured Conversion”) upon the Borrower’s satisfaction of the following requirements as of the date of such Unsecured Conversion (the “Conversion Requirements”):

(i)Administrative Agent has received evidence reasonably satisfactory to Administrative Agent that the Total Asset Value is not less than $500,000,000.00; and

(ii)No Default or Event of Default exists.

Upon an Unsecured Conversion, Administrative Agent’s security interest in the Equity Interests in the Subsidiary Guarantors and any other Collateral pursuant to the Collateral Assignment Agreement or any other Loan Documents shall be automatically released and Administrative Agent shall, (i) file termination statements with respect to any previously filed UCC financing statements covering such Equity Interests and Collateral, and (ii) provide any other documents of the release with respect to such Equity Interests and Collateral reasonably requested by the Borrower. The Borrower shall reimburse Administrative Agent for all reasonable out‑of‑pocket costs associated with such release, termination and other documents.

(c)Cash Collateral Shall Remain. Notwithstanding an Unsecured Conversion, Section 2.15 regarding Cash Collateral shall at all times remain in full force and effect.

59

QB\033578.02011\28349393.9

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01Taxes.

(a)Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.

(c)Evidence of Payments. Upon request by any Loan Party or the Administrative Agent, as the case may be, after any payment of Taxes by any Loan Party or by the Administrative Agent to a Governmental Authority as provided in this Section 3.01, each Loan Party shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.

(d)Indemnification by the Loan Parties. The Loan Parties shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower or the L/C Issuer by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error.

(e)Indemnification by the Lenders. Each Lender or the L/C Issuer shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (i) the Administrative Agent against any Indemnified Taxes attributable to such Lender or the L/C Issuer (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) the Administrative Agent and the Loan Parties, as applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register and (iii) the Administrative Agent and the Loan Parties, as applicable, against any Excluded Taxes attributable to such Lender or the L/C Issuer that are payable or paid by the Administrative Agent or a Loan Party in connection

60

QB\033578.02011\28349393.9

with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender or the L/C Issuer by the Administrative Agent shall be conclusive absent manifest error. Each Lender or the L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or the L/C Issuer, as the case may be, under this Agreement or any other Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this subsection (e).

(f)Status of Lenders. (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)    Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

(A)     any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;

(B)     any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

(1)    in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2)    executed originals of IRS Form W-8ECI;

61

QB\033578.02011\28349393.9

(3)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) substantially in the form of Exhibit  I-1, and (y) executed originals of IRS Form W-8BEN; or

(4)    to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W‑8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit I‑2 or I‑3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit I‑4 on behalf of each such direct and indirect partner;

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)    if a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

62

QB\033578.02011\28349393.9

(g)Treatment of Certain Refunds. If any party determines, in its reasonable discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 3.01 (including by the payment of additional amounts pursuant to this Section 3.01), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments (including any such additional amounts) made under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses (including Indemnified Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this subsection (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this subsection (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(h)Survival; Defined Terms. Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document. For purposes of this Section 3.01, the term “applicable law” includes FATCA.

3.02Illegality. If any Lender reasonably determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to the Eurodollar Rate, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Committed Loans the interest rate on which is determined by reference to the Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurodollar Rate component thereof until the Administrative Agent is advised in writing by such Lender that

63

QB\033578.02011\28349393.9

it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

3.03Inability to Determine Rates. If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, then the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended, and (y) in the event of a determination described in the preceding sentence with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

3.04Increased Costs.

(a)If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the L/C Issuer;

(ii)impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein; or

(iii)subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting or maintaining any Eurodollar Rate Loan or Base Rate Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender, the L/C Issuer or such other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the L/C Issuer or such other Recipient hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender, the L/C Issuer or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the L/C Issuer or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

(b)If any Lender or the L/C Issuer determines that any Change in Law affecting such Lender or Issuing Bank or any Lending Office of such Lender or such Lender’s or Issuing Bank’s holding company,

64

QB\033578.02011\28349393.9

if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction suffered.

(c)A certificate of a Lender or the L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its holding company, as the case may be, as specified in subsections (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the L/C Issuer, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim compensation therefor; providedfurther that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

3.05Compensation for Losses. Within ten (10) days of any demand by any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a)any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b)any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; or

(c)any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;

including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing. A certificate of an affected Lender setting forth its calculation of losses in detail will be conclusive and binding in the absence of manifest error.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Base Rate

65

QB\033578.02011\28349393.9

used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

3.06Mitigation Obligations; Replacement of Lenders.

(a)Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Sections 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower may replace such Lender in accordance with Section 10.13.

3.07Survival. All of the Borrower’s obligations under this Article III shall survive termination of the Commitments and repayment of all other Obligations hereunder.

ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01Conditions of Initial Credit Extension. The effectiveness of this Agreement and the obligation of the L/C Issuer and each Lender to make its initial Credit Extension hereunder is subject to the satisfaction of the following conditions precedent:

(a)completion of all due diligence with respect to (i) the Borrower, (ii) the Guarantors, (iii) the Properties included in the Borrowing Base on the Closing Date and (iv) each Company whose Equity Interests are pledged pursuant to the Collateral Assignment Agreement, in each case, in scope and determination satisfactory to the Lead Arranger and the Lenders in their sole discretion;

(b)The Administrative Agent’s receipt of the following, each of which shall be originals, telecopies or pdf copies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders:

(i)executed counterparts of this Agreement, sufficient in number for distribution to the Administrative Agent, each Lender and the Borrower and executed counterparts of the Guaranty and the Advisor Fee Subordination Agreement;

(ii)Notes executed by the Borrower in favor of each Lender requesting a Note;

66

QB\033578.02011\28349393.9

(iii)Guaranty executed by each Guarantor;

(iv)Collateral Assignment Agreement executed by Borrower, CREIS, each other Assignor and each Subsidiary Guarantor;

(v)the formation, organization and operating documents for each Facility Loan Party;

(vi)such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Facility Loan Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Facility Loan Party is a party;

(vii)such documents and certifications as the Administrative Agent may reasonably require to evidence that each Facility Loan Party is duly organized or formed, and that each Facility Loan Party is validly existing, in good standing and qualified to engage in business in the jurisdiction of its formation;

(viii)UCC searches disclosing that the Administrative Agent will have a first priority security interest in 100% of the Equity Interests granted pursuant to the Collateral Assignment Agreement;

(ix)a favorable opinion of Kutak Rock LLP, counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit G and such other matters concerning the Facility Loan Parties and the Loan Documents as the Required Lenders may reasonably request;

(x)if required by the Administrative Agent, a certificate of a Responsible Officer of each Facility Loan Party either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by such Facility Loan Party and the validity against such Facility Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required;

(xi)a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied, (B) that there has been no event or circumstance since June 30, 2014, that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect and (C) that, after giving effect to all requested Credit Extensions to be made on the Closing Date, the Total Outstandings shall not exceed the Borrowing Base;

(xii)a duly completed Compliance Certificate as of the last day of the fiscal year of the Consolidated Group ended on June 30, 2014, signed by a Responsible Officer of the Borrower;

(xiii)evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect;

(xiv)evidence that the Existing Credit Agreement and all related documents have been or concurrently with the Closing Date are being terminated, all amounts owing thereunder have been

67

QB\033578.02011\28349393.9

repaid in full and all Liens securing obligations under the Existing Credit Agreement, if any, have been or concurrently with the Closing Date are being released;

(xv)documentation and other information reasonably requested by the Lenders in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT Act;

(xvi)with respect to each property that immediately prior to the Closing Date that is a Qualified Unencumbered Property as defined in and pursuant to the Existing Credit Agreement, (a) a certificate of a responsible officer that certifies that such properties satisfy the criteria to be a Qualified Unencumbered Property as defined in and pursuant to this Agreement, and (b) a current title report disclosing any changes that have occurred since the applicable property became a Qualified Unencumbered Property as defined in and pursuant to the Existing Credit Agreement; and

(xvii)such other assurances, certificates, documents, consents or opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender or the Required Lenders reasonably may require.

(c)Any fees required to be paid on or before the Closing Date, including pursuant to the Fee Letter, shall have been paid.

(d)Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).

Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

4.02Conditions to all Credit Extensions. The obligation of each Lender to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the satisfaction of the following conditions precedent:

(a)The representations and warranties of the Borrower contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct, in all material respects, on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct, in all material respects, as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.

68

QB\033578.02011\28349393.9

(b)After giving effect to all requested Credit Extensions, the Total Outstandings shall not exceed the lesser of (i) the Facility Amount and (ii) the Borrowing Base then in effect, and if after an Unsecured Conversion, less any Permitted Unsecured Debt.

(c)No Default or Event of Default shall exist, or would result, from such proposed Credit Extension or from the application of the proceeds thereof.

(d)The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.

Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Administrative Agent and the Lenders that:

5.01Existence, Qualification and Power. Each Loan Party (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any material Contractual Obligation (other than the Loan Documents) to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject, in either case, to the extent such conflict could reasonably be expected to have a Material Adverse Effect; or (c) violate any Law in a manner which could be reasonably expected to have a Material Adverse Effect.

5.03Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document.

5.04Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and

69

QB\033578.02011\28349393.9

binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by equitable principles of general application.

5.05Financial Statements; No Material Adverse Effect; Secured Debt.

(a)The Audited Financial Statements were prepared, and all future audited balance sheets, statements of income or operations, shareholders' equity and cash flows of the Consolidated Group for each fiscal year commencing with fiscal year ending December 31, 2014 when prepared, will be prepared (i) in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Consolidated Group as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other material liabilities, direct or contingent, of the Consolidated Group as of the date thereof, including material liabilities for taxes, material commitments and Indebtedness.

(b)The unaudited consolidated balance sheet of the Consolidated Group dated June 30, 2014, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on the date set forth therein, when prepared will (i) be prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial condition of the Consolidated Group as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

(c)Since June 30, 2014, there has been no event or circumstance, either individually or in the aggregate, that has had or would have a Material Adverse Effect.

(d)The consolidated forecasted balance sheet and statements of income and cash flows of the Consolidated Group delivered pursuant to Section 6.01(c) were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, the Borrower’s best estimate of its future financial condition and performance.

5.06Litigation. Except as specifically disclosed in Schedule 5.06, there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any other Facility Loan Party or against any of their Properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, and there has been no material adverse change in the status, or financial effect on any Facility Loan Party, of the matters, if any, described on Schedule 5.06.

5.07No Default. No Loan Party is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

5.08Ownership of Property; Liens. Each Loan Party has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be

70

QB\033578.02011\28349393.9

expected to have a Material Adverse Effect. As of the Closing Date and the date of each update of Schedule 5.08 pursuant to Section 6.02, set forth on Schedule 5.08 is a list of all real property owned by the Consolidated Group with a notation as to which such real properties are Qualified Unencumbered Properties and which Loan Party owns each Qualified Unencumbered Property. Neither the Qualified Unencumbered Properties nor the Equity Interests of any Subsidiary Guarantor are subject to any Liens, other than Liens permitted by Section 7.01.

5.09Environmental Compliance. The Loan Parties conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrower has reasonably concluded that, except as specifically disclosed in Schedule 5.09, such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

5.10Insurance. The Properties of the Loan Parties are insured with financially sound and reputable insurance companies not Affiliates of a Loan Party, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where such Loan Party operates.

5.11Taxes. The Facility Loan Parties have filed all Federal, state and other material tax returns and reports required to be filed, and have paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against a Facility Loan Party that would, if made, have a Material Adverse Effect. No Loan Party is party to any tax sharing agreement.

5.12ERISA Compliance.

(a)To the best knowledge of the Borrower, each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state laws. Each Pension Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that the form of such Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal Revenue Service to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the Internal Revenue Service. To the best knowledge of the Loan Parties, nothing has occurred that would prevent or cause the loss of such tax-qualified status.

(b)There are no pending or, to the best knowledge of any Loan Party, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c)(i) No ERISA Event has occurred; (ii) CREIS and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) neither CREIS nor any ERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due that are unpaid; (iv) neither CREIS nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA;

71

QB\033578.02011\28349393.9

and (v) no Pension Plan has been terminated by the plan administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan, in each case, that would result in liability, individually, or in the aggregate, in excess of Ten Million and No/100 Dollars ($10,000,000.00).

5.13Subsidiaries; Equity Interests. As of the Closing Date and the date of each update of Schedule 5.13 pursuant to Section 6.02, set forth on Schedule 5.13 is a complete and accurate list of each Facility Loan Party, together with (a) each such Person’s jurisdiction of organization and (b) each such Person’s U.S. taxpayer identification number. The outstanding Equity Interests of the Borrower and each Subsidiary Guarantor are validly issued, fully paid and non‑assessable and free of any Liens other than Permitted Liens.

5.14Margin Regulations; Investment Company Act.

(a)The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

(b)None of the Facility Loan Parties is required to be registered as an “investment company” under the Investment Company Act of 1940.

5.15Disclosure. The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any Loan Party is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished), in each case as of the date thereof, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

5.16Compliance with Laws. Each Facility Loan Party is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

5.17Intellectual Property; Licenses, Etc. The Loan Parties own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person. To the best knowledge of the Loan Parties, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by a Loan Party infringes upon any rights held by any other Person. Except as specifically disclosed in Schedule 5.17, no claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the Loan Parties, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

72

QB\033578.02011\28349393.9

5.18Anti-Corruption Laws andSanctions. The Loan Parties have implemented and maintain in effect policies and procedures designed to achieve compliance by the Loan Parties, their Affiliates and their respective directors, officers and employees with Anti-Corruption Laws, and, with respect to individuals or entities owning indirect interests in the Loan Parties, CREIS utilizes a U.S. broker-dealer network or third party transfer agent to implement the normal and customary investor screening practices mandated by applicable Law, including the Financial Industry Regulatory Authority regulations and applicable Sanctions. The Loan Parties and their Affiliates, and to the knowledge of the chief executive officer, chief financial officer or general counsel of the Loan Parties, any director, officer or employee thereof, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (i) the Loan Parties or any Affiliate, or (ii) to the knowledge of the chief executive officer, chief financial officer or general counsel of the Loan Parties, any director, officer or employee of the Loan Parties or any Affiliate that will act in any capacity in connection with or benefit from the transactions contemplated hereby, is a Sanctioned Person. No transactions contemplated hereby will violate Anti-Corruption Laws or applicable Sanctions, in any material respect. The representations contained in this Section shall not apply to any Person to the extent such Person’s interest is in or through a U.S. Publicly-Traded Entity. “U.S. Publicly-Traded Entity” means an entity whose securities are (a) listed on a national securities exchange or (b) quoted on an automated quotation system in the U.S. or a wholly-owned subsidiary of such an entity.

5.19Solvency.

(a)Immediately after the Closing Date and immediately following the making of each Credit Extension and after giving effect to the application of the proceeds of such Credit Extension, (i) the fair value of the assets of the Facility Loan Parties and their Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of the Facility Loan Parties and their Subsidiaries on a consolidated basis; (ii) the present fair saleable value of the Property of the Facility Loan Parties and their Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Facility Loan Parties and their Subsidiaries on a consolidated basis on their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Facility Loan Parties and their Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Facility Loan Parties and their Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted after the date hereof.

(b)The Facility Loan Parties do not intend to, and do not believe that they will, incur debts beyond their ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by them and the timing of the amounts of cash to be payable on or in respect of their Indebtedness.

5.20REIT Status.

(a)CREIS is qualified as a real estate investment trust under Section 856 of the Code; and

(b)CREIS is in compliance in all material respects with all provisions of the Code applicable to the qualification of CREIS as a real estate investment trust.

73

QB\033578.02011\28349393.9

ARTICLE VI.

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and 6.03 or as otherwise explicitly limited in this Article VI) cause each other Loan Party to:

6.01Financial Statements. Deliver to the Administrative Agent, in form and detail reasonably satisfactory to the Administrative Agent:

(a)as soon as available, but in any event within ninety (90) days after the end of each fiscal year of the Consolidated Group (and commencing with and including the financial statements related to the fiscal year ending December 31, 2014), a consolidated balance sheet of the Consolidated Group as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Administrative Agent, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;

(b)as soon as available, but in any event within forty-five (45) days after the end of each of the first three (3) fiscal quarters of each fiscal year of the Consolidated Group (commencing with the fiscal quarter ending September 30, 2014), a consolidated balance sheet of the Consolidated Group as at the end of such fiscal quarter, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal quarter and for the portion of the Consolidated Group fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, certified by the chief executive officer, chief financial officer, treasurer or controller of CREIS or the Borrower as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of the Consolidated Group in accordance with GAAP, subject only to normal year‑end audit adjustments and the absence of footnotes; and

(c)as soon as available, but in any event at least fifteen (15) days before the end of each fiscal year of the Consolidated Group (commencing with the fiscal year ending December 31, 2014), forecasts prepared by management of CREIS or the Borrower, in form reasonably satisfactory to the Administrative Agent, of consolidated balance sheets and statements of income or operations and cash flows of the Consolidated Group on a monthly basis for the immediately following fiscal year (including the fiscal year in which the Maturity Date occurs).

As to any information contained in materials furnished pursuant to Section 6.02(c), the Borrower shall not be separately required to furnish such information under clauses (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in clauses (a) and (b) above at the times specified therein.

6.02Certificates; Other Information. Deliver to the Administrative Agent, in form and detail reasonably satisfactory to the Administrative Agent:

74

QB\033578.02011\28349393.9

(a)concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b) (commencing with the financial statements for the fiscal quarter ended September 30, 2014), (i) a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of CREIS or the Borrower which shall include compliance with the covenants set forth in Sections 7.06 and 7.11, (ii) a certificate as of the end of the immediately preceding fiscal quarter of the Consolidated Group, setting forth and certifying the amount of all Dividend Reinvestment Proceeds received by CREIS during such immediately preceding fiscal quarter and including a certificate from the chief financial officer, or other executive officer or director, of CREIS or the Borrower certifying that the Borrower shall continue to be in compliance with all applicable provisions of the Code and its bylaws and operating covenants after giving effect to such dividends or distributions, (iii) a duly completed Borrowing Base Compliance Certificate signed by a Responsible Officer of the Borrower, setting forth and certifying the amount of the Borrowing Base then in effect as of the end of the immediately preceding fiscal quarter of the Consolidated Group, and (iv) solely in conjunction with the delivery of the financial statements referred to in Section 6.01(a), an updated Schedule 5.08 and Schedule 5.13, if applicable;

(b)promptly after any reasonable request by the Administrative Agent, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of any Loan Party, or any audit of any of them;

(c)promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of CREIS or the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Consolidated Group may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto (including, without limitation, all form 10-K and 10-Q reports);

(d)promptly, and in any event within five (5) Business Days after receipt thereof by any Loan Party, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any Loan Party;

(e)promptly, any information that the Administrative Agent deems lawfully necessary from time to time in order to ensure compliance with all applicable Laws concerning money laundering and similar activities; and

(f)promptly, such additional information regarding the business, financial or corporate affairs of the Loan Parties or compliance with the terms of the Loan Documents, as the Administrative Agent may from time to time reasonably request.

Documents required to be delivered pursuant to Sections 6.01(a) or (b) or Section 6.02(b) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Consolidated Group posts such documents, or provides a link thereto on CREIS’ or the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering

75

QB\033578.02011\28349393.9

paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Borrower hereunder (collectively, the “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arrangers, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Loan Parties or their securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform that is designated “Public Investor Side Information”; and (z) the Administrative Agent and the Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform that is not designated “Public Investor Side Information.”

6.03Notices. Promptly notify the Administrative Agent:

(a)of the occurrence of any Default and any Event of Default;

(b)of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of any Loan Party; (ii) any dispute, litigation, investigation, proceeding or suspension between any Loan Party and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting any Loan Party, including pursuant to any applicable Environmental Laws;

(c)of the occurrence of any ERISA Event;

(d)of any material change in accounting policies or financial reporting practices by the Consolidated Group, including any determination by the Borrower referred to in Section 2.10(b);

(e)of any announcement by Moody’s or S&P of any change in a Debt Rating of CREIS; and

(f)of the occurrence of any material environmental problems at a Qualified Unencumbered Property.

Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible Officer of CREIS or the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall

76

QB\033578.02011\28349393.9

describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

6.04Payment of Obligations. Subject to the cure periods and provisions contained in Section 8.01, pay and discharge as the same shall become due and payable, all its material obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its Properties, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by such Loan Party; (b) all lawful claims which, if unpaid, would by law become a Lien upon its Property; and (c) to the extent failure to pay or discharge could reasonably be expected to have a Material Adverse Effect, all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.

6.05Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Sections 7.04 or 7.05; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect and (d) maintain or cause to be maintained (as applicable) CREIS’ status as a real estate investment trust in compliance with all applicable provisions of the Code relating to such status.

6.06Maintenance of Properties. (a) Maintain, preserve and protect the Qualified Unencumbered Properties and equipment necessary in the operation thereof in good working order and condition, ordinary wear and tear excepted; (b) make or cause to be made all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of the Qualified Unencumbered Properties.

6.07Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of a Loan Party, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.

6.08Compliance with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect. the Loan Parties will (a) maintain in effect and enforce policies and procedures designed to achieve compliance by the Loan Parties, their Affiliates and their respective directors, officers and employees with Anti‑Corruption Laws, (b) follow their general business practices that they utilize as of the Closing Date to “know their customers” and to avoid violations, in any material respect, of any Sanctions applicable to the Loan Parties and their Affiliates and (c) with respect to individuals or entities owning indirect interests in the Loan Parties, CREIS will utilize a U.S. broker‑dealer network or third party transfer agent to implement the normal and customary investor screening practices mandated by applicable Law, including the Financial Industry Regulatory Authority regulations and applicable Sanctions.

77

QB\033578.02011\28349393.9

6.09Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Consolidated Group; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Consolidated Group.

6.10Inspection Rights. Permit representatives and independent contractors of the Administrative Agent to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants (so long as no Event of Default has occurred and is continuing, a Responsible Officer of any member of the Consolidated Group shall be present at any discussions with independent public accountants), all at the expense of the Borrower and at such reasonable times during normal business hours (provided such visits shall not occur when any independent auditors are conducting an audit of any member of the Consolidated Group), upon reasonable advance notice to the Borrower; provided, however, that such visits shall be limited to no more than once in any calendar year unless an Event of Default has occurred and is continuing, and if an Event of Default has occurred and is continuing, the Administrative Agent and any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

6.11Use of Proceeds. Use the proceeds of the Credit Extensions (i) to refinance the Indebtedness under the Existing Credit Agreement and to pay fees and expenses incurred in connection therewith and (ii) for working capital and general corporate purposes (including real estate acquisitions) not in contravention of any Law or of any Loan Document, including, without limitation, Regulation U of the FRB.

6.12Environmental Matters.

(a)Comply with, and use all reasonable efforts to ensure compliance by all tenants and subtenants, if any, with, all applicable Environmental Laws and obtain and comply with and maintain, and use all reasonable efforts to ensure that all tenants and subtenants obtain and comply with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, except to the extent that failure to do so could not be reasonably expected to have a Material Adverse Effect; provided that in no event shall the Borrower or any Subsidiary Guarantor be required to modify the terms of leases, or renewals thereof, with existing tenants (i) at Projects owned by the Borrower or any Subsidiary Guarantor as of the date hereof, or (ii) at Projects hereafter acquired by the Borrower or any Subsidiary Guarantor as of the date of such acquisition, to add provisions to such effect.

(b)Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws, except to the extent that (i) the same are being contested in good faith by appropriate proceedings and the pendency of such proceedings could not be reasonably expected to have a Material Adverse Effect, or (ii) the Borrower has determined in good faith that contesting the same is not in the best interests of the Borrower or any Subsidiary Guarantor and the failure to contest the same could not be reasonably expected to have a Material Adverse Effect.

(c)Defend, indemnify and hold harmless Administrative Agent and each Lender, and its respective officers, directors, agents and representatives from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown,

78

QB\033578.02011\28349393.9

contingent or otherwise, arising out of, or in any way relating to the violation of, noncompliance with or liability under any Environmental Laws applicable to the operations of the Borrower, any Subsidiary Guarantor or the Qualified Unencumbered Properties, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable attorney’s and consultant’s fees, investigation and laboratory fees, response costs, court costs and litigation expenses, except to the extent that any of the foregoing arise out of the gross negligence or willful misconduct of the party seeking indemnification therefor. This indemnity shall continue in full force and effect regardless of the termination of this Agreement.

(d)Prior to the acquisition of a new Property after the Closing Date that will be a Qualified Unencumbered Property, perform or cause to be performed an environmental investigation which investigation shall at a minimum comply with the specifications and procedures attached hereto as Exhibit H. In connection with any such investigation, the Borrower shall cause to be prepared a report of such investigation, to be made available to the Administrative Agent upon reasonable request (which may be shared with any Lender), for informational purposes and to assure compliance with the specifications and procedures.

6.13Addition of Qualified Unencumbered Properties/Additional Subsidiary Guarantors.

(a)Notify the Administrative Agent at any time that the Borrower will be adding a Project to the pool of Qualified Unencumbered Properties. Prior to an Unsecured Conversion, in order for such Project to be included in the pool of Qualified Unencumbered Properties the Borrower shall deliver the following to the Administrative Agent:

(i)A description of such Project and the name of the owner of all or any portion of such Project (which owner(s) must be Wholly Owned Subsidiary as of the date on which such Project is added as a Qualified Unencumbered Property);

(ii)A certificate of a Responsible Officer that certifies (i) such Project satisfies the criteria to be a Qualified Unencumbered Property and (ii) that there exists no Event of Default under this Agreement and that the addition of such Project shall not result in any such Event of Default

(iii)A Guaranty executed by each new Subsidiary Guarantor that owns each new Project to be included as a Qualified Unencumbered Property.

(iv)A fully and accurately completed Joinder Agreement executed by each Joinder Affiliate and Joinder Company, as defined in the Joinder Agreement.

(v)UCC searches disclosing that the Administrative Agent has a first priority security interest in 100% of the Equity Interests granted pursuant to the Joinder Agreement to be executed in connection with the Collateral Assignment Agreement.

(vi)If required by Administrative Agent, a title report respecting such Project dated not more than fifteen (15) days prior to the date such Project (unless a different time period is otherwise agreed to by the Administrative Agent) will be added to the pool of Qualified Unencumbered Properties;

(vii)If required by Administrative Agent, a copy of (a) the fully executed agreement, and (b) a preliminary or fully executed closing statement, as applicable, pursuant to which the Project was purchased by the Borrower or the applicable Wholly Owned Subsidiary;

79

QB\033578.02011\28349393.9

(viii)If required by Administrative Agent, a Phase I environmental report respecting such Project dated not more than six (6) months prior to the date such Project will be added to the pool of Qualified Unencumbered Properties unless such Project had been included in the pool of Qualified Unencumbered Properties within one (1) year prior to the date such Project will be added again to the pool of Qualified Unencumbered Properties;

(ix)If required by Administrative Agent, evidence satisfactory to Administrative Agent that such Project is covered by insurance as required in accordance with Section 6.07;

(x)If required by Administrative Agent, all leases, assignments to the Borrower or the applicable Wholly Owned Subsidiary of leases, and all estoppel certificates obtained in favor of the Borrower or applicable Wholly Owned Subsidiary regarding the leases, in each case regarding the Project;

(xi)If required by Administrative Agent, a municipal information summary report in form and detail reasonably required by Administrative Agent;

(xii)If required by Administrative Agent, a Project condition report in form and detail reasonably required by Administrative Agent;

(xiii)if requested by the Administrative Agent, the items in (A) Section 4.01(b)(v), (vi), (vii), (x) regarding each new Facility Loan Party, and (B) Section 4.01(b)(xiii) regarding any new Project to be included as a Qualified Unencumbered Property.

(xiv)Such other items reasonably requested by Administrative Agent.

Such Project shall become a Qualified Unencumbered Property upon satisfaction of the criteria in clauses (i) through (xiv) above (the “Addition Date”), which shall be no sooner than ten (10) days after delivery of the items described in clauses (i) through (xiv) above, unless the Administrative Agent consents to a shorter period of time. In the event that Administrative Agent shall not require the delivery of any of the items set forth in clauses (vi) through (xii) or (xiv) above in connection with the addition of any Project as a Qualified Unencumbered Property, then Administrative Agent may later require the delivery of any such item or items in order for such Project to continue as a Qualified Unencumbered Property. From and after an Unsecured Conversion, the Borrower shall only be required to deliver the items referenced in clauses (i), (ii), (vi), (viii), (ix) and (xiii).

(b)If on the Addition Date the owner of all or any portion of such Project is not a Loan Party, the Borrower shall, on or before the Addition Date, (i) cause such owner to become a Subsidiary Guarantor by executing and delivering to the Administrative Agent a counterpart of the Guaranty or such other document as the Administrative Agent shall deem appropriate for such purpose and (ii) deliver to the Administrative Agent documents of the types referred to in clauses (v), (vi), (vii) and (x)of Section 4.01(b) for such Person, together with favorable opinions of counsel to such Person (which shall cover the legality, validity, binding effect and enforceability of the documentation referred to in clause (b)(i) and such other matters as may be reasonably required by the Administrative Agent), in each case in form and substance similar to those delivered on the Closing Date.

6.14Removal of Qualified Unencumbered Properties. Notify the Administrative Agent at any time that the Borrower will be removing a Project from the pool of Qualified Unencumbered Properties. Such Project shall be removed from the pool of Qualified Unencumbered Properties upon satisfaction of the following:

80

QB\033578.02011\28349393.9

(a)the Borrower shall deliver to Administrative Agent a description of such Project and the ownership of such Project;

(b)the Borrower shall deliver to the Administrative Agent a certificate of a Responsible Officer that (i) includes a pro forma Borrowing Base Compliance Certificate demonstrating the effects of removing such Project from the pool of Qualified Unencumbered Properties and the Borrowing Base in effect based on the remaining pool of Qualified Unencumbered Properties and (ii) certifies the Unencumbered Asset Value or NOI, as applicable, of such Project used in the calculations in such pro forma Borrowing Base Compliance Certificate;

(c)after giving effect to (i) the removal of any Project from the pool of Qualified Unencumbered Properties, (ii) the application of any proceeds or prepayments received at the time of such removal and (iii) the value of any Properties being added as Qualified Unencumbered Properties pursuant to Section 6.13 simultaneously with such removal, the Total Outstandings shall not exceed the Borrowing Base then in effect; and

(d)no Default or Event of Default shall exist or would be caused by removing such Project.

Upon the effective date of the removal of such Project from the pool of Qualified Unencumbered Properties , (i) if the owner of such Project is a Subsidiary Guarantor and shall cease to be the owner of any Qualified Unencumbered Property upon such removal, then (1) such Person shall cease to be a Subsidiary Guarantor and shall automatically, and without further action, be released from its obligations under the Loan Documents and (2) the Equity Interests of such Person (and all related collateral) shall cease to be Collateral and all security interests of the Administrative Agent in the Equity Interests of such Person (and all related collateral) shall be deemed immediately released, without any further action and (ii) upon the request, and at the expense of the Borrower, the Administrative Agent agrees to execute and deliver such release documents and take such other actions to acknowledge, evidence or complete any such release of such Person and the collateral assignment of the Equity Interests of such Person. If the Equity Interests of such Person that ceases to be a Subsidiary Guarantor are represented by one or more certificates, the Administrative Agent shall deliver such original certificates along with assignments in blank as required under the Collateral Assignment Agreement.

ARTICLE VII.

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder (other than inchoate indemnification liabilities arising under the Loan Documents) shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower shall not, nor shall it permit any other Loan Party (except as limited below) to:

7.01Liens. Create, incur, assume or suffer to exist any Lien upon any Qualified Unencumbered Property or the Equity Interests of the Borrower or a Subsidiary Guarantor, whether now owned or hereafter acquired, other than the following:

(a)with respect to the Qualified Unencumbered Properties, Permitted Liens; and

(b)with respect to the Equity Interests of the Borrower or any Subsidiary Guarantor:

(i)Liens arising pursuant to the Loan Documents; and

81

QB\033578.02011\28349393.9

(ii)Liens for taxes not yet delinquent or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP or which have been insured or bonded.

7.02Investments. Make any Investments, except:

(a)Investments in the form of cash or Cash Equivalents;

(b)advances to officers, directors and employees of the Loan Parties in an aggregate amount not to exceed One Million and No/100 Dollars ($1,000,000) at any time outstanding, for travel, entertainment, relocation and analogous ordinary business purposes;

(c)Investments in any Person which is a Loan Party;

(d)Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

(e)Guarantees permitted pursuant to Section 7.03 below;

(f)Investments related to income-producing Projects, single tenant or mixed-use Projects, Construction in Progress, improved land, unimproved land, Eligible Real Estate Investments and any business activities and Investments reasonably incidental thereto and Investments in partnerships or joint ventures; provided, that such Investments together with any such Investments held by all other members of the Consolidated Group (collectively but excluding any such Investments that constitute Blackrock Investments, the “Consolidated Group Investments”) shall, as applicable, be limited as follows:

(i)the aggregate value of the Consolidated Group Investments in all non‑wholly owned general and limited partnerships, joint ventures and other Persons (including, without limitation, Investments in C Corporations, Investments in Investment Affiliates and any such Investments in existence as of the date hereof), in each case, which are not consolidated with CREIS for financial reporting purposes under GAAP, shall not constitute more than fifteen percent (15.0%) of Total Asset Value;

(ii)Consolidated Group Investments in Projects contributing to the calculation of Construction in Progress and Improved Land Value shall not, in the aggregate, at any time exceed an amount equal to five percent (5.0%) of Total Asset Value (which for Construction in Progress and Improved Land Value held or owned by Investment Affiliates, will be based upon the Consolidated Group Pro Rata Share of such Construction in Progress and Improved Land Value);

(iii)Consolidated Group Investments in Projects contributing to the calculation of Unimproved Land Value shall not at any time exceed an amount equal to five percent (5.0%) of Total Asset Value (which for Unimproved Land Value held or owned by Investment Affiliates, will be based upon the Consolidated Group Pro Rata Share of such Unimproved Land Value); and

(iv)Consolidated Group Investments in Eligible Real Estate Investments shall not, in the aggregate, exceed fifteen percent (15.0%) of Total Asset Value (which for Eligible Real Estate Investments held or owned by Investment Affiliates, will be based upon the Consolidated Group Pro Rata Share of such Eligible Real Estate Investments).

82

QB\033578.02011\28349393.9

In addition to the limitations above contained in this clause (f), the aggregate value of the types of Consolidated Group Investments permitted pursuant to clauses (f)(i) – (iv) above shall not, in any case, exceed an amount equal to thirty percent (30.0%) of Total Asset Value; provided, that no Blackrock Investments shall be applied to such limitation or any other limitation under this Subsection (f).

(g)Investments existing on the date hereof;

(h)Investments of any Person in existence at the time such Person becomes a Subsidiary; provided such Investments were not made in connection with or anticipation of such Person becoming a Subsidiary of the Borrower;

(i)Investments in new Subsidiaries; and

(j)Blackrock Investments;

provided, that notwithstanding anything to the contrary herein, no Investments shall be made, assumed or permitted to exist which Investments are contrary to the terms and requirements set forth in clause (f) of this Section 7.02

7.03Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

(a)Indebtedness under the Loan Documents

(b)Prior to the Unsecured Conversion, only with the prior reasonable approval of the Administrative Agent, and after the Unsecured Conversion without the approval of the Administrative Agent, obligations (contingent or otherwise) of any Loan Party existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

(c)Indebtedness in respect of capital leases, Off-Balance Sheet Arrangements and purchase money obligations for fixed or capital assets; provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed One Million and No/100 Dollars ($1,000,000.00);

(d)Guarantees in respect of Indebtedness or performance obligations otherwise permitted hereunder;

(e)Indebtedness incurred in respect of indemnification claims relating to adjustments of purchase price or similar obligations in any case incurred in connection with any Disposition permitted under Section 7.05;

(f)Indebtedness in respect of workers’ compensation claims, self-insurance premiums, performance, bid and surety bonds and completion guaranties, in each case, in the ordinary course of business;

(g)Indebtedness incurred in the ordinary course in respect of netting services, overdraft protections, automatic clearinghouse arrangements, arrangements in respect of pooled deposit or sweep

83

QB\033578.02011\28349393.9

accounts, check endorsement guarantees, and otherwise in connection with deposit accounts or cash management services;

(h)unsecured intercompany Indebtedness and intercompany Investments permitted pursuant to Section 7.02;

(i)(a) Guaranties by the Borrower or CREIS of losses relating to customary exceptions to non-recourse limitations under non-recourse Indebtedness incurred by a Subsidiary that is not a Loan Party and (b) customary guaranties by the Borrower or CREIS of the full amount of such non-recourse Indebtedness if certain customary events occur (e.g., bankruptcy, violation of due on sale clauses, etc.);

(j)Approved Subordinated Debt;

(k)other Indebtedness existing on the Closing Date and identified on Schedule 7.03;

(l)guarantees constituting Investments permitted under Subsections 7.02 (a) through (d) and (f) through (i);

(m)on and after the Unsecured Conversion, guarantees by the Borrower or CREIS of Secured Debt of a Subsidiary that is not a Loan Party to the extent the incurrence of any Indebtedness pursuant to this clause (m) does not cause the Borrower to violate any of the financial covenants set forth in Section 7.11;

(n)on and after the Unsecured Conversion, Indebtedness constituting Permitted Unsecured Debt; and

(o)on and after the Unsecured Conversion, Indebtedness that constitutes Unsecured Debt; provided that Short Term Unsecured Debt incurred pursuant to this clause (m) may not exceed $100,000,000, in the aggregate, at any one time, unless all Unsecured Debt incurred pursuant to this clause (m) has a weighted average maturity (including, for the avoidance of doubt, the mandatory redemption date of any Mandatorily Redeemable Stock) of at least seven years; and provided further that at least 50% of outstanding Unsecured Debt incurred pursuant to this clause (m) accrues interest based on a fixed rate, including any such Unsecured Debt that is subject to a Swap Contract that effectively converts the interest rate on such Unsecured Debt to a fixed rate.

7.04Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, except that, so long as no Default exists or would result therefrom:

(a)any Subsidiary Guarantor may merge with (i) the Borrower, provided that the Borrower shall be the continuing or surviving Person or (ii) any one or more of the other Subsidiary Guarantors;

(b)any Subsidiary Guarantor may merge with any third party; provided that (i) such merger is part of one or more transactions constituting an Investment permitted in accordance with the terms and conditions of this Agreement and (ii) immediately following such merger, the surviving entity remains or becomes, as applicable, a Subsidiary Guarantor; and

(c)any Subsidiary Guarantor may merge with any other Person if (i) such merger is for the sole purpose of causing a change in the jurisdiction of organization of such Subsidiary Guarantor, (ii) the percentage share of the Borrower’s and CREIS’ ownership, either directly or indirectly, of the Equity Interests of such Subsidiary Guarantor, in the aggregate, is not changed, (iii) the Person merged with the applicable Subsidiary Guarantor does not have any material liabilities, obligations or other Indebtedness or any material

84

QB\033578.02011\28349393.9

Contractual Obligations of any type and (iv) immediately following such merger, the surviving entity remains or becomes, as applicable, a Subsidiary Guarantor.

7.05Dispositions.Make any Disposition, except:

(a)Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

(b)Dispositions of property to the Borrower or to a Wholly-Owned Subsidiary that is or will be a Subsidiary Guarantor upon the completion of such Disposition;

(c)Any Disposition of a Qualified Unencumbered Property (and any assets related thereto and any Subsidiary Guarantor owning such Qualified Unencumbered Property) in connection with its removal from the pool of Qualified Unencumbered Properties in accordance with the terms of Section 6.14;

(d)any Subsidiary Guarantor may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another Subsidiary Guarantor; and

(e)Dispositions of Cash Equivalents in the ordinary course of business;

(f)Any lease or sublease of any Project to any third party;

(g)the unwinding of any Swap Contract;

(h)Investments permitted pursuant to Section 7.02;

(i)Dividends or distributions permitted under Section 7.06; and

(j)Any other Dispositions; provided that (i) no Event of Default shall exist as of the date of such Disposition or would result from such Disposition, (ii) such Disposition is for fair market value, (iii) written approval of the Required Lenders and the Administrative Agent shall be required for any Disposition, to the extent such Disposition, together with all other Dispositions consummated during the Measurement Period most recently ended, has an aggregate fair market value that is greater than fifteen percent (15%) of Total Asset Value (as of the most recently ended Measurement Period) and (iv) regardless of whether approval of the Required Lenders is otherwise required hereunder or under any Loan Document in connection with any Disposition of any Project or of an ownership interest in a Project or the Person owning the Project, to the extent such Disposition, together with all other Dispositions consummated during such calendar quarter exceed a fair market value of One Hundred Million and No/100 Dollars ($100,000,000.00), in the aggregate, the Borrower will give prior written notice to the Administrative Agent of such Disposition and will, not less than five (5) days prior to the consummation of such Disposition, deliver to the Administrative Agent a pro-forma Compliance Certificate (as if such Disposition had occurred as of the last day of the most recently ended Measurement Period) based on the results of such Disposition demonstrating compliance with the covenants contained herein.

7.06Dividend Payout Ratio.

(a)Permit the Dividend Payout Ratio, at any time, to exceed ninety-five percent (95%); and

(b)Permit CREIS, at any time an Event of Default exists, to make or declare any dividends or similar distributions without the written consent of the Administrative Agent and Required Lenders.

85

QB\033578.02011\28349393.9

Notwithstanding anything in this Section 7.06 to the contrary, CREIS shall be permitted at all times to distribute the minimum amount of dividends necessary for CREIS to maintain its tax status as a real estate investment trust.

7.07Change in Nature of Business. Engage in any material line of business substantially different from those lines of business conducted by the Loan Parties on the date hereof or any business substantially related or incidental thereto.

7.08Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the Borrower that is not a Loan Party, whether or not in the ordinary course of business, other than (a) on fair and reasonable terms substantially as favorable to such Loan Party as would be obtainable by such Loan Party at the time in a comparable arm’s length transaction with a Person other than an Affiliate, (b) Investments permitted under Section 7.02, (c) transactions permitted under Section 7.04, (d) Dispositions permitted under Section 7.05, (e) dividends or distributions permitted under Section 7.06 or (f) any Advisor Fee, including any agreement governing such Advisor Fee.

7.09Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits the ability (i) of any Subsidiary Guarantor to make Restricted Payments to the Borrower or any Guarantor or to otherwise transfer property to the Borrower or any Guarantor, (ii) of any Subsidiary of any Guarantor that owns a Qualified Unencumbered Property to Guarantee the Indebtedness of the Borrower and to pledge its assets or (iii) of a Loan Party to create, incur, assume or suffer to exist Liens on any Qualified Unencumbered Property; provided, however, that clauses (ii) and (iii) shall not prohibit (x) any Negative Pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 7.03(c) solely to the extent any such Negative Pledge relates to the property financed by or the subject of such Indebtedness or (y) on or after the Unsecured Conversion and subject to Section 2.01(a)(i) regarding the limitation on the amount of Total Outstandings, any limits under Indebtedness permitted under Section 7.03(n) or (o); or (b) requires the grant by a Loan Party of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person, except for a Lien securing Indebtedness permitted under Section 7.03(c) or if, on or after the Unsecured Conversion, a Lien is subsequently granted to secure the Obligations, for a Lien securing Indebtedness permitted under Section 7.03(n) or (o).

7.10Use of Proceeds.

(a)Use the proceeds of (i) any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose or (ii) any Committed Revolving Borrowing, whether directly or indirectly, and whether immediately, incidentally or ultimately, to make a Borrower Loan Purchase under Section 10.06(h); or

(b)Request any Borrowing or Letter of Credit, and Borrower shall not use, and shall procure that its Affiliates and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto, in any material respect.

86

QB\033578.02011\28349393.9

7.11Financial Covenants. Commencing with the fiscal quarter ended June 30, 2014:

(a)Leverage Ratio. Permit the Leverage Ratio, as of the end of any fiscal quarter of the Consolidated Group (and any other date for which a pro forma Compliance Certificate is required to be delivered pursuant to the terms hereof) to be greater than sixty‑five percent (65%) until the First Anniversary Date, and then sixty percent (60%) thereafter.

(b)Minimum Fixed Charge Coverage. Permit the Fixed Charge Coverage Ratio, as of the end of any fiscal quarter of the Consolidated Group (and any other date for which a pro forma Compliance Certificate is required to be delivered pursuant to the terms hereof) to be equal to or less than 1.50 to 1.0.

(c)Minimum Consolidated Net Worth. Permit Consolidated Net Worth, as of any date during the term hereof, to be less than the sum of (i) $62,967,750.00, plus (ii) an amount equal to seventy‑five percent (75.0%) of the aggregate increases in Shareholders’ Equity of the Consolidated Group following the Closing Date by reason of the issuance and sale of Equity Interests of the Consolidated Group (other than issuances to a Loan Party), including upon any conversion of debt securities of the Borrower into such Equity Interests.

(d)from and after the Unsecured Conversion:

(i)Unsecured Debt to Unencumbered Asset Value Ratio. Permit the ratio of (A) Unsecured Debt to (B) Unencumbered Asset Value, as of the end of any fiscal quarter of the Consolidated Group (and any other date for which a pro forma Compliance Certificate is required to be delivered pursuant to the terms hereof) to be greater than (1) sixty‑five percent (65%) until the First Anniversary Date, and (2) sixty percent (60%) thereafter;

(ii)Unsecured Debt Service Coverage Ratio. Permit the Unsecured Debt Service Coverage Ratio, as of the end of any fiscal quarter of the Consolidated Group (and any other date for which a pro forma Compliance Certificate is required to be delivered pursuant to the terms hereof) to be equal to or less than 1.75 to 1.0;

(iii)Secured Debt Ratio. Permit the ratio of (A) Secured Debt owed by the Consolidated Group to (B) Total Asset Value, as of the end of any fiscal quarter of the Consolidated Group (and any other date for which a pro forma Compliance Certificate is required to be delivered pursuant to the terms hereof) to be greater than forty percent (40%); or

(iv)Maximum Real Estate Recourse Debt Ratio. Permit the amount of Secured Debt owed by the Consolidated Group which is Recourse Debt, as of any date during the term hereof, to exceed fifteen percent (15%) of TAV.

7.12Additional Restricted Actions. Notwithstanding anything contained herein to the contrary,

(a)enter into or permit to exist (i) any assignment of Equity Interests of any Loan Party (other than CREIS), (ii) any Negative Pledge (other than as permitted by Section 7.09) or (iii) any unencumbered asset covenant or other similar covenant or restriction which prohibits or limits the ability to sell or create Liens against any Qualified Unencumbered Properties (other than as permitted by Section 7.09);

(b)enter into or permit to exist any Sale and Leaseback Transaction;

(c)enter into or permit to exist any Off-Balance Sheet Arrangements without the prior written consent of the Administrative Agent (which such consent shall be granted or withheld in the discretion of the Administrative Agent); or

87

QB\033578.02011\28349393.9

(d)if any Event of Default has occurred and is continuing or would be directly or indirectly caused as a result thereof, after the issuance thereof, (i) amend or modify any of the terms of any Indebtedness of such Loan Party (other than Indebtedness arising under the Loan Documents) if such amendment or modification would add or change any terms in a manner adverse in any material respect to such Loan Party or to the Lenders, (ii) shorten the final maturity or average life to maturity thereof or require any payment thereon to be made sooner than originally scheduled or increase the interest rate applicable thereto, or (iii) make (or give any notice with respect thereto) any voluntary or optional payment or prepayment thereof, or make (or give any notice with respect thereto) any redemption or acquisition for value or defeasance (including without limitation, by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), refund, refinance or exchange with respect thereto.

7.13Organizational Matters.(a) Permit any member of the Consolidated Group to change its fiscal year without the prior written consent of the Required Lenders or (b) permit any Loan Party to amend, modify or change its partnership agreement (other than a change limited solely to add additional limited partners or authorize the issuance of additional units) or articles of incorporation or articles of formation (or corporate charter or company articles or other similar organizational document) or bylaws or operating agreement (or other similar document) in any manner that would reasonably be likely to adversely affect the rights of the Lenders in any material respect.

7.14Ownership and Creation of Foreign Subsidiaries.Notwithstanding any other provisions of this Agreement to the contrary, create, acquire or permit to exist any Foreign Subsidiaries.

7.15Prohibition on Additional Equity Interests and New Members or Partners. Prior to the Unsecured Conversion and solely limited to the Subsidiary Guarantors, (i) issue any additional Equity Interests (other than to the Borrower, CREIS or another Wholly-Owned Subsidiary which has also pledged to Administrative Agent a first priority perfected security interest in such additional Equity Interests by executing a Joinder Agreement and satisfying the conditions and requirements therein), or (ii) admit any new member, partner or holder of any Equity Interest (other than to any Loan Party or Wholly-Owned Subsidiary which has also pledged to Administrative Agent a first priority perfected security interest in the resulting Equity Interests by executing a Joinder Agreement and satisfying the conditions and requirements therein).

7.16Sanctions.     Permit any of the funds or assets of the Borrower that are used to pay any amount due pursuant to this Agreement to constitute funds obtained from transactions in violation of any Anti-Corruption Laws or permit such payment to result in the violation of any Sanctions applicable to any party hereto.

ARTICLE VIII.EVENTS OF DEFAULT AND REMEDIES

8.01Events of Default. Any of the following shall constitute an Event of Default:

(a)Non-Payment. Any Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any L/C Obligation, or (ii) within five (5) Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) within five (5) Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

88

QB\033578.02011\28349393.9

(b)Specific Covenants. (i) Any Loan Party fails to perform or observe any term, covenant or agreement contained in any of Sections 6.03(a), 6.05, 6.10 or 6.11 or Article VII; or (ii) any Loan Party fails to perform or observe any covenant or agreement contained in Sections 6.01, 6.02 or 6.03(b)-(f) on its part to be performed or observed and such failure continues beyond any cure period as may be specifically noted therein (or, if no such cure period is provided, five (5) days after such Loan Party’s receipt of notice of such failure); or

(c)Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues beyond any cure period as may be specifically noted therein (or, if no such cure period is provided, thirty (30) days after such Loan Party’s receipt of notice of such failure); provided, however, if such failure cannot be reasonably cured within such cure period, such cure period shall be extended by a reasonable amount of time needed to cure such failure not to exceed sixty (60) days after such Loan Party’s receipt of such notice; or

(d)Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading, in any material respect, when made or deemed made; or

(e)Cross-Default. (i) Any Loan Party (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or any Guarantee of any such Indebtedness (in either case, other than the Obligations and Indebtedness under Swap Contracts) having an aggregate outstanding principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than Fifty Million and No/100 Dollars ($50,000,000.00) and such failure is not waived and continues beyond any cure period as may be specifically noted therein or (B) fails to observe or perform any other material agreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, in each case the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any Event of Default (as defined in such Swap Contract) as to which any Loan Party is the Defaulting Party (as defined in such Swap Contract) that is not waived and continues beyond any cure period provided therein or (B) any Termination Event (as defined in such Swap Contract) under such Swap Contract as to which any Loan Party is an Affected Party (as defined therein) and, in either event, the Swap Termination Value owed by any Loan Party as a result thereof is greater Fifteen Million and No/100 Dollars ($15,000,000.00); or

(f)Insolvency Proceedings, Etc. Any Loan Party institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any

89

QB\033578.02011\28349393.9

proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or

(g)Inability to Pay Debts; Attachment. (i) A Loan Party becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within thirty (30) days after its issue or levy; or

(h)Judgments. There is entered against a Loan Party (i) any one or more judgments or orders for the payment of money in an aggregate amount exceeding Fifteen Million and No/100 Dollars ($15,000,000.00) individually or in the aggregate Fifty Million and No/100 Dollars ($50,000,000.00) (to the extent not covered by independent third‑party insurance as to which the insurer does not dispute coverage) which remains unsatisfied or unstayed for a period in excess of sixty (60) days, or (ii) any one or more non‑monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, either (A) the Loan Party is not actively challenging the validity, enforceability or effectiveness of such judgment or the grounds for same or (B) there is a period of sixty (60) consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

(i)ERISA. (i) An ERISA Event occurs with respect to a Plan which has resulted in liability of any Loan Party under Title IV of ERISA to the Plan or the PBGC in an aggregate amount in excess of Twenty-five Million and No/100 Dollars ($25,000,000.00), or (ii) any Loan Party or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of Twenty-five Million and No/100 Dollars ($25,000,000.00); or

(j)Invalidity of Loan Documents. Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party contests in writing or pursuant to judicial proceedings the validity or enforceability of any material provision of any Loan Document; or any Loan Party denies in writing that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any material provision of any Loan Document; or

(k)Change of Control. There occurs any Change of Control; or

(l)Approved Subordination Agreement. Any payment of any Approved Subordinated Debt in violation of the terms of the applicable Approved Subordination Agreement or any other breach of any Approved Subordination Agreement; or

(m)Approved Subordinated Debt. Any monetary default under the Approved Subordinated Debt that is not cured within five (5) Business Days.

8.02Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

90

QB\033578.02011\28349393.9

(a)declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

(b)declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;

(c)require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and

(d)exercise on behalf of itself, the Lenders and the L/C Issuer all rights and remedies available to it, the Lenders and the L/C Issuer under the Loan Documents;

provided, however, that upon the occurrence of the entry of an order for relief with respect to a Loan Party or a Subsidiary thereof under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

8.03Application of Funds. After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall, subject to the provisions of Section 2.15 and Section 2.16 be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the L/C Issuer (not to exceed one counsel to the L/C Issuer) and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting (i) unpaid principal of the Loans and L/C Borrowings and (ii) breakage, termination or other payments due under any Swap Contract between any Loan Party and any Lender or any Affiliate of a Lender, ratably among the Lenders, the applicable Affiliates (with respect to clause (ii)) and the L/C Issuer in proportion to the respective amounts described in this clause Fourth held by them;

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit; and

91

QB\033578.02011\28349393.9

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

Subject to Section 2.15, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.

Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or its assets, but appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve the allocation to Obligations otherwise set forth above in this Section.

ARTICLE IX.ADMINISTRATIVE AGENT

9.01Appointment and Authority. Each of the Lenders and the L/C Issuer hereby irrevocably appoints JPMC to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

9.02Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

9.03Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

(a)shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b)shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its reasonable opinion or the reasonable opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

(c)shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Loan Parties

92

QB\033578.02011\28349393.9

or any of their Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower, a Lender or the L/C Issuer.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.04Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

9.05Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub‑agents appointed by the Administrative Agent. The Administrative Agent and any such sub‑agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub‑agent and to the Related Parties of the Administrative Agent and any such sub‑agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

9.06Resignation of Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders

93

QB\033578.02011\28349393.9

and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.

If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof or a court of competent jurisdiction has determined in a final judgment that the Administrative Agent has taken actions, or omitted to take actions, constituting gross negligence or willful misconduct in connection with the performance of its rights, powers or duties hereunder or under the other Loan Documents, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the Borrower and such Person, remove such Person as Administrative Agent and, in consultation with the Borrower, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub‑agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

Any resignation by JPMC as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer and Swing Line Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements reasonably satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit.

9.07Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the

94

QB\033578.02011\28349393.9

L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

9.08No Other Duties, Etc.Anything herein to the contrary notwithstanding, none of the Bookrunner, Syndication Agent, Documentation Agent or Arranger, each as either defined herein or listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.

9.09Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise

(a)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections 2.03(h) and (i), 2.09 and 10.04) allowed in such judicial proceeding; and

(b)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or the L/C Issuer in any such proceeding.

9.10Collateral and Guaranty Matters. The Lenders and the L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion, (a) to release any Subsidiary Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary Guarantor as a result of a transaction permitted hereunder, (b) to release the Cash Collateral and any Lien thereon in accordance with the terms and conditions set forth in Section 2.15, and (c) to release any Lien on any of the Collateral (i) upon all Obligations being Fully Satisfied, (ii) pursuant to Section 2.18 or Section 6.14, or (iii) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s

95

QB\033578.02011\28349393.9

authority to release any Collateral or any Subsidiary Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.

9.11Swap Contracts.No Lender or Affiliate of a Lender that obtains the benefits of Section 8.03 or the Guaranty by virtue of the provisions hereof (in its role as provider of a Swap Contract to the Borrower or any Loan Party) shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Treasury Management Agreements and Swap Contracts unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Lender or Affiliate of a Lender, as the case may be.

9.12Enforcement.Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with the Loan Documents for the benefit of all applicable Persons.

ARTICLE X.MISCELLANEOUS

10.01Amendments, Etc.No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

(a)extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender (it being understood and agreed that a waiver of any condition precedent set forth in Section 4.02 or of any Default or a mandatory reduction in Commitments is not considered an extension or increase in Commitments of any Lender);

(b)postpone any date fixed by this Agreement or any other Loan Document for any payment or mandatory prepayment of principal, interest, fees or other amounts due to the Lenders (or any of them) or any scheduled or mandatory reduction of the Aggregate Revolving Commitments hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

(c)reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing or (subject to clause (v) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document, or change the manner of computation of the Leverage Ratio (including any change in such defined term or defined terms used directly or indirectly in the definition of Leverage Ratio), as it is used in determining the Applicable Rate, that would result in a reduction of any interest rate on any Loan or any fee payable hereunder without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or Letter of Credit Fees at the Default Rate;

96

QB\033578.02011\28349393.9

(d)change Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected thereby;

(e)change any provision of this Section or the definition of “Required Lenders,” “Required Revolving Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender;

(f)release the Borrower or CREIS without the written consent of each Lender;

(g)release all or substantially all of the Subsidiary Guarantors (except in connection with the release of Qualified Unencumbered Properties pursuant to this Agreement) without the consent of each Lender;

(h)change the definition of “Borrowing Base” or any of the definitions directly related thereto without the written consent of each Lender; or

(i)change the definition of “Qualified Unencumbered Properties” without the written consent of each Lender;

and, providedfurther, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) Section 10.06(f) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; and (v) the Fee Letters may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.

Notwithstanding the above:

(A)prior to the termination of the Aggregate Revolving Commitments, unless also signed by Revolving Lenders holding in the aggregate at least a majority of the Aggregate Revolving Commitments, no such amendment, waiver or consent shall, (i) waive any Default for purposes of Section 4.02(b) or (ii) amend, change, waive, discharge or terminate Sections 2.03(a)(ii)(B), 4.02 or 8.01 in a manner adverse to such Lenders or this clause (A);

(B)each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent provisions set forth herein,

(C)the Required Lenders shall determine whether or not to allow a Loan Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders;

97

QB\033578.02011\28349393.9

(D)no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that (x) the Commitment of such Lender may not be increased or extended without the consent of such Lender, (y) the principal owing to such Lender may not be decreased without the consent of such Lender and (z) the interest rate being paid to such Lender may not be decreased without the consent of such Lender; and

(E)no amendment contemplated by Section 2.14(e) shall require the consent of any Person other than the Borrower and the Lenders providing such New Term Loan.

10.02Notices; Effectiveness; Electronic Communication.

(a)Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i)if to any Loan Party, the Administrative Agent, the L/C Issuer or the Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

(ii)if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

(b)Electronic Communications. Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e‑mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail

98

QB\033578.02011\28349393.9

address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(c)The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

(d)Change of Address, Etc. Each of the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities laws.

(e)Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

99

QB\033578.02011\28349393.9

10.03No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuer; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 10.08 (subject to the terms of Section 2.13), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

10.04Expenses; Indemnity; Damage Waiver.

(a)Costs and Expenses. The Borrower shall pay (i) all reasonable out‑of‑pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out‑of‑pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out‑of‑pocket expenses incurred by the Administrative Agent, any Lender or the L/C Issuer (including the reasonable fees, charges and disbursements of one counsel for the Administrative Agent, any Lender and the L/C Issuer (but not including fees related to internal counsel of such Persons) taken as a whole (unless (x) a conflict exists as determined in the good faith judgment of each affected Lender or the L/C Issuer, in which case(s) the fees, charges and disbursements of reasonably necessary additional counsel for all such affected Lenders or the L/C Issuer shall be covered, or (y) a special counsel is necessary as determined in the good faith judgment of the Administrative Agent, in which case(s) the fees, charges and disbursements of one reasonably necessary special counsel for the Administrative Agent shall be covered), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such reasonable out‑of‑pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. It is understood and agreed that the Administrative Agent may determine, in its discretion, the one counsel referenced in subsection (a)(iii); provided, however, that upon the written request of the Required Lenders (subject to the

100

QB\033578.02011\28349393.9

proviso in Section 9.03(b)), the Administrative Agent shall, pursuant to such written request, engage a different counsel to serve as the one counsel referenced in subsection (a)(iii).

(b)Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of one counsel for all Indemnitees (but not including fees related to internal counsel of such Persons), plus, (x) in the event of a conflict of interest as determined in the good faith judgment of each affected Indemnitee, one additional counsel for all such affected Indemnitees (together with all similarly situated Indemnitees) and (y) in the event that a special counsel is necessary as determined in the good faith judgment of the Administrative Agent, one additional counsel for Administrative Agent), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed in Section 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by a Loan Party or any of its Subsidiaries, or any Environmental Liability related in any way to a Loan Party or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such other Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. It is understood and agreed that the Administrative Agent may determine, in its discretion, the one counsel for all Indemnitees referenced in this subsection (b); provided, however, that upon the written request of the Required Lenders (subject to the proviso in Section 9.03(b)), the Administrative Agent shall, pursuant to such written request, engage a different counsel to serve as the one counsel for all Indemnitees referenced in this subsection (b). This Section 10.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

(c)Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsections (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may

101

QB\033578.02011\28349393.9

be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).

(d)Waiver of Consequential Damages, Etc.To the fullest extent permitted by applicable law, a Loan Party shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

(e)Payments. All amounts due under this Section shall be payable not later than ten (10) Business Days after receipt by the Borrower of written demand therefor.

(f)Survival. The agreements in this Section shall survive the resignation of the Administrative Agent, the L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Revolving Commitments and the repayment, satisfaction or discharge of all the other Obligations.

10.05Payments Set Aside. To the extent that any payment by or on behalf of a Loan Party is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect. The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

102

QB\033578.02011\28349393.9

10.06Successors and Assigns.

(a)Successors and Assigns Generally. The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor any Loan Party may assign or otherwise transfer any of its rights or obligations hereunder or thereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section, or (iv) to an SPC in accordance with the provisions of subsection (h) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i)Minimum Amounts.

(A)in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B)in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans (and participations in Letters of Credit and Swing Line Loans) of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than Five Million and No/100 Dollars ($5,000,000.00) unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met.

(ii)Intentionally Omitted.

(iii)Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

103

QB\033578.02011\28349393.9

(A)the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided, further, that the Borrower shall be deemed to have consented to any such assignment requiring its consent under this clause (A) unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received written notice thereof;

(B)the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender;

(C)the consent of the L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and

(D)the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under Swing Line Loans (whether or not then outstanding).

(iv)Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of Three Thousand Five Hundred and No/100 Dollars ($3,500.00) payable by the assignor; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v)No Assignment to Certain Persons. Except as provided in subsection (h) of this Section 10.06, no such assignment shall be made (A) to a Loan Party or any Affiliates or Subsidiaries of a Loan Party or (B) to any Defaulting Lender or any of its Affiliates or Subsidiaries or to any Person who, upon becoming a Lender hereunder, would constitute one of the foregoing Persons described in this clause (B).

(vi)No Assignment to Natural Persons. No such assignment shall be made to a natural person.

(vii)Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Applicable

104

QB\033578.02011\28349393.9

Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Upon request, the Borrower (at its expense) shall execute and deliver a substitute Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

(c)Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d)Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 10.04(c) without regard to the existence of any participation.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other

105

QB\033578.02011\28349393.9

modification described inSections 10.01(a) – (f) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 10.13 as if it were an assignee under subsection (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01, 3.04 or 3.05, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e)Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(f)Special Purpose Funding Vehicles. Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to provide all or any part of any Committed Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Committed Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Committed Loan, the Granting Lender shall be obligated to make such Committed Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.12(b)(ii). Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrower under this Agreement (including its obligations under Section 3.04), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder. The making of a Committed Loan by an SPC hereunder shall utilize the Commitment of

106

QB\033578.02011\28349393.9

the Granting Lender to the same extent, and as if, such Committed Loan were made by such Granting Lender. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one (1) year and one (1) day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof. Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the Borrower and the Administrative Agent and with the payment of a processing fee in the amount of Three Thousand Five Hundred and No/100 Dollars ($3,500.00) (which processing fee may be waived by the Administrative Agent in its sole discretion), assign all or any portion of its right to receive payment with respect to any Committed Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Committed Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.

(g)Resignation as L/C Issuer or Swing Line Lender after Assignment. Notwithstanding anything to the contrary contained herein, if at any time JPMC assigns all of its Commitment and Loans pursuant to subsection (b) above, JPMC may, (i) upon thirty (30) calendar days’ notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon thirty (30) calendar days’ notice to the Borrower, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder with the consent of such successor L/C Issuer or Swing Line Lender; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of JPMC as L/C Issuer or Swing Line Lender, as the case may be. If JPMC resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Committed Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If JPMC resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Committed Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements reasonably satisfactory to JPMC to effectively assume the obligations of JPMC with respect to such Letters of Credit.

(h)Borrower Loan Purchase.

(i)Notwithstanding anything in this Agreement or any other Loan Document to the contrary, the Borrower shall have the right from time to time to voluntarily purchase Term Loans from one or more Lenders and simultaneously cancel or retire such Term Loans and Lenders shall be permitted to sell or assign such Term Loans to the Borrower (in each case, a “Borrower Loan Purchase”) provided that no Default or Event of Default shall exist at the time of such purchase and assignment or would result from such purchase and assignment and subject to satisfaction all of the other requirements of this Section 10.06(h).

107

QB\033578.02011\28349393.9

(ii)Any offer to make a Borrower Loan Purchase by the Borrower and any sale of Term Loans to the Borrower by a Lender shall be in accordance with the following:

(A)by no later than 11:00 a.m. at least five (5) Business Days prior to the Response Date (as defined below), the Borrower shall notify the Administrative Agent (and the Administrative Agent shall provide such information to the Lenders), in writing, of its desire to purchase Term Loans from the Lenders (the “Purchase Offer”) which Purchase Offer shall be made to all Lenders on a pro rata basis and shall contain (I) the date by which the Lenders may elect to participate in a Borrower Loan Purchase (the “Response Date”), (II) the price (which may be a range and which may be at a discount to par) of the proposed purchase (the “Offer Price”), (III) the amount of Term Loans the Borrower is proposing to purchase and (IV) the type of Term Loans, if applicable;

(B)no later than 5:00 p.m. on the Response Date, each Lender shall, in its sole discretion, notify the Administrative Agent and the Borrower, in writing, as to the amount of Term Loans it wishes to sell to the Borrower (which shall not be less than One Million and No/100 Dollars ($1,000,000.00) at the Offer Price (any such notification by a Lender shall be irrevocable absent manifest error and shall be referred to herein as a “Sales Offer” and any failure to timely provide such notice shall be deemed a decline of the Purchase Offer);

(C)The Borrower may accept as many or as few of the Sales Offers by written notice to the Administrative Agent no later than 5:00 p.m. as of the third Business Day following the Response Date (the “Acceptance Date”), provided that (I) such offers must be accepted in descending order of discount (that is, the Borrower must accept the greatest discount first, then the next greatest discount, and so on), and (II) in the case of a tie, the prepayment must be applied on a pro rata basis to the offering Lenders based on the principal amount of the Loans offered for prepayment. The Administrative Agent will notify the Lenders that provided Sales Offers as to whether or not their offer was accepted and, in the case of acceptance, the principal amount subject to prepayment. The Borrower will purchase the Loans on a certain Business Day (the “Settlement Date”; which Settlement Date shall be determined by the Borrower in conjunction with the Administrative Agent, provided that the Settlement Date shall be (x) no earlier than two (2) Business Days and (y) no later than five (5) Business Days, in each case, following the Acceptance Date) by payment of the discounted principal amount to the Administrative Agent for distribution to the respective Lenders; and

(D)on the Settlement Date, the Borrower shall deliver to the Administrative Agent a certificate stating that (I) when the Borrower delivered the Purchase Offer and (II) at all times subsequent to its delivery of the Purchase Offer through the time of such Borrower Loan Purchase, the Borrower did not have any material non-public information (“MNPI”) that either (y) was not, or has not been, disclosed to the Lenders (other than those which have elected not to receive such MNPI) during such time or (z) would reasonably be expected to have a material effect upon, or otherwise be material to, the market price of the Term Loan or a Lender’s decision to participate in such Borrower Loan Purchase.

(iii)In order to consummate a Borrower Loan Purchase:

108

QB\033578.02011\28349393.9

(A)each of the assigning Lender and the Borrower (in its capacity as purchaser of the applicable Term Loan) shall enter into a Borrower Assignment Agreement as of the Settlement Date; and

(B)the Administrative Agent shall receive the recordation and processing fee in connection with such assignment as set forth in Section 10.06(b)(iv);

(iv)A Borrower Loan Purchase shall be effective upon satisfaction of the conditions set forth in clauses (i), (ii) and (iii) of this Section 10.06(h) above and such date shall be referred to herein as a “Borrower Assignment Effective Date.”

(v)On and after a Borrower Assignment Effective Date, (I) the Term Loans purchased by the Borrower shall be deemed cancelled or retired for all purposes and shall no longer be deemed outstanding (and may not be resold by the Borrower), for all purposes of this Agreement and all other Loan Documents (notwithstanding any provisions herein or therein to the contrary), including, but not limited to, (A) the making of, or the application of, any payments to the Lenders under this Agreement or any other Loan Document, (B) the making of any request, demand, authorization, direction, notice, consent or waiver under this Agreement or any other Loan Document, (C) the providing of any rights to the Borrower as a Lender under this Agreement or any other Loan Document, (D) the determination of Required Lenders and (E) the calculation of the amount of Indebtedness hereunder and (II) no interest or fees of any type shall accrue from and after a Borrower Assignment Effective Date on any Term Loans purchased by the Borrower on such Borrower Assignment Effective Date. For clarification purposes, the Borrower shall never be deemed to be a Lender hereunder.

(vi)The Lenders hereby consent to the transactions described in this Section 10.06(h) and waive the requirements of any provision of this Agreement and any other Loan Document that might otherwise result in a breach of this Agreement or create a Default or an Event of Default as a result of or in connection with the consummation of any Borrower Loan Purchase. The Lenders acknowledge that purchases made by the Borrower pursuant to this Section 10.06(h) will result in the retirement of Term Loans on a non-pro rata basis among the Lenders. The Lenders further acknowledge that any payment made to a Lender in connection with a Borrower Loan Purchase is solely for the account of such Lender and no ratable sharing of such proceeds is required under this Agreement or any other Loan Document.

(vii)All Borrower Loan Purchases and subsequent cancellation or retirement of such Term Loans by the Borrower pursuant to this Section 10.06(h) shall reduce pro rata the payments, with respect to Term Loans, due on the Maturity Date.

10.07Treatment of Certain Information; Confidentiality. Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, trustees, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self‑regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this

109

QB\033578.02011\28349393.9

Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same (or at least as restrictive) as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to Section 2.14(c) or (ii) any actual or prospective direct or indirect contractual counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than a Loan Party.

For purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary of any Loan Party relating to the Borrower or any Subsidiary of any Loan Party or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by the Borrower or a Subsidiary of any Loan Party, provided that, in the case of information received from the Borrower or any Subsidiary of any Loan Party after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary of any Loan Party, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.

10.08Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C Issuer, irrespective of whether or not such Lender or the L/C Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borroweror such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or the L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.16 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, the L/C Issuer, the Swing Line Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

110

QB\033578.02011\28349393.9

10.09Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

10.10Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

10.11Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

10.12Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 10.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent or the L/C Issuer, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

10.13Replacement of Lenders. If (i) any Lender requests compensation under Section 3.04, (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, (iii) a Lender (a “Non-Consenting Lender”) does not consent to a proposed change, waiver, discharge or termination with respect to any Loan Document that has been approved by the Required Lenders as provided in Section 10.01 but requires unanimous consent of all

111

QB\033578.02011\28349393.9

Lenders or all Lenders directly affected thereby (as applicable) or (iv) any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which Eligible Assignee may be another Lender, if a Lender accepts such assignment), provided that:

(a)the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b);

(b)such Lender shall have received payment of an amount equal to the outstanding “par” principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the Eligible Assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(c)in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and

(d)such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

10.14Governing Law; Jurisdiction; Etc.

(a)GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b)SUBMISSION TO JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

112

QB\033578.02011\28349393.9

(c)WAIVER OF VENUE. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN SUBSECTION (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d)SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees and acknowledges its Affiliates’ understanding, that:  (i)(A) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Arrangers are arm’s-length commercial transactions between the Borrower, each other Loan Party and their respective Affiliates, on the one hand, and the Administrative Agent and the Arrangers, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii)(A) each of the Administrative Agent, the Lenders and the Arrangers is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent nor any Arranger or Lender has any obligation to the Borrower, any other Loan Party or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Lenders and the Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, the other Loan Parties and their respective Affiliates, and neither the Administrative Agent nor any Arranger or Lender has any obligation to disclose any of such interests to the Borrower, any other Loan Party or any of their respective Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent, the Lenders and the Arrangers with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

113

QB\033578.02011\28349393.9

10.17USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act. The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

10.18Electronic Execution of Assignments and Certain Other Documents. The words “execution,” “signed,” “signature” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

10.19Time of the Essence. Time is of the essence of the Loan Documents.

10.20Entire Agreement. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY.

[Remainder of page left intentionally blank--signature page(s) to follow.]

114

QB\033578.02011\28349393.9

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

BORROWER:

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV) OPERATING PARTNERSHIP, LP, a Delaware limited partnership

By: COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC., a Maryland corporation, General Partner

By: /s/ Todd J. Weiss             

Name:     Todd J. Weiss                

Title: Authorized Officer            

Signature Page - Amended and Restated Credit Agreement

QB\033578.02011\28349393.9

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By: /s/ Ryan Dempsey    

Name: Ryan Dempsey                    

Title: Authorized Officer                

Signature Page - Amended and Restated Credit Agreement

QB\033578.02011\28349393.9

JPMORGAN CHASE BANK, N.A., as a Lender, L/C Issuer and Swing Line Lender

By: /s/ Ryan Dempsey    

Name: Ryan Dempsey                    

Title: Authorized Officer                

U.S. BANK NATIONAL ASSOCIATION, as a Lender

By: /s/ Troy Lyscio    

Name: Troy Lyscio                    

Title: Senior Vice President                

Signature Page - Amended and Restated Credit Agreement

QB\033578.02011\28349393.9

EX-31.1

Exhibit 31.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nicholas S. Schorsch, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cole Real Estate Income Strategy (Daily NAV), Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 12, 2014	/s/ NICHOLAS S. SCHORSCH
		Name:	Nicholas S. Schorsch
		Title:	Chairman, Chief Executive Officer and President (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Simon J. Misselbrook, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cole Real Estate Income Strategy (Daily NAV), Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 12, 2014	/s/ SIMON J. MISSELBROOK
		Name:	Simon J. Misselbrook
		Title:	Chief Financial Officer and Treasurer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C 1350)

Each of the undersigned officers of Cole Real Estate Income Strategy (Daily NAV), Inc. (the “Company”) hereby certifies, for purposes of Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2014 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

		/s/ NICHOLAS S. SCHORSCH
		Name:	Nicholas S. Schorsch
		Title:	Chairman, Chief Executive Officer and President (Principal Executive Officer)
		/s/ SIMON J. MISSELBROOK
		Name:	Simon J. Misselbrook
Date:	November 12, 2014	Title:	Chief Financial Officer and Treasurer (Principal Financial Officer)

The foregoing certification is being furnished with the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2014 pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Summary of Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Maximum Advisors Other organization and offering expenses	Sep. 30, 2014 Building
Valuation of real estate and related assets
Acquired real estate asset, useful life				40 years
Organization and offering expense			0.75%
Quarterly redemption capacity	10.00%	10.00%
Temporary Equity, Carrying Amount, Attributable to Parent	$ 12,690	$ 6,982

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The condensed consolidated unaudited financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2013, and related notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The condensed consolidated unaudited financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q.

The condensed consolidated unaudited financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Investment in and Valuation of Real Estate and Related Assets

Real estate and related assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate and related assets consist of the cost of acquisition, excluding acquisition related expenses, construction and any tenant improvements, major improvements and betterments that extend the useful life of the real estate and related assets and leasing costs. All repairs and maintenance are expensed as incurred.

The Company is required to make subjective assessments as to the useful lives of its depreciable assets. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life of the assets. Real estate and related assets, other than land, are depreciated or amortized on a straight-line basis. The estimated useful lives of the Company’s real estate and related assets by class are generally as follows:

Buildings	40 years
Tenant improvements	Lesser of useful life or lease term
Intangible lease assets	Lease term

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors, a significant decrease in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses, reduced lease rates or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate and related assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions. No impairment indicators were identified and no impairment losses were recorded during the nine months ended September 30, 2014 or 2013.

When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, terminal capitalization and discount rates, the expected number of months it takes to re-lease the property, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in estimating expected future cash flows could result in a different determination of the property’s expected future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the fair value of the real estate and related assets.

When a real estate asset is identified by the Company as held for sale, the Company will cease depreciation and amortization of the assets related to the property and estimate the fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount would be recorded to reflect the estimated fair value of the property, net of selling costs. There were no assets identified as held for sale as of September 30, 2014 or December 31, 2013.

Allocation of Purchase Price of Real Estate and Related Assets

Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and identified intangible assets and liabilities, consisting of the value of above market and below market leases and the value of in-place leases, based in each case on their respective fair values. Acquisition related expenses are expensed as incurred. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and building). The Company obtains an independent appraisal for each real property acquisition. The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information.

The fair values of above market and below market lease intangibles are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease including any bargain renewal periods, with respect to a below market lease. The above market and below market lease intangibles are capitalized as intangible lease assets or liabilities, respectively. Above market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. In considering whether or not the Company expects a tenant to execute a bargain renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition, such as the financial strength of the tenant, remaining lease term, the tenant mix of the leased property, the Company’s relationship with the tenant and the availability of competing tenant space. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market or below market lease intangibles relating to that lease would be recorded as an adjustment to rental income.

The fair values of in-place leases include estimates of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rental and other property income which are avoided by acquiring a property with an in-place lease. Direct costs associated with obtaining a new tenant include commissions and other direct costs, and are estimated in part by utilizing information obtained from independent appraisals and management’s consideration of current market costs to execute a similar lease. The intangible values of opportunity costs, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease are capitalized as intangible lease assets and are amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed.

The Company may acquire certain properties subject to contingent consideration arrangements that may obligate the Company to pay additional consideration to the seller based on the outcome of future events. Additionally, the Company may acquire certain properties for which it funds certain contingent consideration amounts into an escrow account pending the outcome of certain future events. The outcome may result in the release of all or a portion of the escrow funds to the Company or the seller or a combination thereof. Contingent consideration arrangements will be based on a predetermined formula and have set time periods regarding the obligation to make future payments, including funds released to the seller from escrow accounts, or the right to receive escrowed funds as set forth in the respective purchase and sale agreement. Contingent consideration arrangements, including amounts funded through an escrow account, will be recorded upon acquisition of the respective property at their estimated fair value, and any changes to the estimated fair value, subsequent to acquisition, will be reflected in the accompanying condensed consolidated unaudited statements of operations. The determination of the amount of contingent consideration arrangements is based on the probability of several possible outcomes as identified by management.

The Company will estimate the fair value of assumed mortgage notes payable based upon indications of current market pricing for similar types of debt financing with similar maturities. Assumed mortgage notes payable will initially be recorded at their estimated fair value as of the assumption date, and any difference between such estimated fair value and the mortgage note’s outstanding principal balance will be amortized to interest expense over the term of the respective mortgage note payable.

The determination of the fair values of the real estate and related assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could impact the Company’s results of operations.

Investment in Marketable Securities

Investment in marketable securities consists primarily of the Company’s investment in corporate and government debt securities. The Company determines the appropriate classification for debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. As of September 30, 2014, the Company classified its investments as available-for-sale as the Company is not actively trading the securities; however, the Company may sell them prior to their maturity. These investments are carried at their estimated fair value with unrealized gains and losses reported in accumulated other comprehensive (loss) income.

The Company monitors its available-for-sale securities for impairments. A loss is recognized when the Company determines that a decline in the estimated fair value of a security below its amortized cost is other-than-temporary. The Company considers many factors in determining whether the impairment of a security is deemed to be other-than-temporary, including, but not limited to, the length of time the security has had a decline in estimated fair value below its amortized cost, the amount of the unrealized loss, the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value, recent events specific to the issuer or industry, external credit ratings and recent changes in such ratings. The analysis of determining whether the impairment of a security is deemed to be other-than-temporary requires significant judgments and assumptions. The use of alternative judgments and assumptions could result in a different conclusion.

The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method and is recorded in the accompanying condensed consolidated unaudited statements of operations in interest and other expense, net. Upon the sale of a security, the realized net gain or loss is computed on the specific identification method.

Restricted Cash and Escrows

Included in restricted cash were escrowed investor proceeds for which shares of common stock had not been issued as of September 30, 2014 and December 31, 2013.

Concentration of Credit Risk

As of September 30, 2014, the Company had cash on deposit, including restricted cash, at three financial institutions, in one of which the Company had deposits in excess of federally insured levels totaling $5.3 million; however, the Company has not experienced any losses in such accounts. The Company limits significant cash deposits to accounts held by financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits.

As of September 30, 2014, no single tenant accounted for greater than 10% of the Company’s 2014 gross annualized rental revenues. Tenants in the discount store, manufacturing, drugstore and grocery industries accounted for 15%14%, 10% and 10%, respectively, of the Company’s 2014 gross annualized rental revenues. Additionally, the Company has certain geographic concentrations in its property holdings. In particular, as of September 30, 2014, eight of the Company’s properties were located in Texas, accounting for 17% of the Company’s 2014 gross annualized rental revenues.

Offering and Related Costs

Cole Advisors funds all of the organization and offering costs associated with the sale of the Company’s common stock (excluding selling commissions, the distribution fee and the dealer manager fee) and is reimbursed for such costs up to 0.75% of gross proceeds from the Offering, excluding selling commissions charged on A Shares sold in the Primary Offering. As of September 30, 2014, Cole Advisors or its affiliates had paid organization and offering costs in excess of the 0.75% in connection with the Offering. These excess costs were not included in the financial statements of the Company because such costs were not a liability of the Company as they exceeded 0.75% of gross proceeds from the Offering. As the Company raises additional proceeds from the Offering, these excess costs may become payable to Cole Advisors.

Redeemable Common Stock

The Company has adopted a share redemption program that permits its stockholders to redeem their shares, subject to certain limitations. The Company records amounts that are redeemable under the share redemption program as redeemable common stock outside of permanent equity on its condensed consolidated unaudited balance sheets. Redeemable common stock is recorded at the greater of the carrying amount or redemption value each reporting period. Changes in the value from period to period are recorded as an adjustment to capital in excess of par value.

As of September 30, 2014 and December 31, 2013, the quarterly redemption capacity was equal to 10% of the Company’s NAV and this amount was recorded as redeemable common stock on the condensed consolidated unaudited balance sheet for a total of $12.7 million and $7.0 million, respectively.

Recent Accounting Pronouncements

In April 2014, the U.S. Financial Accounting Standards Board (the “FASB”), issued Accounting Standards Update (“ASU”) 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”), which amends the reporting requirements for discontinued operations by updating the definition of a discontinued operation to be a component of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, resulting in fewer disposals that qualify for discontinued operations reporting, yet, the pronouncement also requires expanded disclosures for discontinued operations. The adoption of ASU 2014-08 did not have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company did not have any discontinued operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers, including real estate sales, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. The Company does not believe ASU 2014-09, when effective, will have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company currently accounts for real estate sales in a manner that is consistent with ASU 2014-09.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which requires management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. ASU 2014-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with early application permitted. The Company does not believe ASU 2014-15, when effective, will have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company currently does not have any conditions that give rise to substantial doubt about its ability to continue as a going concern.

XML

Marketable Securities (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014 Security	Sep. 30, 2013	Dec. 31, 2013
Schedule of Available-for-sale Securities
Investment in marketable securities	$ 504		$ 460
Total	503
Unrealized Gain	1
Total	504
Amortized Cost Basis Rollforward
Marketable securities as of September 30, 2014	503
Unrealized Gain (Loss) Rollforward
Marketable securities as of December 31, 2013	(3)
Sales of securities	0
Increase in fair value of marketable securities	4
Marketable securities as of September 30, 2014	1
Fair Value Rollforward
Increase in fair value of marketable securities	4
Marketable securities as of September 30, 2014	504
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract]
Due within one year	45
Due after one year through five years	271
Due after five years through ten years	181
Due after ten years	6
Total	503
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Due within one year	45
Due after one year through five years	271
Due after five years through ten years	182
Due after ten years	6
Total	504
Available-for-sale Securities, Other Disclosure Items [Abstract]
Number of Securities Sold	29
Proceeds from sale of marketable securities	226	85
Trading Securities, Unrealized Holding Gain	4
Amortized Cost Basis
Schedule of Available-for-sale Securities
Total	503
Amortized Cost Basis Rollforward
Marketable securities as of December 31, 2013	463
Face value of marketable securities acquired	265
Amortization on marketable securities	1
Sales of securities	(226)
Marketable securities as of September 30, 2014	503
Fair Value Rollforward
Face value of marketable securities acquired	265
Amortization on marketable securities	1
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract]
Total	503
Fair Value
Schedule of Available-for-sale Securities
Total	504
Amortized Cost Basis Rollforward
Face value of marketable securities acquired	265
Amortization on marketable securities	1
Unrealized Gain (Loss) Rollforward
Increase in fair value of marketable securities	4
Fair Value Rollforward
Marketable securities as of December 31, 2013	460
Face value of marketable securities acquired	265
Amortization on marketable securities	1
Sales of securities	(226)
Increase in fair value of marketable securities	4
Marketable securities as of September 30, 2014	504
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Total	504
U.S. Treasury Bonds
Schedule of Available-for-sale Securities
Total	134
Unrealized Gain	2
Total	136
Amortized Cost Basis Rollforward
Marketable securities as of September 30, 2014	134
Unrealized Gain (Loss) Rollforward
Marketable securities as of September 30, 2014	2
Fair Value Rollforward
Marketable securities as of September 30, 2014	136
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract]
Total	134
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Total	136
U.S. Agency Bonds
Schedule of Available-for-sale Securities
Total	70
Unrealized Gain	(1)
Total	69
Amortized Cost Basis Rollforward
Marketable securities as of September 30, 2014	70
Unrealized Gain (Loss) Rollforward
Marketable securities as of September 30, 2014	(1)
Fair Value Rollforward
Marketable securities as of September 30, 2014	69
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract]
Total	70
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Total	69
Corporate Bonds
Schedule of Available-for-sale Securities
Total	299
Unrealized Gain	0
Total	299
Amortized Cost Basis Rollforward
Marketable securities as of September 30, 2014	299
Unrealized Gain (Loss) Rollforward
Marketable securities as of September 30, 2014	0
Fair Value Rollforward
Marketable securities as of September 30, 2014	299
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract]
Total	299
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Total	$ 299

XML

Real Estate Acquisitions (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended		6 Months Ended	9 Months Ended				3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2013 2013 acquisitions	Jun. 30, 2012 2013 acquisitions	Jun. 30, 2012 2013 acquisitions	Sep. 30, 2013 2013 acquisitions Commercial_Property	Sep. 30, 2013 2013 acquisitions Acquired in-place leases	Sep. 30, 2013 2013 acquisitions Acquired above market leases	Sep. 30, 2013 2013 acquisitions Acquired below market leases	Sep. 30, 2014 2014 acquisitions	Sep. 30, 2013 2014 acquisitions	Sep. 30, 2014 2014 acquisitions Property	Sep. 30, 2013 2014 acquisitions	Sep. 30, 2014 2014 acquisitions Acquired in-place leases	Sep. 30, 2014 2014 acquisitions Acquired above market leases	Sep. 30, 2014 2014 acquisitions Acquired below market leases
Business Acquisition
Business acquisition, percentage of voting interests acquired					100.00%			100.00%				100.00%		100.00%
Number of real estate acquisitions (in number of properties)								18						39
Total purchase price								$ 50,000,000						$ 121,400,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Land					8,635,000			8,635,000				21,067,000		21,067,000
Building and improvements					35,768,000			35,768,000				85,060,000		85,060,000
Acquired in-place leases and acquired above market leases									5,868,000	213,000						12,898,000	3,286,000
Acquired below market leases											(515,000)							(863,000)
Total purchase price					49,969,000			49,969,000				121,448,000		121,448,000
Revenue of acquiree since acquisition date					643,000			977,000				1,200,000		1,800,000
Net income (loss) of acquiree since acquisition date					(7,000)			(64,000)				(192,000)		(579,000)
Acquisition related expenses	639,000	381,000	1,222,000	645,000	381,000			645,000				639,000		1,200,000
Pro forma basis
Revenue					1,741,000	1,683,000	5,056,000	5,226,000				3,993,000	3,158,000	12,037,000	8,526,000
Net income (loss)					$ (50,000)	$ 297,000	$ 371,000	$ 555,000				$ 234,000	$ (266,000)	$ 1,264,000	$ (1,015,000)

XML

Line of Credit and Note Payable (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Debt Instrument
Debt, Long-term and Short-term, Combined Amount	$ 112,750,000	$ 43,900,000
Weighted average interest rate	2.40%
Proceeds From Issuance Of Debt and Non-Cash Assumption of Debt	111,804,000
Weighted average years to maturity	3 years 8 months 5 days
Repayments of Debt	(42,954,000)
Line of credit and note payable	112,750,000	43,900,000
Debt security, amount, aggregate gross real estate assets net of gross intangible lease liabilities	160,800,000
Line of Credit
Debt Instrument
Line of credit and note payable	92,400,000
Line of credit facilities, borrowing base Calculation, percentage applied to the value of qualified properties	65.00%
Debt instrument, interest rate, stated percentage	2.09%
Line of Credit | Revolving Credit Facility
Debt Instrument
Line of credit facility, maximum borrowing capacity	75,000,000
Line of credit, remaining borrowing capacity	7,600,000
JPMorgan Chase, Revolving Credit Facility | Line of Credit | Revolving Credit Facility
Debt Instrument
Debt, Long-term and Short-term, Combined Amount	92,446,000	43,900,000
Proceeds From Issuance Of Debt and Non-Cash Assumption of Debt	91,500,000
Repayments of Debt	(42,954,000)
JPMorgan Chase, Revolving Credit Facility | Unsecured Debt | Term Loan
Debt Instrument
Line of credit facility, maximum borrowing capacity	25,000,000
Fixed Rate Debt | Loans Payable
Debt Instrument
Debt, Long-term and Short-term, Combined Amount	20,304,000	0
Proceeds From Issuance Of Debt and Non-Cash Assumption of Debt	20,304,000
Repayments of Debt	0
Amended Credit Facility | Line of Credit
Debt Instrument
Line of credit facilities, borrowing base Calculation, percentage applied to the value of qualified properties	60.00%
PNC Loan | Loans Payable
Debt Instrument
Debt instrument, interest rate, stated percentage	3.82%
Long-term debt	20,300,000
Number of properties held as collateral	8
Number of Multi-Tenant Commercial Properties Held as Collateral	1
Leverage Ratio Less than or Equal to Fifty Percent | Secured Revolving Credit Facility, Base Rate | Line of Credit | Revolving Credit Facility
Debt Instrument
Debt instrument, interest rate, stated percentage	0.90%
Leverage ratio	50.00%
Leverage Ratio Less than or Equal to Fifty Percent | Secured Revolving Credit Facility, Eurodollar Rate | Line of Credit | Revolving Credit Facility
Debt Instrument
Debt instrument, interest rate, stated percentage	1.90%
Leverage ratio	50.00%
Leverage Ratio Greater than Sixty-Five Percent | Secured Revolving Credit Facility, Base Rate | Line of Credit | Revolving Credit Facility
Debt Instrument
Debt instrument, interest rate, stated percentage	1.45%
Leverage ratio	60.00%
Leverage Ratio Greater than Sixty-Five Percent | Secured Revolving Credit Facility, Eurodollar Rate | Line of Credit | Revolving Credit Facility
Debt Instrument
Debt instrument, interest rate, stated percentage	2.45%
Leverage ratio	60.00%
Federal Funds Effective Rate | Secured Revolving Credit Facility | Line of Credit | Revolving Credit Facility
Debt Instrument
Basis spread on variable rate	0.50%
Statutory Reserve Rate | Secured Revolving Credit Facility | Line of Credit | Revolving Credit Facility
Debt Instrument
Basis spread on variable rate	1.00%
Commercial Real Estate | PNC Loan | Loans Payable
Debt Instrument
Total purchase price	$ 33,800,000

XML

Related-Party Transactions and Arrangements (Details) (USD $)															3 Months Ended		9 Months Ended									3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended									3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			9 Months Ended	3 Months Ended		9 Months Ended			3 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended				9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Common Class W	Sep. 30, 2014 Common Class A	Sep. 30, 2014 Common Class I	Sep. 30, 2014 Advisors	Dec. 31, 2013 Advisors	Sep. 30, 2014 Advisors Minimum	Sep. 30, 2014 Dealer manager fee Dealer manager Common Class W		Sep. 30, 2014 Dealer manager fee Dealer manager Common Class A		Sep. 30, 2014 Dealer manager fee Dealer manager Common Class I		Sep. 30, 2014 Dealer manager fee Advisors	Sep. 30, 2013 Dealer manager fee Advisors	Sep. 30, 2014 Dealer manager fee Advisors	Sep. 30, 2013 Dealer manager fee Advisors	Sep. 30, 2014 Selling commissions Dealer manager Common Class W		Sep. 30, 2014 Selling commissions Dealer manager Common Class A		Sep. 30, 2014 Selling commissions Dealer manager Common Class I		Sep. 30, 2014 Selling commissions Dealer manager Maximum Common Class A	Sep. 30, 2014 Selling commissions Advisors	Sep. 30, 2013 Selling commissions Advisors	Sep. 30, 2014 Selling commissions Advisors	Sep. 30, 2013 Selling commissions Advisors	Sep. 30, 2014 Selling commissions reallowed by cole capital Advisors	Sep. 30, 2013 Selling commissions reallowed by cole capital Advisors	Sep. 30, 2014 Selling commissions reallowed by cole capital Advisors	Sep. 30, 2013 Selling commissions reallowed by cole capital Advisors	Sep. 30, 2014 Selling commissions reallowed by cole capital Advisors Common Class A	Sep. 30, 2014 Distribution fee Dealer manager Common Class W		Sep. 30, 2014 Distribution fee Dealer manager Common Class A		Sep. 30, 2014 Distribution fee Dealer manager Common Class I		Sep. 30, 2014 Distribution fee Advisors	Sep. 30, 2013 Distribution fee Advisors	Sep. 30, 2014 Distribution fee Advisors	Sep. 30, 2013 Distribution fee Advisors	Sep. 30, 2014 Distribution fee reallowed by cole capital Advisors	Sep. 30, 2013 Distribution fee reallowed by cole capital Advisors	Sep. 30, 2014 Distribution fee reallowed by cole capital Advisors	Sep. 30, 2013 Distribution fee reallowed by cole capital Advisors	Sep. 30, 2014 Dealer manager fee reallowed by cole capital Advisors	Sep. 30, 2013 Dealer manager fee reallowed by cole capital Advisors	Sep. 30, 2014 Dealer manager fee reallowed by cole capital Advisors	Sep. 30, 2013 Dealer manager fee reallowed by cole capital Advisors	Sep. 30, 2014 Other organization and offering expenses Advisors	Sep. 30, 2013 Other organization and offering expenses Advisors	Sep. 30, 2014 Other organization and offering expenses Advisors	Sep. 30, 2013 Other organization and offering expenses Advisors	Sep. 30, 2014 Other organization and offering expenses Advisors Maximum	Sep. 30, 2014 Commissions, Fees and Expense Reimbursements Advisors	Sep. 30, 2014 Acquisition and advisory fees and expenses Advisors	Sep. 30, 2013 Acquisition and advisory fees and expenses Advisors	Sep. 30, 2014 Acquisition and advisory fees and expenses Advisors	Sep. 30, 2013 Acquisition and advisory fees and expenses Advisors	Sep. 30, 2014 Acquisition and advisory fees and expenses Advisors Maximum	Sep. 30, 2014 Excess general and administrative expenses to be reimbursed Advisors	Sep. 30, 2014 Excess general and administrative expenses to be reimbursed Advisors	Sep. 30, 2014 Advisory fees Advisors	Sep. 30, 2013 Advisory fees Advisors	Sep. 30, 2014 Advisory fees Advisors	Sep. 30, 2013 Advisory fees Advisors	Sep. 30, 2014 Operating expense reimbursement Advisors	Sep. 30, 2013 Operating expense reimbursement Advisors	Sep. 30, 2014 Operating expense reimbursement Advisors	Sep. 30, 2013 Operating expense reimbursement Advisors	Sep. 30, 2014 Performance fee Advisors	Sep. 30, 2013 Performance fee Advisors	Sep. 30, 2014 Performance fee Advisors	Sep. 30, 2013 Performance fee Advisors	Sep. 30, 2014 Performance fee Advisors Maximum	Sep. 30, 2014 Performance fee Advisors Minimum	Sep. 30, 2014 Fees and Expense Reimbursements Advisors
Related Party Transaction
Daily asset based related party fee percent									0.55%	[1]	0.55%	[1]	0.25%	[1]					0.00%	[2]	3.75%	[2]	0.00%	[2]	3.90%										0.00%	[1]	0.50%	[1]	0.00%	[1]																			0.90%		0.90%
Common stock, share purchase volume discount																					$ 150,001
Daily asset based related party fee reallowed to third party percent																																		100.00%
Organization and offering expense																																																									0.75%
Related party transaction, expenses from transactions with related party															159,000	67,000	382,000	144,000								259,000	0	478,000	0	259,000	0	478,000	0								12,000	0	17,000	0	9,000	0	11,000	0	12,000	1,000	20,000	2,000	171,000	69,000	440,000	281,000			151,000	0	286,000	0		131,000	371,000	263,000	109,000	635,000	235,000	0	0	0	0	41,000	215,000	41,000	215,000
Payments to Related Parties																																																										977,000																						507,000
Due to Affiliate	772,000	829,000																																																								340,000																						455,000
Operating expense reimbursement percent of average invested assets								2.00%
Operating expense reimbursement percent of net income								25.00%
Acquisition and advisory fee																																																															6.00%
Excess general and administrative expense, annualized rate limitation						1.25%
Due from related parties																																																																131,000	131,000
Total return threshold to receive performance fee																																																																														10.00%	6.00%
Performance fee, percent applied to total return on stockholders' capital between 6 percent and 10 percent																																																																										25.00%		25.00%
Share price, base net asset value			$ 15.00	$ 16.72	$ 16.82
Due to affiliates						$ 772,000	$ 829,000

[1] The dealer manager and distribution fees accrue daily in an amount equal to 1/365th of the percentage of NAV per W Share, A Share or I Share, as applicable, for such day on a continuous basis. CCC, in its sole discretion, may reallow a portion of the dealer manager fee and distribution fee to participating broker-dealers.

[2] The selling commission is based on the offering price for A Shares. The selling commission expressed as a percentage of NAV per A Share, rather than the offering price, is up to 3.90%, subject to rounding and the effect of volume discounts the Company is offering on certain purchases of $150,001 or more of A Shares. Selling commissions are deducted directly from the offering price for A Shares and paid to CCC. CCC reallows 100% of the selling commissions on A Shares to participating broker-dealers.

XML

Organization and Business

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BUSINESS

ORGANIZATION AND BUSINESS

Cole Real Estate Income Strategy (Daily NAV), Inc. (the “Company”) is a Maryland corporation that was formed on July 27, 2010, which has elected to be taxed, and currently qualifies, as a real estate investment trust (“REIT”) for federal income tax purposes. Substantially all of the Company’s business is conducted through Cole Real Estate Income Strategy (Daily NAV) Operating Partnership, LP (“Cole OP”), a Delaware limited partnership. The Company is the sole general partner of, and owns, directly or indirectly, 100% of the partnership interest in, Cole OP. The Company is externally managed by Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company (“Cole Advisors”), an affiliate of the Company’s sponsor, Cole Capital^®, which is a trade name used to refer to a group of affiliated entities directly or indirectly controlled by American Realty Capital Properties, Inc. (“ARCP”), a self-managed publicly traded REIT, organized as a Maryland corporation, listed on The NASDAQ Global Select Market. On February 7, 2014, ARCP acquired Cole Real Estate Investments, Inc. (“Cole”), which, prior to its acquisition, indirectly owned and/or controlled the Company’s external advisor, Cole Advisors, the Company’s dealer manager, Cole Capital Corporation (“CCC”), the Company’s property manager, CREI Advisors, LLC (“CREI Advisors”), and Cole Capital. As a result of ARCP’s acquisition of Cole, ARCP indirectly owns and/or controls Cole Advisors, CCC, CREI Advisors and Cole Capital.

On December 6, 2011, pursuant to a registration statement filed on Form S-11 (Registration No. 333-169535) (the “Initial Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), the Company commenced its initial public offering on a “best efforts” basis of $4.0 billion in shares of common stock. On August 26, 2013, pursuant to a registration statement filed on Form S-11 (Registration No. 333-186656) (the “Multi-Class Registration Statement”) under the Securities Act, the Company designated the existing shares of the Company’s common stock that were sold prior to such date to be Wrap Class shares (“W Shares”) of common stock and registered two new classes of the Company’s common stock, Advisor Class shares (“A Shares”) and Institutional Class shares (“I Shares”). Pursuant to the Multi-Class Registration Statement, the Company is offering up to $4.0 billion in shares of common stock of the three classes (the “Offering”), consisting of $3.5 billion in shares in the Company’s primary offering (the “Primary Offering”) and $500.0 million in shares pursuant to a distribution reinvestment plan (the “DRIP”). The Company is offering to sell any combination of W Shares, A Shares and I Shares with a dollar value up to the maximum offering amount.

The per share purchase price for each class of common stock varies from day-to-day and, on each business day, is equal to, for each class of common stock, the Company’s net asset value (“NAV”) for such class, divided by the number of shares of that class outstanding as of the close of business on such day, plus, for A Shares sold in the Primary Offering, applicable selling commissions. The Company’s NAV per share is calculated daily as of the close of business by an independent fund accountant using a process that reflects (1) estimated values of each of the Company’s commercial real estate assets, related liabilities and notes receivable secured by real estate provided periodically by the Company’s independent valuation expert in individual appraisal reports, (2) daily updates in the price of liquid assets for which third party market quotes are available, (3) accruals of daily distributions and (4) estimates of daily accruals, on a net basis, of operating revenues, expenses, debt service costs and fees. As of September 30, 2014, the NAV per share for W Shares, A Shares and I Shares was $17.10, $17.05 and $17.14, respectively. The Company’s NAV is not audited or reviewed by its independent registered public accounting firm.

The Company intends to use substantially all of the net proceeds from the Offering to acquire and operate a diversified portfolio primarily consisting of (1) necessity retail, office and industrial properties that are leased to creditworthy tenants under long-term net leases and are strategically located throughout the United States and U.S. protectorates, (2) notes receivable secured by commercial real estate, including the origination of loans, and (3) cash, cash equivalents, other short-term investments and traded real estate-related securities. As of September 30, 2014, the Company owned 71 commercial properties located in 26 states, containing 1.7 million rentable square feet of commercial space, including the square feet of buildings which are on land subject to ground leases. As of September 30, 2014, these properties were 99.6% leased.

The Company is structured as a perpetual-life, non-exchange traded REIT. This means that, subject to regulatory approval of filing for additional offerings, the Company will be selling shares of common stock on a continuous basis and for an indefinite period of time to the extent permissible under applicable law. The Company will endeavor to take all reasonable actions to avoid interruptions in the continuous offering of shares of common stock. The Company reserves the right to terminate the Offering at any time.

XML

Subsequent Events (Details) (USD $)	9 Months Ended			1 Months Ended	35 Months Ended		1 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 2014 acquisitions Property	Nov. 10, 2014 Subsequent event	Nov. 12, 2014 Subsequent event	Nov. 10, 2014 Subsequent event Line of Credit	Nov. 12, 2014 Subsequent event 2014 acquisitions Property
Subsequent Event
Business acquisition, percentage of voting interests acquired			100.00%				100.00%
Number of real estate acquisitions (in number of properties)			39				4
Total purchase price			$ 121,400,000				$ 5,000,000
Issuance of common stock	59,188,000				136,000,000
Issuance of common stock, shares					8,200,000
Repayments of lines of credit	42,954,000	17,840,000
Line of credit, amount outstanding						92,400,000
Line of credit, remaining borrowing capacity						7,600,000
Redemption of stock (in shares)				170,000
Value of stock redeemed (in usd)				$ 2,900,000

XML

Condensed Consolidated Unaudited Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Investment in real estate assets:
Land	$ 45,209	$ 24,143
Buildings and improvements, less accumulated depreciation of $3,404 and $1,451, respectively	150,231	67,123
Intangible lease assets, less accumulated amortization of $1,877 and $795, respectively	26,808	11,530
Total investment in real estate assets, net	222,248	102,796
Investment in marketable securities	504	460
Total investment in real estate assets and marketable securities, net	222,752	103,256
Cash and cash equivalents	5,511	5,370
Restricted cash	76	105
Rents and tenant receivables	977	581
Prepaid expenses and other assets	298	107
Deferred financing costs, less accumulated amortization of $1,126 and $489, respectively	1,864	464
Total assets	231,478	109,883
LIABILITIES AND STOCKHOLDERS’ EQUITY
Line of credit and note payable	112,750	43,900
Accounts payable and accrued expenses	955	479
Escrowed investor proceeds	76	105
Due to affiliates	772	829
Acquired below market lease intangibles, less accumulated amortization of $229 and $126, respectively	2,108	1,348
Distributions payable	580	317
Deferred rental income and other liabilities	532	261
Total liabilities	117,773	47,239
Commitments and contingencies
Redeemable common stock	12,690	6,982
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding	0	0
Capital in excess of par value	108,589	59,573
Accumulated distributions in excess of earnings	(7,650)	(3,949)
Accumulated other comprehensive income (loss)	1	(3)
Total stockholders’ equity	101,015	55,662
Total liabilities and stockholders’ equity	231,478	109,883
A Shares common stock, $0.01 par value; 163,000,000 shares authorized, 759,516 and 23,767 shares issued and outstanding, respectively
STOCKHOLDERS’ EQUITY
Common stock	8	0
I Shares common stock, $0.01 par value; 163,000,000 shares authorized, 252,927 and 129,176 shares issued and outstanding, respectively
STOCKHOLDERS’ EQUITY
Common stock	3	1
W Shares common stock, $0.01 par value; 164,000,000 shares authorizes, 6,401,672 and 3,993,916 shares issued and outstanding, respectively
STOCKHOLDERS’ EQUITY
Common stock	$ 64	$ 40

XML

Condensed Consolidated Unaudited Statement of Stockholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total USD ($)	Common Class A	Common Class I	Common Class W	Common Stock Common Class A USD ($)	Common Stock Common Class I USD ($)	Common Stock Common Class W USD ($)	Capital in Excess of Par Value USD ($)	Accumulated Distributions in Excess of Earnings USD ($)	Accumulated Other Comprehensive (Loss) / Income USD ($)
Balance at Dec. 31, 2013	$ 55,662				$ 0	$ 1	$ 40	$ 59,573	$ (3,949)	$ (3)
Balance, shares at Dec. 31, 2013		23,767	129,176	3,993,916	23,767	129,176	3,993,916
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, shares					735,749	123,751	2,590,725
Issuance of common stock	59,188				8	2	26	59,152
Distributions to investors	(4,016)								(4,016)
Commissions on stock sales and related distribution and dealer manager fees	(877)							(877)
Other offering costs	(440)							(440)
Redemptions of common stock, shares					0	0	(182,969)
Redemptions of common stock	(3,113)				0	0	(2)	(3,111)
Changes in redeemable common stock	(5,708)							(5,708)
Comprehensive income	319								315	4
Balance at Sep. 30, 2014	$ 101,015				$ 8	$ 3	$ 64	$ 108,589	$ (7,650)	$ 1
Balance, shares at Sep. 30, 2014		759,516	252,927	6,401,672	759,516	252,927	6,401,672

XML

Line of Credit and Note Payable (Tables)

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Summary of Debt Activity

The following table summarizes the debt activity for the nine months ended September 30, 2014 and the debt balances as of September 30, 2014 and December 31, 2013 (in thousands):

			During the Nine Months Ended September 30, 2014
	Balance as of December 31, 2013			Debt Issuance		Repayments			Balance as of September 30, 2014
Line of credit	$	43,900		$	91,500	$	(42,954	)	$	92,446
Fixed rate debt	—			20,304		—			20,304
Total	$	43,900		$	111,804	$	(42,954	)	$	112,750

XML

Organization and Business (Details) (USD $)											9 Months Ended
	Sep. 30, 2014 states	Sep. 30, 2014 Common Class W	Sep. 30, 2014 Common Class A	Sep. 30, 2014 Common Class I	Aug. 26, 2013 IPO class_of_stock	Dec. 06, 2011 IPO	Aug. 26, 2013 Multi-class offering class_of_stock	Aug. 26, 2013 Primary offering Multi-class offering	Aug. 26, 2013 Distribution reinvestment plan Multi-class offering	Sep. 30, 2014 Consolidated properties sqft Property	Sep. 30, 2014 Cole OP
Organization and business
General partner partnership interest percentage											100.00%
Common stock, value authorized						$ 4,000,000,000	$ 4,000,000,000	$ 3,500,000,000	$ 500,000,000
Classes of common stock, additions					2
Classes of common stock							3
Share price (in dollars per share)		$ 17.10	$ 17.05	$ 17.14
Number of owned properties (in number of properties)										71
Number of states in which entity owns properties (in number of states)	26
Rentable square feet (in square feet)										1,700,000
Percentage of rentable space leased (in square feet)	99.60%

XML

Condensed Consolidated Unaudited Statement of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net income (loss)	$ 315	$ (508)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	1,953	608
Amortization of intangible lease assets and below market lease intangibles, net	979	258
Amortization of deferred financing costs	637	178
Amortization on marketable securities, net	1	2
Gain (Loss) on sale of marketable securities	(2)	2
Changes in assets and liabilities:
Rents and tenant receivables	(396)	(116)
Prepaid expenses and other assets	(191)	(72)
Accounts payable and accrued expenses	351	(15)
Deferred rental income and other liabilities	271	34
Due to affiliates	(187)	237
Net cash provided by operating activities	3,731	608
Cash flows from investing activities:
Investment in real estate and related assets	(121,499)	(49,017)
Investment in marketable securities	(265)	(323)
Proceeds from sale of marketable securities	226	85
Change in restricted cash	29	(350)
Net cash used in investing activities	(121,509)	(49,605)
Cash flows from financing activities:
Proceeds from issuance of common stock	57,657	37,164
Offering costs on issuance of common stock	(1,187)	(165)
Redemptions of common stock	(3,113)	(413)
Distributions to investors	(2,222)	(917)
Proceeds from line of credit and note payable	111,804	31,475
Repayments of line of credit	(42,954)	(17,840)
Deferred financing costs paid	(2,037)	(360)
Change in escrowed investor proceeds liability	(29)	350
Net cash provided by financing activities	117,919	49,294
Net increase in cash and cash equivalents	141	297
Cash and cash equivalents, beginning of period	5,370	998
Cash and cash equivalents, end of period	5,511	1,295
Supplemental disclosures of non-cash investing and financing activities:
Accrued dealer manager fee and other offering costs	340	397
Distributions declared and unpaid	580	223
Common stock issued through distribution reinvestment plan	1,531	330
Unrealized gain (loss) on marketable securities	4	(6)
Reclassification of unrealized loss on marketable securities into net income (loss)	0	1
Accrued capital expenditures and deferred financing costs	125	1,150
Supplemental cash flow disclosures:
Interest paid	$ 1,029	$ 394

XML

Condensed Consolidated Unaudited Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Buildings and improvements, less accumulated depreciation of $3,404 and $1,451, respectively	$ 3,404	$ 1,451
Intangible lease assets, less accumulated amortization of $1,877 and $795, respectively	1,877	795
Deferred financing costs, less accumulated amortization of $1,126 and $489, respectively	1,126	489
Acquired below market lease intangibles, less accumulated amortization of $229 and $126, respectively	$ 229	$ 126
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Class W
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	164,000,000	164,000,000
Common stock, shares issued	6,401,672	3,993,916
Common stock, shares outstanding	6,401,672	3,993,916
Common Class A
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	163,000,000	163,000,000
Common stock, shares issued	759,516	23,767
Common stock, shares outstanding	759,516	23,767
Common Class I
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	163,000,000	163,000,000
Common stock, shares issued	252,927	129,176
Common stock, shares outstanding	252,927	129,176

XML

Subsequent Events

9 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

ARCP/RCAP Agreement

On September 30, 2014, an affiliate of ARCP entered into a definitive agreement (the “RCAP Agreement”) with RCS Capital Corporation (“RCAP”) pursuant to which RCAP would acquire Cole Capital. The acquisition would include CCI II Advisors and CCC. Despite the indirect change of control that would occur for the Company’s advisor, dealer manager and sponsor upon consummation of the transaction contemplated by the RCAP Agreement, such entities are expected to continue to serve in their respective capacities to the Company following the transaction.

The RCAP Agreement contemplates a strategic arrangement by which an indirect wholly-owned subsidiary of ARCP would act as sub-advisor (the “Sub-advisor”) to, and acquire and property manage real estate assets for, the non-traded real estate investment trusts sponsored by Cole Capital, including the Company, after completion of the transaction. As set forth in the RCAP Agreement, the Sub-advisor and RCAP (by way of its ownership of the Company’s advisor) would equally share the acquisition and advisory fees and expenses currently provided pursuant to the Company’s advisory agreement. In addition, the Sub-advisor would receive a portion of any disposition and incentive fees that may later become due to RCAP for advising the Company. The Sub-advisor would also receive all acquisition fees and expenses for property acquisitions under any purchase and sale agreement or letter of intent executed on or prior to September 30, 2014. All fees and expenses payable to RCAP or the Sub-advisor under the sub-advisory arrangement would be limited to the total amounts payable to the Company’s advisor under the advisory agreement, which would not change as a result of this arrangement. The completion of the transaction contemplated by the RCAP Agreement is subject to various closing conditions.

On October 22, 2014, Cole Advisors entered into an interim sub-advisory agreement (the “Interim Agreement”) with RCAP Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a subsidiary of RCAP (the “RCAP Sub-advisor”), in connection with the first closing under the RCAP Agreement. Pursuant to the Interim Agreement, the RCAP Sub-advisor will use commercially reasonable best efforts to manage and supervise the operations and administration of the Company, other than the acquisition, operation and disposition of the Company’s assets, pending the final closing under the RCAP Agreement. The Interim Agreement provides for substantially the same allocation of advisory services and compensation as contemplated under the RCAP agreement.

On November 3, 2014, RCAP publicly announced that it had notified ARCP of its purported termination of the RCAP Agreement, and that the RCAP Sub-advisor would not act as sub-advisor with respect to the Company. Also on November 3, 2014, ARCP publicly announced that it had informed RCAP that RCAP’s attempt to terminate the RCAP Agreement constitutes a breach of the RCAP Agreement.

On November 11, 2014, ARCP filed a complaint in the Court of Chancery of the State of Delaware against RCAP alleging that RCAP’s attempt to terminate the RCAP Agreement constitutes a breach of the RCAP Agreement and seeking, among other things, specific performance of the RCAP Agreement or, in the alternative, money damages.

Investment in Real Estate Assets

Subsequent to September 30, 2014, the Company acquired a 100% interest in four real estate properties for an aggregate purchase price of $5.0 million. These were funded with proceeds from the Offering. The Company has not completed its initial purchase price allocations with respect to these properties and therefore cannot provide the disclosures included for these properties in Note 4 to these condensed consolidated unaudited financial statements.

Status of the Offering

As of November 10, 2014, the Company had received $136.0 million in gross offering proceeds through the issuance of approximately 8.2 million shares of its common stock in the Offering (including shares issued pursuant to the DRIP).

Share Redemptions

Subsequent to September 30, 2014 through November 10, 2014, the Company redeemed approximately 170,000 shares for $2.9 million.

Line of Credit

As of November 10, 2014, the Company had $92.4 million outstanding under the Line of Credit and $7.6 million available for borrowing.

Cap on General and Administrative Expenses

As discussed in Note 8 to these condensed consolidated unaudited financial statements, Cole Advisors stated that it will continue the existing expense cap for the three months ending December 31, 2014, whereby Cole Advisors will fund all Excess G&A of the Company for such periods.

XML

Document and Entity Information In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Nov. 10, 2014 Wrap Class common stock	Nov. 10, 2014 Advisor Class common stock	Nov. 10, 2014 Institutional Class common stock
Entity Information
Entity Registrant Name	COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC.
Entity Central Index Key	0001498542
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		6,700	864	255

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Basis of presentation

The condensed consolidated unaudited financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2013, and related notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The condensed consolidated unaudited financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q.

Principles of consolidation

The condensed consolidated unaudited financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Investment in and valuation of real estate and related assets

Investment in and Valuation of Real Estate and Related Assets

Real estate and related assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate and related assets consist of the cost of acquisition, excluding acquisition related expenses, construction and any tenant improvements, major improvements and betterments that extend the useful life of the real estate and related assets and leasing costs. All repairs and maintenance are expensed as incurred.

The Company is required to make subjective assessments as to the useful lives of its depreciable assets. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life of the assets. Real estate and related assets, other than land, are depreciated or amortized on a straight-line basis. The estimated useful lives of the Company’s real estate and related assets by class are generally as follows:

Buildings	40 years
Tenant improvements	Lesser of useful life or lease term
Intangible lease assets	Lease term

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors, a significant decrease in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses, reduced lease rates or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate and related assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions. No impairment indicators were identified and no impairment losses were recorded during the nine months ended September 30, 2014 or 2013.

When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, terminal capitalization and discount rates, the expected number of months it takes to re-lease the property, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in estimating expected future cash flows could result in a different determination of the property’s expected future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the fair value of the real estate and related assets.

When a real estate asset is identified by the Company as held for sale, the Company will cease depreciation and amortization of the assets related to the property and estimate the fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount would be recorded to reflect the estimated fair value of the property, net of selling costs. There were no assets identified as held for sale as of September 30, 2014 or December 31, 2013.

Allocation of purchase price of real estate and related assets

Allocation of Purchase Price of Real Estate and Related Assets

Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and identified intangible assets and liabilities, consisting of the value of above market and below market leases and the value of in-place leases, based in each case on their respective fair values. Acquisition related expenses are expensed as incurred. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and building). The Company obtains an independent appraisal for each real property acquisition. The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information.

The fair values of above market and below market lease intangibles are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease including any bargain renewal periods, with respect to a below market lease. The above market and below market lease intangibles are capitalized as intangible lease assets or liabilities, respectively. Above market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. In considering whether or not the Company expects a tenant to execute a bargain renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition, such as the financial strength of the tenant, remaining lease term, the tenant mix of the leased property, the Company’s relationship with the tenant and the availability of competing tenant space. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market or below market lease intangibles relating to that lease would be recorded as an adjustment to rental income.

The fair values of in-place leases include estimates of direct costs associated with obtaining a new tenant and opportunity costs associated with lost rental and other property income which are avoided by acquiring a property with an in-place lease. Direct costs associated with obtaining a new tenant include commissions and other direct costs, and are estimated in part by utilizing information obtained from independent appraisals and management’s consideration of current market costs to execute a similar lease. The intangible values of opportunity costs, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease are capitalized as intangible lease assets and are amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed.

The Company may acquire certain properties subject to contingent consideration arrangements that may obligate the Company to pay additional consideration to the seller based on the outcome of future events. Additionally, the Company may acquire certain properties for which it funds certain contingent consideration amounts into an escrow account pending the outcome of certain future events. The outcome may result in the release of all or a portion of the escrow funds to the Company or the seller or a combination thereof. Contingent consideration arrangements will be based on a predetermined formula and have set time periods regarding the obligation to make future payments, including funds released to the seller from escrow accounts, or the right to receive escrowed funds as set forth in the respective purchase and sale agreement. Contingent consideration arrangements, including amounts funded through an escrow account, will be recorded upon acquisition of the respective property at their estimated fair value, and any changes to the estimated fair value, subsequent to acquisition, will be reflected in the accompanying condensed consolidated unaudited statements of operations. The determination of the amount of contingent consideration arrangements is based on the probability of several possible outcomes as identified by management.

The Company will estimate the fair value of assumed mortgage notes payable based upon indications of current market pricing for similar types of debt financing with similar maturities. Assumed mortgage notes payable will initially be recorded at their estimated fair value as of the assumption date, and any difference between such estimated fair value and the mortgage note’s outstanding principal balance will be amortized to interest expense over the term of the respective mortgage note payable.

The determination of the fair values of the real estate and related assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could impact the Company’s results of operations.

Investment in marketable securities

Investment in Marketable Securities

Investment in marketable securities consists primarily of the Company’s investment in corporate and government debt securities. The Company determines the appropriate classification for debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. As of September 30, 2014, the Company classified its investments as available-for-sale as the Company is not actively trading the securities; however, the Company may sell them prior to their maturity. These investments are carried at their estimated fair value with unrealized gains and losses reported in accumulated other comprehensive (loss) income.

The Company monitors its available-for-sale securities for impairments. A loss is recognized when the Company determines that a decline in the estimated fair value of a security below its amortized cost is other-than-temporary. The Company considers many factors in determining whether the impairment of a security is deemed to be other-than-temporary, including, but not limited to, the length of time the security has had a decline in estimated fair value below its amortized cost, the amount of the unrealized loss, the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value, recent events specific to the issuer or industry, external credit ratings and recent changes in such ratings. The analysis of determining whether the impairment of a security is deemed to be other-than-temporary requires significant judgments and assumptions. The use of alternative judgments and assumptions could result in a different conclusion.

The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method and is recorded in the accompanying condensed consolidated unaudited statements of operations in interest and other expense, net. Upon the sale of a security, the realized net gain or loss is computed on the specific identification method.

Restricted cash and escrows

Restricted Cash and Escrows

Included in restricted cash were escrowed investor proceeds for which shares of common stock had not been issued as of September 30, 2014 and December 31, 2013.

Concentration of credit risk

Concentration of Credit Risk

As of September 30, 2014, the Company had cash on deposit, including restricted cash, at three financial institutions, in one of which the Company had deposits in excess of federally insured levels totaling $5.3 million; however, the Company has not experienced any losses in such accounts. The Company limits significant cash deposits to accounts held by financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits.

As of September 30, 2014, no single tenant accounted for greater than 10% of the Company’s 2014 gross annualized rental revenues. Tenants in the discount store, manufacturing, drugstore and grocery industries accounted for 15%14%, 10% and 10%, respectively, of the Company’s 2014 gross annualized rental revenues. Additionally, the Company has certain geographic concentrations in its property holdings. In particular, as of September 30, 2014, eight of the Company’s properties were located in Texas, accounting for 17% of the Company’s 2014 gross annualized rental revenues.

Offering and related costs

Offering and Related Costs

Cole Advisors funds all of the organization and offering costs associated with the sale of the Company’s common stock (excluding selling commissions, the distribution fee and the dealer manager fee) and is reimbursed for such costs up to 0.75% of gross proceeds from the Offering, excluding selling commissions charged on A Shares sold in the Primary Offering. As of September 30, 2014, Cole Advisors or its affiliates had paid organization and offering costs in excess of the 0.75% in connection with the Offering. These excess costs were not included in the financial statements of the Company because such costs were not a liability of the Company as they exceeded 0.75% of gross proceeds from the Offering. As the Company raises additional proceeds from the Offering, these excess costs may become payable to Cole Advisors.

Redeemable common stock

Redeemable Common Stock

The Company has adopted a share redemption program that permits its stockholders to redeem their shares, subject to certain limitations. The Company records amounts that are redeemable under the share redemption program as redeemable common stock outside of permanent equity on its condensed consolidated unaudited balance sheets. Redeemable common stock is recorded at the greater of the carrying amount or redemption value each reporting period. Changes in the value from period to period are recorded as an adjustment to capital in excess of par value.

As of September 30, 2014 and December 31, 2013, the quarterly redemption capacity was equal to 10% of the Company’s NAV and this amount was recorded as redeemable common stock on the condensed consolidated unaudited balance sheet for a total of $12.7 million and $7.0 million, respectively.

Recent accounting pronouncements

Recent Accounting Pronouncements

In April 2014, the U.S. Financial Accounting Standards Board (the “FASB”), issued Accounting Standards Update (“ASU”) 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”), which amends the reporting requirements for discontinued operations by updating the definition of a discontinued operation to be a component of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, resulting in fewer disposals that qualify for discontinued operations reporting, yet, the pronouncement also requires expanded disclosures for discontinued operations. The adoption of ASU 2014-08 did not have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company did not have any discontinued operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers, including real estate sales, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. The Company does not believe ASU 2014-09, when effective, will have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company currently accounts for real estate sales in a manner that is consistent with ASU 2014-09.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which requires management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. ASU 2014-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with early application permitted. The Company does not believe ASU 2014-15, when effective, will have a material impact on the Company’s condensed consolidated unaudited financial statements because the Company currently does not have any conditions that give rise to substantial doubt about its ability to continue as a going concern.

XML

Condensed Consolidated Unaudited Statement of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues:
Rental and other property income	$ 3,224	$ 1,304	$ 7,884	$ 2,997
Tenant reimbursement income	216	55	593	134
Interest income on marketable securities	2	2	6	4
Total revenue	3,442	1,361	8,483	3,135
Expenses:
General and administrative expenses	396	332	936	894
Property operating expenses	259	61	698	167
Advisory expenses	304	325	676	450
Acquisition related expenses	639	381	1,222	645
Depreciation	815	281	1,953	608
Amortization	407	134	979	291
Total operating expenses	2,820	1,514	6,464	3,055
Operating income (loss)	622	(153)	2,019	80
Other expense:
Interest and other expense, net	703	236	1,704	588
Net (loss) income	$ (81)	$ (389)	$ 315	$ (508)
Weighted average number of common shares outstanding:
Basic and diluted	6,800,702	2,894,887	5,551,843	2,113,659
Net (loss) income per common share:
Basic and diluted	$ (0.01)	$ (0.13)	$ 0.06	$ (0.24)
Distributions declared per common share	$ 0.25	$ 0.22	$ 0.72	$ 0.66

XML

Marketable Securities

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

MARKETABLE SECURITIES

MARKETABLE SECURITIES

The Company owned marketable securities with an estimated fair value of $504,000 and $460,000 as of September 30, 2014 and December 31, 2013, respectively. The following is a summary of the Company’s available-for-sale securities as of September 30, 2014 (in thousands):

	Available-for-Sale Securities
	Amortized Cost Basis		Unrealized Gain			Fair Value
U.S. Treasury Bonds	$	134	$	2		$	136
U.S. Agency Bonds	70		(1		)	69
Corporate Bonds	299		—			299
Total available-for-sale securities	$	503	$	1		$	504

The following table provides the activity for the marketable securities during the nine months endedSeptember 30, 2014 (in thousands):

	Amortized Cost Basis			Unrealized (Loss) Gain			Fair Value
Marketable securities as of December 31, 2013	$	463		$	(3	)	$	460
Face value of marketable securities acquired	265			—			265
Amortization on marketable securities	1			—			1
Sales of securities	(226		)	—			(226		)
Increase in fair value of marketable securities	—			4			4
Marketable securities as of September 30, 2014	$	503		$	1		$	504

During the nine months endedSeptember 30, 2014, the Company sold 29 marketable securities for aggregate proceeds of $226,000, which approximated their carrying value. In addition, the Company recorded an unrealized gain of $4,000 on its investments, which is included in accumulated other comprehensive income (loss) on the accompanying condensed consolidated unaudited statement of stockholders’ equity for the nine months endedSeptember 30, 2014 and the condensed consolidated unaudited balance sheet as of September 30, 2014.

The scheduled maturities of the Company’s marketable securities as of September 30, 2014 are as follows (in thousands):

	Available-for-Sale Securities
	Amortized Cost		Estimated Fair Value
Due within one year	$	45	$	45
Due after one year through five years	271		271
Due after five years through ten years	181		182
Due after ten years	6		6
Total	$	503	$	504

Actual maturities of marketable securities can differ from contractual maturities because borrowers on certain debt securities may have the right to prepay their respective debt obligations at any time. In addition, factors such as prepayments and interest rates may affect the yields on the such securities.

XML

Real Estate Acquisitions

9 Months Ended

Sep. 30, 2014

Real Estate [Abstract]

REAL ESTATE ACQUISITIONS

REAL ESTATE ACQUISITIONS

2014 Property Acquisitions

During the nine months ended September 30, 2014, the Company acquired a 100% interest in 39 commercial properties for an aggregate purchase price of $121.4 million (the “2014 Acquisitions”). The Company purchased the 2014 Acquisitions with net proceeds from the Offering combined with proceeds from borrowings, as discussed in Note 6 to these condensed consolidated unaudited financial statements. The Company allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the purchase price allocation for the acquisitions purchased during the nine months ended September 30, 2014 (in thousands):

	2014 Acquisitions
Land	$	21,067
Building and improvements	85,060
Acquired in-place leases	12,898
Acquired above market leases	3,286
Acquired below market leases	(863		)
Total purchase price	$	121,448

The Company recorded revenue of $1.2 million and $1.8 million, respectively, and net loss of $192,000 and $579,000, respectively, for the three and nine months ended September 30, 2014 related to the 2014 Acquisitions. In addition, the Company recorded $639,000 and $1.2 million, respectively, of acquisition related expenses for the three and nine months ended September 30, 2014.

The following information summarizes selected financial information of the Company as if all of the 2014 Acquisitions were completed on January 1, 2013 for each period presented below. The table below presents the Company’s estimated revenue and net income (loss), on a pro forma basis, for the three and nine months ended September 30, 2014 and 2013 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014		2013
Pro forma basis
Revenue	$	3,993	$	3,158		$	12,037	$	8,526
Net income (loss)	$	234	$	(266	)	$	1,264	$	(1,015	)

The pro forma information for the three and nine months ended September 30, 2014 was adjusted to exclude acquisition related expenses recorded during such periods related to the 2014 Acquisitions. These expenses were recognized in the pro forma information for the nine months endedSeptember 30, 2013. The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2013, nor does it purport to represent the results of future operations.

2013 Property Acquisitions

During the nine months ended September 30, 2013, the Company acquired a 100% interest in 18 commercial properties for an aggregate purchase price of $50.0 million (the “2013 Acquisitions”). The Company purchased the 2013 Acquisitions with net proceeds from the Offering and borrowings from the Line of Credit (as defined in Note 6). The Company allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the purchase price allocation for the acquisitions purchased during the nine months ended September 30, 2013 (in thousands):

	2013 Acquisitions
Land	$	8,635
Building and improvements	35,768
Acquired in-place leases	5,868
Acquired above market leases	213
Acquired below market leases	(515		)
Total purchase price	$	49,969

The Company recorded revenue of $643,000 and $977,000, respectively, and a net loss of $7,000 and $64,000, respectively, for the three and nine months ended September 30, 2013 related to the 2013 Acquisitions. In addition, the Company recorded $381,000 and $645,000, respectively, of acquisition related expenses for the three and nine months ended September 30, 2013.

The following information summarizes selected financial information of the Company as if all of the 2013 Acquisitions were completed on January 1, 2012 for each period presented below. The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2013 and 2012 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013		2012
Pro forma basis:
Revenue	$	1,741		$	1,683	$	5,226	$	5,056
Net (loss) income	$	(50	)	$	297	$	555	$	371

The pro forma information for the three and nine months ended September 30, 2013 was adjusted to exclude acquisition related expenses recorded during such periods related to the 2013 Acquisitions. These expenses were recognized in the pro forma information for the nine months endedSeptember 30, 2012. The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2012, nor does it purport to represent the results of future operations.

XML

Related-Party Transactions and Arrangements (Tables)

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The Company recorded fees and expense reimbursements as shown in the table below for services provided by Cole Advisors or its affiliates related to the services described above during the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Acquisitions, Operations and Performance:
Acquisition expense reimbursement	$	151	$	—	$	286	$	—
Advisory fee	$	263	$	109	$	635	$	235
Operating expense reimbursement	$	—	$	—	$	—	$	—
Performance fee	$	41	$	215	$	41	$	215

The Company recorded commissions, fees and expense reimbursements as shown in the table below for services provided by Cole Advisors and its affiliates related to the services described above during the periods indicated (in thousands):

	Three Months Ended September 30,			Nine Months Ended September 30,
	2014		2013	2014		2013
Offering:
Selling commissions	$	259	—	$	478	$	—
Selling commissions reallowed by CCC	$	259	—	$	478	$	—
Distribution fees	$	12	—	$	17	$	—
Distribution fees reallowed by CCC	$	9	—	$	11	$	—
Dealer manager fees	$	159	67	$	382	$	144
Dealer manager fees reallowed by CCC	$	12	1	$	20	$	2
Organization and offering expense reimbursement	$	171	69	$	440	$	281

In connection with the Offering, CCC, the Company’s dealer manager, will receive selling commissions, an asset-based dealer manager fee and/or an asset-based distribution fee, as summarized in the table below for each class of common stock:

	Selling Commission (1)	Dealer Manager Fee (2)		Distribution Fee (2)
W Shares	—	0.55	%	—
A Shares	up to 3.75%	0.55	%	0.50	%
I Shares	—	0.25	%	—

(1) The selling commission is based on the offering price for A Shares. The selling commission expressed as a percentage of NAV per A Share, rather than the offering price, is up to 3.90%, subject to rounding and the effect of volume discounts the Company is offering on certain purchases of $150,001 or more of A Shares. Selling commissions are deducted directly from the offering price for A Shares and paid to CCC. CCC reallows 100% of the selling commissions on A Shares to participating broker-dealers.

(2) The dealer manager and distribution fees accrue daily in an amount equal to 1/365th of the percentage of NAV per W Share, A Share or I Share, as applicable, for such day on a continuous basis. CCC, in its sole discretion, may reallow a portion of the dealer manager fee and distribution fee to participating broker-dealers.

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Investment in and valuation of real estate and related assets

Real estate and related assets, other than land, are depreciated or amortized on a straight-line basis. The estimated useful lives of the Company’s real estate and related assets by class are generally as follows:

Buildings	40 years
Tenant improvements	Lesser of useful life or lease term
Intangible lease assets	Lease term

XML

Related-Party Transactions and Arrangements

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS

RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS

The Company has incurred, and will continue to incur, commissions, fees and expenses payable to Cole Advisors and certain of its affiliates in connection with the Offering, and the acquisition, management and performance of the Company’s assets.

Offering

In connection with the Offering, CCC, the Company’s dealer manager, will receive selling commissions, an asset-based dealer manager fee and/or an asset-based distribution fee, as summarized in the table below for each class of common stock:

	Selling Commission (1)	Dealer Manager Fee (2)		Distribution Fee (2)
W Shares	—	0.55	%	—
A Shares	up to 3.75%	0.55	%	0.50	%
I Shares	—	0.25	%	—

(1) The selling commission is based on the offering price for A Shares. The selling commission expressed as a percentage of NAV per A Share, rather than the offering price, is up to 3.90%, subject to rounding and the effect of volume discounts the Company is offering on certain purchases of $150,001 or more of A Shares. Selling commissions are deducted directly from the offering price for A Shares and paid to CCC. CCC reallows 100% of the selling commissions on A Shares to participating broker-dealers.

(2) The dealer manager and distribution fees accrue daily in an amount equal to 1/365th of the percentage of NAV per W Share, A Share or I Share, as applicable, for such day on a continuous basis. CCC, in its sole discretion, may reallow a portion of the dealer manager fee and distribution fee to participating broker-dealers.

All organization and offering expenses associated with the sale of the Company’s common stock (excluding selling commissions, the distribution fee and the dealer manager fee) are paid for by Cole Advisors or its affiliates and can be reimbursed by the Company up to 0.75% of the aggregate gross offering proceeds, excluding selling commissions charged on A Shares sold in the Primary Offering. As of September 30, 2014, Cole Advisors or its affiliates had paid organization and offering costs in excess of the 0.75% in connection with the Offering. These excess costs were not included in the financial statements of the Company because such costs were not a liability of the Company as they exceeded 0.75% of gross proceeds from the Offering. As the Company raises additional proceeds from the Offering, these excess costs may become payable to Cole Advisors.

The Company recorded commissions, fees and expense reimbursements as shown in the table below for services provided by Cole Advisors and its affiliates related to the services described above during the periods indicated (in thousands):

	Three Months Ended September 30,			Nine Months Ended September 30,
	2014		2013	2014		2013
Offering:
Selling commissions	$	259	—	$	478	$	—
Selling commissions reallowed by CCC	$	259	—	$	478	$	—
Distribution fees	$	12	—	$	17	$	—
Distribution fees reallowed by CCC	$	9	—	$	11	$	—
Dealer manager fees	$	159	67	$	382	$	144
Dealer manager fees reallowed by CCC	$	12	1	$	20	$	2
Organization and offering expense reimbursement	$	171	69	$	440	$	281

As of September 30, 2014, $977,000 of the amounts shown above had been paid to Cole Advisors and its affiliates and $340,000 had been incurred, but not yet paid, for services provided by Cole Advisors or its affiliates in connection with the offering stage of the Offering and was a liability to the Company. No selling commissions or distribution fees were recorded during the three and nine months ended September 30, 2013 as no A Shares were sold prior to October 2013.

Acquisitions, Operations and Performance

The Company pays Cole Advisors an asset-based advisory fee that is payable in arrears on a monthly basis and accrues daily in an amount equal to 1/365th of 0.90% of the Company’s NAV for each class of common stock, for each day.

The Company will reimburse Cole Advisors for the operating expenses it paid or incurred in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse for any amount by which its operating expenses (including the advisory fee) at the end of the four preceding fiscal quarters exceeds the greater of (1) 2% of average invested assets; or (2) 25% of net income, other than any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of assets for that period.

In addition, the Company will reimburse Cole Advisors for all out-of-pocket expenses incurred in connection with the acquisition of the Company’s investments. While most of the acquisition expenses are expected to be paid to third parties, a portion of the out-of-pocket acquisition expenses may be reimbursed to Cole Advisors or its affiliates. Acquisition expenses, together with any acquisition fees paid to third parties for a particular real estate-related asset, will in no event exceed 6% of the gross purchase price of such asset.

In the fourth quarter of 2013, Cole Advisors implemented an expense cap, which has been continued for the nine months ended September 30, 2014 and will be continued for the three months ending December 31, 2014, whereby Cole Advisors will fund all general and administrative expenses of the Company that are in excess of an amount calculated by multiplying the average NAV, for the respective three month period by an annualized rate of 1.25% (the “Excess G&A”). General and administrative expenses, as presented in these condensed consolidated unaudited financial statements, include, but are not limited to, legal fees, audit fees, board of directors costs, professional fees, escrow and trustee fees, insurance, state franchise and income taxes and fees for unused amounts on the Line of Credit. At Cole Advisors’ discretion, it may fund the Excess G&A through reimbursement to the Company or payment to third parties on behalf of the Company, but in no event will the Company be liable to Cole Advisors in future periods for such amounts paid or reimbursed. During the three and nine months ended September 30, 2014, the Company incurred $131,000 and $371,000, respectively, of Excess G&A which will be reimbursed by Cole Advisors, of which $131,000 had not been reimbursed and was due to the Company as of September 30, 2014. As of September 30, 2014, the $131,000 was included as a reduction to due to affiliates on the condensed consolidated unaudited balance sheets.

As compensation for services provided pursuant to the advisory agreement, the Company will also pay Cole Advisors a performance-based fee calculated based on the Company’s annual total return to stockholders for each class of common stock (defined below), payable annually in arrears. The performance fee will be calculated such that for any calendar year in which the total return per share for a particular class exceeds 6% (the “6% Return”), Cole Advisors will receive 25% of the excess total return on such class above the 6% Return allocable to that class, but in no event will the Company pay Cole Advisors more than 10% of the aggregate total return, for that class, for such year. However, in the event the NAV per share of the Company’s W Shares, A Shares and I Shares decreases below the base NAV for the respective share class ($15.00, $16.72 and $16.82 for the W Shares, A Shares and I Shares, respectively) (the “Base NAV”), the performance-based fee for a respective class will not be calculated on any increase in NAV up to the Base NAV for the respective share class. In addition, the performance fee will not be paid with respect to any calendar year in which the NAV per share as of the last business day of the calendar year (the “Ending NAV”) for the respective share class is less than the Base NAV of that class. The Base NAV of any share class is subject to downward adjustment in the event that the Company’s board of directors, including a majority of the independent directors, determines that such an adjustment is necessary to provide an appropriate incentive to Cole Advisors to perform in a manner that seeks to maximize stockholder value and is in the best interests of the Company’s stockholders. In the event of any stock dividend, stock split, recapitalization or similar change in the Company’s capital structure, the Base NAV for the respective share class shall be ratably adjusted to reflect the effect of any such event.

The total return to stockholders is defined, for each class of the Company’s common stock, as the change in NAV per share plus distributions per share for such class. The NAV per share for a class calculated on the last trading day of a calendar year shall be the amount against which changes in NAV per share for such class are measured during the subsequent calendar year. Therefore, for each class of the Company’s common stock, payment of the performance-based component of the advisory fee (1) is contingent upon the Company’s actual annual total return exceeding the 6% Return and the Ending NAV per share for the respective share class being greater than the Base NAV of that class, (2) will vary in amount based on the Company’s actual performance, (3) cannot cause the Company’s total return as a percentage of stockholders’ invested capital for the year to be reduced below 6% and (4) is payable to Cole Advisors if the Company’s total return exceeds the 6% Return in a particular calendar year, even if the total return to stockholders (or any particular stockholder) on a cumulative basis over any longer or shorter period has been less than 6% per annum. Cole Advisors will not be obligated to return any portion of advisory fees paid based on the Company’s subsequent performance.

The Company recorded fees and expense reimbursements as shown in the table below for services provided by Cole Advisors or its affiliates related to the services described above during the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Acquisitions, Operations and Performance:
Acquisition expense reimbursement	$	151	$	—	$	286	$	—
Advisory fee	$	263	$	109	$	635	$	235
Operating expense reimbursement	$	—	$	—	$	—	$	—
Performance fee	$	41	$	215	$	41	$	215

As of September 30, 2014, $507,000 of the amounts shown above had been paid to Cole Advisors and its affiliates and $455,000 had been incurred, but not yet paid, for services provided by Cole Advisors or its affiliates in connection with the acquisitions and operations stage and was a liability to the Company. Cole Advisors waived its right to receive acquisition expense reimbursements for the three and nine months ended September 30, 2013; accordingly, the Company did not reimburse Cole Advisors for any acquisition expenses during these periods. Additionally, Cole Advisors waived its right to receive operating expense reimbursements for the three and nine months ended September 30, 2014 and 2013; accordingly, the Company did not reimburse Cole Advisors for any such expenses during the three and nine months ended September 30, 2014 and 2013.

Due to Affiliates

As of September 30, 2014, $772,000 was due to Cole Advisors and its affiliates related to advisory, distribution and dealer manager fees and the reimbursement of organization, offering and acquisition expenses, which were included in due to affiliates on the condensed consolidated unaudited balance sheet. As of December 31, 2013, $829,000 was due to Cole Advisors and its affiliates related to performance fees, advisory, distribution and dealer manager fees, the reimbursement of organization and offering expenses, and escrow deposits that were paid on the Company’s behalf in connection with the acquisition of the Company’s properties, which were included in due to affiliates on the condensed consolidated unaudited balance sheet.

XML

Line of Credit and Note Payable

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

LINE OF CREDIT AND NOTE PAYABLE

LINE OF CREDIT AND NOTE PAYABLE

As of September 30, 2014, the Company had $112.8 million of debt outstanding, with a weighted average years to maturity of 3.7 years and a weighted average interest rate of 2.40%. The following table summarizes the debt activity for the nine months ended September 30, 2014 and the debt balances as of September 30, 2014 and December 31, 2013 (in thousands):

			During the Nine Months Ended September 30, 2014
	Balance as of December 31, 2013			Debt Issuance		Repayments			Balance as of September 30, 2014
Line of credit	$	43,900		$	91,500	$	(42,954	)	$	92,446
Fixed rate debt	—			20,304		—			20,304
Total	$	43,900		$	111,804	$	(42,954	)	$	112,750

During the nine months endedSeptember 30, 2014, the Company entered into an amended and restated credit agreement (the “Amended Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent, (“JPMorgan Chase”), U.S. Bank National Association and other lending institutions that may become parties to the Amended Credit Agreement. As of September 30, 2014, the Company had $92.4 million of debt outstanding under its secured revolving line of credit, as amended (the “Line of Credit”). The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the Line of Credit was $160.8 million as of September 30, 2014.

As of September 30, 2014, the Line of Credit allowed the Company to borrow up to $75.0 million in revolving loans (the “Revolving Loans”), and includes a $25.0 million term loan (the “Term Loan”), with the maximum amount outstanding not to exceed the borrowing base (the “Borrowing Base”), calculated as 65% of the aggregate value allocated to each qualified property comprising eligible collateral (collectively, the “Qualified Properties”) during the period from September 30, 2014 through September 11, 2015 and 60% of the Qualified Properties during the period from September 12, 2015 to September 12, 2017 (the “Amended Line of Credit”). As of September 30, 2014, the Company had $7.6 million available for borrowing. The Line of Credit matures on September 12, 2017; however, the Company may elect to extend the maturity dates of such loans to September 12, 2019, subject to satisfying certain conditions described in the Amended Credit Agreement.

The Revolving Loans and Term Loan will bear interest at rates depending upon the type of loan specified by the Company. For a eurodollar rate loan the interest rate will be equal to the one-month, two-month, three-month or six-month LIBOR for the interest period, as elected by the Company, multiplied by the Statutory Reserve Rate (as defined in the Amended Credit Agreement), plus the applicable rate (the “Eurodollar Applicable Rate”). The Eurodollar Applicable Rate is based upon the Company’s overall leverage ratio, generally defined in the Amended Credit Agreement as the total consolidated outstanding indebtedness of the Company divided by the total consolidated asset value of the Company (as defined in the Amended Credit Agreement) (the “Leverage Ratio”), and ranges from 1.90% at a Leverage Ratio of 50.0% or less to 2.45% at a Leverage Ratio greater than 60.0%. For base rate committed loans, the interest rate will be a per annum amount equal to the greatest of: (a) JPMorgan Chase’s Prime Rate; (b) the Federal Funds Effective Rate (as defined in the Amended Credit Agreement) plus 0.50%; and (c) one-month LIBOR multiplied by the Statutory Reserve plus 1.0% plus the applicable rate (the “Base Rate Applicable Rate”). The Base Rate Applicable Rate is based upon the Leverage Ratio, and ranges from 0.90% at a Leverage Ratio of 50.0% or less to 1.45% at a Leverage Ratio greater than 60.0%. As of September 30, 2014, amounts outstanding on the Line of Credit accrued interest at an annual rate of 2.09%.

The Amended Credit Agreement contains customary representations, warranties, borrowing conditions and affirmative, negative and financial covenants, including minimum net worth, debt service coverage and leverage ratio requirements and dividend payout and REIT status requirements. The Amended Credit Agreement also includes usual and customary events of default and remedies for facilities of this nature. Based on the Company’s analysis and review of its results of operations and financial condition, as of September 30, 2014, the Company believes it was in compliance with the covenants of the Amended Credit Agreement.

In addition, during the nine months endedSeptember 30, 2014, the Company entered into a $20.3 million loan (the “PNC Loan”), agreement with PNC Bank, National Association. The PNC Loan has a fixed interest rate of 3.82% per annum with interest payments due monthly. The principal amount will be due October 1, 2021, the maturity date. The PNC Loan is collateralized by eight single-tenant commercial properties and one multi-tenant commercial property, which were purchased for an aggregated collective purchase price of $33.8 million.

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Litigation

In the ordinary course of business, the Company may become subject to litigation or claims. The Company is not aware of any pending legal proceedings of which the outcome is reasonably possible to have a material effect on its results of operations, financial condition or liquidity.

Environmental Matters

In connection with the ownership and operation of real estate, the Company potentially may be liable for costs and damages related to environmental matters. The Company owns certain properties that are subject to environmental remediation. In each case, the seller of the property, the tenant of the property and/or another third party has been identified as the responsible party for environmental remediation costs related to the respective property. Additionally, in connection with the purchase of certain of the properties, the respective sellers and/or tenants have indemnified the Company against future remediation costs. In addition, the Company carries environmental liability insurance on its properties that provides limited coverage for remediation liability and pollution liability for third-party bodily injury and property damage claims. Accordingly, the Company does not believe that it is reasonably possible that the environmental matters identified at such properties will have a material effect on its results of operations, financial condition or liquidity, nor is it aware of any environmental matters at other properties which it believes are reasonably possible to have a material effect on its results of operations, financial condition or liquidity.

XML

Economic Dependency

9 Months Ended

Sep. 30, 2014

Economic Dependency [Abstract]

ECONOMIC DEPENDENCY

ECONOMIC DEPENDENCY

Under various agreements, the Company has engaged or will engage Cole Advisors and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issuance, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon Cole Advisors and its affiliates. In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services.

XML

Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Available-for-sale securities

The following is a summary of the Company’s available-for-sale securities as of September 30, 2014 (in thousands):

	Available-for-Sale Securities
	Amortized Cost Basis		Unrealized Gain			Fair Value
U.S. Treasury Bonds	$	134	$	2		$	136
U.S. Agency Bonds	70		(1		)	69
Corporate Bonds	299		—			299
Total available-for-sale securities	$	503	$	1		$	504

Schedule of available-for-sale securities reconciliation

The following table provides the activity for the marketable securities during the nine months endedSeptember 30, 2014 (in thousands):

	Amortized Cost Basis			Unrealized (Loss) Gain			Fair Value
Marketable securities as of December 31, 2013	$	463		$	(3	)	$	460
Face value of marketable securities acquired	265			—			265
Amortization on marketable securities	1			—			1
Sales of securities	(226		)	—			(226		)
Increase in fair value of marketable securities	—			4			4
Marketable securities as of September 30, 2014	$	503		$	1		$	504

Investments classified by contractual maturity date

The scheduled maturities of the Company’s marketable securities as of September 30, 2014 are as follows (in thousands):

	Available-for-Sale Securities
	Amortized Cost		Estimated Fair Value
Due within one year	$	45	$	45
Due after one year through five years	271		271
Due after five years through ten years	181		182
Due after ten years	6		6
Total	$	503	$	504

XML

Summary of Significant Accounting Policies - Concentration of credit risk (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Concentration Risk
Cash on deposit, number of financial institutions	3
Cash on deposit, number of financial institutions which had deposits in excess of current federally insured limits	1
Texas
Concentration Risk
Number of owned properties (in number of properties)	8
Gross annualized rental revenues by industry
Concentration Risk
Concentration risk, percentage	10.00%
Credit concentration risk | Demand deposits
Concentration Risk
Concentration risk, credit risk, financial instrument, maximum exposure	$ 5.3
Credit concentration risk | Gross annualized rental revenues by industry | Texas
Concentration Risk
Concentration risk, percentage	17.00%
Customer concentration risk | Gross annualized rental revenues by industry
Concentration Risk
Number of tenants	0
Customer concentration risk | Gross annualized rental revenues by industry | Discount store industry
Concentration Risk
Concentration risk, percentage	15.00%
Customer concentration risk | Gross annualized rental revenues by industry | Manufacturing Industry [Member]
Concentration Risk
Concentration risk, percentage	14.00%
Customer concentration risk | Gross annualized rental revenues by industry | Drugstore industry
Concentration Risk
Concentration risk, percentage	10.00%
Customer concentration risk | Gross annualized rental revenues by industry | Grocery store industry
Concentration Risk
Concentration risk, percentage	10.00%

XML

Condensed Consolidated Unaudited Statement of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Condensed Consolidated Unaudited Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (81)	$ (389)	$ 315	$ (508)
Other comprehensive income (loss):
Reclassification of previous unrealized loss on marketable securities into net loss	0	1	0	1
Unrealized (loss) gain on marketable securities	(2)	3	4	(6)
Total other comprehensive (loss) income	(2)	4	4	(5)
Comprehensive (loss) income	$ (83)	$ (385)	$ 319	$ (513)

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

GAAP defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. GAAP emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows:

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).

Level 3 – Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.

The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities:

Cash and cash equivalents – The Company considers the carrying amounts of these financial assets to approximate fair value because of the short period of time between their origination and their expected realization. These financial assets are considered Level 1.

Line of credit and note payable – The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. The estimated fair value of the Company’s debt was $112.8 million and $43.9 million as of September 30, 2014 and December 31, 2013, respectively, which approximated the carrying value on such dates. The fair value of the Company’s debt is estimated using Level 2 inputs.

Marketable securities – The Company’s marketable securities are carried at fair value and are valued using Level 1 inputs. The estimated fair value of the Company’s marketable securities are based on quoted market prices that are readily and regularly available in an active market.

Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, on disposition of the financial assets and liabilities. As of September 30, 2014, there have been no transfers of financial assets or liabilities between fair value hierarchy levels.

XML

Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Carrying amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Line of credit, fair value	$ 112.8	$ 43.9
Fair value, inputs, level 2 | Fair value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Line of credit, fair value	$ 112.8	$ 43.9

XML

Real Estate Acquisitions (Tables)

9 Months Ended

Sep. 30, 2014

Real Estate [Abstract]

Schedule of purchase price allocation

The following table summarizes the purchase price allocation for the acquisitions purchased during the nine months ended September 30, 2014 (in thousands):

	2014 Acquisitions
Land	$	21,067
Building and improvements	85,060
Acquired in-place leases	12,898
Acquired above market leases	3,286
Acquired below market leases	(863		)
Total purchase price	$	121,448

The following table summarizes the purchase price allocation for the acquisitions purchased during the nine months ended September 30, 2013 (in thousands):

	2013 Acquisitions
Land	$	8,635
Building and improvements	35,768
Acquired in-place leases	5,868
Acquired above market leases	213
Acquired below market leases	(515		)
Total purchase price	$	49,969

Business acquisition, pro forma information

The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2013 and 2012 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013		2012
Pro forma basis:
Revenue	$	1,741		$	1,683	$	5,226	$	5,056
Net (loss) income	$	(50	)	$	297	$	555	$	371

The table below presents the Company’s estimated revenue and net income (loss), on a pro forma basis, for the three and nine months ended September 30, 2014 and 2013 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014		2013
Pro forma basis
Revenue	$	3,993	$	3,158		$	12,037	$	8,526
Net income (loss)	$	234	$	(266	)	$	1,264	$	(1,015	)