10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended September 30, 2005

Or

o 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 333-121094 (1933 Act)

COLE CREDIT PROPERTY TRUST II, INC.

(Exact name of registrant as specified in its charter)

Maryland	20-1676382
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2555 East Camelback Road, Suite 400	(602) 778-8700
Phoenix, Arizona 85016	(Registrant’s telephone number,
(Address of principal executive offices)	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 Sections 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 þ     No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o     No þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o     No þ

As of November 10, 2005, there were 1,191,173 shares of common stock, par value $0.01, of Cole Credit Property Trust II, Inc. outstanding.

COLE CREDIT PROPERTY TRUST II, INC.
INDEX

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2005 and December 31, 2004 (Unaudited)	4
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2005 (Unaudited)	5
Condensed Consolidated Statements of Stockholders’ Equity for the period September 29, 2004 (date of inception) to December 31, 2004 and for the nine months ended September 30, 2005 (Unaudited)	6
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 and for the period September 29, 2004 (date of inception) to September 30, 2004 (Unaudited)	7
Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	21
Item 4. Controls and Procedures	22
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3. Defaults Upon Senior Securities	23
Item 4. Submission of Matters to a Vote of Security Holders	23
Item 5. Other Information	23
Item 6. Exhibits	23
Signatures	24
EX-10.1 PURCHASE AGREEMENT BETWEEN COLE TS PARKERSBURG WV. LLC, AND C&F DEVELOPMENT ASSOCIATES, LLC
EX-10.2 PROMISSORY NOTE BETWEEN COLE TS PARKERSBURG WV. LLC, AND WACHOVIA BANK NATIONAL ASSOCIATION
EX-10.3 PURCHASE AGREEMENT BETWEEN COLE WG BRAINERD MN, LLC, AND BRAINERD DRUGSTORE, LLC
EX-10.4 PROMISSORY NOTE BETWEEN COLE WG BRAINERD MN, LLC. AND WACHOVIA BANK NATIONAL ASSOCIATION
EX-10.5 PURCHASE AGREEMENT BETWEEN COLE RA ALLIANCE OH, LLC, AND MONOGRAM DEVELOPMENT XV, LTD
EX-10.6 PURCHASE AGREEMENT BETWEEN COLE LZ GLENDALE AZ, LLC, AND E&R BELL ROAD, LLC
EX-10.7 PROMISSORY NOTE /BETWEEN COLE LZ GLENDALE AZ, LLC, AND WACHOVIA BANK NATIONAL ASSOCIATION
EX-10.8 PURCHASE AGREEMENT BETWEEN COLE WG ST. LOUIS MO PORTFOLIO, LLC. AND TEACHERS' RETIREMENT SYSTEM OF THE STATE OF KENTUCKY
EX-10.9 PROMISSORY NOTE BETWEEN COLE WG ST. LOUIS MO PORTFOLIO, LLC, AND WACHOVIA BANK NATIONAL ASSOCIATION
EX-31.1 SECTION 302 CERTIFICATION OF THE CEO
EX-31.2 SECTION 302 CERTIFICATION OF THE CFO
EX-32.1 SECTION 906 CERTIFICATION OF THE CEO AND CFO

2

PART I

FINANCIAL INFORMATION

The information furnished in our accompanying condensed consolidated balance sheets and condensed consolidated statements of operations, stockholders’ equity, and cash flows reflects all adjustments that are, in our opinion, necessary for a fair presentation of the aforementioned financial statements.

The financial statements should be read in conjunction with the notes to the financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report. The results of operations for the nine months ended September 30, 2005, are not necessarily indicative of the operating results expected for the full year. Condensed consolidated results of operations for the three and nine months ended September 30, 2004, have not been presented because Cole Credit Property Trust II, Inc. was in the development stage and did not have any operations during that period.

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COLE CREDIT PROPERTY TRUST II, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2005 and December 31, 2004
(Unaudited)

	September 30,			December 31,
	2005			2004
ASSETS
Real estate assets, at cost:
Land	$	934,094		$	—
Buildings and improvements, less accumulated depreciation of $2,466 at September 30, 2005		2,046,509			—
Intangible lease assets, less accumulated amortization of $1,037 at September 30, 2005		368,299			—
Total real estate assets		3,348,902			—
Cash		4,772,471			200,000
Restricted cash		1,363,506			—
Prepaid expenses and other assets		107,584			—
Deferred financing costs, less accumulated amortization of $227 at September 30, 2005		46,202			—
Total assets	$	9,638,665		$	200,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Mortgage notes payable	$	2,607,000		$	—
Accounts payable and accrued expenses		14,678			—
Due to affiliates		80,438			—
Escrowed investor proceeds liability		1,363,506			—
Total liabilities		4,065,622			—
Commitments and contingencies
Stockholders’ equity:
Preferred Stock, $.01 par value, 10,000,000 shares authorized, none issued and outstanding at September 30, 2005 and December 31, 2004		—			—
Common stock, $.01 par value, 90,000,000 shares authorized, 620,216 and 20,000 shares issued and outstanding at September 30, 2005 and December 31, 2004, respectively		6,202			200
Capital in excess of par value		5,596,384			199,800
Accumulated deficit		(29,543	)		—
Total stockholders’ equity		5,573,043			200,000
Total liabilities and stockholders’ equity	$	9,638,665		$	200,000

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

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COLE CREDIT PROPERTY TRUST II, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended			Nine Months Ended
	September 30, 2005			September 30, 2005
REVENUE:
Rental income	$	2,761		$	2,761
EXPENSES:
Depreciation & amortization		3,504			3,504
Interest expense		1,864			1,864
General and administrative expenses		26,936			26,936
Total operating expenses		32,304			32,304
NET LOSS	$	(29,543	)	$	(29,543	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted		64,467			34,822
NET LOSS PER COMMON SHARE
Basic and Diluted	$	(0.46	)	$	(0.85	)

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

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COLE CREDIT PROPERTY TRUST II, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Period September 29, 2004 (Date of Inception) to December 31, 2004
and for the Nine Months Ended September 30, 2005
(Unaudited)

	Common Stock
					Capital in						Total
	Number of		Par		Excess of			Accumulated			Stockholders’
	Shares		Value		Par Value			Deficit			Equity
Balance, September 29, 2004 (Date of Inception)		—	$	—	$	—		$	—		$	—
Issuance of common stock to Cole Holdings Corporation		20,000		200		199,800			—		$	200,000
Balance, December 31, 2004		20,000		200		199,800			—			200,000
Issuance of common stock		600,216		6,002		5,982,424			—			5,988,426
Commission on stock sales and related dealer manager fees						(496,445	)					(496,445	)
Other offering costs						(89,395	)					(89,395	)
Net loss									(29,543	)		(29,543	)
Balance, September 30, 2005		620,216	$	6,202	$	5,596,384		$	(29,543	)	$	5,573,043

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

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COLE CREDIT PROPERTY TRUST II, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2005
and for the Period September 29, 2004 (date of inception) to September 30, 2004
(Unaudited)

				Period
				September 29, 2004 (date
	Nine Months Ended			of inception) to
	September 30, 2005			September 30, 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(29,543	)	$	—
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation		2,466			—
Amortization		1,264			—
Changes in assets and liabilities:
Accounts payable and accrued expenses		14,678			—
Prepaid expenses and other assets		(7,584	)		—
Due to affiliates		13,268
Total adjustments		24,092			—
Net cash used in operating activities		(5,451	)		—
CASH FLOWS FROM INVESTMENT ACTIVITIES:
Investment in real estate and related assets		(3,352,405	)		—
Escrow deposit on property to be acquired		(50,000	)		—
Restricted cash		(1,363,506	)
Net cash used in investing activities		(4,765,911	)		—
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		5,988,426			200,000
Proceeds from mortgage notes payable		2,607,000			—
Escrowed investor proceed liability		1,363,506			—
Offering costs on issuance of common stock		(568,670	)		—
Deferred financing costs paid		(46,429	)		—
Net cash provided by financing activities		9,343,833			—
NET INCREASE IN CASH AND CASH EQUIVALENTS:		4,572,471			200,000
CASH – Beginning of period		200,000			—
CASH – End of period	$	4,772,471		$	200,000
SUPPLEMENTAL DISCLOSURES OF INVESTING AND FINANCING NON-CASH ACTIVITIES
Escrow deposit due to affiliate	$	50,000		$	—
Other offering costs due to affiliate	$	17,170		$	—

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

7

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2005
(Unuaudited)

Note 1 — Organization

Cole Credit Property Trust II, Inc. (the “Company”) was formed on September 29, 2004 and is a Maryland corporation that intends to qualify as a real estate investment trust (“REIT”) beginning with the taxable year ending December 31, 2005. Substantially all of the Company’s business is conducted through Cole Operating Partnership II, LP (“Cole OP II”), a Delaware limited partnership. The Company is the sole general partner of and owns a 99.9% partnership interest in Cole OP II. Cole REIT Advisors II, LLC (the “Advisor”), the affiliated advisor to the Company, is the sole limited partner and owner of 0.1% of the partnership interests of Cole OP II.

Pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933, as amended (the “Registration Statement”), the Company is offering for sale to the public on a “best efforts” basis a minimum of 250,000 and a maximum of 45,000,000 shares of its common stock at a price of $10 per share, subject to discounts in certain circumstances, (the “Offering”) and up to 5,000,000 additional shares pursuant to a distribution reinvestment plan under which its stockholders may elect to have distributions reinvested in additional shares of the Company’s common stock at $9.15 per share. The Registration Statement was declared effective on June 27, 2005.

On September 23, 2005, the Company issued the initial 486,000 shares under the Offering and commenced its principal operations. Prior to such date, the Company was considered a development stage company. As of September 30, 2005, the Company had issued approximately 600,000 shares of its common stock in the Offering for aggregate gross proceeds of approximately $6.0 million before offering costs and selling commissions of approximately $586,000. As disclosed in the Registration Statement, the Company expects to use substantially all of the net proceeds from the Offering to acquire and operate commercial real estate primarily consisting of high quality, freestanding, single-tenant commercial properties net-leased to investment grade and other creditworthy tenants located throughout the United States.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, 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 for complete financial statements. In the opinion of management, the statements for the unaudited interim period presented include all adjustments, which are of a normal and recurring nature, necessary to present a fair presentation of the results for such period. Results for this interim period are not necessarily indicative of full year results. Consolidated results of operations for the three and nine months ended September 30, 2004 have not been presented because the Company was in the development stage and did not have any operations during that period.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America necessarily 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Real Estate Assets

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

8

The Company is required to make subjective assessments as to the useful lives of its depreciable assets. The Company will consider the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. All assets are depreciated on a straight line basis. The estimate useful lives of our assets by class are generally as follows:

Building	40 years
Property acquisition costs	40 years
Tenant improvements	Lease term
Intangible lease assets	Lease term

Impairment losses are recorded on long-lived assets used in operations, which includes the operating property, when indicators of impairment are present and the assets’ carrying amount is greater than the sum of the future undiscounted cash flows, excluding interest, estimated to be generated by those assets. As of September 30, 2005, no indicators of impairment existed and no losses had been recorded.

Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, the Company allocates the purchase price of such properties to acquired tangible assets, consisting of land and building, 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 fair values.

The Company utilizes independent appraisals to determine the fair values of the tangible assets of an acquired property (which includes land and building). Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases, including leasing commissions and other related costs. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses during the expected lease-up periods based on current market demand.

The fair values of above-market and below-market in-place leases are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) 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 terms of the leases. The capitalized above-market and below-market lease values are recorded as intangible lease assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the leases.

The fair values of in-place leases include direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease, and tenant relationships. Direct costs associated with obtaining a new tenant include commissions, tenant improvements and other direct costs and are estimated based on independent appraisals and management’s consideration of current market costs to execute a similar lease. These direct costs are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. Customer relationships are valued based on expected renewal of a lease or the likelihood of obtaining a particular tenant for other locations. These lease intangibles are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to rental income over the remaining term of the respective leases.

Intangible Lease Assets

Intangible lease assets consist of the fair value of the in-place lease associated with the real estate acquisition (see Note 3). The weighted average life of the in-place lease is fifteen years. During the three and nine months ended September 30, 2005, approximately $1,000 in amortization of intangible lease assets was recorded in the condensed consolidated statements of operations.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturities when purchased of three months or less to be cash equivalents.

9

Restricted Cash and Escrowed Investor Proceeds

The Company is currently engaged in a public offering of its common stock. Included in restricted cash and escrowed investor proceeds is approximately $1.3 million of offering proceeds for which shares of common stock have not been issued as of September 30, 2005.

Deferred Financing Costs

Deferred financing costs are capitalized and amortized on a straight-line basis over the term of the related financing arrangement. Amortization of deferred financing costs for the three and nine months ended September 30, 2005 was $227 and was recorded in interest expense in the condensed consolidated statements of operations.

Deferred Lease Costs

Costs incurred to procure operating leases, including those identified as part of the purchase price allocations process, are capitalized as deferred lease costs and amortized on a straight-line basis over the terms of the related leases.

Revenue Recognition

Upon the acquisition of real estate, certain properties have leases that provide for tenant occupancy during periods for which no rent is due or where minimum rent payments increase during the term of the lease. The Company will record rental revenue for the full term of each lease on a straight-line basis. Accordingly, the Company will record a receivable from tenants that the Company expects to collect over the remaining lease term rather than currently, which will be recorded as deferred rents receivable. When the Company acquires a property, the term of existing leases is considered to commence as of the acquisition date for the purposes of this calculation.

Income Taxes

The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its taxable year ending December 31, 2005. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, and so long as it distributes at least 90% of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income.

Concentration of Credit Risk

At September 30, 2005 and December 31, 2004, the Company had cash on deposit in one financial institution in excess of federally insured levels; however, the Company has not experienced any losses in such account. The Company limits investment of cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on cash.

Offering and Related Costs

The Advisor funds all of the organization and offering costs on the Company’s behalf and may be reimbursed for such costs up to 1.5% of the cumulative capital raised by the Company in the Offering. As of September 30, 2005 and December 31, 2004, the Advisor had incurred organization and offering costs of approximately $881,000 and $463,000, respectively, on behalf of the Company. Of these amounts, the Company was responsible for approximately $90,000 and $0 at September 30, 2005 and December 31, 2004, respectively. The offering costs, which include items such as legal and accounting fees, marketing, and promotional printing costs, are recorded as a reduction of capital in excess of par value along with sales commissions and dealer manager fees of 7% and 1.5%, respectively. Organization costs are expensed as incurred.

Due to affiliates

Due to affiliates consists of approximately $17,000 due to our Advisor for reimbursement of organizational and offering costs (see Note 6) and approximately $50,000 due to an affiliate of our Advisor for reimbursement of a property escrow deposit.

10

Stockholders’ Equity

At September 30, 2005 and December 31, 2004, the Company was authorized to issue 90,000,000 shares of common stock and 10,000,000 shares of preferred stock. All shares of such stock have a par value of $.01 per share. The Company’s board of directors may authorize additional shares of capital stock and amend their terms without obtaining stockholder approval.

The par value of investor proceeds raised from the Offering is classified as common stock, with the remainder allocated to capital in excess of par value. The Company’s share redemption program provides that all redemptions during any calendar year, including those upon death or qualifying disability, are limited to those that can be funded with proceeds raised from the Company’s distribution reinvestment plan. In accordance with Accounting Series Release No. 268, “Presentation in Financial Statements of Redeemable Preferred Stock,” the Company will account for the proceeds received from its distribution reinvestment plan as temporary equity for future redemption of shares.

Earnings Per Share

Earnings per share are calculated based on the weighted average number of common shares outstanding during each period. The weighted average number of common shares outstanding is identical for basic and fully diluted earnings per share. The effect of the outstanding stock options was anti-dilutive to earnings per share for the three and nine months ended September 30, 2005.

Stock Options

As permitted by Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-Based Compensation, and SFAS No. 148, Accounting for Stock-Based Compensation Transition and Disclosure, the Company elected to follow Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock options under the Independent Directors Stock Option Plan (“IDSOP”) (see Note 8). Under APB No. 25, compensation expense is recorded when the exercise price of stock options is less than the fair value of the underlying stock on the date of grant. The Company has implemented the disclosure-only provisions of SFAS No. 123 and SFAS No. 148. As of September 30, 2005, there were 10,000 stock options outstanding under the IDSOP at an average exercise price of $9.15 per share. If the Company elected to adopt the expense recognition provisions of SFAS No. 123, the impact on net loss would have been an additional approximately $15,000 of general and administrative expenses for the three and nine months ended September 30, 2005, or additional loss of $0.24 and $0.44 per dilutive share, respectively.

Segments

The Company internally evaluates all of the properties owned as one industry segment and, accordingly, does not report segment information.

Recent Accounting Pronouncements

SFAS No. 123R, “Share Based Payment,” is effective for fiscal years beginning after June 15, 2005. The Company will be required to adopt the new standard on January 1, 2006. This statement requires companies to expense the value of employee stock options and similar awards. The Company is currently evaluating the impact of the standard on its consolidated financial statements.

In July 2005, the FASB issued Staff Position (“FSP”) Statement of Position (“SOP”) 78-9-1, Interaction of American Institute of Certified Public Accountants (“AICPA”) SOP 78-9 and Emerging Issues Task Force (“EITF”) Issue No. 04-5. The EITF reached a consensus on EITF Issue No. 04-5, Determining Whether a General Partner or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights stating that a general partner is presumed to control a limited partnership and should consolidate the limited partnership unless the limited partners possess substantive “kick-out” rights or the limited partners possess substantive participating rights. This FSP eliminates the concept of “important rights” of SOP 78-9 and replaces it with the concepts of “kick-out rights” and “substantive participating rights” as defined in Issue 04-5. This EITF and FSP are effective after June 29, 2005 for general partners of all new partnerships formed and for existing partnerships for which the partnership agreements are modified. For general partners in all other partnerships, this guidance is effective no later than January 1, 2006. The Company is currently evaluating the impact of this FSP on its financial statements.

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Note 3 — Real Estate Assets

Acquisitions

Tractor Supply — Parkersburg, WV

On September 26, 2005, the Company acquired an approximately 22,000 square foot single-tenant retail building, which was constructed in 2005 on an approximately 2.97 acre site in Parkersburg, West Virginia (the “TS Parkersburg Property”). The purchase price of the TS Parkersburg Property was approximately $3.3 million, exclusive of closing costs. The acquisition was funded by net proceeds from the Offering and an approximately $2.6 million loan secured by the TS Parkersburg Property (see Note 4 for a description of the loan). In connection with the acquisition, the Company paid an affiliate of its Advisor an acquisition fee of approximately $65,000 and its Advisor a finance coordination fee of approximately $18,000. The TS Parkersburg Property is 100% leased to Tractor Supply Company (“Tractor Supply”). The results of operations from this acquired property are included in the Company’s results of operation from the date of acquisition through September 30, 2005.

Assuming the acquisition had occurred on January 1, 2005, pro forma revenue, net loss and net loss per diluted share would have been approximately $63,000, $27,000, and $0.41, respectively, for the three months ended September 30, 2005 and $189,000, $2,000, and $0.06, respectively, for the nine months ended September 30, 2005. The pro forma results for the nine months ended September 30, 2005, assume the repayment of approximately $0.8 million of the approximately $2.6 million loan after three months, in accordance with the terms of the loan (see Note 4). The pro forma results are not necessarily indicative of the operating results that would have been obtained had the acquisition occurred at the beginning of the periods presented, nor are they necessarily indicative of future operating results.

Note 4 — Borrowings

Tractor Supply — Parkersburg, WV

On September 26, 2005, in connection with the acquisition of the TS Parkersburg Property, the Company entered into an approximately $2.6 million loan (the “TS Parkersburg Loan”) from Wachovia Bank National Association (the “Lender”). The TS Parkersburg Loan, which is secured by the TS Parkersburg Property, consists of an approximately $1.8 million fixed interest rate tranche (the “TS Parkersburg Fixed Rate Tranche”) and an approximately $0.8 million variable interest rate tranche (the “TS Parkersburg Variable Rate Tranche”). The TS Parkersburg Fixed Rate Tranche has a fixed interest rate of 5.57% per annum with monthly interest only payments and the outstanding principal and interest due on October 11, 2015. The TS Parkersburg Variable Rate Tranche has a variable interest rate based on the one-month LIBOR rate plus 200 basis points with monthly interest only payments and the outstanding principal and interest due on December 26, 2005.

Note 5 — Commitments and Contingencies

On September 28, 2005, the Company entered into a purchase agreement relating to a single-tenant retail building located in Brainerd, Minnesota. See Note 9 for details of the acquisition.

Note 6 — Related-Party Transactions and Arrangements

Certain affiliates of the Company will receive fees and compensation in connection with the Offering, and the acquisition, management and sale of the assets of the Company. Cole Capital Corporation (“Cole Capital”), the affiliated dealer-manager, will receive a selling commission of up to 7% of gross offering proceeds before reallowance of commissions earned by participating broker-dealers. Cole Capital intends to reallow 100% of commissions earned to participating broker-dealers. In addition, Cole Capital will receive up to 1.5% of gross proceeds, before reallowance to participating broker-dealers, as a dealer-manager fee. Cole Capital, in its sole discretion, may reallow all or a portion of its dealer-manager fee to such participating broker-dealers as a marketing and due diligence expense reimbursement, based on such factors as the volume of shares sold by such participating broker-dealers and marketing support incurred as compared to those of other participating broker-dealers. During the three and nine months ended September 30, 2005, the Company paid approximately $497,000 to Cole Capital for commissions and dealer manager fees, of which approximately $413,000 was reallowed to participating broker-dealers.

All organization and offering expenses (excluding selling commissions and the dealer-manager fee) are being paid for by the Advisor or its affiliates and will be reimbursed by the Company up to 1.5% of gross offering proceeds. The Advisor or its affiliates also will receive acquisition and advisory fees of up to 2% of the contract purchase price of each asset for the acquisition, development or construction of real property and will be reimbursed for acquisition costs incurred in the process of acquiring properties, but not to exceed 2.0% of the contract purchase price. The Company expects the acquisition expenses to be approximately 0.5% of the purchase price of each property. During the three and nine months ended

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September 30, 2005, the Company reimbursed the Advisor approximately $90,000 for organizational and offering expenses and paid approximately $65,000 for acquisition fees.

If the Advisor provides services, as determined by the independent directors, in connection with the origination or refinancing of any debt financing obtained by the Company that is used to acquire properties or to make other permitted investments, the Company will pay the Advisor a financing coordination fee equal to 1% of the amount available under such financing; provided, however, that the Advisor shall not be entitled to a financing coordination fee in connection with the refinancing of any loan secured by any particular property that was previously subject to a refinancing in which the Advisor received such a fee. Financing coordination fees payable from loan proceeds from permanent financing will be paid to the Advisor as the Company acquires such permanent financing. However, no acquisition fees will be paid on loan proceeds from any line of credit until such time as all net offering proceeds have been invested by the Company. During the three and nine months ended September 30, 2005, the Company paid the Advisor approximately $18,000 for finance coordination fees.

The Company expects to pay Fund Realty Advisors, Inc. (“Fund Realty”), its affiliated property manager, fees for the management and leasing of the Company’s properties. Such fees are expected to equal 2% of gross revenues, plus leasing commissions at prevailing market rates; provided however, that the aggregate of all property management and leasing fees paid to affiliates plus all payments to third parties will not exceed the amount that other nonaffiliated management and leasing companies generally charge for similar services in the same geographic location. Fund Realty may subcontract its duties for a fee that may be less than the fee provided for in the property management agreement. During the three and nine months ended September 30, 2005, the Company did not pay any property management fees to Fund Realty.

The Company will pay the Advisor an annualized asset management fee of 0.25% of the aggregate asset value of the Company’s assets (the “Asset Management Fee”). The fee will be payable monthly in an amount equal to 0.02083% of aggregate asset value as of the last day of the immediately preceding month. During the three and nine months ended September 30, 2005, the Company did not pay any asset management fees to the Advisor.

If the Advisor or its affiliates provides a substantial amount of services, as determined by the Company’s independent directors, in connection with the sale of one or more properties, the Company will pay the Advisor up to one-half of the brokerage commission paid, but in no event to exceed an amount equal to 2% of the sales price of each property sold. In no event will the combined real estate commission paid to the Advisor, its affiliates and unaffiliated third parties exceed 6% of the contract sales price. In addition, after investors have received a return of their net capital contributions and an 8% annual cumulative, non-compounded return, then the Advisor is entitled to receive 10% of remaining net sale proceeds. During the three and nine months ended September 30, 2005, the Company did not pay any fees or amounts to the Advisor relating to the sale of properties.

Upon listing of the Company’s common stock on a national securities exchange or included for quotation on The Nasdaq National Market, a fee equal to 10% of the amount by which the market value of the Company’s outstanding stock plus all distributions paid by the Company prior to listing, exceeds the sum of the total amount of capital raised from investors and the amount of cash flow necessary to generate an 8% annual cumulative, non-compounded return to investors will be paid to the Advisor (the “Subordinated Incentive Listing Fee”).

Upon termination of the advisory agreement with the Advisor, other than termination by the Company because of a material breach of the advisory agreement by the Advisor, a performance fee of 10% of the amount, if any, by which (i) the appraised asset value at the time of such termination plus total distributions paid to stockholders through the termination date exceeds (ii) the aggregate capital contribution contributed by investors less distributions from sale proceeds plus payment to investors of an 8% annual, cumulative, non-compounded return on capital. No subordinated performance fee will be paid if the Company has already paid or become obligated to pay the Advisor a Subordinated Incentive Listing Fee.

The Company will reimburse the Advisor for all 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 it’s operating expenses (including the Asset Management Fee) at the end of the four preceding fiscal quarters exceeds the greater of (i) 2% of average invested assets, or (ii) 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. The Company will not reimburse for personnel costs in connection with services for which the Advisor receives acquisition fees or real estate commissions. During the three and nine months ended September 30, 2005, the Company did not reimburse the Advisor for any such costs.

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Note 7 — Economic Dependency

Under various agreements, the Company has engaged or will engage the Advisor 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 issue, 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 the Advisor and its affiliates. In the event that these companies were unable to provide the Company with the respective services, the Company would be required to find alternative providers of these services.

Note 8 — Independent Director’s Stock Option Plan

The Company has a stock option plan, the IDSOP, which authorizes the grant of non-qualified stock options to the Company’s independent directors, subject to the absolute discretion of the board and the applicable limitations of the plan. The Company intends to grant options under the IDSOP to each qualifying director annually. The exercise price for the options granted under the IDSOP initially will be $9.15 per share (or greater, if such higher price as is necessary so that such options shall not be considered a “nonqualified deferred compensation plan” under Section 409A of the Internal Revenue Code of 1986, as amended). It is intended that the exercise price for future options granted under the IDSOP will be at least 100.0% of the fair market value of the Company’s common stock as of the date that the option is granted. As of September 30, 2005 and December 31, 2004, the Company had granted options to purchase 10,000 and 0 shares, respectively, at $9.15 per share. A total of 1,000,000 shares have been authorized and reserved for issuance under the IDSOP.

Note 9 — Subsequent Events

Sale of Shares of Common Stock

As of November 10, 2005, the Company raised approximately $10.2 million through the issuance of approximately 1.2 million shares of its common stock under the Offering. As of November 10, 2005, approximately $438.1 million (43.8 million shares) remained available for sale to the public under the offering, exclusive of shares available under the Company’s distribution reinvestment plan.

Property Acquisitions

Walgreens – Brainerd, MN

On October 6, 2005 the Company acquired an approximately 15,000 square foot single-tenant retail building located in Brainerd, Minnesota, which was constructed in 2000 on an approximately 2.07 acre site (the “WG Brainerd Property”). The WG Brainerd Property is 100% leased to Walgreen Co. The purchase price of the WG Brainerd Property was approximately $4.3 million, exclusive of closing costs. The acquisition was funded by net proceeds from the Offering and an approximately $3.5 million loan secured by the WG Brainerd Property (see below under borrowings for a description of the loan). In connection with the acquisition, the Company paid an affiliate of the Advisor an acquisition fee of approximately $87,000 and its Advisor a finance coordination fee of approximately $28,000.

Rite Aid – Alliance, OH

On October 20, 2005 the Company acquired an approximately 11,000 square foot single-tenant retail building, which was constructed in 1996 on an approximately 1.79 acre site located in Alliance, Ohio (the “RA Alliance Property”). The purchase price of the RA Alliance Property was $2.1 million, exclusive of closing costs. The acquisition was funded by net proceeds from the Offering. In connection with the acquisition, the Company paid an affiliate of its Advisor an acquisition fee of $42,000. The RA Alliance Property is 100% leased to RA Ohio, a subsidiary of Rite Aid Corporation (“Rite Aid”), which guarantees the lease.

La-Z-Boy – Glendale, AZ

On October 25, 2005 the Company acquired a 23,000 square foot single-tenant retail building located in Glendale, Arizona, which was constructed in 2001 on an approximately 3.18 acre site (the “LZ Glendale Property”). The purchase price of the LZ Glendale Property was approximately $5.7 million, exclusive of closing costs. The acquisition was funded by net proceeds from the Offering and an approximately $4.6 million loan secured by the LZ Glendale Property (see below under borrowings for a description of the loan). In connection with the acquisition, the Company paid an affiliate of its Advisor an acquisition fee of approximately $114,000 and its Advisor a finance coordination fee of approximately $34,000. Concurrent with the acquisition of the LZ Glendale Property on October 25, 2005, the Company entered into a new lease with EBCO,

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Inc., which is an affiliate of the seller, for 100% of the property.

Walgreens Portfolio — Missouri

On November 2, 2005, the Company acquired interest in (i) a 15,120 square foot single-tenant retail building on an approximately 2.11 acre site located in St. Louis, Missouri (ii) a 15,120 square foot single-tenant retail building on an approximately 2.13 acre site located in St. Louis, Missouri and (iii) a 15,120 square foot single-tenant retail building on an approximately 1.82 acre site located in Florissant, Missouri (collectively, the “WG SL Properties”) for a gross purchase price of approximately $16.4 million, exclusive of closing costs. The WG SL Properties each were constructed in 2001 and are 100% leased to Walgreen Co. The acquisition was funded by net proceeds from the Offering and an approximately $13.1 million loan secured by the WG SL Properties (see below under borrowings for a description of the loan). In connection with the acquisition, the Company paid an affiliate of its Advisor an acquisition fee of $246,000 and its Advisor a finance coordination fee of approximately $106,000.

Borrowings

Walgreens – Brainerd, MN

On October 5, 2005, in connection with the acquisition of the WG Brainerd Property, the Company obtained an approximately $3.5 million loan from the Lender by executing a promissory note (the “WG Brainerd Loan”). The WG Brainerd Loan, which is secured by the WG Brainerd Property, consists of an approximately $2.8 million fixed interest rate tranche (the “WG Brainerd Fixed Rate Tranche”) and an approximately $649,000 variable interest rate tranche (the “WG Brainerd Variable Rate Tranche”). The WG Brainerd Fixed Rate Tranche has a fixed interest rate of 5.44% per annum with monthly interest-only payments and the outstanding principal and interest due on October 11, 2015. The WG Brainerd Variable Rate Tranche has a variable interest rate based on the one-month LIBOR rate plus 200 basis points with monthly interest-only payments and the outstanding principal and interest due on January 4, 2006.

La-Z-Boy – Glendale, AZ

On October 25, 2005, in connection with the acquisition of the LZ Glendale Property, the Company obtained an approximately $4.6 million loan from the Lender by executing a promissory note (the “LZ Glendale Loan”). The LZ Glendale Loan, which is secured by the LZ Glendale Property, consists of an approximately $3.4 million fixed interest rate tranche (the “LZ Glendale Fixed Rate Tranche”) and an approximately $1.1 million variable interest rate tranche (the “LZ Glendale Variable Rate Tranche”). The LZ Glendale Fixed Rate Tranche has a fixed interest rate of 5.76% per annum with monthly interest-only payments and the outstanding principal and interest due on November 11, 2010. The LZ Glendale Variable Rate Tranche has a variable interest rate based on the one-month LIBOR rate plus 200 basis points with monthly interest-only payments and the outstanding principal and interest due on January 25, 2006.

Walgreens Portfolio — Missouri

On November 2, 2005, in connection with the acquisition of the WG SL Properties, the Company obtained an approximately $13.12 million loan from the Lender by executing a promissory note (the “WG SL Loan”). The WG SL Loan, which is secured by the WG SL Properties, consists of an approximately $10.66 million fixed interest rate tranche (the “WG SL Fixed Rate Tranche”) and an approximately $2.46 million variable interest rate tranche (the “WG SL Variable Rate Tranche”). The WG SL Fixed Rate Tranche has a fixed interest rate of 5.48% per annum with monthly interest-only payments and the outstanding principal and interest due on November 11, 2015. The WG SL Variable Rate Tranche has a variable interest rate based on the one-month LIBOR rate plus 200 basis points with monthly interest-only payments and the outstanding principal and interest due on February 2, 2006.

Declaration of Distributions

On October 4, 2005, the Company’s board of directors declared a distribution of $0.05 per share for stockholders of record on each of October 7, 2005, November 7, 2005 and December 7, 2005. The payment date for each of the distributions will be January 3, 2006. The monthly distributions are calculated to be equivalent to an annualized distribution of six percent (6%) per share, assuming a purchase price of $10.00 per share.

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

The following discussion and analysis should be read in conjunction with our accompanying condensed consolidated financial statements and notes thereto.

Forward-Looking Statements

This section contains forward-looking statements, including discussion and analysis of the financial condition of us and our subsidiary, our anticipated capital expenditures required to commence operations, amounts of anticipated cash distributions to our stockholders in the future and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on their knowledge and understanding of our business and industry. Words such as “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “could,” “should” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.

Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. Investors are cautioned not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date of this Quarterly Report on Form 10-Q. 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. Factors that could cause actual results to differ materially from any forward-looking statements made in the Form 10-Q include changes in general economic conditions, changes in real estate conditions, construction costs that may exceed estimates, construction delays, increases in interest rates, lease-up risks, inability to obtain new tenants upon the expiration of existing leases, and the potential need to fund tenant improvements or other capital expenditures out of operating cash flows. The forward-looking statements should be read in light of the risk factors identified in the “Risk Factors” section of the Registration Statement, relating to the Offering, as filed with the Securities and Exchange Commission.

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a regular basis, we evaluate these estimates. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Results of Operations

We commenced our principal operations on September 23, 2005, when we issued the initial 486,000 shares in the Offering. Prior to such date, we were considered a development stage company. During the quarter ended September 30, 2005, we purchased a single-tenant, freestanding retail building 100% leased to Tractor Supply located in Parkersburg, West Virginia (see Notes 3 and 4 to the condensed consolidated financial statements accompanying this Quarterly Report on Form 10-Q). Because we did not commence operations until the third quarter of 2005, comparative financial data is not presented for the prior fiscal year.

Our management is not aware of any material trends or uncertainties, other than national economic conditions affecting real estate generally (such as lower capitalization rates, which lead to lower rents), that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the acquisition and operations of real properties and mortgage loans, other than those referred to in our Registration Statement.

As of September 30, 2005, our real estate property was 100% leased. Our results of operations are not indicative of those expected in future periods as we expect that rental income, depreciation expense, operating expenses, asset management fees and net income will each increase in the future as we acquire additional properties.

Rental income for the three and nine months ended September 30, 2005 totaled approximately $2,800. For the three and nine months ended September 30, 2005, property operating expenses were approximately $1,900, and depreciation and amortization expenses were approximately $3,500. We acquired our first property on September 26, 2005, which offered five days of revenues and expenses for the quarter ended September 30, 2005.

General and administrative expenses for the three and nine months ended September 30, 2005 totaled approximately $27,000, primarily relating to fees paid to our independent directors and other organization costs. We sustained a net loss for the three and nine months ended September 30, 2005 of approximately $30,000, primarily as a result of incurring overhead-related

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general and administrative expenses and interest expense without sufficient rental revenues from properties to cover the costs. Loss per share for the three and nine months ended September 30, 2005 was $0.47 and $0.86, respectively. With the acquisition of new properties in future periods, we anticipate that general and administrative expenses, net income, and earnings per share will increase. However, we expect general and administrative expenses to decrease as a percentage of total revenue.

Our property acquisition was financed with debt of approximately $2.6 million. During the three and nine months ended September 30, 2005, we incurred amortization of deferred financing costs and interest expense of approximately $1,900 related to our use of this debt. Our debt financing costs in future periods will vary based on our level of future borrowings, which will depend on the level of investor proceeds raised, the cost of borrowings, and the opportunity to acquire real estate assets fitting our investment objectives.

Liquidity and Capital Resources

Overview

We expect to continue to raise capital through our ongoing Offering of common stock and to utilize such funds and proceeds from secured or unsecured financings to complete future property acquisitions. As of September 30, 2005, we had raised approximately $6.0 million in the Offering.

We expect to meet our short-term liquidity requirements through net cash provided by property operations and proceeds from the Offering. Operating cash flows are expected to increase as additional properties are added to our portfolio. The offering and organizational costs associated with the Offering are initially paid by our Advisor, which will be reimbursed for such costs up to 1.5% of the capital raised by us in the Offering. As of September 30, 2005, our Advisor has paid approximately $881,000 of offering and organization costs and we have reimbursed the advisor for approximately $90,000 of such costs.

Subsequent to September 30, 2005, we completed the acquisition of six single-tenant retail buildings in separate transactions for an aggregate purchase price of $28.5 million, exclusive of closing costs. The acquisitions were funded with proceeds from the Offering and approximately $21.2 million in aggregate proceeds from three loans.

On October 4, 2005, our board of directors declared a distribution of $0.05 per share for stockholders of record on each of October 7, 2005, November 7, 2005 and December 7, 2005. The payment date for each of the distributions will be January 3, 2006. The monthly distributions are calculated to be equivalent to an annualized distribution of six percent (6%) per share, assuming a purchase price of $10.00 per share.

On a long-term basis, our principal demands for funds will be for property acquisitions, either directly or through investment interests, for the payment of operating expenses and distributions and for the payment of interest on our outstanding indebtedness and other investments. Generally, cash needs for items other than property acquisitions will be met from operations and property acquisitions from funding by public offerings of our shares.

Operating Activities

Net cash used in operating activities was approximately $5,000 for the nine months ended September 30, 2005, primarily due to a net loss for the period of approximately $30,000 due to our initial property acquisition, the TS Parkersburg Property, occurring on September 26, 2005. See “Results of Operations” for a more complete discussion of the factors impacting our operating performance.

Investing and Financing Activities

Net cash used in investing activities was approximately $4.8 million for the nine months ended September 30, 2005, primarily due to approximately $3.4 million used on the acquisition of the TS Parkersburg Property and the associated acquisition costs and approximately $1.3 million in restricted cash, which is held in escrow pending issuance of shares to investors.

Net cash provided by financing activities was approximately $9.3 million for the nine months ended September 30, 2005, primarily due to net proceeds from the issuance of common stock under the Offering of approximately $5.4 million, net proceeds from the issuance of a mortgage note in connection with the acquisition of the TS Parkersburg Property of approximately $2.6 million and an approximately $1.3 million liability related to investor proceeds, which are held in escrow pending issuance of shares to the investors .

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Election as a REIT

We intend to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its taxable year ending December 31, 2005. If we qualify for taxation as a REIT, we generally will not be subject to federal corporate income tax to the extent we distribute our REIT taxable income to our stockholders, and so long as we distribute at least 90% of our REIT taxable income. REITs are subject to a number of other organizational and operational requirements. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on our undistributed income.

Inflation

The real estate market has not been affected significantly by inflation in the past several years due to the relatively low inflation rate. However, in the event inflation does become a factor, the leases on the real estate we may acquire may not include provisions that would protect us from the impact of inflation.

Critical Accounting Policies and Estimates

Our accounting policies have been established in to conform to accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires us 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 our judgment or interpretation of the facts and circumstances relating to the 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.

The following discussion pertains to accounting policies management believes are most “critical” to the portrayal of our financial condition and results of operations which require management’s most difficult, subjective or complex judgments. These judgments often result from the need to make estimates about the effect of matters that are inherently uncertain. This discussion addresses judgments known to management pertaining to trends, events or uncertainties which were taken into consideration upon the application of those policies and the likelihood that materially different amounts would be reported upon taking into consideration different conditions and assumptions.

Real Estate Assets

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

We are required to make subjective assessments as to the useful lives of our depreciable assets. We will consider the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. All assets are depreciated on a straight line basis. The estimate useful lives of our assets by class are generally as follows:

Building	40 years
Property acquisition costs	40 years
Tenant improvements	Lease term
Intangible lease assets	Lease term

Impairment losses are recorded on long-lived assets used in operations, which includes the operating property, when indicators of impairment are present and the assets’ carrying amount is greater than the sum of the future undiscounted cash flows, excluding interest, estimated to be generated by those assets. As of September 30, 2005, no indicators of impairment existed and no losses had been recorded.

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Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, we allocate the purchase price of properties to acquired tangible assets, consisting of land and building, 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 fair values.

We utilize independent appraisals performed using the cost approach to determine the fair values of the tangible assets of an acquired property (which includes land and building). Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases, including leasing commissions and other related costs. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses during the expected lease-up periods based on current market demand.

The fair values of above-market and below-market in-place leases are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) 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 terms of the leases. The capitalized above-market and below-market lease values are recorded as intangible lease assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the leases.

The fair values of in-place leases include direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease, and tenant relationships. Direct costs associated with obtaining a new tenant include commissions, tenant improvements and other direct costs and are estimated based on independent appraisals and management’s consideration of current market costs to execute a similar lease. These direct costs are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. Customer relationships are valued based on expected renewal of a lease or the likelihood of obtaining a particular tenant for other locations. These lease intangibles are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to rental income over the remaining term of the respective leases.

During the three and nine months ended September 30, 2005, approximately $1,000 in amortization of intangible lease assets was recorded in the condensed consolidated statements of operations.

Commitments and Contingencies

We are subject to certain contingencies and commitments with regard to certain transactions. Refer to Notes 2 & 5 to our consolidated financial statements for further explanations. Examples of such commitments and contingencies include:

• Properties under contract (Note 5)

• Reimbursement of offering-related costs (Note 2)

Related-Party Transactions and Agreements

We have entered into agreements with our Advisor and its affiliates, whereby we pay certain fees or reimbursements to our Advisor or its affiliates for acquisition fees and expenses, organization and offering costs, sales commissions, dealer manager fees, asset and management fees and reimbursement of operating costs. See Note 6 to our condensed consolidated financial statements included in this report for a discussion of the various related-party transactions, agreements and fees.

Subsequent Events

Certain events occurred subsequent to September 30, 2005 through the date of this report. Refer to Note 9 to our condensed consolidated financial statements for further explanation. Such events include:

• Sale of shares of common stock;

• Acquisition of a property in Brainerd, MN;

• Acquisition of a property in Alliance, OH;

• Acquisition of a property in Glendale, AZ;

• Acquisition of three properties in Missouri;

• Various borrowings with Wachovia Bank National Association relating to the acquisitions described above; and

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• Declaration of distributions.

Recent Accounting Pronouncements

SFAS No. 123R, “Share Based Payment,” is effective for fiscal years beginning after June 15, 2005. We will be required to adopt the new standard on January 1, 2006. This statement requires companies to expense the value of employee stock options and similar awards. We are currently evaluating the impact of the standard on our consolidated financial statements.

In July 2005, the FASB issued Staff Position (“FSP”) Statement of Position (“SOP”) 78-9-1, Interaction of American Institute of Certified Public Accountants (“AICPA”) SOP 78-9 and Emerging Issues Task Force (“EITF”) Issue No. 04-5. The EITF reached a consensus on EITF Issue No. 04-5, Determining Whether a General Partner or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights stating that a general partner is presumed to control a limited partnership and should consolidate the limited partnership unless the limited partners possess substantive “kick-out” rights or the limited partners possess substantive participating rights. This FSP eliminates the concept of “important rights” of SOP 78-9 and replaces it with the concepts of “kick-out rights” and “substantive participating rights” as defined in Issue 04-5. This EITF and FSP are effective after June 29, 2005 for general partners of all new partnerships formed and for existing partnerships for which the partnership agreements are modified. For general partners in all other partnerships, this guidance is effective no later than January 1, 2006. We are currently evaluating the impact of this FSP on our financial statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

In connection with property acquisitions, we have obtained variable rate debt financing (described below) to fund a property acquisition, and therefore we are exposed to interest rate changes in the LIBOR rate. Our objectives in managing interest rate risk 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 will borrow primarily at interest rates with the lowest margins available and, in some cases, with the ability to convert variable interest rates to fixed rates. In the future, we may enter into derivative financial instruments such as interest rate swaps, caps and treasury locks in order to mitigate our interest rate risk on a given financial instrument. We will not enter into derivative or interest rate transactions for speculative purposes.

As of September 30, 2005, approximately $0.8 million of the approximately $2.6 million outstanding on the TS Parkersburg Loan was subject to a variable interest rate, which is based on the one-month LIBOR rate plus 200 basis points.

We do not have any foreign operations and thus we are not exposed to foreign currency fluctuations.

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Item 4. Controls and Procedures

We have established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the officers who certify the Company’s financial reports and to other members of senior management and the Board of Directors.

Based on their evaluation as of September 30, 2005, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules, regulations and forms of the Securities and Exchange Commission (the “Commission").

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2005, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We have confidence in our disclosure controls and procedures and internal control over financial reporting. Nevertheless, our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all error, misstatements or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

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PART II
OTHER INFORMATION

Item 1. Legal Proceedings

No events occurred during the quarter covered by this report that would require a response to this item.

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

On June 27, 2005, our Registration Statement (No. 333-121094), covering a public offering of up to 45,000,000 shares of common stock to be offered at a price of $10 per share, subject to reduction in certain circumstances, was declared effective under the Securities Act of 1933. The Registration Statement also covers up to 5,000,000 shares of common stock available pursuant to our distribution reinvestment plan.

On September 23, 2005, we issued the initial approximately 486,000 shares in the Offering. As of September 30, 2005, we had issued approximately 600,000 shares for gross offering proceeds of approximately $6.0 million, out of which we paid costs of approximately $65,000 in acquisition fees, approximately $497,000 in selling commissions and dealer manager fees, and approximately $90,000 in organization and offering costs to the Advisor or its affiliates. With the net offering proceeds and indebtedness, we acquired approximately $3.4 million in real estate and related assets. As of November 10, 2005, we have sold approximately 1.2 million shares in our primary offering at an aggregate offering price of $10.2 million.

Item 3. Defaults Upon Senior Securities

No events occurred during the quarter covered by this report that would require a response to this item.

Item 4. Submission of Matters to a Vote of Security Holders

No events occurred during the quarter covered by this report that would require a response to this item.

Item 5. Other Information

No events occurred during the quarter covered by this report that would require a response to this item.

Item 6. Exhibits

The exhibits listed on the Exhibit Index (following the signatures section of this report) are included, or incorporated by reference, in this quarterly report.

23

SIGNATURES

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 Credit Property Trust II, Inc. (Registrant)
By:	/s/ Christopher H. Cole
	Christopher H. Cole
	Chief Executive Officer and President
By:	/s/ Blair D. Koblenz
	Blair D. Koblenz
	Executive Vice President and Chief Financial Officer

Date: November 14, 2005

24

EXHIBIT INDEX

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
10.1	Purchase Agreement between Cole TS Parkersburg WV, LLC, and C&F Development Associates, LLC pursuant to an Assignment of Agreement of Purchase and Sale Agreement dated September 23, 2005.
10.2	Promissory Note between Cole TS Parkersburg WV, LLC, and Wachovia Bank National Association dated September 26, 2005.
10.3	Purchase Agreement between Cole WG Brainerd MN, LLC, and Brainerd Drugstore, LLC pursuant to an Assignment of Purchase Agreement and Escrow Instructions dated September 28, 2005.
10.4	Promissory Note between Cole WG Brainerd MN, LLC, and Wachovia Bank National Association dated October 5, 2005.
10.5	Purchase Agreement between Cole RA Alliance OH, LLC, and Monogram Development XV, LTD pursuant to an Assignment of Purchase Agreement dated October 19, 2005.
10.6	Purchase Agreement between Cole LZ Glendale AZ, LLC, and E&R Bell Road, LLC pursuant to an Assignment of Purchase Agreement and Escrow Instructions dated October 25, 2005.
10.7	Promissory Note between Cole LZ Glendale AZ, LLC, and Wachovia Bank National Association dated October 25, 2005.
10.8	Purchase Agreement between Cole WG St. Louis MO Portfolio, LLC, and Teachers’ Retirement System of the State of Kentucky pursuant to an Assignment of Purchase Agreement and Escrow Instructions dated November 1, 2005.
10.9	Promissory Note between Cole WG St. Louis MO Portfolio, LLC, and Wachovia Bank National Association dated November 2, 2005.
31.1	Certification of the Chief Executive Officer of the Company pursuant to Securities 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	Certification of the Chief Financial Officer of the Company pursuant to Securities 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	Certification of the Chief Executive Officer and Chief 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

25

EX-10.1

                  ASSIGNMENT OF AGREEMENT OF PURCHASE AND SALE

                  C & F DEVELOPMENT ASSOCIATES, LLC, AS SELLER
                                       AND
                             SERIES C, LLC, AS BUYER

      ASSIGNOR, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, does hereby assign all of its right, title and
interest in that certain Agreement of Purchase and Sale ("Purchase Agreement")
described herein, to ASSIGNEE and its successors and assigns. The Purchase
Agreement is described as follows:

      DATE OF AGREEMENT: August 2, 2005; amended August 12, 2005 and August 31,
                         2005

      ORIGINAL BUYER:    Series C, LLC

      ASSIGNED TO:       Cole TS Parkersburg WV, LLC

      PROPERTY ADDRESS:  101 Tara Lane, Parkersburg, West Virginia

      ASSIGNOR acknowledges that it is not released from any and all obligations
or liabilities under said Purchase Agreement with the exception of the earnest
money deposit which is currently in escrow.

      ASSIGNEE hereby agrees to assume and be responsible for all obligations
and liabilities under said Purchase Agreement. This Assignment shall be in full
force and effect upon its full execution.

      Executed this 23rd day of September, 2005.

ASSIGNOR:                                  ASSIGNEE:

SERIES C, LLC                              COLE TS PARKERSBURG WV, LLC

                                           By:  Cole REIT Advisors II, LLC
By: /s/ John M. Pons                            its Manager
    -----------------
    John M. Pons
    Authorized Officer

                                           By: /s/ John M. Pons
                                               -------------------
                                               John M. Pons
                                               Senior Vice President


                         AGREEMENT OF PURCHASE AND SALE

      This Agreement of Purchase and Sale ("Agreement") is entered into
effective the 2nd day of August, 2005, among C & F DEVELOPMENT ASSOCIATES, LLC,
a West Virginia limited liability company ("Buyer"), SERIES C, LLC, an Arizona
limited liability company ("Buyer"), and Fidelity National Title Insurance
Company ("Escrow Agent").

                                    RECITALS:

      A. Seller is the owner of approximately 2.966 acres of land (the "Land")
located at the intersection of U.S. Route 14 and Pike Street near I-77,
Parkersburg, WV, and more particularly described on Exhibit "A" attached hereto.

      B. Seller is the landlord under that certain lease (the "Lease") dated
November 12, 2004, between Seller, as landlord, and Tractor Supply Company, a
Delaware corporation ("Tenant"), whereby Seller shall construct a Tractor Supply
store on the Land to be occupied by Tenant.

      C. Seller desires to sell the Land and assign its interest in the Lease,
and Buyer desires to purchase the Land and assume Seller's interest in the
Lease, upon the terms and conditions hereinafter set forth.

      NOW, THEREFORE, for good and valuable consideration, and in consideration
of the foregoing recitals, the mutual benefits to be gained by the performance
hereof, Seller, Escrow Agent and Buyer hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

      1.1 Definitions. For purposes of this Agreement, the following terms shall
have the following meanings ascribed to them. Other terms are defined in the
section of this Agreement to which such terms relate.

      "Building" shall mean a Tractor Supply building consisting of
approximately 21,688 rentable square feet, built in accordance with the
Construction Documents and constructed in a good and workmanlike manner,
acceptable to the Tenant.

      "Certificate of Completion" shall mean a Certificate of Completion
executed by Seller's general construction contractor certifying that the
Building has been completed in substantial accordance with the Construction
Documents.

      "Certificate of Occupancy" shall mean a Certificate of Occupancy, or its
equivalent, issued by the applicable governmental authority, allowing the Tenant
to open for business to the public at the Project.

      "Closing" means the closing of the purchase and sale hereunder, as
described in Article V of this Agreement.

                                       1


      "Closing Date" shall mean the actual date that Buyer and Seller consummate
the transactions contemplated hereby and fulfill their respective obligations
hereunder.

      "Construction Documents" shall mean the final plans and specifications
with respect to construction of the Building in accordance with the terms of and
as required by the Lease.

      "Contracts" shall mean all of Seller's interest, to the extent
transferable, in all permits, licenses, warranties, contractual rights and
intangibles (including rights to the name of the improvements as well as
architectural/engineering plans) with respect to the operation, maintenance,
repair or improvement of the Project.

      "Due Diligence Period" shall mean the period of time commencing on the
date of this Agreement and ending on the 22nd calendar day after the date of
this Agreement.

      "Earnest Money" shall mean all amounts deposited with Escrow Agent
pursuant to Section 2.2 of this Agreement, together with all interest accrued
thereon.

      "Improvements" shall mean all improvements and fixtures on the Land.

      "Land" is defined in the recitals hereto.

      "Lease" is defined in the recitals hereto.

      "Parties" means Buyer, Seller and Escrow Agent.

      "Permitted Exceptions" shall mean the lien of taxes and assessments not
yet due and payable, easements, covenants and restrictions of record approved or
deemed approved by Buyer pursuant to the terms hereof.

      "Personal Property" shall mean Seller's interest, if any, in any
equipment, machinery and personal property located on or used in connection with
the Land and/or the Building.

      "Project" shall mean the Land, the Building, the Improvements, the
Contracts and the Personal Property.

      "Purchase Price" shall mean Three Million Two Hundred Fifty Nine Thousand
Two Hundred Forty Three and No/100 ($3,259,243.00) Dollars.

      "State" shall mean the State of West Virginia.

      "Survey" shall be defined in Article III of this Agreement.

      "Tenant" is defined in the recitals hereto.

      "Title Company" shall mean Escrow Agent, as such term is defined in the
introductory paragraph hereof.

      "Transfer Documents" shall mean the Deed, the Assignment of Lease, the
Bill of Sale and the Assignment Agreement (each, as defined in Section 5.3
hereof), in a form reasonably acceptable to Seller and Buyer.

                                       2


                                   ARTICLE II
                       PURCHASE AND SALE AND EARNEST MONEY

      2.1 Purchase and Sale. Seller hereby agrees to sell to Buyer, and Buyer
hereby agrees to purchase from Seller, upon the terms and conditions hereinafter
provided, the Project for the Purchase Price, in immediately available funds to
be paid by Buyer on the Closing Date.

      2.2 Earnest Money. Within five business days after the date of this
Agreement, Buyer shall deliver a deposit of Earnest Money in the amount of
$40,000.00 to the Escrow Agent. The Earnest Money shall thereafter be held by
the Escrow Agent in accordance with this Agreement. If the purchase and sale
hereunder is consummated in accordance with the terms and provisions hereof, the
Earnest Money shall be credited against the Purchase Price at the Closing. In
all other events, the Earnest Money shall be disposed of by the Escrow Agent as
herein provided.

                                   ARTICLE III
                                   INSPECTION

      3.1 Delivery of Documents. Seller shall, to the extent the same are in
Seller's possession or the possession of Seller's agents, provide Buyer with
true, accurate, and complete copies of the following: (a) a copy of Seller's
existing boundary survey; (b) a copy of the Lease; (c) a copy of permits from
the governmental agencies approving the construction of the Project; (d)
environmental reports with respect to the Land; (e) any appraisals prepared in
connection with the Project; (f) Construction Documents applicable to the
Project; and (g) a copy of Seller's existing title insurance policy together
with any easements, covenants, or restrictions placed against the Land
subsequent to the date of such title insurance policy.

      3.2 Inspection. Buyer may, in its sole and absolute discretion for any
reason or for no reason, terminate this Agreement and receive an immediate
return of the Earnest Money unless on or before the expiration of the Due
Diligence Period, Buyer has determined, to Buyer's sole satisfaction, that the
Project is suitable for Buyer's purposes in all respects. Unless Buyer notifies
Seller prior to the expiration of the Due Diligence Period that the Project is
suitable to Buyer in all respects, the Earnest Money shall promptly be returned
to Buyer and neither party shall have further obligations to the other. Failure
by Buyer to deliver such notice to Seller prior to the expiration of the Due
Diligence Period shall be deemed to be Buyer's election to terminate the
Agreement.

      3.3 Buyer's Access to the Project. Seller agrees to permit Buyer's agents
reasonable access to the Project during the Due Diligence Period for the
purposes of conducting engineering and feasibility studies and tests, provided
that such studies and tests do not result in any material damage to the present
character or topography of the Project. Buyer agrees to indemnify, defend and
hold harmless Seller from any liens, claims, loss, damages, injury to persons or
damage to Project, including improvements, located on the Project, and
attorneys' fees directly arising from Buyer's inspections, testing and exercise
of its right of access to the Project. Buyer will restore the Project to the
same condition after its inspections or testing has been completed as it was
prior to said inspections/testing.

      3.4 Title Commitment. During the Due Diligence Period, Buyer shall obtain
a current, effective commitment (the "Title Commitment") for an ALTA extended
coverage

                                       3


owner's title insurance policy issued by the Title Company, in the amount of the
Purchase Price with Buyer as the proposed insured (the "Owner's Policy"), and
accompanied by true, complete, and legible copies of all documents referred to
in the Title Commitment.

      3.5. Survey. During the Due Diligence Period, Buyer may obtain a current
survey of the Property (the "Survey"). In no event shall Seller be required to
obtain any new survey or update any existing survey of the Property, or provide
a survey affidavit or other similar document to any party.

      3.6. Title and Survey Review and Cure. (a) Upon its receipt of the Title
Commitment and Survey, Buyer shall deliver copies thereof to Seller and during
the Due Diligence Period may notify Seller of any title objections it may have.
Seller shall have ten (10) business days from its receipt of such notice to
respond to Buyer that it (a) will cure or otherwise remove such title objections
prior to Closing or (b) that it will not cure or otherwise remove such title
objections. Should Seller elect to proceed under clause (a) but shall not able
to obtain such removal or cure prior to Closing despite its good faith efforts
to do so, Seller shall be entitled to extend the Closing for a reasonable period
of time (not to exceed thirty (30) days) in which to complete such cure. Should
Seller elect to proceed under clause (b), Buyer shall have shall have five (5)
business days from its receipt of Seller's notice that it has elected to proceed
under clause (b) hereof, or until the end of the Due Diligence Period, whichever
is later, to notify Seller whether it will (a) terminate this Agreement and
receive a prompt return of the Earnest Money or (b) proceed under this Agreement
to Closing, without reduction or abatement of the Purchase Price. Seller's lack
of response shall be deemed to be Seller's notice that Seller has elected to
proceed under clause (b) hereof. Buyer's notice that the Project is suitable
made under Section 3.2 hereof shall be deemed an acceptance by Buyer of all
matters related to the title of the Land existing prior to the date of the Title
Commitment.

      (b) In the event the Title Commitment is amended to include new exceptions
that are not set forth in a prior version of the Title Commitment, Buyer shall
have until the later of (i) the expiration of the Due Diligence Period, or (ii)
the date seven (7) days after Buyer's receipt of the amended Title Commitment
and copies of the documents identified in the new exceptions or new
requirements, within which to cancel this Agreement and receive a refund of the
Earnest Money or to provisionally accept the title subject to Seller's agreement
to cause the removal of any disapproved exceptions or objections. If Seller
serves notice to Buyer that Seller does not intend to remove such new exceptions
and objections before Closing, Buyer shall, within ten (10) days thereafter,
notify Seller and Escrow Agent in writing of Buyer's election to either (i)
terminate this Agreement, whereupon the Earnest Money shall be returned to Buyer
and all obligations shall terminate, or (ii) Buyer may waive such objections and
the transaction shall close as scheduled. If written notice of objection to such
new exceptions or requirements is not timely given by Buyer to Seller pursuant
to this Section 3.6(b), then Buyer shall be deemed to have objected to all such
new objections or requirements.

      3.7. Title and Survey Costs. Buyer shall pay any and all costs related to
the Title Commitment and Owner's Policy. Buyer shall pay any and all costs
related to the Survey.

      3.8. Confidentiality. Neither Buyer nor Seller shall make public
announcement or disclosure of any information related to this Agreement to
outside brokers or third parties including tax assessors before the Closing
without the prior written specific consent of the other; provided, however, that
either may make disclosure of this Agreement to its attorneys, lenders,
contractors, creditors, officers, employees and agents as necessary to perform
its obligations and

                                       4


conduct investigations hereunder. The provisions of this section shall survive
termination of this Agreement for twelve (12) months.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

      4.1 Seller's Representations and Warranties. In order to induce Buyer to
enter into this Agreement, Seller represents and warrants to Buyer that:

            (a) Seller is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of West Virginia and
has all requisite right, power and authority to execute, deliver and perform
this Agreement;

            (b) This Agreement has been duly authorized for execution, delivery
and performance by Seller, has been duly executed and delivered by Seller, and
constitutes the valid and binding agreement of Seller, enforceable against
Seller in accordance with its terms;

            (c) There is no pending or threatened litigation, condemnation or
similar proceeding affecting the Project or any part thereof, nor to the best
knowledge and belief of Seller is any such proceeding or assessment contemplated
by any governmental authority;

            (d) Except for Tenant, there are no parties in possession of any
portion of the Land as lessees, tenants at sufferance, licensees, or trespassers
and no person or entity has any right or option to lease, purchase, occupy, or
possess all or any part of the Project or any interest therein;

            (e) Seller is not a "foreign person" within the meaning of Section
1445 of the Internal Revenue Code;

            (f) To the knowledge of Seller and except as disclosed in the
environmental report delivered to Buyer, the Land does not contain any hazardous
wastes, hazardous substances or materials, toxic materials, or the like, as
defined or designated in any federal, state, or local law or environmental
statute, regulation, or ordinance, including asbestos, nor does the Land contain
any environmental hazard under any local, state, or federal laws or regulations
applicable to the Land;

            (g) To Seller's knowledge, no notice of violation has been issued
with regard to any applicable regulation, ordinance, requirement, covenant,
condition or restriction relating to the present use or occupancy of the Project
by any person, authority or agency having jurisdiction;

            (h) Seller will not, without the prior written consent of Buyer,
take any action before any governmental authority having jurisdiction thereover,
the object of which would be to change the present zoning of or other land-use
limitations, upon the Project, or any portion thereof, or its potential use,
and, to Seller's knowledge, there are no pending proceedings, the object of
which would be to change the present zoning or other land-use limitations;

                                       5


            (i) Except for any item to be prorated at Closing in accordance with
this Agreement, all bills or other charges, costs or expenses arising out of or
in connection with or resulting from Seller's use, ownership, or operation of
the Project up to Closing shall be paid in full by Seller;

            (j) All general real estate taxes, assessments and personal property
taxes that have become due with respect to the Project (except for those that
will be prorated at Closing) have been paid or will be so paid by Seller prior
to Closing;

            (k) From the date hereof until Closing or the earlier termination of
this Agreement, Seller shall (i) operate and maintain the Project in a manner
generally consistent with the manner in which Seller has operated and maintained
the Project prior to the date hereof, and shall perform in all material
respects, its obligations under the Lease, (ii) not, without Buyer's written
consent which shall not be unreasonably withheld, amend, modify or waive any
material rights under the Lease, and (iii) maintain the existing or comparable
insurance coverage, if any, for the Improvements which Seller is obligated to
maintain under the Lease;

            (l) To Seller's actual knowledge, except as disclosed in any
environmental report delivered to Buyer, there is not now, nor has there
ever been, on or in the Project underground storage tanks, any
asbestos-containing materials or any polychlorinated biphenyls, including those
used in hydraulic oils, electric transformers, or other equipment. Seller hereby
assigns to Buyer, effective as of Closing, all claims, counterclaims, defenses,
or actions, whether at common law, or pursuant to any other applicable federal
or state or other laws which Seller may have against any third parties relating
to the existence of any Hazardous Materials in, at, on, under or about the
Project (including Hazardous Materials released on the Project prior to Closing
and continuing in existence on the Project at Closing);

            (m) Should Seller receive notice or knowledge of any information
regarding any of the matters set forth in this Section 4.1 after the date hereof
and prior to Closing, Seller will immediately notify Buyer of the same in
writing; and

            (n) All representations made in this Agreement by Seller shall
survive the execution and delivery of this Agreement and Closing for a period of
two (2) years. Seller shall and does hereby indemnify against and hold Buyer
harmless from any loss, damage, liability and expense, together with all court
costs and attorneys' fees which Buyer may incur, by reason of any material
misrepresentation by Seller or any material breach of any of Seller's
warranties. Seller's indemnity and hold harmless obligations shall survive
Closing for a period of two (2) years.

      4.2 Buyer's Representations and Warranties. In order to induce Seller to
enter into this Agreement, Buyer represents and warrants to Seller that:

            (a) Buyer is duly formed, validly existing and in good standing
under the laws of its state of organization and has all requisite right, power
and authority to execute, deliver and perform this Agreement;

            (b) This Agreement has been duly authorized for execution, delivery
and performance by Buyer, has been duly executed and delivered by Buyer, and
constitutes the valid and binding agreement of Buyer, enforceable against Buyer
in accordance with its terms;

                                       6


            (c) There is no pending or threatened litigation or similar
proceeding affecting the Buyer, nor to the best knowledge and belief of Buyer is
any such proceeding or assessment contemplated;

            (d) should Buyer receive notice or knowledge of any information
regarding any of the matters set forth in this Section 14 after the Effective
Date and prior to Closing, Buyer will promptly notify Seller of the same in
writing; and

            (e) All representations made in this Agreement by Buyer shall
survive the execution and delivery of this Agreement and Closing for a period of
two (2) years. Buyer shall and does hereby indemnify against and hold Seller
harmless from any loss, damage, liability and expense, together with all court
costs and attorneys' fees, if awarded by a court of law, which Seller may incur,
by reason of any material misrepresentation by Buyer or any material breach of
any of Buyer's warranties. Buyer's indemnity and hold harmless obligations shall
survive Closing for a period of two (2) years.

      4.3 Intentionally Omitted.

      4.4 "AS IS, WHERE IS" Purchase. In recognition of the fact Buyer will have
conducted its own due diligence and thoroughly inspected the Project prior to
electing to proceed to Closing pursuant to this Agreement, including the
Project's physical, environmental, operational and structural aspects, it is
expressly understood and agreed that Seller has not made, and shall not be
deemed to have made, except as expressly set forth in Section 4.1 of this
Agreement, any warranties or representations, expressed or implied, and Seller
shall not have any liability to Buyer, except in connection with a breach of any
representation or warranty set forth in Section 4.1, with respect to any aspect
of the Project or its condition, including specifically but without limitation
as to (a) area, design, construction, maintenance, operation, value,
profitability or marketability or (b) the condition of the Project relating to
health, safety, zoning, environmental conditions or access for persons with
disabilities, or (c) the status of the Project regarding compliance with any
legal requirements. Further, it is expressly understood and agreed that, if
Buyer elects to purchase the Project, Buyer will acquire the Project in its "AS
IS, WHERE IS" condition, and that, except as expressly set forth in Section 4.1,
any other warranty or representation, express or implied, including specifically
but without limitation, any WARRANTY OF MERCHANTABILITY and WARRANTY OF FITNESS
FOR ANY PARTICULAR PURPOSE are hereby expressly EXCLUDED and NEGATED. The
provisions of this Paragraph shall survive the Closing of the sale of the
Project to Buyer for the full term of any applicable statute of limitations.

                                    ARTICLE V
                                     CLOSING

      5.1. Buyer's Conditions Precedent. It is a condition precedent to the
performance by Buyer of Buyer's obligations hereunder that, on or before the
Closing Date, the following conditions precedent be satisfied:

            (a) Seller shall have completed construction of the Project in
substantial accordance with the Construction Documents, as evidenced by delivery
of a Certificate of Completion;

                                       7


            (b) Seller shall have delivered to Buyer a Certificate of Occupancy;

            (c) Tenant shall have accepted delivery of the Project and the
"Commencement Date", as defined in the Lease, shall have occurred, as evidenced
by Seller's delivery of an Estoppel Certificate naming Buyer (or its designee)
and Wachovia Bank, National Association as addressees, which Estoppel
Certificate must be reasonably acceptable to Buyer, in Tenant's standard form,
without any punch list items remaining, executed by Tenant pursuant to Section
26 of the Lease (the "Estoppel Certificate");

            (d) The issuance of the Owner's Policy (or a written commitment
therefore) subject only to those matters approved or deemed approved by Buyer
pursuant to this Agreement;

            (e) The deposit with Escrow Agent of a letter from Seller to Tenant
requesting that future rent under the Lease be paid to Buyer;

            (f) The deposit with Escrow Agent of an executed final lien waiver
by the general contractor, an executed affidavit of Seller and such other
documentation as may be reasonably required by Escrow Agent to allow for the
deletion of the mechanics' lien exception from the Owner's Policy;

            (g) The delivery by Seller to Escrow Agent, for delivery to Buyer at
Closing, of the executed original Transfer Documents;

            (h) Omitted.

            (i) Delivery to Buyer of originals of the Lease and the Contracts,
if any, in the possession of Seller or Seller's agents and any correspondence
with respect thereto, together with such non-proprietary leasing and property
manuals, files and records which are material in connection with the continued
operation, leasing and maintenance of the Project;

            (j) All representations and warranties of Seller hereunder shall
continue to be true and correct;

            (k) Delivery by Seller to Escrow Agent of a subordination,
non-disturbance and attornment agreement, in the form attached to the Lease, for
the benefit of Wachovia Bank, National Association, executed by Tenant (the
"SNDA"); and

            (l) No material adverse change has occurred with respect to the
Project since the expiration of the Due Diligence Period.

      5.2 Closing. Closing shall occur on or before 5:00 p.m. MST on the
fifteenth (15th) day after the Commencement Date under the Lease (if such day
falls on a Saturday, Sunday, or federal holiday, then Closing shall occur on the
next such day that is not a Saturday, Sunday, or federal holiday). If the
Closing is extended beyond November 1, 2005 because Seller has failed to satisfy
the items in Section 5.1, then Buyer shall have the option of canceling this
transaction, receiving a prompt return of the Earnest Money and neither party
shall have any further obligation to the other. Buyer may extend the Closing
Date for up to an additional twenty (20) days upon delivery of written notice to
extend the Closing Date to Escrow Agent prior to the original Closing Date and
by depositing an additional Fifty Thousand and no/100 Dollars ($50,000.00) of
earnest money with Escrow Agent. For purposes of this Agreement, any

                                       8


additional earnest money deposited with Escrow Agent pursuant to this Section
5.2 shall be added to and become a part of the Earnest Money.

      5.3 Items to be Delivered at the Closing.

            (a) By Seller. At Closing, Seller shall deliver to Buyer, at
Seller's sole cost and expense, each of the following items:

                  (i) A limited warranty deed, duly executed and acknowledged by
Seller, and in form for recording, conveying good and marketable fee simple
title to the Project to Buyer, subject only to the Permitted Exceptions (the
"Deed");

                  (ii) Evidence reasonably satisfactory to the Title Company and
Buyer of Seller's authority to consummate this transaction;

                  (iii) Affidavits reasonably required by the Title Company in
order to remove all standard exceptions from the Buyer's title insurance
commitment, including exceptions for mechanic's liens;

                  (iv) State tax withholding affidavit and a certificate stating
that it is not a "foreign person" within the meaning of Section 1445 of the
Internal Revenue Code;

                  (v) The Certificate of Occupancy;

                  (vi) The Certificate of Completion;

                  (vii) The original Lease;

                  (viii) An assignment and assumption of the Lease (the
"Assignment of Lease");

                  (ix) The Estoppel Certificate and the SNDA;

                  (x) The Bill of Sale;

                  (xi) The Assignment Agreement; and

                  (xii) A signed closing statement.

            (b) By Buyer. At the Closing, Buyer shall deliver to Seller each of
the following items:

                  (i) The Purchase Price in the form of cash or wired funds and
a signed closing statement; and

                  (ii) The Assignment of Lease.

      5.4. Taxes, Prorations and Closing Costs. Seller and Buyer shall each pay
their respective attorney's fees and shall each pay one-half of any escrow fees
(with Seller's share of escrow fees not to exceed $150.00). Buyer shall pay
recording fees and the cost of the title insurance commitment, title insurance
policy, and Survey. Seller shall pay the cost of (i)

                                       9


releasing all liens, judgments and other encumbrances that are to be released
pursuant to the terms hereof, (ii) recording such releases, (iii) preparing the
deed and (iv) the deed transfer tax. To the extent not required to be paid by
Tenant, real estate taxes for the then current year shall be prorated at the
Closing Date effective as of the Closing Date, based on the most recent tax
bills. If the final tax rate or assessment for the year of closing for the
Project is different than that upon which the proration at closing was made,
Seller and Buyer agree to adjust the proration at such time as the actual taxes
for the Project are known. Seller shall be solely responsible for any taxes and
assessments attributable to the Project for any period prior to the Closing
Date. The agreements in this paragraph shall survive the Closing. Seller shall
(a) be entitled to all rents and other income, receipts and revenue with respect
to the period up to, but not including, the Closing Date, and (b) remain
responsible for all invoices, payables and other obligations with respect to the
period up to, but not including, the Closing Date. Buyer shall (y) be entitled
to all rents and other income, receipts and revenue with respect to the period
beginning on the Closing Date and continuing thereafter and (z) become
responsible only for such invoices, payables and other obligations as arise with
respect to the period beginning on the Closing Date and continuing thereafter to
the extent the same are not paid or payable under the Lease.

      Seller shall pay a brokerage fee of two percent (2.00%) of the Purchase
Price, allocated as follows: 1.0% of the Purchase Price to OMNI Group; 1.0% of
the Purchase Price to Charles Wayne Properties, which brokerage fee shall be
paid at Closing.

                                   ARTICLE VI
                           EMINENT DOMAIN AND CASUALTY

      Seller shall bear all risk of loss, damage or taking of the Project which
may occur prior to Closing, as described in this Article. In the event that,
prior to the Closing Date, all or any portion of the Project is damaged or
destroyed to any extent by fire, earthquake, flood or other cause or casualty or
shall have been affected by condemnation or taking by eminent domain, or shall
be the subject of any condemnation proceeding of which Seller shall have
received actual or constructive notice, or shall be sold by Seller in lieu
thereof, Buyer shall have the option, but not the obligation, to accept the
Project, or such title thereto as Seller can convey, in such condition as the
Project or title may then be, with no reduction in the Purchase Price, but
together with the right to receive the proceeds of any insurance or condemnation
award or sale in lieu of such condemnation proceeding which shall have been or
shall be made in connection with such damage, destruction, condemnation or
taking, as the case may be. Such option must be exercised by Buyer by written
notice to Seller within a reasonable time but in no event later than ten (10)
days following receipt by Buyer of written notice from Seller of such damage,
destruction, condemnation or taking, and if such option is not so exercised,
this Agreement shall thereafter terminate. In the event of termination of this
Agreement pursuant to this Section, the Earnest Money shall be promptly returned
to Buyer and both Parties shall be relieved of all obligations hereunder which
do not expressly survive termination of this Agreement.

                                   ARTICLE VII
                                     DEFAULT

      7.1 Seller's Default. In the event that Seller shall fail to perform any
of Seller's obligations hereunder within the time for or in the manner of
performance herein provided following the expiration of any applicable grace or
cure period, Buyer shall have the right to elect one (1) of the following: (i)
terminate this Agreement in which event the Earnest Money, together with any
interest accrued thereon, shall be refunded to Buyer; (ii) waive such default
and close

                                       10


under this Agreement; or (iii) seek the specific performance of this Agreement.
Notwithstanding the foregoing, if specific performance is unavailable as a
remedy to Buyer because of Seller's affirmative acts, Buyer shall be entitled to
pursue all rights and remedies available at law or in equity.

      7.2 Buyer's Default. In the event that Buyer shall fail to perform any of
Buyer's obligations hereunder following the expiration of any applicable grace
or cure period, Seller may terminate this Agreement in which event the Earnest
Money, together with all interest accrued thereon, shall be paid to Seller as
Seller's sole remedy for Buyer's default.

      7.3 Right to Cure Defaults. Prior to the exercise by Buyer or Seller of
their respective rights under this Article, the non-defaulting Party shall
provide written notice specifying such default to the other party (the
"Defaulting Party") and the Defaulting Party shall have ten (10) days following
notice to cure such default.

                                  ARTICLE VIII
                                   THE ESCROW

      8.1 Deposit of the Earnest Money. Escrow Agent shall hold the Earnest
Money in a non-interest bearing account in accordance with the terms of this
Agreement; provided, however, if Buyer pays all fees incurred in connection with
the establishment of an interest bearing account and so directs Escrow Agent in
writing, the Earnest Money will be deposited into an interest bearing account.
All checks, money orders or drafts deposited with Escrow Agent under this
Agreement will be processed for collection in the normal course of business.
Escrow Agent may not commingle funds received by it in escrow with funds of
others and may, without limitation, deposit such funds in its trust or escrow
accounts with any reputable Trust Company, Bank, Savings Bank or Savings
Association. Escrow Agent shall not be liable for any loss caused by the
failure, suspension, bankruptcy or dissolution of any such investment vehicle or
fund.

      8.2 No Liability for Certain Acts and Omissions. Escrow Agent shall not be
liable for any loss or damage resulting from the following: (a) any defects or
conditions of title to any property; (b) any defects in the property purchased,
obligations or rights of any tenant or other party in possession, the surrender
of possession or any misrepresentations made by any other party; (c) any
default, error, action or omission of any other party; (d) the expiration of any
time limit or other delay, unless such time limit was known to Escrow Agent and
such loss is solely caused by failure of Escrow Agent to proceed in its ordinary
course of business; (e) lack of authenticity, sufficiency and effectiveness of
any documents delivered to it and lack of genuineness of any signature or
authority of any person to sign any such document; (f) any loss or impairment of
Earnest Money deposited in the course of collection or while on deposit with any
Trust Company, Bank, Savings Bank or Savings Association resulting from failure,
insolvency or suspension of such institution; (g) Escrow Agent complying with
any and all legal process, writs, orders, judgments and decrees of any court
whether issued with or without jurisdiction and whether or not subsequently
vacated, modified, set aside or reversed; (h) Escrow Agent asserting or failing
to assert any cause of action or defense in any judicial, administrative or
other proceeding either in the interest of itself or any other party or parties;
or (i) any good faith act or forbearance by Escrow Agent.

      8.3 Authenticity of Instructions. Escrow Agent shall have no obligation to
inquire into the authenticity of any written instructions delivered to it as
required by this Agreement nor

                                       11


to inquire as to the genuineness of any signature of authority of any person to
issue such instructions.

      8.4 Disputes. If written notice of default, non-performance or dispute by
or between either Seller or Buyer is given to Escrow Agent, Escrow Agent shall
notify in writing all other parties of the receipt of such notice and shall not
disburse any Earnest Money until Escrow Agent receives written joint
disbursement instructions by both Seller and Buyer or until Escrow Agent
receives an order from a court of competent jurisdiction authorizing or
requiring Escrow Agent to disburse the Earnest Money. If within (15) days from
the date of mailing of such notice by Escrow Agent, a written joint instruction
reply executed by both Seller and Buyer has not been received by Escrow Agent or
a conflicting instruction reply has been received from any party, Escrow Agent
may file an interpleader action to resolve the conflict. Escrow Agent shall be
indemnified, saved and held harmless by the other parties for all of its
expenses, costs and reasonable attorney fees incurred in connection with an
interpleader action and such expenses, costs and fees may be deducted from the
Earnest Money held hereunder.

      8.5 Indemnification. If Escrow Agent is made a party to any judicial,
non-judicial or administrative action, hearing or process based on acts of any
of the other parties hereto and not on the malfeasance and/or gross negligence
of Escrow Agent in performing its duties hereunder and which seeks to attach,
recover or direct disbursement/release of the subject matter of this Agreement,
the expenses, costs and reasonable attorney fees incurred by Escrow Agent in
responding to such action, hearing or process may be deducted from the funds
held hereunder and the parties shall indemnify save and hold Escrow Agent
harmless from said expenses costs and fees so incurred.

                                   ARTICLE IX
                            MISCELLANEOUS PROVISIONS

      9.1 Broker's Commission. Seller and Buyer hereby agree and acknowledge
that there are no third party real estate brokers involved in this transaction,
except as set forth in the Article V of this Agreement. Except as set forth in
Article V of this Agreement, Seller and Buyer each represent and warrant to the
other that there are no claims for broker's commissions or finder's fees in
connection with the execution and delivery of this Agreement. Seller and Buyer
each agree to indemnify the other against and hold each party harmless from all
liabilities arising from a breach of the representation and warranty made by
such party herein, including without limitation, attorney's fees and related
court costs.

      9.2 Notices. Any notice, approval, waiver, objection or other
communication (for convenience, "notice") required or permitted to be given
hereunder or given in regard to this Agreement by one party to the other shall
be in writing and the same shall be given and be deemed to have been served and
given upon receipt or refusal of delivery (a) when delivered in person to the
address set forth hereinafter for the party to whom notice is given; (b) when
deposited in the United States mail, postage prepaid, by Certified Mail, Return
Receipt Requested, addressed to the party at the address hereinafter specified;
or (c) when deposited with a national overnight delivery company such as Federal
Express, addressed to the party at the address hereinafter specified. Any party
may change its address for notices by notice theretofore given in accordance
with this section and shall be deemed effective only when actually received by
the other party.

                                       12


       If to Seller to:             C& F Development Associates, LLC
                                    100 Star Avenue, Suite 112
                                    Parkersburg, WV 26101
                                    Attn: James A. Cochrane

       With a copy, which           Hull, Towill, Norman, Barrett & Salley, P.C.
       shall not constitute         111 Park Avenue, SW
       notice to:                   Aiken, SC 29801
                                    Attn: Rand Hanna

       If to Buyer to:              SERIES C, LLC
                                    2555 E. Camelback Road, Suite 400
                                    Phoenix, AZ 85016
                                    Attn: Legal Department

       With a copy, which           Bennett Wheeler Lytle & Cartwright, PLC
       shall not constitute         3838 N. Central Avenue, Suite 1120
       notice to:                   Phoenix, AZ 85012
                                    Attn: Kevin T. Lytle, Esq.

       If to the Escrow             Fidelity National Title Insurance Company
       Agent to:                    40 N. Central Avenue, Suite 2850
                                    Phoenix, AZ 85004
                                    Attn: Mary Garcia

      9.3 Entire Agreement. This Agreement and the exhibits attached hereto
constitute the entire agreement between Seller and Buyer, and there are no other
covenants, agreements, promises, terms, provisions, conditions, undertakings, or
understandings, either oral or written, between them concerning the Project
other than those herein set forth. No subsequent alteration, amendment, change,
deletion or addition to this Agreement shall be binding upon Seller or Buyer
unless in writing and signed by both Seller and Buyer.

      9.4 Headings. The headings, captions, numbering system, etc. are inserted
only as a matter of convenience and may under no circumstances be considered in
interpreting the provisions of this Agreement.

      9.5 Binding Effect; Assignment. All of the provisions of this Agreement
are hereby made binding upon the personal representatives, heirs, successors,
and assigns of both parties hereto. Where required for proper interpretation,
words in the singular shall include the plural; the masculine gender shall
include the neuter and the feminine, and vice versa. The terms "heirs,
executors, administrators and assigns" shall include "successors, legal
representatives and assigns". Notwithstanding the foregoing, this Agreement
shall not be assigned by Buyer without the prior written consent of Seller and
any such prohibited assignment shall be void; provided, however, that Buyer may
assign this Agreement to any "affiliate" of Buyer, which for purposes of this
Section shall mean any business entity controlled (greater than 50%) by Buyer or
under common control with Buyer. Any assignment by Buyer hereunder will not
absolve or release

                                       13


Buyer from liability under this Agreement. In order for any assignment to be
effective, Buyer must provide to Seller a copy of the fully executed assignment
by Buyer.

      9.6 Time of Essence. Time is of the essence of this Agreement.

      9.7 Unenforceable or Inapplicable Provisions. If any provision hereof is
for any reason unenforceable or inapplicable, the other provisions hereof will
remain in full force and effect in the same manner as if such unenforceable or
inapplicable provision had never been contained herein.

      9.8 Counterparts. This Agreement may be executed by facsimile and in any
number of counterparts, each of which will for all purposes be deemed to be an
original, and all of which are identical.

      9.9 Applicable Law. Waiver of Jury Trial. This Agreement shall be
construed under and in accordance with the laws of the State of West Virginia.
Seller and Buyer hereby agree that venue for any action brought under this
Agreement shall be in Wood County, West Virginia. Buyer and Seller waive their
right to jury trial in all actions against each other.

      9.10 Attorney's Fees. In the event either Buyer or Seller should bring
suit against the other in respect to any matters provided for in this Agreement,
the prevailing party shall be entitled to recover from the other party
reasonable attorneys' fees in connection with such suit upon a final
adjudication of such suit.

      9.11 Authority. Each person executing this Agreement, by his execution
hereof, represents and warrants that he is fully authorized to do so, and that
no further action or consent on the part of the party for whom he is acting is
required to the effectiveness and enforceability of this Agreement against such
party following such execution.

      9.12 Further Assurances. In addition to the acts and deeds recited herein
and contemplated to be performed at the Closing, Seller and Buyer agree to
perform such other acts, and to execute and/or deliver such other instruments
and documents and either Seller or Buyer, or their respective counsel, may
reasonab1y require in order to effect the intents and purposes of this
Agreement. Further, Seller and Buyer each agree to deliver to the Title Company
affidavits and such other assurances as may reasonably be necessary or required
to enable the Title Company to issue the policy of title insurance as
contemplated in this Agreement.

      9.13 Time Periods. Unless otherwise expressly provided, all periods for
delivery or review and the like shall be determined on a "calendar" day basis.
If any date for performance, approval, delivery or Closing falls on a Saturday,
Sunday or legal holiday (state or federal) in Parkersburg, West Virginia, the
time therefore shall be extended to the next Business Day. The term "Business
Days" as used herein means Mondays through Fridays except holidays.

      9.14 Internal Revenue Code Section 1031 Exchange. Either party may
consummate the purchase or sale of the Project as part of a so called like kind
exchange (an "Exchange") pursuant to Section 1031 of the Internal Revenue Code
of 1986, as amended (the "Code"), provided that: (a) the Closing shall not be
delayed or affected by reason of an Exchange nor shall the consummation or
accomplishment of any Exchange be a condition precedent or condition subsequent
to a party's obligations under this Agreement; (b) any party desiring an
Exchange shall effect its Exchange through an assignment of this Agreement, or
its rights under this Agreement, to a qualified intermediary and the other party
shall not be required to take an

                                       14


assignment of the purchase agreement for the relinquished or replacement
property or be required to acquire or hold title to any real property for
purposes of consummating such Exchange; and (c) the party desiring an Exchange
shall pay any additional costs that would not otherwise have been incurred by
Purchaser or Seller had such party not consummated its purchase or sale through
an Exchange. Neither party shall by this agreement or acquiescence to an
Exchange desired by the other party (i) have its rights under this Agreement
affected or diminished in any manner or (ii) be responsible for compliance with
or be deemed to have warranted to the other party that such party's Exchange in
fact complies with Section 1031 of the Code.

      9.15 Escrow Cancellation Charges. If escrow fails to close because of
Seller's default, Seller shall be liable for any reasonable cancellation charges
of Escrow Agent. If escrow fails to close because of Buyer's default, Buyer
shall be liable for any reasonable cancellation charges of Escrow Agent. If
escrow fails to close for any other reason, Seller and Buyer shall each be
liable for one-half of any reasonable cancellation charges of Escrow Agent. The
provisions of this Section 9.15 shall survive cancellation of this Agreement.

      9.16 Releases. Effective the date of closing of this Agreement, except as
expressly provided in this Agreement, Seller and anyone claiming through Seller
hereby releases Tenant from any and all claims of whatever kind or nature, in
law or equity, whether now known or unknown to Seller, whether contingent or
matured, that Seller may now have or hereafter acquire against Tenant for any
costs, loss, liability, damage, expenses, demand, action or cause of action
arising from or related to the Lease arising from events occurring prior to
Closing.

      9.17 Incorporation of Exhibits by Reference. All Exhibits to this
Agreement are fully incorporated herein as though set forth at length herein.

                         [SIGNATURES ON FOLLOWING PAGE]

                                       15


      IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date of their respective signatures below.

SELLER:                                    BUYER:

C & F DEVELOPMENT limited                  SERIES C, LLC, an Arizona limited
ASSOCIATES, LLC, a West Virginia           liability company (Seal)
liability company (Seal)
                                           By: /S/ John M. Pons
                                               ----------------
                                           John M. Pons
By: /S/ Edwin B. Farmer                    Authorized Officer
    ------------------
Edwin Farmer
As its Managing Member

                                           ESCROW AGENT:

                                           FIDELITY NATIONAL TITLE
                                           INSURANCE COMPANY (Seal)

                                           By: /S/ Mary L. Garcia
                                               ----------------------------
                                           Print Name: Mary L. Garcia
                                           As its: V.P. Senior Commercial Escrow

                                       16


                               FIRST AMENDMENT TO
                         AGREEMENT OF PURCHASE AND SALE

      This First Amendment to Agreement of Purchase and Sale ("Amendment") is
entered into effective the 12th day of August, 2005, among C & F DEVELOPMENT
ASSOCIATES, LLC, a West Virginia limited liability company ("Buyer"), SERIES C,
LLC, an Arizona limited liability company ("Buyer"), and Fidelity National Title
Insurance Company ("Escrow Agent").

                                    RECITALS:

      A. Seller, Buyer and Escrow Agent entered into that Agreement of Purchase
and Sale ("Purchase Agreement") dated August 2, 2005 related to the purchase and
sale of approximately 2.966 acres of land located at the intersection of U.S.
Route 14 and Pike Street near I-77, Parkersburg, WV, commonly known as 101 Tara
Lane Parkersburg, WV 26101.

      B. Seller, Buyer and Escrow Agent desire to amend the Purchase Agreement,
upon the terms and conditions hereinafter set forth.

      NOW, THEREFORE, for $10 and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Seller, Escrow Agent and
Buyer hereby amend the Purchase Agreement as follows:

      1. Closing. The first sentence of Section 5.2 of the Purchase Agreement is
amended to read as follows:

      Closing shall occur on or before 5:00 p.m. MST on the fifteenth (15th) day
      after the expiration of the Due Diligence Period (if such day falls on a
      Saturday, Sunday, or federal holiday, then Closing shall occur on the next
      such day that is not a Saturday, Sunday, or federal holiday).

      2. Ratification of Purchase Agreement. Except to the extent
expressly modified or amended by this Amendment, the Purchase Agreement shall
remain unmodified and in full force and effect and is hereby ratified and
affirmed. To the extent of any inconsistency between the Amendment and the
Purchase Agreement, the terms and conditions of this Amendment shall control.

      3. Execution by Facsimile and Counterparts. This Amendment may be executed
in any number of counterparts, each of which shall be deemed to be an original,
and all of such counterparts shall constitute one agreement. To facilitate
execution of this Amendment, the parties may execute and exchange by telephone
facsimile counterparts of the signature pages.

                         [SIGNATURES ON FOLLOWING PAGE]

                                       1


      IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date and year first above written.

SELLER:                                    BUYER:

C & F DEVELOPMENT                          SERIES C, LLC, an Arizona limited
ASSOCIATES, LLC, a West Virginia           liability company (Seal)
limited liability company (Seal)
                                           By: /S/ John M. Pons
By:  /S/ Edwin B. Farmer                       -------------------
    --------------------                       John M. Pons
Edwin Farmer                                   Authorized Officer
As its Managing Member
                                           ESCROW AGENT:

                                           FIDELITY NATIONAL TITLE
                                           INSURANCE COMPANY (Seal)

                                           By: /S/ Mary L. Garcia
                                               ---------------------------------
                                           Print Name: Mary L. Garcia
                                           As its: V.P. Senior Commercial Escrow

                                       2


                               SECOND AMENDMENT TO
                         AGREEMENT OF PURCHASE AND SALE

      This Second Amendment to Agreement of Purchase and Sale ("Amendment") is
entered into effective the 31st day of August, 2005, among C & F DEVELOPMENT
ASSOCIATES, LLC, a West Virginia limited liability company ("Buyer"), SERIES C,
LLC, an Arizona limited liability company ("Buyer"), and Fidelity National Title
Insurance Company ("Escrow Agent").

                                    RECITALS:

      A. Seller, Buyer and Escrow Agent entered into that Agreement of Purchase
and Sale (as amended, the "Purchase Agreement") dated August 2, 2005 related to
the purchase and sale of approximately 2.966 acres of land located at the
intersection of U.S. Route 14 and Pike Street near I-77, Parkersburg, WV,
commonly known as 101 Tara Lane Parkersburg, WV 26101.

      B. Seller, Buyer and Escrow Agent desire to amend the Purchase Agreement,
upon the terms and conditions hereinafter set forth.

      NOW, THEREFORE, for $10 and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Seller, Escrow Agent and
Buyer hereby amend the Purchase Agreement as follows:

      1. Due Diligence Period. The definition of "Due Diligence Period" in
Section 1 is amended to read as follows:

      "Due Diligence Period" shall mean the period of time commencing on the
      date of this Agreement and ending on September 9, 2005.

      2. Ratification of Purchase Agreement. Except to the extent expressly
modified or amended by this Amendment, the Purchase Agreement shall remain
unmodified and in full force and effect and is hereby ratified and affirmed. To
the extent of any inconsistency between the Amendment and the Purchase
Agreement, the terms and conditions of this Amendment shall control.

      3. Execution by Facsimile and Counterparts. This Amendment may be executed
in any number of counterparts, each of which shall be deemed to be an original,
and all of such counterparts shall constitute one agreement. To facilitate
execution of this Amendment, the parties may execute and exchange by telephone
facsimile counterparts of the signature pages.

                         [SIGNATURES ON FOLLOWING PAGE]

                                       1


      IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date and year first above written.

SELLER:                                    BUYER:

C & F DEVELOPMENT                          SERIES C, LLC, an Arizona limited
ASSOCIATES, LLC, a West Virginia           liability company (Seal)
limited liability company (Seal)
                                           By: /S/ John M. Pons
                                               ------------------
By: /S/ Edwin B. Farmer                    John M. Pons
    -------------------                    Authorized Officer
Edwin Farmer
As its Managing Member

                                           ESCROW AGENT:

                                           FIDELITY NATIONAL TITLE
                                           INSURANCE COMPANY (Seal)

                                           By: /S/ Mary L. Garcia
                                               --------------------------------
                                           Print Name: Mary L. Garcia
                                           As its: V.P. Senior Commercial Escrow
                                                   Officer

                                       2

EX-10.2

                                                                    EXHIBIT 10.2

                                                    TRACTOR SUPPLY - PARKERSBURG
                                                             LOAN NO. 50-2853260

                                 PROMISSORY NOTE

 $2,607,000.00                                                September 26, 2005

      FOR VALUE RECEIVED, the undersigned, COLE TS PARKERSBURG WV, LLC, a
Delaware limited liability company ("Maker"), having an address at 2555 East
Camelback Road, Suite 400, Phoenix, Arizona 85016, promises to pay to the order
of WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association
("Payee"), at the office of Payee at Commercial Real Estate Services, 8739
Research Drive URP - 4, NC 1075, Charlotte, North Carolina 28262, or at such
other place as Payee may designate to Maker in writing from time to time, the
principal sum of TWO MILLION SIX HUNDRED SEVEN THOUSAND AND NO/100 DOLLARS
($2,607,000.00), together with interest on so much thereof as is from time to
time outstanding and unpaid, from the date of the advance of the principal
evidenced hereby and as allocated to Fixed Rate Tranche A and Floating Rate
Tranche B (as each term is hereinafter defined) for each such tranche, at the
Note Rate (as hereinafter defined), together with all other amounts due
hereunder or under the other Loan Documents (as defined herein), in lawful money
of the United States of America, which shall at the time of payment be legal
tender in payment of all debts and dues, public and private.

                        ARTICLE I -- TERMS AND CONDITIONS

      1.1 Definitions. The following terms, as used in this Note, shall have the
following meanings, which meanings shall be applicable equally to the singular
and the plural of the terms defined:

         (a) "Business Day" shall mean a day of the year on which banks are not
required or authorized to close in Charlotte, North Carolina.

         (b) "Determination Date" shall mean a date on which the LIBOR-Based
Rate shall be selected as the applicable interest rate in respect of Floating
Rate Tranche B, which date shall be the day that is two (2) London Business Days
prior to the commencement of an Interest Period or, with respect to the first
Interest Period, the date the Loan shall be advanced by Payee.

         (c) "Extended Maturity Date" shall mean October 11, 2035.

         (d) "Fixed Rate Tranche A" shall mean One Million Seven Hundred
Ninety-Three Thousand and No/100 Dollars ($1,793,000.00) of the aggregate amount
of the Loan which shall bear interest as set forth in Section 1.3 hereof.

         (e) "Floating Rate Tranche B" shall mean Eight Hundred Fourteen
Thousand and No/100 Dollars ($814,000.00) of the aggregate amount of the Loan
which shall bear interest at the LIBOR-Based Rate (as hereinafter defined).

         (f) "Interest Period" shall mean initially, the period commencing on
the date hereof and ending on and including the day of
the tenth (10th) day of the calendar month



following the date of this Note, unless principal is advanced on the tenth
(10th) of a month, in which case the first Interest Period shall consist only
such tenth (10th) day. Each Interest Period thereafter shall commence on the
eleventh (11th) day of each calendar month during the term of this Note and
shall end on and include the tenth (10th) day of the next occurring calendar
month. Interest shall accrue from the date on which funds are advanced hereunder
(regardless of the time of day) through and including the day on which funds are
credited pursuant to Section 1.4 hereof.

         (g) "LIBOR-Based Rate" shall mean (i) for the first Interest Period, an
interest rate per annum equal to _______________ percent (______%) and (ii) for
each succeeding Interest Period until Floating Rate Tranche B is satisfied, an
interest rate per annum equal at all times to two hundred (200) basis points
above the one-month LIBOR, in each case as determined by Payee prior to the
commencement of each Interest Period.

         (h) "LIBOR" shall mean with respect to each day during each Interest
Period, the rate for U.S. dollar deposits of that many months maturity as
reported on Telerate page 3750 as of 11:00 a.m., London time, on the second
London Business Day before the relevant Interest Period begins (or if not so
reported, then as determined by Payee from another recognized source or
interbank quotation), rounded up to the nearest one-eighth of one percent
(1/8%).

         (i) "Loan" shall mean that certain loan made by Payee to Maker in
respect of the Property which is evidenced by this Note and secured by, among
other things, the Security Instrument and all other Loan Documents.

         (j) "Loan Documents" shall mean the Security Instrument, this Note and
all other documents now or hereafter evidencing, securing, guarantying,
modifying or otherwise relating to the indebtedness evidenced hereby.

         (k) "London Business Day" shall mean a day of the year on which
dealings in United States dollars are carried on in the London interbank market
and banks are not required or authorized to close in London or in New York, New
York.

         (l) "Maturity Date" shall mean October 11, 2015.

         (m) "Monthly Payment Amount" shall mean the sum of (A) from and
including the First Payment Date through the Maturity Date, an amount equal to
the interest payable under this Note on the portion allocated as Fixed Rate
Tranche A at the Fixed Interest Rate in the amounts for each such Payment Date
set forth on Annex 1 attached hereto and incorporated herein by this reference
or as provided by Payee to Maker in connection with the initial Fixed Interest
Rate Interest Period, plus (B) through and until Floating Rate Tranche B is
satisfied, an amount equal to the interest payable under this Note on the
portion allocated as Floating Rate Tranche B at the LIBOR-Based Rate pursuant to
the provisions of Section 1.2 hereof. Annex 1 is for reference purposes only and
any payment incorrectly referenced thereon or omitted therefrom shall not limit
or reduce Maker's obligations for actual amounts due under this Note in
accordance with its payment terms, and Maker agrees that Payee may substitute a
replacement Annex 1 in the event the attached does not accurately reflect
Maker's scheduled payment obligations.

         (n) "Optional Prepayment Date" shall mean October 11, 2015.

                                       2


         (o) "Optional Prepayment Determination Date" shall mean August 11,
2015.

         (p) "Security Instrument" shall mean that certain mortgage, deed of
trust or deed to secure debt and security agreement from Maker for the benefit
of Payee, dated of even date herewith, covering property located in Wood County,
West Virginia.

      Each of the capitalized terms not otherwise defined in this Note shall
have the respective meaning ascribed to it in the Security Instrument of even
date herewith from Maker to Payee.

      1.2 LIBOR-Based Rate; Pay-Down Date. (a) From the date of the advance of
the principal evidenced hereby through the Pay-Down Date (as hereinafter
defined) for Floating Rate Tranche B, Floating Rate Tranche B shall bear
interest at the LIBOR-Based Rate. The LIBOR-Based Rate shall remain in effect,
subject to the provisions hereof, from and including the first day of the
Interest Period to and excluding the last day of the Interest Period for which
it is determined.

         (b) If requested by Payee, Maker shall immediately confirm the
LIBOR-Based Rate and the duration of the applicable Interest Period by
acknowledging receipt of a written confirmation of the LIBOR-Based Rate and
Interest Period delivered by Payee to Maker. Only one Interest Period may be in
effect at any given time.

         (c) Without limiting the effect of any other provision of this Note,
Maker shall pay to Payee on the last day of each and every Interest Period, so
long as and to the extent that Payee (or its source of funds) may directly or
indirectly be required to maintain reserves against "Eurocurrency liabilities"
under Federal Reserve Regulation D (as at any time amended), additional interest
(as determined by Payee and disclosed to Maker) for each such Interest Period at
an interest rate per annum equal, at all times during such Interest Period for
the principal balance of Floating Rate Tranche B, to the excess of (i) the rate
obtained by dividing LIBOR for such Interest Period by a percentage equal to
100% minus the reserve percentage applicable during such Interest Period under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or if more than one such percentage is so applicable, minus the
daily average of such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) for determining the maximum
reserve requirement (including, without limitation, any marginal reserve
requirement) for Payee (or its source of funds) in respect of liabilities or
assets consisting of or including "Eurocurrency liabilities" under Federal
Reserve Regulation D (as at any time amended) having a term equal to such
Interest Period over (ii) LIBOR for such Interest Period. Terms used in
Regulation D shall have the same meanings when used herein. Each such
determination made by Payee and each such notification by Payee to Maker under
this subparagraph of the amount of additional interest payable hereunder shall
be conclusive as to the matters set forth therein.

         (d) In addition to the payment of interest and fees as aforesaid, Maker
shall, from time to time, upon demand by Payee pay to Payee amounts as shall be
sufficient to compensate Payee for (i) any loss, cost, fee, breakage or other
expense incurred or sustained directly or indirectly by reason of the
liquidation or reemployment of deposits or other funds acquired by Payee to fund
or maintain Floating Rate Tranche B during any Interest Period as a result of
any prepayment of Floating Rate Tranche B or any portion thereof or any attempt
by

                                       3


Maker to rescind the selection of the LIBOR-Based Rate as the applicable
interest rate for Floating Rate Tranche B and (ii) any increased costs incurred
by Payee, by reason of:

            (x) taxes (or the withholding of amounts for taxes) of any nature
      whatsoever, including, without limitation, income, excise and interest
      equalization taxes (other than United States or state income taxes) as
      well as all levies, imports, duties, or fees whether now in existence or
      as the result of a change in, or promulgation of, any treaty, statute or
      regulation or interpretation thereof, or any directive, guideline or
      otherwise, by a central bank or fiscal authority or any other entity
      (whether or not having the force of law) or a change in the basis of, or
      time of payment of, such taxes and other amounts resulting therefrom;

            (y) any reserve or special deposit requirements against or with
      respect to assets or liabilities or deposits outstanding under LIBOR
      (including, without limitation, those imposed under the Monetary Control
      Act of 1978) currently required by, or resulting from a change in, or the
      promulgation of, such requirements by treaty, statute, regulation,
      interpretation thereof, or any directive, guidelines, or otherwise by a
      central bank or fiscal authority (whether or not having the force of law);
      and

            (z) any other costs resulting from compliance with treaties,
      statutes, regulations, interpretations or any directives or guidelines or
      otherwise, promulgated by or of a central bank or fiscal authority or
      other entity with similar authority (whether or not having the force of
      law).

A certificate as to the amount of any such costs prepared by Payee, signed by an
authorized officer of Payee and submitted to Maker shall be conclusive as to the
matters therein set forth.

      (e) The selection at any time of an interest rate based upon LIBOR shall
be expressly conditioned upon the existence of an adequate and fair means of
determining LIBOR and the absence of any legal prohibition against the charging
of interest based on LIBOR.

      (f) On or prior to December 26, 2005 (the "Pay-Down Date"), Maker shall
fully prepay the principal balance of this Note allocated as Floating Rate
Tranche B. Floating Rate Tranche B shall not be deemed to have been paid and/or
satisfied in full until all such additional costs, in addition to the principal
balance thereof and all interest thereon and all other sums due and payable
under the Loan Documents in regards to Floating Rate Tranche B, shall have been
paid.

      1.3 Note Rate; Computation of Interest. The term "Note Rate" as used in
this Note shall mean (a) for Fixed Rate Tranche A, from the date of this Note
through but not including the Optional Prepayment Date, a rate per annum equal
to five and fifty-seven one-hundredths percent (5.57%) (the "Fixed Interest
Rate"), (b) for Floating Rate Tranche B, from the date of this Note through the
Pay-Down Date and satisfaction of Floating Rate Tranche B, a rate per annum
equal to the LIBOR-Based Rate, and (c) from the Optional Prepayment Date through
and including the date this Note is paid in full, a rate per annum equal to the
greater of (i) the Fixed Interest Rate plus two (2%) percent or (ii) the
Treasury Constant Maturity Yield Index (as hereinafter defined) plus two (2%)
percent ((i) or (ii), as applicable, the "Revised Interest Rate"). Interest
shall be computed hereunder based on a 360-day year and based on the actual
number of

                                       4


days elapsed for any period in which interest is being calculated. For purposes
of this Section 1.3, the term "Treasury Constant Maturity Yield Index" shall
mean the average yield for "This Week" as reported by the Federal Reserve Board
in Federal Statistical Release H.15 (519) published during the second full week
preceding the Optional Prepayment Date for instruments having a maturity
coterminous with the remaining term of this Note. If there is no Treasury
Constant Maturity Yield Index for instruments having a maturity coterminous with
the remaining term of this Note, then the index shall be equal to the weighted
average yield to maturity of the Treasury Constant Maturity Yield Indices with
maturities next longer and shorter than such remaining average life to maturity,
calculated by averaging (and rounding upward to the nearest whole multiple of
1/100 of 1% per annum, if the average is not such a multiple) the yields of the
relevant Treasury Constant Maturity Yield Indices (rounded, if necessary, to the
nearest 1/100 of 1% with any figure of 1/200 of 1% or above rounded upward). If
such Release is not available or no longer published, Payee may refer to another
recognized source of financial market information.

      1.4 Payment of Principal and Interest. Payments in federal funds
immediately available at the place designated for payment received by Payee
prior to 2:00 p.m. local time on a day on which Payee is open for business at
said place of payment shall be credited prior to close of business, while other
payments, at the option of Payee, may not be credited until immediately
available to Payee in federal funds at the place designated for payment prior to
2:00 p.m. local time on a day on which Payee is open for business. Interest only
shall be payable in consecutive monthly installments of the Monthly Payment
Amount, beginning on November 11, 2005 (the "First Payment Date"), and
continuing on the eleventh (11th) day of each and every calendar month
thereafter (each, a "Payment Date"). On the Maturity Date or the Optional
Prepayment Date, the entire outstanding principal balance hereof, together with
all accrued but unpaid interest thereon, shall be due and payable in full
provided, however, that in the event that such amounts are not paid on such
date, the Maturity Date shall be extended to the Extended Maturity Date. In
computing the number of days during which interest accrues, the day on which
funds are initially advanced shall be included regardless of the time of day
such advance is made, and the day on which funds are repaid shall be included
unless repayment is credited prior to close of business. Payments in federal
funds immediately available in the place designated for payment received by
Payee prior to 2:00 p.m. local time on a Business Day at said place of payment
shall be credited prior to close of business, while other payments, at the
option of Payee, may not be credited until immediately available to Payee in
federal funds in the place designated for payment prior to 2:00 p.m. local time
at said place of payment on a Business Day.

      1.5 Application of Payments. So long as no Event of Default (as
hereinafter defined) exists hereunder or under any other Loan Document, each
such monthly installment shall be applied, prior to the Optional Prepayment
Date, first, to any amounts hereafter advanced by Payee hereunder or under any
other Loan Document, second, to any late fees and other amounts payable to
Payee, third, to the payment of accrued interest and last to reduction of
principal, and from and after the Optional Prepayment Date, as provided in
Section 2.2 of this Note.

      1.6 Payment of "Short Interest". If the advance of the principal amount
evidenced by this Note is made on a date on or after the first (1st) day of a
calendar month and prior to the eleventh (11th) day of a calendar month, Maker
shall pay to Payee contemporaneously with the

                                       5


execution hereof interest at the Note Rate for a period from the date hereof
through and including the tenth (10th) day of this calendar month. If the
advance of the principal amount evidenced by this Note is made on a date after
the eleventh (11th) day of a calendar month and prior to or on the last day of a
calendar month, Maker shall pay to Payee contemporaneously with the execution
hereof interest at the Note Rate for a period from the date hereof through and
including the tenth (10th) day of the immediately succeeding calendar month.

      1.7 Prepayment; Defeasance.

      (a) This Note may not be prepaid, in whole or in part (except as otherwise
specifically provided herein), at any time prior to the Optional Prepayment
Date. In the event that Maker wishes to have the Security Property (as
hereinafter defined) released from the lien of the Security Instrument prior to
the Optional Prepayment Date, Maker's sole option shall be a Defeasance (as
hereinafter defined) upon satisfaction of the terms and conditions set forth in
Section 1.7(d) hereof. This Note may be prepaid in whole but not in part without
premium or penalty on any of the three (3) Payment Dates occurring immediately
prior to the Maturity Date provided (i) written notice of such prepayment is
received by Payee not more than ninety (90) days and not less than thirty (30)
days prior to the date of such prepayment, and (ii) such prepayment is
accompanied by all interest accrued hereunder through and including the date of
such prepayment and all other sums due hereunder or under the other Loan
Documents. If, upon any such permitted prepayment on any of the three (3)
Payment Dates occurring immediately prior to the Maturity Date, the aforesaid
prior written notice has not been timely received by Payee, there shall be due a
prepayment fee equal to, an amount equal to the lesser of (i) thirty (30) days'
interest computed at the Note Rate on the outstanding principal balance of this
Note so prepaid and (ii) interest computed at the Note Rate on the outstanding
principal balance of this Note so prepaid that would have been payable for the
period from, and including, the date of prepayment through the Maturity Date of
this Note as though such prepayment had not occurred.

      (b) If, prior to the fourth (4th) anniversary of the First Payment Date
(the "Lock-out Expiration Date"), the indebtedness evidenced by this Note shall
have been declared due and payable by Payee pursuant to Article III hereof or
the provisions of any other Loan Document due to a default by Maker, then, in
addition to the indebtedness evidenced by this Note being immediately due and
payable, there shall also then be immediately due and payable a sum equal to the
interest which would have accrued on the principal balance of this Note at the
Note Rate from the date of such acceleration to the Lock-out Expiration Date,
together with a prepayment fee in an amount equal to the Yield Maintenance
Premium (as hereinafter defined) based on the entire indebtedness on the date of
such acceleration. If such acceleration is on or following the Lock-out
Expiration Date, the Yield Maintenance Premium shall also then be immediately
due and payable as though Maker were prepaying the entire indebtedness on the
date of such acceleration. In addition to the amounts described in the two
preceding sentences, in the event of any such acceleration or tender of payment
of such indebtedness occurs or is made on or prior to the first (1st)
anniversary of the date of this Note, there shall also then be immediately due
and payable an additional prepayment fee of three percent (3%) of the principal
balance of this Note. The term "Yield Maintenance Premium" shall mean an amount
equal to the greater of (A) two percent (2.0%) of the principal amount being
prepaid, and (B) the present value of a series of

                                       6


payments each equal to the Payment Differential (as hereinafter defined) and
payable on each Payment Date over the remaining original term of this Note and
on the Maturity Date, discounted at the Reinvestment Yield (as hereinafter
defined) for the number of months remaining as of the date of such prepayment to
each such Payment Date and the Maturity Date. The term "Payment Differential"
shall mean an amount equal to (i) the Note Rate less the Reinvestment Yield,
divided by (ii) twelve (12) and multiplied by (iii) the principal sum
outstanding under this Note after application of the constant monthly payment
due under this Note on the date of such prepayment, provided that the Payment
Differential shall in no event be less than zero. The term "Reinvestment Yield"
shall mean an amount equal to the lesser of (i) the yield on the U.S. Treasury
issue (primary issue) with a maturity date closest to the Maturity Date, or (ii)
the yield on the U.S. Treasury issue (primary issue) with a term equal to the
remaining average life of the indebtedness evidenced by this Note, with each
such yield being based on the bid price for such issue as published in the Wall
Street Journal on the date that is fourteen (14) days prior to the date of such
prepayment set forth in the notice of prepayment (or, if such bid price is not
published on that date, the next preceding date on which such bid price is so
published) and converted to a monthly compounded nominal yield. In the event
that any prepayment fee is due hereunder, Payee shall deliver to Maker a
statement setting forth the amount and determination of the prepayment fee, and,
provided that Payee shall have in good faith applied the formula described
above, Maker shall not have the right to challenge the calculation or the method
of calculation set forth in any such statement in the absence of manifest error,
which calculation may be made by Payee on any day during the fifteen (15) day
period preceding the date of such prepayment. Payee shall not be obligated or
required to have actually reinvested the prepaid principal balance at the
Reinvestment Yield or otherwise as a condition to receiving the prepayment fee.

      (c) Partial prepayments of this Note shall not be permitted, except for
(i) partial prepayments resulting from Payee's election to apply insurance or
condemnation proceeds to reduce the outstanding principal balance of this Note
as provided in the Security Instrument, in which event no prepayment fee or
premium shall be due unless, at the time of either Payee's receipt of such
proceeds or the application of such proceeds to the outstanding principal
balance of this Note, an Event of Default shall have occurred, which Event of
Default is unrelated to the applicable casualty or condemnation, in which event
the applicable prepayment fee or premium shall be due and payable based upon the
amount of the prepayment or (ii) any partial prepayment required on or prior to
the Pay-Down Date pursuant to Section 1.2(f) above, in which event no prepayment
fee or premium shall be due. No notice of prepayment shall be required under the
circumstances specified in subclause (i) of the preceding sentence. No principal
amount repaid may be reborrowed. Any such partial prepayments of principal under
subclause (i) above shall be applied to the unpaid principal balance evidenced
hereby but such application shall not reduce the amount of the fixed monthly
installments required to be paid pursuant to Section 1.4 above. Except as
otherwise expressly provided herein, the prepayment fees provided above shall be
due, to the extent permitted by applicable law, under any and all circumstances
where all or any portion of this Note is paid prior to the Maturity Date,
whether such prepayment is voluntary or involuntary, including, without
limitation, if such prepayment results from Payee's exercise of its rights upon
Maker's default and acceleration of the Maturity Date of this Note (irrespective
of whether foreclosure proceedings have been commenced), and shall be in
addition to any other sums due hereunder or under any of the other Loan
Documents. No tender of a prepayment of this Note

                                       7


with respect to which a prepayment fee is due shall be effective unless such
prepayment is accompanied by the applicable prepayment fee.

      (d) (i) On any Payment Date on or after the later to occur of (x) the
      Lock-out Expiration Date, and (y) the day immediately following the date
      which is two (2) years after the "startup day," within the meaning of
      Section 860G(a)(9) of the Internal Revenue Code of 1986, as amended from
      time to time or any successor statute (the "Code"), of a "real estate
      mortgage investment conduit," within the meaning of Section 860D of the
      Code, that holds this Note, and provided no Event of Default has occurred
      hereunder or under any of the other Loan Documents, at Maker's option,
      Payee shall cause the release of the Security Property from the lien of
      the Security Instrument and the other Loan Documents (a "Defeasance") upon
      the satisfaction of the following conditions:

                  (A) Maker shall give not more than ninety (90) days' or less
         than sixty (60) days' prior written notice to Payee specifying the date
         Maker intends for the Defeasance to be consummated (the "Release
         Date"), which date shall be a Payment Date.

                  (B) All accrued and unpaid interest and all other sums due
         under this Note and under the other Loan Documents up to and including
         the Release Date shall be paid in full on or prior to the Release Date.

                  (C) Maker shall deliver to Payee on or prior to the Release
         Date:

                  (1) a sum of money in immediately available funds (the
            "Defeasance Deposit"), equal to the outstanding principal balance of
            this Note plus an amount, if any, which together with the
            outstanding principal balance of this Note, shall be sufficient to
            enable Payee to purchase, through means and sources customarily
            employed and available to Payee, for the account of Maker, direct,
            non-callable obligations of the United States of America that
            provide for payments prior, but as close as possible, to all
            successive monthly Payment Dates occurring after the Release Date
            and to the Maturity Date, with each such payment being equal to or
            greater than the amount of the corresponding installment of
            principal and/or interest required to be paid under this Note
            (including, but not limited to, all amounts due on the Maturity
            Date) for the balance of the term hereof (the "Defeasance
            Collateral"), each of which shall be duly endorsed by the holder
            thereof as directed by Payee or accompanied by a written instrument
            of transfer in form and substance satisfactory to Payee in its sole
            discretion (including, without limitation, such instruments as may
            be required by the depository institution holding such securities or
            the issuer thereof, as the case may be, to effectuate book-entry
            transfers and pledges through the book-entry facilities of such
            institution) in order to perfect upon the delivery of the Defeasance
            Security Agreement (as hereinafter defined) the first priority
            security interest in the Defeasance Collateral in

                                       8


            favor of Payee in conformity with all applicable state and federal
            laws governing granting of such security interests;

                  (2) a pledge and security agreement, in form and substance
            satisfactory to a prudent lender, creating a first priority security
            interest in favor of Payee in the Defeasance Collateral (the
            "Defeasance Security Agreement"), which shall provide, among other
            things, that any excess received by Payee from the Defeasance
            Collateral over the amounts payable by Maker hereunder shall be
            refunded to Maker promptly after each monthly Payment Date;

                  (3) a certificate of Maker certifying that all of the
            requirements set forth in this Section 1.7(d)(i) have been
            satisfied;

                  (4) one or more opinions of counsel for Maker in form and
            substance and delivered by counsel which would be satisfactory to a
            prudent lender stating, among other things, that (i) Payee has a
            perfected first priority security interest in the Defeasance
            Collateral and that the Defeasance Security Agreement is enforceable
            against Maker in accordance with its terms, (ii) in the event of a
            bankruptcy proceeding or similar occurrence with respect to Maker,
            none of the Defeasance Collateral nor any proceeds thereof will be
            property of Maker's estate under Section 541 of the U.S. Bankruptcy
            Code or any similar statute and the grant of security interest
            therein to Payee shall not constitute an avoidable preference under
            Section 547 of the U.S. Bankruptcy Code or applicable state law,
            (iii) the release of the lien of the Security Instrument and the
            pledge of Defeasance Collateral will not directly or indirectly
            result in or cause any REMIC Trust that then holds this Note to fail
            to maintain its status as a REMIC Trust and (iv) the defeasance will
            not cause any REMIC Trust to be an "investment company" under the
            Investment Company Act of 1940;

                  (5) evidence in writing from the applicable rating agencies to
            the effect that the collateral substitution will not result in a
            downgrading, withdrawal or qualification of the respective ratings
            in effect immediately prior to such defeasance event for any
            securities issued in connection with the securitization which are
            then outstanding;

                  (6) a certificate in form and scope acceptable to Payee in its
            sole discretion from an acceptable accountant certifying that the
            Defeasance Collateral will generate amounts sufficient to make all
            payments of principal and interest due under this Note (including
            the scheduled outstanding principal balance of the Loan due on the
            Maturity Date);

                  (7) Maker and any guarantor or indemnitor of Maker's
            obligations under the Loan Documents for which Maker has personal

                                       9


            liability executes and delivers to Payee such documents and
            agreements as Payee shall reasonably require to evidence and
            effectuate the ratification of such personal liability and guaranty
            or indemnity, respectively;

                  (8) such other certificates, documents or instruments as Payee
            may reasonably require;

                  (9) payment of all fees, costs, expenses and charges incurred
            by Payee in connection with the Defeasance of the Security Property
            and the purchase of the Defeasance Collateral, including, without
            limitation, all legal fees and costs and expenses incurred by Payee
            or its agents in connection with release of the Security Property,
            review of the proposed Defeasance Collateral and preparation of the
            Defeasance Security Agreement and related documentation, any
            revenue, documentary, stamp, intangible or other taxes, charges or
            fees due in connection with transfer of the Note, assumption of the
            Note, or substitution of collateral for the Security Property shall
            be paid on or before the Release Date. Without limiting Maker's
            obligations with respect thereto, Payee shall be entitled to deduct
            all such fees, costs, expenses and charges from the Defeasance
            Deposit to the extent of any portion of the Defeasance Deposit which
            exceeds the amount necessary to purchase the Defeasance Collateral;
            and

                  (10) in the event the Amendment (as defined in Section 4.35 of
            the Security Instrument) has been executed, evidence satisfactory to
            Payee that following the Defeasance of this Loan, the minimum debt
            service coverage ratio for each of the Additional Loans (as defined
            in Section 4.35 of the Security Instrument) shall be 1.75 to 1.00
            and the maximum loan to value percentage for each of the Additional
            Loans shall be 65%.

                  (D) In connection with the Defeasance Deposit, Maker hereby
         authorizes and directs Payee using the means and sources customarily
         employed and available to Payee to use the Defeasance Deposit to
         purchase for the account of Maker the Defeasance Collateral.
         Furthermore, the Defeasance Collateral shall be arranged such that
         payments received from such Defeasance Collateral shall be paid
         directly to Payee to be applied on account of the indebtedness of this
         Note. Any part of the Defeasance Deposit in excess of the amount
         necessary to purchase the Defeasance Collateral and to pay the other
         and related costs Maker is obligated to pay under this Section 1.7
         shall be refunded to Maker.

        (ii) Upon compliance with the requirements of Section 1.7(d)(i), the
      Security Property shall be released from the lien of the Security
      Instrument and the other Loan Documents, and the Defeasance Collateral
      shall constitute collateral which shall secure this Note and all other
      obligations under the Loan Documents. Payee will, at Maker's expense,
      execute and deliver any agreements reasonably requested by Maker to
      release the lien of the Security Instrument from the Security Property.

                                       10


            (iii) Upon the release of the Security Property in accordance with
      this Section 1.7(d), Maker shall assign all its obligations and rights
      under this Note, together with the pledged Defeasance Collateral, to a
      newly created successor entity which complies with the terms of Section
      1.33 of the Security Instrument designated by Maker and approved by Payee
      in its sole discretion. Such successor entity shall execute an assumption
      agreement in form and substance satisfactory to Payee in its sole
      discretion pursuant to which it shall assume Maker's obligations under
      this Note and the Defeasance Security Agreement. As conditions to such
      assignment and assumption, Maker shall (x) deliver to Payee an opinion of
      counsel in form and substance and delivered by counsel satisfactory to a
      prudent lender stating, among other things, that such assumption agreement
      is enforceable against Maker and such successor entity in accordance with
      its terms and that this Note and the Defeasance Security Agreement, as so
      assumed, are enforceable against such successor entity in accordance with
      their respective terms, and (y) pay all costs and expenses (including, but
      not limited to, legal fees) incurred by Payee or its agents in connection
      with such assignment and assumption (including, without limitation, the
      review of the proposed transferee and the preparation of the assumption
      agreement and related documentation). Upon such assumption, Maker shall be
      relieved of its obligations hereunder, under the other Loan Documents
      other than as specified in Section 1.7(d)(i)(C)(7) above and under the
      Defeasance Security Agreement.

      1.8 Security. The indebtedness evidenced by this Note and the obligations
created hereby are secured by, among other things, the Security Instrument. All
of the terms and provisions of the Loan Documents are incorporated herein by
reference. Some of the Loan Documents are to be filed for record on or about the
date hereof in the appropriate public records.

                ARTICLE II -- OPTIONAL PREPAYMENT DATE PROVISIONS

      2.1 Optional Prepayment Determination Date. The following subsections
shall apply from and after the Optional Prepayment Determination Date:

      (a) [Reserved].

      (b) For the calendar year in which the Optional Prepayment Determination
Date occurs and for each calendar year thereafter, Maker shall submit to Payee
for Payee's written approval an annual budget (an "Annual Budget") not later
than (i) the Optional Prepayment Determination Date for the calendar year in
which the Optional Prepayment Determination occurs and (ii) sixty (60) days
prior to the commencement of each calendar year thereafter, in form satisfactory
to Payee setting forth in reasonable detail budgeted monthly operating income
and monthly operating capital and other expenses for the Mortgaged Property.
Each Annual Budget shall contain, among other things, limitations on management
fees, third party service fees and other expenses as Maker may reasonably
determine. Payee shall have the right to approve such Annual Budget and in the
event that Payee objects to the proposed Annual Budget submitted by Maker, Payee
shall advise Maker of such objections within fifteen (15) days after receipt
thereof (and deliver to Maker a reasonably detailed description of such
objections) and Maker shall, within three (3) days after receipt of notice of
any such objections, revise such Annual Budget and resubmit the same to Payee.
Payee shall advise Maker of any objections to such revised Annual Budget within
ten (10) days after receipt

                                       11


thereof (and deliver to Maker a reasonably detailed description of such
objections) and Maker shall revise the same in accordance with the process
described in this subsection until Payee approves an Annual Budget, provided,
however, that if Payee shall not advise Maker of its objections to any proposed
Annual Budget within the applicable time period set forth in this subsection,
then such proposed Annual Budget shall be deemed approved by Payee. Each such
Annual Budget approved by Payee in accordance with terms hereof shall
hereinafter be referred to as an "Approved Annual Budget." Until such time that
Payee approves a proposed Annual Budget, the most recently Approved Annual
Budget shall apply; provided, that such Approved Annual Budget shall be adjusted
to reflect actual increases in real estate taxes, insurance premiums and
utilities expenses.

      (c) In the event that Maker must incur an extraordinary operating expense
or capital expense not set forth in the Annual Budget (an "Extraordinary
Expense"), then Maker shall promptly deliver to Payee a reasonably detailed
explanation of such proposed Extraordinary Expense for Payee's approval.

      (d) For the purposes of this Note, "Cash Expenses" shall mean, for any
period, the operating expenses for the operation and maintenance of the
Mortgaged Property as set forth in an Approved Annual Budget to the extent that
such expenses are actually incurred by Maker excluding payments into the Impound
Account and expenses for which Maker shall be reimbursed from, or which shall be
paid for out of, any such account or reserve.

      (e) Notwithstanding the other provisions of this Section 2.1, in the event
that, prior to the Optional Prepayment Determination Date, Maker delivers to
Payee either (i) a written commitment (the "Commitment") for the refinancing of
the loan evidenced by this Note from a Qualified Institutional Lender (as
hereinafter defined), which reasonably provides for the consummation of such
refinance prior to the Optional Prepayment Date or (ii) other evidence in form
and substance satisfactory to Payee in its sole determination of Maker's ability
to refinance the loan evidenced by this Note prior to the Optional Prepayment
Date, then, solely in either such event, the terms of Section 2.1(a), (b), (c)
and (d) of this Note shall be inoperative, provided, however, that upon (x) the
failure of such refinance to be consummated in accordance with the terms of the
Commitment or such other evidence, as applicable, (y) the termination of the
Commitment for any reason or (z) any adverse change in circumstances with
respect to Maker or any principals of Maker, the Mortgaged Property, the
proposed lender or otherwise, as determined by Payee in its sole determination,
which, in Payee's reasonable judgment, significantly decreases the likelihood of
such refinance being consummated prior to the Optional Prepayment Date, the
terms of Section 2.1(a), (b), (c) and (d) of this Note shall immediately become
operative and Maker shall immediately comply with any of the terms thereof
which, except for the operation of this subsection (e), Maker would theretofore
have been obligated to comply. "Qualified Institutional Lender" shall mean a
financial institution or other lender with a long term credit rating which is
not less than investment grade. The determination of whether the conditions set
forth in clause (i) or (ii) above, shall be made and notice of such
determination shall be delivered to Maker, within ten (10) business days
following Payee's receipt of the items set forth in such clauses.

      2.2 Failure to Prepay On or Before Optional Prepayment Date. In the event
that Maker does not prepay the entire principal balance of this Note and any
other amounts outstanding under this Note or any of the other Loan Documents on
or prior to the Optional Prepayment Date,

                                       12


the provisions of Section 2.1(b), (c) and (d) as set forth above shall remain in
full force and effect, and the following subsections also shall apply:

      (a) From and after the Optional Prepayment Date, interest shall accrue on
the unpaid principal balance from time to time outstanding under this Note at
the Revised Interest Rate. Interest accrued at the Revised Interest Rate and not
paid pursuant to this Section 2.2 shall be deferred and added to the principal
balance of this Note and shall earn interest at the Revised Interest Rate to the
extent permitted by applicable law (such accrued interest is hereinafter
referred to as "Accrued Interest"). All of the unpaid principal balance of this
Note, including, without limitation, any Accrued Interest, shall be due and
payable on the Extended Maturity Date.

      (b) Maker shall be obligated to pay, and Payee shall collect from the Rent
Account (as defined in the Security Instrument) to the extent of funds on
deposit in such account, on the Optional Prepayment Date and on the eleventh
(11th) day of each calendar month thereafter to and including the Extended
Maturity Date the following payments from Rents (as defined in the Security
Instrument) received on or before such day in the listed order of priority:

            (i) First, the payment of the Monthly Payment Amount with interest
      computed at the Fixed Interest Rate;

            (ii) Second, payments to the Impound Account (as defined in the
      Security Instrument) in accordance with the terms and conditions of the
      Security Instrument;

            (iii) [Reserved];

            (iv) Fourth, payments for monthly Cash Expenses, less management
      fees payable to affiliates of Maker, pursuant to the terms and conditions
      of the related Approved Annual Budget;

            (v) Fifth, payment for Extraordinary Expenses approved by Payee, if
      any;

            (vi) Sixth, payments to Payee of the balance of the funds then on
      deposit in the Rent Account to be applied to (x) any other amounts due
      under the Loan Documents, (y) Accrued Interest and (z) the reduction of
      the outstanding principal balance of this Note until such principal
      balance is paid in full in whatever proportion and priority as Payee may
      determine.

      (c) Nothing in this Article II shall limit, reduce or otherwise affect
Maker's obligations to make payments of the Monthly Payment Amount (including
interest on the Note as provided in Section 1.3 hereof) payments to the Impound
Account and payments of other amounts due hereunder and under the other Loan
Documents, whether or not Rents (as defined in the Security Instrument) are
available to make such payments.

                             ARTICLE III -- DEFAULT

      3.1 Events of Default. It is hereby expressly agreed that should any
default occur in the

                                       13


payment of principal or interest as stipulated above and such payment is not
made on the date such payment is due, or should any other default not cured
within any applicable grace or notice period occur under any other Loan
Document, then an event of default (an "Event of Default") shall exist
hereunder, and in such event the indebtedness evidenced hereby, including all
sums advanced or accrued hereunder or under any other Loan Document, and all
unpaid interest accrued thereon, shall, at the option of Payee and without
notice to Maker, at once become due and payable and may be collected forthwith,
whether or not there has been a prior demand for payment and regardless of the
stipulated date of maturity.

      3.2 Late Charges. In the event that any payment is not received by Payee
on the date when due, then, in addition to any default interest payments due
hereunder, Maker shall also pay to Payee a late charge in an amount equal to
five percent (5%) of the amount of such overdue payment.

      3.3 Default Interest Rate. So long as any Event of Default exists
hereunder, regardless of whether or not there has been an acceleration of the
indebtedness evidenced hereby, and at all times after maturity of the
indebtedness evidenced hereby (whether by acceleration or otherwise), interest
shall accrue on the outstanding principal balance of this Note, from the date
due until the date credited, at a rate per annum equal to four percent (4%) in
excess of the Note Rate, or, if such increased rate of interest may not be
collected under applicable law, then at the maximum rate of interest, if any,
which may be collected from Maker under applicable law (the "Default Interest
Rate"), and such default interest shall be immediately due and payable.

      3.4 Maker's Agreements. Maker acknowledges that it would be extremely
difficult or impracticable to determine Payee's actual damages resulting from
any late payment or default, and such late charges and default interest are
reasonable estimates of those damages and do not constitute a penalty. The
remedies of Payee in this Note or in the Loan Documents, or at law or in equity,
shall be cumulative and concurrent, and may be pursued singly, successively or
together, in Payee's discretion.

      3.5 Maker to Pay Costs. In the event that this Note, or any part hereof,
is collected by or through an attorney-at-law, Maker agrees to pay all costs of
collection, including, but not limited to, reasonable attorneys' fees.

      3.6 Exculpation. Notwithstanding anything in this Note or the Loan
Documents to the contrary, but subject to the qualifications hereinbelow set
forth, Payee agrees that:

      (a) Maker shall be liable upon the indebtedness evidenced hereby and for
the other obligations arising under the Loan Documents to the full extent (but
only to the extent) of the security therefor, the same being all properties
(whether real or personal), rights, estates and interests now or at any time
hereafter securing the payment of this Note and/or the other obligations of
Maker under the Loan Documents (collectively, the "Security Property");

      (b) if a default occurs in the timely and proper payment of all or any
part of such indebtedness evidenced hereby or in the timely and proper
performance of the other obligations of Maker under the Loan Documents, any
judicial proceedings brought by Payee against Maker shall

                                       14


be limited to the preservation, enforcement and foreclosure, or any thereof, of
the liens, security titles, estates, assignments, rights and security interests
now or at any time hereafter securing the payment of this Note and/or the other
obligations of Maker under the Loan Documents, and no attachment, execution or
other writ of process shall be sought, issued or levied upon any assets,
properties or funds of Maker other than the Security Property, except with
respect to the liability described below in this section; and

      (c) in the event of a foreclosure of such liens, security titles, estates,
assignments, rights or security interests securing the payment of this Note
and/or the other obligations of Maker under the Loan Documents, no judgment for
any deficiency upon the indebtedness evidenced hereby shall be sought or
obtained by Payee against Maker, except with respect to the liability described
below in this section; provided, however, that, notwithstanding the foregoing
provisions of this section, Maker shall be fully and personally liable and
subject to legal action (i) for proceeds paid under any insurance policies (or
paid as a result of any other claim or cause of action against any person or
entity) by reason of damage, loss or destruction to all or any portion of the
Security Property, to the full extent of such proceeds not previously delivered
to Payee, but which, under the terms of the Loan Documents, should have been
delivered to Payee, (ii) for proceeds or awards resulting from the condemnation
or other taking in lieu of condemnation of all or any portion of the Security
Property, to the full extent of such proceeds or awards not previously delivered
to Payee, but which, under the terms of the Loan Documents, should have been
delivered to Payee, (iii) for all tenant security deposits or other refundable
deposits paid to or held by Maker or any other person or entity in connection
with leases of all or any portion of the Security Property which are not applied
in accordance with the terms of the applicable lease or other agreement, (iv)
for rent and other payments received from tenants under leases of all or any
portion of the Security Property paid more than one (1) month in advance, (v)
for rents, issues, profits and revenues of all or any portion of the Security
Property received or applicable to a period after the occurrence of any Event of
Default hereunder or under the Loan Documents, which are not either applied to
the ordinary and necessary expenses of owning and operating the Security
Property or paid to Payee, (vi) for waste committed on the Security Property,
damage to the Security Property as a result of the intentional misconduct or
gross negligence of Maker or any of its principals, officers, general partners
or members, any guarantor, any indemnitor, or any agent or employee of any such
person, or any removal of all or any portion of the Security Property in
violation of the terms of the Loan Documents, to the full extent of the losses
or damages incurred by Payee on account of such occurrence, (vii) for failure to
pay any valid taxes, assessments, mechanic's liens, materialmen's liens or other
liens which could create liens on any portion of the Security Property which
would be superior to the lien or security title of the Security Instrument or
the other Loan Documents, to the full extent of the amount claimed by any such
lien claimant except, with respect to any such taxes or assessments, to the
extent that funds have been deposited with Payee pursuant to the terms of the
Security Instrument specifically for the applicable taxes or assessments and not
applied by Payee to pay such taxes and assessments, (viii) for all obligations
and indemnities of Maker under the Loan Documents relating to hazardous or toxic
substances or radon or compliance with environmental laws and regulations to the
full extent of any losses or damages (including, but not limited to, those
resulting from diminution in value of any Security Property) incurred by Payee
as a result of the existence of such hazardous or toxic substances or radon or
failure to comply with environmental laws or regulations, and (ix) for fraud,
material misrepresentation or failure to disclose a material fact by Maker or
any of its principals, officers, general partners or members, any

                                       15


guarantor, any indemnitor or any agent, employee or other person authorized or
apparently authorized to make statements, representations or disclosures on
behalf of Maker, any principal, officer, general partner or member of Maker, any
guarantor or any indemnitor, to the full extent of any losses, damages and
expenses of Payee on account thereof.

      References herein to particular sections of the Loan Documents shall be
deemed references to such sections as affected by other provisions of the Loan
Documents relating thereto. Nothing contained in this section shall (1) be
deemed to be a release or impairment of the indebtedness evidenced by this Note
or the other obligations of Maker under the Loan Documents or the lien of the
Loan Documents upon the Security Property, or (2) preclude Payee from
foreclosing the Loan Documents in case of any default or from enforcing any of
the other rights of Payee except as stated in this section, or (3) limit or
impair in any way whatsoever (A) any Indemnity and Guaranty Agreements (the
"Indemnity Agreements") or (B) the Environmental Indemnity Agreement (the
"Environmental Indemnity Agreement"), executed and delivered in connection with
the indebtedness evidenced by this Note or release, relieve, reduce, waive or
impair in any way whatsoever, any obligation of any party to the Indemnity
Agreements or the Environmental Indemnity Agreement.

      Notwithstanding the foregoing, the agreement of Payee not to pursue
recourse liability as set forth in subsection (c) above SHALL BECOME NULL AND
VOID and shall be of no further force and effect (i) in the event of a default
by Maker or Indemnitor (as defined in the Security Instrument) of any of the
covenants set forth in Section 1.13 or Section 1.33 of the Security Instrument,
or (ii) if the Security Property or any part thereof shall become an asset in
(A) a voluntary bankruptcy or insolvency proceeding of Maker, or (B) an
involuntary bankruptcy or insolvency proceeding of Maker which is not dismissed
within sixty (60) days of filing.

      Notwithstanding anything to the contrary in this Note, the Security
Instrument or any of the other Loan Documents, Payee shall not be deemed to have
waived any right which Payee may have under Section 506(a), 506(b), 1111(b) or
any other provisions of the U.S. Bankruptcy Code to file a claim for the full
amount of the indebtedness evidenced hereby or secured by the Security
Instrument or any of the other Loan Documents or to require that all collateral
shall continue to secure all of the indebtedness owing to Payee in accordance
with this Note, the Security Instrument and the other Loan Documents.

                        ARTICLE IV -- GENERAL CONDITIONS

      4.1 No Waiver; Amendment. No failure to accelerate the indebtedness
evidenced hereby by reason of default hereunder, acceptance of a partial or past
due payment, or indulgences granted from time to time shall be construed (i) as
a novation of this Note or as a reinstatement of the indebtedness evidenced
hereby or as a waiver of such right of acceleration or of the right of Payee
thereafter to insist upon strict compliance with the terms of this Note, or (ii)
to prevent the exercise of such right of acceleration or any other right granted
hereunder or by any applicable laws; and Maker hereby expressly waives the
benefit of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in conflict
with the foregoing. No extension of the time for the payment of this Note or any
installment due hereunder made by agreement with any person now or hereafter
liable for the payment of this Note shall operate to release, discharge, modify,
change or affect the original liability of Maker under this

                                       16


Note, either in whole or in part, unless Payee agrees otherwise in writing. This
Note may not be changed orally, but only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought.

      4.2 Waivers. Presentment for payment, demand, protest and notice of
demand, protest and nonpayment and all other notices are hereby waived by Maker.
Maker hereby further waives and renounces, to the fullest extent permitted by
law, all rights to the benefits of any moratorium, reinstatement, marshaling,
forbearance, valuation, stay, extension, redemption, appraisement, exemption and
homestead now or hereafter provided by the Constitution and laws of the United
States of America and of each state thereof, both as to itself and in and to all
of its property, real and personal, against the enforcement and collection of
the obligations evidenced by this Note or the other Loan Documents.

      4.3 Limit of Validity. The provisions of this Note and of all agreements
between Maker and Payee, whether now existing or hereafter arising and whether
written or oral, including, but not limited to, the Loan Documents, are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of demand or acceleration of the maturity of this Note or otherwise,
shall the amount contracted for, charged, taken, reserved, paid or agreed to be
paid ("Interest") to Payee for the use, forbearance or detention of the money
loaned under this Note exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, performance or fulfillment of any
provision hereof or of any agreement between Maker and Payee shall, at the time
performance or fulfillment of such provision shall be due, exceed the limit for
Interest prescribed by law or otherwise transcend the limit of validity
prescribed by applicable law, then, ipso facto, the obligation to be performed
or fulfilled shall be reduced to such limit, and if, from any circumstance
whatsoever, Payee shall ever receive anything of value deemed Interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excessive Interest shall be applied to the reduction of the principal balance
owing under this Note in the inverse order of its maturity (whether or not then
due), in which event no prepayment fee or premium shall be due, or, at the
option of Payee, be paid over to Maker, and not to the payment of Interest. All
Interest (including any amounts or payments judicially or otherwise under the
law deemed to be Interest) contracted for, charged, taken, reserved, paid or
agreed to be paid to Payee shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of this Note,
including any extensions and renewals hereof until payment in full of the
principal balance of this Note so that the Interest thereon for such full term
will not exceed at any time the maximum amount permitted by applicable law. To
the extent United States federal law permits a greater amount of interest than
is permitted under the law of the State in which the Security Property is
located, Payee will rely on United States federal law for the purpose of
determining the maximum amount permitted by applicable law. Additionally, to the
extent permitted by applicable law now or hereafter in effect, Payee may, at its
option and from time to time, implement any other method of computing the
maximum lawful rate under the law of the State in which the Security Property is
located or under other applicable law by giving notice, if required, to Maker as
provided by applicable law now or hereafter in effect. This Section 4.3 will
control all agreements between Maker and Payee.

      4.4 Use of Funds. Maker hereby warrants, represents and covenants that no
funds disbursed hereunder shall be used for personal, family or household
purposes.

                                       17


      4.5 Unconditional Payment. Maker is and shall be obligated to pay
principal, interest and any and all other amounts which become payable hereunder
or under the other Loan Documents absolutely and unconditionally and without any
abatement, postponement, diminution or deduction and without any reduction for
counterclaim or setoff. In the event that at any time any payment received by
Payee hereunder shall be deemed by a court of competent jurisdiction to have
been a voidable preference or fraudulent conveyance under any bankruptcy,
insolvency or other debtor relief law, then the obligation to make such payment
shall survive any cancellation or satisfaction of this Note or return thereof to
Maker and shall not be discharged or satisfied with any prior payment thereof or
cancellation of this Note, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof, and such payment
shall be immediately due and payable upon demand.

      4.6 GOVERNING LAW. THIS NOTE SHALL BE INTERPRETED, CONSTRUED AND ENFORCED
ACCORDING TO THE LAWS OF THE STATE IN WHICH THE SECURITY PROPERTY IS LOCATED.

      4.7 WAIVER OF JURY TRIAL. MAKER, TO THE FULL EXTENT PERMITTED BY LAW,
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THE DEBT EVIDENCED BY THIS NOTE OR ANY CONDUCT, ACT OR OMISSION OF
PAYEE OR MAKER, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS,
MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH
PAYEE OR MAKER, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE.

      4.8 Secondary Market. Payee may sell, transfer and deliver the Loan
Documents to one or more investors in the secondary mortgage market. In
connection with such sale, Payee may retain or assign responsibility for
servicing the loan evidenced by this Note or may delegate some or all of such
responsibility and/or obligations to a servicer, including, but not limited to,
any subservicer or master servicer, on behalf of the investors. All references
to Payee herein shall refer to and include, without limitation, any such
servicer, to the extent applicable.

      4.9 Dissemination of Information. If Payee determines at any time to sell,
transfer or assign this Note, the Security Instrument and the other Loan
Documents, and any or all servicing rights with respect thereto, or to grant
participations therein (the "Participations") or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement (the "Securities"), Payee may
forward to each purchaser, transferee, assignee, servicer, participant,
investor, or their respective successors in such Participations and/or
Securities (collectively, the "Investor") or any Rating Agency rating such
Securities, each prospective Investor and each of the foregoing's respective
counsel, all documents and information which Payee now has or may hereafter
acquire relating to the debt evidenced by this Note and to Maker, any guarantor,
any indemnitor and the Security Property,

                                       18


which shall have been furnished by Maker, any guarantor or any indemnitor as
Payee determines necessary or desirable.

                      ARTICLE V -- MISCELLANEOUS PROVISIONS

      5.1 Miscellaneous. The terms and provisions hereof shall be binding upon
and inure to the benefit of Maker and Payee and their respective heirs,
executors, legal representatives, successors, successors-in-title and assigns,
whether by voluntary action of the parties or by operation of law. As used
herein, the terms "Maker" and "Payee" shall be deemed to include their
respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties or
by operation of law. If Maker consists of more than one person or entity, each
shall be jointly and severally liable to perform the obligations of Maker under
this Note. All personal pronouns used herein, whether used in the masculine,
feminine or neuter gender, shall include all other genders; the singular shall
include the plural and vice versa. Titles of articles and sections are for
convenience only and in no way define, limit, amplify or describe the scope or
intent of any provisions hereof. Time is of the essence with respect to all
provisions of this Note. This Note and the other Loan Documents contain the
entire agreements between the parties hereto relating to the subject matter
hereof and thereof and all prior agreements relative hereto and thereto which
are not contained herein or therein are terminated.

      5.2 Maker's Tax Identification Number is 20-1676382.

             [THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       19


      IN WITNESS WHEREOF, Maker has executed this Note as of the date first
written above.

                                     MAKER:

                                     COLE TS PARKERSBURG WV, LLC,
                                     a Delaware limited liability company

                                     By: Cole REIT Advisors II, LLC,
                                         a Delaware limited liability company,
                                         its manager

                                         By: /S/ John M. Pons
                                             -----------------------------------
                                             John M. Pons, Senior Vice President



                                   Schedule A

                                   LOAN TERMS

Original Principal Amount                             $1,793,000.00

Note Rate % (Per Annum)                                      5.570%

Original Amortization Term (Months)                             999

Monthly Payment Amount (Excluding IO Period)              $8,322.51

Note Date                                                 9/26/2005

First Pay Date                                           11/11/2005

Original Loan Term (Months)                                     120

Scheduled Maturity Date                                  10/11/2015

Interest Accrual Basis During Amortization Periods       ACTUAL/360

Interest Only (IO) Periods (Months)                             120

Interest Accrual Basis During IO Period                  ACTUAL/360

COLE TRACTOR SUPPLY PARKERSBURG WV                                     502853260



                                                         INTEREST         PRINCIPAL          ENDING UNPAID
                         ACCRUAL                        COMPONENT        COMPONENT OF          PRINCIPAL
 PAY                     DAYS IN      SCHEDULED        OF SCHEDULED    SCHEDULED PAYMENT        BALANCE
Period    PAY DATE       PERIOD        PAYMENT           PAYMENT
                                                                           
  0      10/11/2005        15       $        0.00     $    4,161.30      $        0.00       $1,793,000.00
  1      11/11/2005        31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
  2      12/11/2005        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
  3      1/11/2006         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
  4      2/11/2006         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
  5      3/11/2006         28       $    7,767.67     $    7,767.67      $        0.00       $1,793,000.00
  6      4/11/2006         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
  7      5/11/2006         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
  8      6/11/2006         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
  9      7/11/2006         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 10      8/11/2006         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 11      9/11/2006         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 12      10/11/2006        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 13      11/11/2006        31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 14      12/11/2006        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 15      1/11/2007         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 16      2/11/2007         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 17      3/11/2007         28       $    7,767.67     $    7,767.67      $        0.00       $1,793,000.00
 18      4/11/2007         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 19      5/11/2007         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 20      6/11/2007         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 21      7/11/2007         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 22      8/11/2007         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 23      9/11/2007         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00




                                                                           
 24      10/11/2007        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 25      11/11/2007        31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 26      12/11/2007        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 27      1/11/2008         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 28      2/11/2008         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 29      3/11/2008         29       $    8,045.09     $    8,045.09      $        0.00       $1,793,000.00
 30      4/11/2008         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 31      5/11/2008         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 32      6/11/2008         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 33      7/11/2008         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 34      8/11/2008         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 35      9/11/2008         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 36      10/11/2008        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 37      11/11/2008        31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 38      12/11/2008        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 39      1/11/2009         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 40      2/11/2009         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 41      3/11/2009         28       $    7,767.67     $    7,767.67      $        0.00       $1,793,000.00
 42      4/11/2009         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 43      5/11/2009         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 44      6/11/2009         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 45      7/11/2009         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 46      8/11/2009         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 47      9/11/2009         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 48      10/11/2009        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 49      11/11/2009        31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 50      12/11/2009        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 51      1/11/2010         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 52      2/11/2010         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 53      3/11/2010         28       $    7,767.67     $    7,767.67      $        0.00       $1,793,000.00
 54      4/11/2010         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 55      5/11/2010         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 56      6/11/2010         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 57      7/11/2010         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 58      8/11/2010         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 59      9/11/2010         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 60      10/11/2010        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 61      11/11/2010        31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 62      12/11/2010        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 63      1/11/2011         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 64      2/11/2011         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 65      3/11/2011         28       $    7,767.67     $    7,767.67      $        0.00       $1,793,000.00
 66      4/11/2011         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 67      5/11/2011         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 68      6/11/2011         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 69      7/11/2011         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 70      8/11/2011         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 71      9/11/2011         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00





                                                                           
 72      10/11/2011        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 73      11/11/2011        31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 74      12/11/2011        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 75      1/11/2012         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 76      2/11/2012         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 77      3/11/2012         29       $    8,045.09     $    8,045.09      $        0.00       $1,793,000.00
 78      4/11/2012         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 79      5/11/2012         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 80      6/11/2012         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 81      7/11/2012         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 82      8/11/2012         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 83      9/11/2012         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 84      10/11/2012        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 85      11/11/2012        31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 86      12/11/2012        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 87      1/11/2013         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 88      2/11/2013         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 89      3/11/2013         28       $    7,767.67     $    7,767.67      $        0.00       $1,793,000.00
 90      4/11/2013         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 91      5/11/2013         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 92      6/11/2013         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 93      7/11/2013         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 94      8/11/2013         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 95      9/11/2013         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 96      10/11/2013        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 97      11/11/2013        31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
 98      12/11/2013        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
 99      1/11/2014         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
100      2/11/2014         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
101      3/11/2014         28       $    7,767.67     $    7,767.67      $        0.00       $1,793,000.00
102      4/11/2014         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
103      5/11/2014         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
104      6/11/2014         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
105      7/11/2014         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
106      8/11/2014         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
107      9/11/2014         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
108      10/11/2014        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
109      11/11/2014        31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
110      12/11/2014        30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
111      1/11/2015         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
112      2/11/2015         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
113      3/11/2015         28       $    7,767.67     $    7,767.67      $        0.00       $1,793,000.00
114      4/11/2015         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
115      5/11/2015         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
116      6/11/2015         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
117      7/11/2015         30       $    8,322.51     $    8,322.51      $        0.00       $1,793,000.00
118      8/11/2015         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00
119      9/11/2015         31       $    8,599.93     $    8,599.93      $        0.00       $1,793,000.00





                                                                           
120      10/11/2015        30       $1,801,322.51     $    8,322.51      $1,793,000.00       $        0.00
120                        3,652    $2,806,127.04     $1,013,127.04      $1,793,000.00



                             AUTO DRAFT INFORMATION

If you would like to sign up for our automatic payment drafting service, fill
out and return the enclosed authorization form along with a voided check and
mail to the address listed below. Please continue to send your monthly payments
until you receive written confirmation that the auto-draft service has begun.
You will receive written notification confirming your auto-draft setup and first
auto-draft date within 7 business days of the 15th of the month submitted.

NOTE: REQUESTS MUST BE RECEIVED BY THE 15TH TO BE SET UP FOR THE FOLLOWING
MONTH.

Wachovia Securities
Attention: Customer Service Department
8739 Research Drive - URP4
Charlotte, NC 28288-1075



WACHOVIA
SECURITIES

                                 AUTO DRAFT FORM

I hereby request and authorize Wachovia Bank, National Association, doing
business as Wachovia Securities ("Wachovia Securities"), to draft my account
specified below made payable to the order of Wachovia Securities located in
Charlotte, NC, provided there are sufficient funds in said account to pay the
same upon presentation. I agree that your rights in respect to each such draft
shall be the same as if it were a check drawn on Wachovia Securities and signed
personally by me. This authorization is to remain in effect until revoked by me
in writing and until Wachovia Securities actually receives such notice. I agree
that Wachovia Securities shall be fully protected in honoring any such drafts.

LOAN NUMBER                                 NAME OF BORROWING ENTITY
- --------------------------------            ---------------------------
Wachovia Loan # (9 digits)                  Borrower Name

BANK'S ROUTING NUMBER FROM CHECK            ACCOUNT # TO BE DRAFTED
- --------------------------------            ---------------------------
Bank Routing Number (9 digits)              Bank Account # (from check)

NAME OF BANK TO BE DRAFTED                  LOCATION OF THE BANK
- -----------------------------               ---------------------------
Name of Bank                                City and State

                  PLEASE INCLUDE A VOIDED CHECK WITH THIS FORM

                                 [VOIDED CHECK]

BORROWER'S SIGNATURE                        BORROWER'S NAME
- ---------------------------------           ---------------------
Authorized Signature                        Print Name
(as it appears on bank documents)

                                            TODAY'S DATE
                                            ---------------------
                                            Date

DAY OF MONTH PAYMENT WILL DRAFT             BORROWER'S FAX NUMBER
- ---------------------------------           ---------------------
Draft Date (Payment due date)               Fax #

TERMS AND CONDITIONS

EFFECTIVE DATE OF DRAFT: The draft will occur on the payment due date, unless
otherwise agreed upon by borrower and servicer. The borrower will receive a
confirmation letter to insure auto-draft set-up and to confirm draft date.

REVOCATION OF THIS AUTHORITY: The authority of Wachovia Securities to transfer
funds from the borrowers account will not cease until Wachovia Securities
receives written notification revoking this authorization agreement. Wachovia
Securities must receive this notice at least 15 days prior to the date on which
you wish the arrangement to end.

DISHONOR: Wachovia Securities shall be under no liability whatsoever if a
transfer of funds cannot be made, whether or not such failure is caused by the
act of omission of the borrower.

INSUFFICIENT FUNDS: If the automatic withdrawal is returned due to insufficient
funds both Wachovia Securities and the borrower's financial institution may
assess a fee.

ERRORS: The borrower has the right to have the amount of any incorrect deduction
immediately corrected by the borrower's financial institution provided the
borrower sends the appropriate notice to the financial institution.

AMOUNT OF DRAFT: Wachovia Securities will withdraw the amount of the current
monthly receivable. This amount may vary due to escrow analyses, interest rate
changes or reserve requirements as applicable.

ACH ROUTING NUMBER: Please contact the financial institution from which the
money will be drafted for this information.

Wachovia Securities is the trade name under which Wachovia Corporation conducts
its investment banking, capital markets and institutional securities business
through First Union Securities, Inc. ("FUSI"), Member NYSE, NASD, SIPC, and
through other bank and non-bank and broker-dealer subsidiaries of Wachovia
Corporation.

EX-10.3

                        ASSIGNMENT OF PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                       BRAINERD DRUGSTORE, LLC, AS SELLER
                                       AND
                             SERIES A, LLC, AS BUYER

      ASSIGNOR, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, does hereby assign all of its right, title and
interest in that certain Purchase Agreement and Escrow Instructions (the
"Purchase Agreement") described herein, to ASSIGNEE and its successors and
assigns. The Purchase Agreement is described as follows:

      DATE OF AGREEMENT:  August 18, 2005, as amended on August 26, 2005,
                          September 1, 2005, and September 7, 2005

      ORIGINAL BUYER:     Series A, LLC

      ASSIGNED TO:        Cole WG Brainerd MN, LLC

      PROPERTY ADDRESS:   340 W. Washington St., Brainerd, MN  56401

      ASSIGNOR acknowledges that it is not released from any and all obligations
or liabilities under said Purchase Agreement with the exception of the earnest
money deposit which is currently in escrow.

      ASSIGNEE hereby agrees to assume and be responsible for all obligations
and liabilities under said Purchase Agreement. This Assignment shall be in full
force and effect upon its full execution.

      Executed this 28th day of September, 2005.

ASSIGNOR:                                 ASSIGNEE:

SERIES A, LLC,                            COLE WG BRAINERD MN, LLC,
an Arizona limited liability company      a Delaware limited liability company

                                          By: COLE REIT ADVISORS II, LLC, a
                                            Delaware limited liability company,
                                            its Manager
By: /s/ John M. Pons
    ----------------------
      John M. Pons
      Authorized Officer

                                              By: /s/ John M. Pons
                                                  ------------------------------
                                                    John M. Pons
                                                    Senior Vice President


                                                                    EXHIBIT 10.3

                               PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                                     BETWEEN

                             BRAINERD DRUGSTORE, LLC

                                    AS SELLER

                                       AND

                                  SERIES A, LLC

                                    AS BUYER

                                 AUGUST 18, 2005

                                       1


                   PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

DATED:      Dated to be effective as of August 18, 2005 (the "Effective Date").

PARTIES:    This Purchase Agreement and Escrow Instructions (this "Agreement")
            is between Brainerd Drugstore, LLC, a Colorado limited liability
            company, as "Seller", and Series A, LLC, an Arizona limited
            liability company, as "Buyer".

      WHEREAS, as of the Effective Date, Seller is the owner of that certain
improved property located at 340 West Washington Street, Brainerd, Minnesota,
that is legally described on Exhibit A attached (the "Real Property");

      WHEREAS, as of the Effective Date, the Real Property is improved with a
building containing approximately 15,076 square feet (the "Building"), which
Building is leased to Walgreen Co., an Illinois corporation ("Tenant") in
accordance with a written lease dated May 17, 1999 as amended by an Amendment to
Lease dated November 12, 1999 (collectively, the "Lease"). The Real Property,
the Building, the improvements to the Real Property (the "Improvements"), the
personal property, if any, of Seller located on the Real Property and Seller's
interest in the Lease and all rents issued and profits due or to become due
under the Lease are collectively referred to as the "Property"; and

      WHEREAS, Buyer desires to purchase the Property from Seller and Seller
desires to sell the Property to Buyer, all as more particularly set forth in
this Purchase Agreement and Escrow Instructions (this "Agreement").

      NOW THEREFORE, in consideration of the promises set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, Seller and Buyer (collectively, the "Parties" or
individually, a "Party") agree as follows:

      1. INCORPORATION OF RECITALS. All of the Recitals are incorporated as
agreements of the Parties.

      2. BINDING AGREEMENT. This Agreement constitutes a binding agreement
between Seller and Buyer for the sale and purchase of the Property subject to
the terms set forth in this Agreement. Subject to the limitations set forth in
this Agreement, this Agreement shall bind and inure to the benefit of the
Parties and their respective successors and assigns. This Agreement supersedes
all other written or verbal agreements between the Parties concerning any
transaction embodied in this Agreement. No claim of waiver or modification
concerning the provisions of this Agreement shall be made against a Party unless
based upon a written instrument signed by such Party.

                                       2


      3. INCLUSIONS IN PROPERTY.

            (a) The Property. The term "Property" also shall include the
following:

                  (1) all tenements, hereditaments and appurtenances pertaining
to the Real Property;

                  (2) all mineral, water and irrigation rights, if any, running
with or otherwise pertaining to the Real Property;

                  (3) all interest, if any, of Seller in any road adjoining the
Real Property;

                  (4) all interest, if any, of Seller in any award made or to be
made or settlement in lieu of such award for damage to the Property by reason of
condemnation, eminent domain or exercise of police power;

                  (5) all of Seller's interest in the Building, the Improvements
and any other improvements and fixtures on the Real Property;

                  (6) all of Seller's interest, if any, in any equipment,
machinery and personal property on or used in connection with the Real Property
(the "Personalty");

                  (7) the Lease and security deposit, if any, now or hereafter
due under the Lease; and,

                  (8) all of Seller's interest, to the extent transferable, in
any permits and licenses (the "Permits"), warranties, contractual rights and
intangibles with respect to the operation, maintenance, repair or improvement of
the Property (the "Contracts").

            (b) The Transfer Documents. Except for the Personalty which shall be
transferred by that certain bill of sale from Seller to Buyer, a specimen of
which is attached as Exhibit B (the "Bill of Sale"), the Lease which is to be
transferred by that certain assignment and assumption of lease, a specimen of
which is attached as Exhibit C (the "Assignment of Lease"), the Permits and
Contracts which are to be transferred by that certain assignment agreement, a
specimen of which is attached as Exhibit D (the "Assignment Agreement"), all
components of the Property shall be transferred and conveyed by execution and
delivery of Seller's limited warranty deed, a specimen of which is attached as
Exhibit E (the "Deed"). The Bill of Sale, the Assignment of Lease, the
Assignment Agreement and the Deed are hereinafter collectively referred to as
the "Transfer Documents".

      4. PURCHASE PRICE. The price to be paid by Buyer to Seller for the
Property is Four Million Three Hundred Twenty-Eight Thousand Five Hundred and
no/100 Dollars ($4,328,500.00) (the "Purchase Price"), payable as follows:

                                       3


            (a) Fifty Thousand and no/100 Dollars ($50,000.00) earnest money
(the "Earnest Money Deposit") to be deposited by Buyer in escrow with First
American Title Insurance Company, 2425 E. Camelback Road, Suite 300, Phoenix,
Arizona 85016, Attention: Carol Peterson ("Escrow Agent") within one business
day after receipt of written confirmation of execution of this Agreement by
Seller along with a copy of the fully-executed original of this Agreement (the
"Opening of Escrow"), which Earnest Money Deposit is to be held by Escrow Agent
until released as provided in this Agreement or paid to Seller at close of
escrow ("COE");

            (b) Ten Thousand and no/100 ($10,000.00) of the Earnest Money
Deposit (the "Non-Refundable Deposit") will be non-refundable to Buyer from and
after August 26, 2005, except as specifically provided in this Agreement;

            (c) The Earnest Money Deposit is to be increased by an additional
Fifty Thousand and no/100 Dollars ($50,000.00) (bringing the total Earnest Money
Deposit to $100,000.00) to be deposited with the Escrow Agent by Buyer within
one business day following the expiration of the Due Diligence Period (as
defined below) unless Buyer elects to cancel this Agreement on or before the
last day of the Due Diligence Period under Section 6 or Section 7(c). If Buyer
does not so cancel the Agreement on or before the last day of the Due Diligence
Period, the entire Earnest Money Deposit shall become non-refundable to Buyer
except as specifically provided in this Agreement; and

            (d) Four Million Two Hundred Twenty-Eight Thousand Five Hundred and
no/100 Dollars ($4,228,500.00) in additional cash, or other immediately
available funds (as may be increased or decreased by such sums as are required
to take into account any additional deposits, prorations, credits, or other
adjustments required by this Agreement), to be deposited in escrow with Escrow
Agent one day prior to the COE (the "Additional Funds") which are to be held by
Escrow Agent until cancellation of this Agreement as provided in this Agreement
or paid to Seller at COE.

      5. DISPOSITION OF EARNEST MONEY DEPOSIT. Seller and Buyer hereby instruct
Escrow Agent to place the Earnest Money Deposit in a federally insured
interest-bearing passbook account on behalf of Seller and Buyer. The Earnest
Money Deposit and interest on the Earnest Money Deposit shall be applied as
follows:

            (a) if Buyer cancels this Agreement prior to August 26, 2004, as
Buyer is so entitled to do as provided in this Agreement, the Earnest Money
Deposit and all interest earned to the effective date of withdrawal shall be
paid immediately to Buyer;

            (b) if Buyer cancels this Agreement after August 26, 2004, but prior
to the expiration of the Due Diligence Period, as Buyer is so entitled to do as
provided in this Agreement, the Earnest Money Deposit and all interest earned to
the effective date of withdrawal less the Non-Refundable Deposit shall be paid
immediately to Buyer and the Non-Refundable Deposit shall be paid to Seller,
except as specifically set forth in this Agreement;

            (c) if the Earnest Money Deposit is forfeited by Buyer pursuant to
this Agreement, such Earnest Money Deposit and all interest earned to the date
of withdrawal shall

                                       4


be paid to Seller as Seller's agreed and total liquidated damages, it being
acknowledged and agreed that it would be difficult or impossible to determine
Seller's exact damages; and

            (d) if escrow closes, the Earnest Money Deposit and all interest
earned to COE shall be credited to Buyer, automatically applied against the
Purchase Price and paid to Seller upon Closing.

      6. TITLE COMMITMENT AND OBJECTIONS.

            (a) Evidence of Title. Within ten days after the Effective Date,
Escrow Agent shall deliver a current title commitment (the "Commitment") for an
ALTA standard coverage title insurance policy (the "Owner's Policy") on the Real
Property to Buyer and Seller. The Commitment shall show the status of title to
the Real Property as of the date of the Commitment and shall also describe the
requirements of Escrow Agent for the issuance of the Owner's Policy as described
in this Agreement. The cost of a standard Owner's Policy will be paid for by
Seller; Buyer shall pay any additional cost for the extended coverage policy and
any endorsements to the policy if such policy or endorsements are required by
Buyer or its lender. In addition to the Commitment, Escrow Agent shall deliver
simultaneously to Buyer and Seller copies of all documents identified in Part
Two of Schedule B of the Commitment (the "Title Documents").

            (b) Defects of Title. If on or before August 31, 2005, Buyer asserts
the existence of any encumbrance, encroachment on or defect in, or objection to
title to, any portion of the Real Property based on Buyer's examination of the
Commitment and the Title Documents, or any other information received by Buyer
(any of which is called a "Defect in Title"), Buyer will give written notice
thereof to Seller on or before August 31, 2005, and then Seller may, at Seller's
sole election either: (i) notify Buyer in writing that it does not intend to
correct or cure the Defect in Title, or (ii) attempt to correct or cure the
Defect in Title on or before the COE by (A) attempting to obtain title insurance
over such Defect in Title, or (B) otherwise using reasonable efforts to remove
the Defect in Title. Seller's lack of response within a period of one business
day after receipt of Buyer's notice shall be deemed as Seller's election not to
correct or cure the Defect in Title prior to COE. If Seller does not elect or is
deemed not to have elected o correct or cure the Defect in Title, Buyer shall
have the right to cancel this Agreement by delivering written notice to Seller
on or before the last day of the Due Diligence Period, or to waive any such
Defect in Title and elect to close under this Agreement.. If Seller elects to
attempt to correct or cure the Defect in Title, but the Defect in Title cannot,
through the exercise of reasonable diligence, be corrected or cured on or before
the COE, the COE shall be automatically extended for a time period not to exceed
15 days in order to allow Seller to correct or cure such matter. If Seller
elects to attempt to correct or cure the Defect in Title and if such Defect in
Title cannot be corrected or cured within the 15-day extension of the COE, then
Buyer will have the right to either: (x) waive any such Defect in Title and
elect to close under this Agreement, or (y) cancel this Agreement by delivering
written notice to Seller on or before the date of the COE (as it may be
extended). If Buyer elects to cancel this Agreement due to Seller's election to
not correct or cure any Defect in Title, Buyer will receive a prompt refund of
the Earnest Money Deposit plus interest less the Non-Refundable Deposit and the
Parties will be relieved of all further obligations under this Agreement, except
that the indemnities contained in Sections 7(b) and 16(b) shall survive such
termination. If, after Seller notifies Buyer of its intent

                                       5


to correct or cure any Defect in Title but is subsequently unable to correct or
cure any Defect in Title within the 15-day extension of COE and Buyer terminates
due to such inability, Buyer will receive a prompt refund of the entirety of the
Earnest Money Deposit plus interest and the Parties will be relieved of all
further obligations under this Agreement, except that the indemnities contained
in Sections 7(b) and 16(b) shall survive such termination.

            (c) Permitted Exceptions. The Lease, the title exceptions shown on
the Commitment not made the subject of any objection to title by Buyer, any
title exceptions otherwise approved by Buyer in writing on or before the last
day of the Due Diligence Period, and any Defect in Title waived by Buyer as
provided in Sections 6(b) and 6(d), will be deemed to be approved by Buyer and
will be referred to as "Permitted Exceptions" under this Agreement. At COE,
Seller will convey the Property to Buyer free and clear of all liens, claims,
pledges and encumbrances arising by, through or under Seller, subject the
Permitted Exceptions.

            (d) Change in Title. In the event on or before COE any supplement to
the Commitment discloses any change or addition to the Permitted Exceptions
which, in Buyer's sole judgment, could have a material adverse effect on the
condition of title to the Property or on Buyer's ability to operate the Property
in the manner in which it currently is being operated, other than changes caused
by Buyer (an "Additional Exception"), Buyer may object in writing to such
Additional Exception in which case Seller may, at Seller's sole election,
either: (i) notify Buyer in writing that it does not intend to correct or cure
the Defect in Title, or (ii) attempt to correct or cure the Additional Exception
on or before the COE by (A) attempting to obtain title insurance over such
Additional Exception, or (B) otherwise using reasonable efforts to remove the
Additional Exception. Seller's lack of response within a period of one business
day of receipt of Buyer's notice shall be deemed as Seller's election not to
correct or cure the Defect in Title prior to COE. In the event the Defect in
Title cannot, through the exercise of reasonable diligence, be corrected or
cured on or before the COE, the COE shall be automatically extended for a time
period not to exceed 15 days in order to allow Seller to correct or cure such
matter. If Seller does not elect to correct or cure the Additional Exception or
if such Additional Exception cannot be corrected or cured within the 15-day
extension of the COE, then Buyer will have the right to either: (x) waive any
such Additional Exception and elect to close under this Agreement, or (y) cancel
this Agreement by delivering written notice to Seller on or before the date of
the COE (as it may be extended). If Buyer elects to cancel this Agreement due to
Seller's election to not correct or cure any Additional Exception, Buyer will
receive a prompt refund of the Earnest Money Deposit plus interest less the
Non-Refundable Deposit and the Parties will be relieved of all further
obligations under this Agreement, except that the indemnities contained in
Sections 7(b) and 16(b) shall survive such termination. If, after Seller
notifies Buyer of its intent to correct or cure any Additional Exception but is
subsequently unable to correct or cure any Additional Exception within the
15-day extension of COE and Buyer terminates due to such inability, Buyer will
receive a prompt refund of the entirety of the Earnest Money Deposit plus
interest and the Parties will be relieved of all further obligations under this
Agreement, except that the indemnities contained in Sections 7(b) and 16(b)
shall survive such termination.

      7. BUYER'S DUE DILIGENCE PERIOD.

            (a) The Due Diligence Period. Buyer shall have until 10:00 a.m.
Denver, Colorado time on September 6, 2005 (the "Due Diligence Period"), at
Buyer's sole cost, within

                                       6


which to conduct and approve any investigations, studies or tests deemed
necessary by Buyer, in Buyer's sole discretion, to determine the feasibility of
acquiring the Property (the "Studies"). The Studies shall include, but not be
limited to, Buyer's right to: (i) review and approve the Survey (as defined
below), the Lease, Seller's operating statements with respect to the Property,
and the Contracts; (ii) meet and confer with Tenant; and, (iii) obtain, review
and approve an environmental study of the Real Property and Building.

            (b) Right of Entry. Subject to the prior rights of the Tenant of the
Property, Seller hereby grants to Buyer and Buyer's agents, employees and
contractors the right to enter upon the Property, at any reasonable time or
times during the Due Diligence Period and after reasonable prior notice to
Seller, to conduct the Studies. In conducting the Studies, Buyer shall use
commercially reasonable efforts to not interfere with any of the operations or
business of the Tenant of the Property. In consideration of the license granted
to Buyer in this Section, Buyer hereby indemnifies and holds Seller harmless
from any and all liabilities, claims, losses or damages, including, but not
limited to, court costs and attorneys' fees, which may be incurred by Seller as
a direct result of the Studies. Buyer's indemnity and hold harmless obligation
shall survive cancellation of this Agreement or COE.

            (c) Cancellation. Unless Buyer so notifies Seller and Escrow Agent,
in writing, on or before the end of the Due Diligence Period of Buyer's
acceptance of the Studies and waiver of the contingencies as set forth in this
Section 7, this Agreement shall be canceled. If Buyer notifies Seller and Escrow
Agent that it desires to cancel this Agreement on or before August 26, 2005, the
Earnest Money Deposit plus interest shall be returned immediately to Buyer and
the Parties will be relieved of all further obligations under this Agreement,
except that the indemnities contained in Sections 7(b) and 16(b) shall survive
such termination. If Buyer notifies Seller and Escrow Agent that it desires to
cancel this Agreement after August 26, 2005 but prior to the expiration of the
Due Diligence Period, or if Buyer is deemed to have canceled this Agreement
pursuant to the first sentence of this subsection 7(c), the Earnest Money
Deposit plus interest less the Non-Refundable Deposit shall be returned
immediately to Buyer and the Parties will be relieved of all further obligations
under this Agreement, except that the indemnities contained in Sections 7(b) and
16(b) shall survive such termination. If this Agreement is canceled for any
reason, then (x) to the extent reasonably practicable, Buyer shall, within ten
days after cancellation, repair any damage caused by any of those visits,
inspections or studies so as to restore the Property to as near its same
condition as before the damage as is reasonably possible, (y) within the same
ten-day period Buyer will return to Seller all Property Documents, and (z) Buyer
will maintain in confidence any information it obtained about the Property. The
provisions of this paragraph will survive COE.

            (d) Right of First Refusal. If at any time prior to or following the
expiration of the Due Diligence Period the Tenant validly exercises its right of
first refusal contained in the Lease, this Agreement will terminate, and Buyer
will receive a prompt refund of the Earnest Money Deposit plus interest and the
Parties will be relieved of all further obligations under this Agreement, except
that the indemnities contained in Sections 7(b) and 16(b) shall survive such
termination.

                                       7


      8. DELIVERY OF STUDIES.

            (a) Deliveries to Buyer. The Parties agree that prior to the
Effective Date, Seller has delivered to Buyer copies of the following documents:
the executed Lease including any amendments to the Lease; the Geotechnical
Exploration Report dated October 20, 1998; the Phase I Environmental Site
Assessment dated November 12, 1998; the Phase I Environmental Site Assessment
Update dated September 15, 1999; the Phase I Environmental Site Assessment dated
June 18, 2001; an existing ALTA survey of the Real Property and the Building; an
existing owner's title policy for the Real Property; site plans; the roof
warranty; a zoning letter dated June 2001; a certificate of occupancy dated
April 20, 2000; the Architect/Developer Project Specifications dated July 17,
1999; and Walgreen's Statements of Receipts for July 1, 2002 through June 30,
2003 and July 1, 2003 through June 30, 2004 (the "Property Documents"). Seller
makes no representation or warranty regarding, and does not assume liability or
responsibility for, the truth, accuracy or completeness of any reports,
material, tests or information prepared by third parties.

            (b) Delivery by Buyer. If this Agreement is canceled for any reason,
except Seller's willful default hereunder, Buyer agrees to deliver to Seller all
Property Documents received by Buyer.

      9. THE SURVEY. Buyer, at Buyer's cost, shall, at any time after the
Opening of Escrow, have the option to cause a certified ALTA survey of the Real
Property, Building and Improvements, or an update of Seller's existing survey,
(either being referred to as the "Survey") to be completed by a surveyor
licensed in the State of Minnesota and deposited with Escrow Agent. The Survey
shall set forth the legal description and boundaries of the Property and all
easements, encroachments and improvements thereon.

      10. IRS SECTION 1445. Seller shall furnish to Buyer in escrow by COE a
sworn affidavit (the "Non-Foreign Affidavit") stating under penalty of perjury
that Seller is not a "foreign person" as such term is defined in Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). If
Seller does not timely furnish the Non-Foreign Affidavit, Buyer may withhold (or
direct Escrow Agent to withhold) from the Earnest Money Deposit and/or the
Additional Funds, an amount equal to the amount required to be so withheld
pursuant to Section 1445(a) of the Code, and such withheld funds shall be
deposited with the Internal Revenue Service as required by such Section 1445(a)
and the regulations promulgated thereunder. The amount withheld, if any, shall
nevertheless be deemed to be part of the Purchase Price paid to Seller.

      11. DELIVERY OF POSSESSION. Seller shall deliver possession of the
Property to Buyer at COE subject only to the rights of Tenant under the Lease as
approved by Buyer as part of the Studies.

      12. CONDITIONS PRECEDENT. In addition to all other conditions precedent
set forth in this Agreement, Buyer's obligations to perform under this Agreement
and to close escrow are expressly subject to the following:

                                       8


            (a) the delivery by Buyer and Seller to Escrow Agent, respectively,
for delivery to the other party at COE, of the executed original Transfer
Documents to the extent required to be executed by such Parties, and other
documents reasonably necessary to consummate the transaction contemplated
hereby, including without limitation an owner's affidavit;

            (b) the issuance of the Owner's Policy (or a written commitment
therefor) subject only to those Permitted Exceptions approved or deemed approved
by Buyer pursuant to this Agreement;

            (c) the delivery by Seller to Buyer at COE of all security deposits
and pre-paid/abated rents under the Lease, if any, in the form of a credit in
favor of Buyer against the Additional Funds;

            (d) upon expiration of the Due Diligence Period and Buyer's
acceptance of the Studies without cancellation of this Agreement as set forth in
Section 7 (or prior thereto at Seller's sole option), Seller shall request a
tenant estoppel certificate from the Tenant. Such certificate shall be on the
Tenant's standard form of certificate, which shall be substantially similar to
that on Exhibit F attached, shall state that the Lease is in full force and
effect and shall not identify any offset or abatement rights (except as are
stated in the Lease), punchlist items or defaults (the "Estoppel"). The Tenant
is not required under the Lease to list Buyer and its lender on the Estoppel;
however, Seller will make reasonable efforts to add Buyer and its lender,
Wachovia Bank, National Association, to the Estoppel. Seller makes no guarantee
on the timing of receipt of the Estoppel; therefore, if the Estoppel is not
received by two (2) business days prior to the scheduled date of COE pursuant to
Section 17 , the COE shall be extended to the date which is two (2) business
days after receipt of the Estoppel, provided such extension shall not exceed
thirty (30) days. If the Estoppel is not received within such 30-day extension
period, Buyer may terminate this Agreement upon written notice to Seller, which
termination shall have the effect set forth below in this Section 12;

            (e) the deposit with Escrow Agent of letter from Seller to Tenant
requesting that future rent under the Lease be paid to Buyer;

            (f) each Party shall have performed all covenants, agreements and
obligations required to be performed by it under this Agreement;

            (g) delivery by Seller of originals of the Lease, the Contracts and
Permits, if any such original documents are in the possession of Seller;

            (h) each Party shall have executed and delivered to the Escrow Agent
a certificate confirming the that all of the representations and warranties of
such Party set forth in Section 13 are accurate and complete in all material
respects as of the COE (with appropriate modifications as permitted under this
Agreement);

            (i) receipt of an express waiver of Tenant's right of first refusal
under the Lease or, in the alternative, the deposit with the Escrow Agent of
evidence satisfactory to Buyer, in its reasonable discretion, that Seller has
delivered the notice letter to the Tenant described in

                                       9


Section 13(e)(5) together with an affidavit of Seller stating that the period
for Tenant's exercise of its right of first refusal provided in the Lease has
expired without Tenant having exercised such right; and

            (j) deposit with Escrow Agent by Buyer of the Additional Funds, by
wire transfer of immediately available funds;

Seller's obligations to perform under this Agreement and to close escrow are
expressly subject to the satisfaction by Buyer of the conditions set forth in
Section 12(a), (f), (h), (i) and (j) above. Either Party shall have the right,
in its sole and absolute discretion, to waive in writing of the foregoing
conditions that are included for the sole benefit for the waiving Party. If any
of the conditions described above which is not an obligation of Buyer has not
been satisfied by the COE as such date may be extended under the terms of this
Agreement, then Buyer shall have the right, at Buyer's sole option, by giving
written notice to Seller and Escrow Agent, to cancel this Agreement and Buyer
will receive a prompt refund of the Earnest Money Deposit plus interest and the
Parties will be relieved of all further obligations under this Agreement, except
that the indemnities contained in Sections 7(b) and 16(b) shall survive such
termination.

      13. SELLER'S WARRANTIES AND COVENANTS.

            (a) Seller represents and warrants to Buyer as of the Effective Date
that:

                  (1) to Seller's Actual Knowledge, no notice of violation has
been issued and delivered to Seller with regard to any applicable regulation,
ordinance, requirement, covenant, condition or restriction relating to the
present use or occupancy of the Property by any person, authority or agency
having jurisdiction;

                  (2) to Seller's Actual Knowledge, there is no impending or
contemplated condemnation or taking by inverse condemnation of the Property, or
any portion thereof, by any governmental authorities;

                  (3) to Seller's Actual Knowledge, there are no suits or claims
pending or threatened with respect to or in any manner affecting the Property;

                  (4) other than Tenant's right of first refusal set forth in
the Lease, Seller has not entered into and there is not existing any other
agreement, written or oral, under which Seller is or could become obligated to
sell the Property, or any portion thereof, to a third party, prior to
termination of this Agreement;

                  (5) this transaction will not in any way violate any other
agreements to which Seller is a party;

                  (6) Seller has full power and authority to execute, deliver
and perform under this Agreement as well as under the Transfer Documents,
specimens of which are attached as Exhibits;

                                       10


                  (7) to Seller's Actual Knowledge, no default of Seller or of
the other parties exists under any of the Contracts;

                  (8) no consent of any third party is required in order for
Seller to enter into this Agreement and perform Seller's obligations hereunder
(subject to Tenant's election not to exercise Tenant's right of first refusal).
Without limiting the generality of the foregoing, to Seller's Actual Knowledge,
no consent of any third party is required in order for Seller to assign to Buyer
the Contracts or the Lease;

                  (9) the execution, delivery and performance of this Agreement
and the Transfer Documents, specimens of which are attached as Exhibits, have
not and will not constitute a breach or default under any other agreement or, to
Seller's Actual Knowledge, any law or court order under which Seller is a party
or may be bound;

                  (10) to Seller's Actual Knowledge, all general real estate
taxes, assessments and personal property taxes that have become due with respect
to the Property have been paid or will be so paid by Tenant pursuant to the
terms of the Lease;

                  (11) to Seller's Actual Knowledge and except as disclosed in
the Property Documents, Seller is not aware that there exists or has existed,
and Seller itself has not caused any generation, production, location,
transportation, storage, treatment, discharge, disposal, release or threatened
release upon, under or about the Property of any Hazardous Materials. "Hazardous
Materials" shall mean any flammables, explosives, radioactive materials,
hazardous wastes, hazardous and toxic substances or related materials, asbestos
or any material containing asbestos (including, without limitation, vinyl
asbestos tile), or any other substance or material, defined as a "hazardous
substance" by any federal, state, or local environmental law, ordinance, rule or
regulation including, without limitation, the Federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, the
Federal Hazardous Materials Transportation Act, as amended, the Federal Resource
Conservation and Recovery Act, as amended, and the rules and regulations adopted
and promulgated pursuant to each of the foregoing ("Environmental Law)". Seller
hereby assigns to Buyer, effective as of COE, all claims, counterclaims,
defenses, or actions whether at common law, or pursuant to any other applicable
federal or state or other laws which Seller may have against any third parties
relating to the existence of any Hazardous Materials in, at, on, under or about
the Property (including Hazardous Materials released on the Property prior to
COE and continuing in existence on the Property at COE); and

                  (12) except for any item to be prorated at COE in accordance
with this Agreement, all bills or other charges, costs or expenses arising out
of or in connection with or resulting from Seller's use, ownership, or operation
of the Property up to COE shall be paid in full by Seller, except to the extent
payable by Tenant pursuant to the terms of the Lease.

            (b) all representations made in this Agreement by Seller shall
survive the execution and delivery of this Agreement and COE for a period of
four (4) months after COE, after which time they shall automatically terminate
and be of no further force or effect. Seller shall and does hereby indemnify
against and hold Buyer harmless from any loss, damage,

                                       11


liability and expense, together with all court costs and attorneys' fees which
Buyer may incur, directly as a result of any material misrepresentation by
Seller or any material breach of any of Seller's warranties. Seller's indemnity
and hold harmless obligations shall survive COE for a period of four (4) months
after COE, after which time they shall automatically terminate and be of no
further force or effect. As used in this Agreement, the phrase "to Seller's
Actual Knowledge" or words of similar import shall mean the actual (and not
constructive or imputed) knowledge, without independent investigation or
inquiry, of Marcel J.C. Arsenault, as managing member of Seller.

            (c) In the event that any representation or warranty of Seller needs
to be modified due to changes since the Effective Date, Seller shall deliver to
Buyer a certificate dated as of the COE signed by Seller, identifying any
representation or warranty which is not, or no longer is, true and correct and
explaining the state of facts giving rise to the change. The occurrence of any
such change shall, if materially adverse to Purchaser, constitute the
non-fulfillment of the condition set forth in Section 12(h) entitling Buyer to
terminate this Agreement and Buyer will receive a prompt refund of the Earnest
Money Deposit plus interest and the Parties will be relieved of all further
obligations under this Agreement, except that the indemnities contained in
Sections 7(b) and 16(b) shall survive such termination. Such remedy shall be
Buyer's sole and exclusive remedy for any change in the foregoing
representations and warranties about which Seller provides such notice to Buyer,
or about which Buyer learns, before the COE, and Buyer hereby waives any and all
other remedies therefor. If the COE occurs despite such changes in Seller's
representations and warranties or other matters described in the Seller's
certificate, Seller's representations and warranties set forth in this Agreement
shall be deemed to have been modified by all statements made in the certificate.

            (d) With the sole exception of the representations set forth in this
Section 13, this Agreement is made without representation or warranty of any
kind by Seller; Seller makes no representation or warranty of any kind with
regard to the physical condition of the Property or any component thereof, with
regard to any restrictions, requirements, costs or constraints that may be
associated with the Property, with regard to the suitability of the Property for
Buyer's purposes or with regard to the accuracy or completeness of any of the
Property Documents furnished or made available to Buyer (including, without
limitation, any environmental or structural studies or reports), it being the
parties' express understanding and agreement that Buyer shall fully inspect the
Property and all aspects thereof during the Due Diligence Period and prior to
COE, and that Buyer will rely solely on its own inspection in determining the
physical condition and other features of the Property, any restrictions,
requirements, costs or constraints that may be associated with the Property, and
whether the Property is suitable for Buyer's intended purposes; and Buyer will
acquire the Property in "AS IS" and "WITH ALL FAULTS" condition. Without
limiting the generality of the foregoing, Buyer, for itself and its successors
and assigns, releases Seller and Seller's partners, agents, employees, managers,
members, brokers, contractors and representatives from, and waives any and all
causes of action or claims against any of such persons for, (i) any and all
liability attributable to any physical condition of or at the Property,
including, without limitation, the presence on, under or about the Property of
any Hazardous Materials; and (ii) any and all liability resulting from the
failure of the Property to comply with any applicable laws, including, without
limitation, any

                                       12


Environmental Law (as defined below). This Section 13(d) shall survive the
execution and delivery of this Agreement and the COE.

            (e) Seller covenants with Buyer that Seller will perform and comply
with each of the following from and after the Effective Date, or the date the
Due Diligence Period expires without cancellation of this Agreement by Buyer, as
the case may be, until termination of this Agreement:

                  (1) from and after the Effective Date, Seller will not enter
into nor execute any agreement to grant a right of first refusal or option to
purchase the Property, or any portion of the Property, to a third party, without
Buyer's prior written consent; provided, however, that Seller shall be allowed
to enter into back-up contracts for the sale of the Property that are expressly
contingent upon the expiration or termination of this Agreement;

                  (2) from and after the Effective Date until termination of
this Agreement, Seller will not enter into or execute any employment, management
or service contract with respect to the Real Property without Buyer's prior
written consent, which consent shall not be unreasonably withheld or delayed,
provided that any such contract so entered by Seller with or without Buyer's
consent shall provide that such contract can be terminated by Seller, or
Seller's successor, at any time without penalty, upon not more than thirty (30)
days' prior written notice to the other party. When any such contracts are fully
executed, Seller shall deliver a copy thereof to Buyer;

                  (3) from and after the Effective Date until termination of
this Agreement, Seller shall not execute or enter into any lease with respect to
the Property, or terminate, amend, modify, extend or waive any rights under the
Lease without Buyer's prior written consent, which consent may be withheld at
Buyer's discretion;

                  (4) from and after the Effective Date until termination of
this Agreement, Seller, without Buyer's prior written consent which consent will
not be unreasonably withheld or delayed, shall not amend, modify or terminate
any Contract or waive any substantial right thereunder; and

                  (5) no later than the fifth business day after the Effective
Date, Seller will send a letter to Tenant notifying Tenant of Buyer's offer and
requesting that Tenant provide Seller with an signed waiver of Tenant's right of
first refusal under the Lease as to the transaction described in this Agreement,
it being understood that the Lease does not require Tenant to affirmatively
respond to a request by Seller for a written waiver and Tenant may elect to
waive by permitting the period for exercise of the right to expire. Seller will
provide Buyer with a copy of its letter to the Tenant.

      14. BUYER'S WARRANTIES AND COVENANTS.

            (a) Buyer hereby represents to Seller as of the Effective Date that:

                                       13


                  (1) Buyer has full power and authority to execute, deliver and
perform under this Agreement as well as under the Transfer Documents, specimens
of which are attached as Exhibits;

                  (2) there are no actions or proceedings pending or to Buyer's
Actual Knowledge, threatened against Buyer which may in any manner whatsoever
affect the validity or enforceability of this Agreement or any of the documents,
specimens of which are attached as Exhibits; and

                  (3) the execution, delivery and performance of this Agreement
and the Transfer Documents, specimens of which are attached hereto as Exhibits,
have not and will not constitute a breach or default under any other agreement
or, to Buyer's Actual Knowledge, any law or court order under which Buyer is a
party or may be bound.

            (b) all representations made in this Agreement by Buyer shall
survive the execution and delivery of this Agreement and COE for a period of
four (4) months after COE, after which time they shall automatically terminate
and be of no further force or effect. Buyer shall and does hereby indemnify
against and hold Seller harmless from any loss, damage, liability and expense,
together with all court costs and attorneys' fees, if awarded by a court of law,
which Seller may incur directly as a result of any material misrepresentation by
Buyer or any material breach of any of Buyer's warranties. Buyer's indemnity and
hold harmless obligations shall survive COE for a period of four (4) months
after COE, after which time they shall automatically terminate and be of no
further force or effect. As used in this Agreement, the phrase "to Buyer's
Actual Knowledge" or words or similar import shall mean the actual (and not
constructive or implied) knowledge, without independent investigation or
inquiry, of John M. Pons as Authorized Officer of Buyer.

            (c) Buyer shall hold maintain as confidential (i) all data and
information received by Buyer from Seller that is not in the public domain or
known generally to the public with respect to the Property and the Seller or its
business, whether obtained before or after the execution and delivery of this
Agreement, and (ii) the terms and conditions of this Agreement, and Buyer shall
not disclose same to others, except that Buyer may make such disclosures to its
accountants, attorneys, lenders and consultants as Buyer reasonably deems
necessary or desirable in order to evaluate or obtain financing for the
transaction contemplated by this Agreement. The foregoing provisions
notwithstanding, if the COE occurs, then no such confidentiality obligation
shall apply thereafter. Under no circumstances shall Buyer market the Property
for sale to third parties or list the Property with a real estate broker or
agent for sale, prior to the end of the Due Diligence Period and before Buyer
has delivered to Seller the second $50,000 installment of the Earnest Money
Deposit due pursuant to Section 4(c). If Buyer breaches any provision of this
Section 14 (c), Seller shall have all of the remedies provided in Section 20(b)
of this Agreement.

      15. CONDEMNATION. Seller shall bear all risk of a taking or condemnation
of the Property which may occur prior to COE. If prior to COE any governmental
or other entity having condemnation authority institutes an eminent domain
proceeding or takes any steps preliminary thereto to condemn any portion of the
Real Property or Building, Buyer will have the right to terminate this Agreement
upon notice to Seller and Escrow Agent. If Buyer elects to

                                       14


cancel this Agreement then Buyer will receive a prompt refund of the Earnest
Money Deposit plus interest and the Parties will be relieved of all further
obligations under this Agreement, except that the indemnities contained in
Sections 7(b) and 16(b) shall survive such termination. If Buyer does not so
terminate this Agreement, Buyer will proceed to COE without any reduction to the
Purchase Price, and Seller agrees to assign to Buyer at the COE, Seller's rights
to any compensation or damages relating to such taking.

      16. BROKER'S COMMISSION. Concerning any brokerage commission, the Parties
agree as follows:

            (a) The Parties warrant to one another that they have not dealt with
any finder, broker or realtor in connection with this Agreement except Anthon
Stauffer and Sage Investment Properties (collectively, "Broker");

            (b) If any person other than Broker shall assert a claim to a
finder's fee or brokerage commission on account of alleged employment as a
finder or broker in connection with this Agreement, the Party under whom the
finder or broker is claiming shall indemnify and hold the other Party harmless
from and against any such claim and all costs, expenses and liabilities incurred
in connection with such claim or any action or proceeding brought on such claim,
including, but not limited to, counsel and witness fees and court costs in
defending against such claim. The provisions of this Section shall survive
cancellation of this Agreement or COE; and

            (c) In the event of the COE, Seller shall be responsible for payment
of a commission to Broker in an amount equal to one percent (1.0 %) of the
Purchase Price, which commission shall be paid at COE.

      17. CLOSE OF ESCROW. COE shall be on October 6, 2005 or such earlier date
as Buyer and Seller may mutually agree in writing. Seller may extend the COE
date for up to an additional thirty (30) days upon delivery of written notice to
extend the COE to Escrow Agent prior to the original COE date, such period of
extension to run concurrently with any extension required by Seller pursuant to
the provisions of Sections 6(b) or (d). Notwithstanding any provision to the
contrary contained in this Agreement, Buyer will cooperate with Seller's loan
defeasance requirements by closing the Transfer Documents into escrow two
business days prior to the scheduled COE and funding the Additional Funds one
business day prior to the COE on or before 12:00 p.m. Denver, Colorado time on
such date.

      18. ASSIGNMENT. This Agreement may not be assigned by Seller without the
prior written consent of Buyer (which consent shall not be unreasonably
withheld), other than an Approved Assignee (defined below) or as part of an
Exchange (defined below). Buyer may not assign its rights under this Agreement
without Seller's consent, which consent may be withheld for any reason, other
than to an Approved Assignee. Any assignment by Buyer permitted under this
Agreement shall not become effective until the assignee executes an instrument
whereby such assignee expressly assumes each of the obligations of Buyer under
this Agreement, including specifically, without limitation, all obligations
concerning the Earnest Money Deposit. No assignment shall release or otherwise
relieve Buyer from any obligations hereunder. Subject

                                       15


to the foregoing, this Agreement shall be binding upon, and inure to the benefit
of, the Parties and their respective successors, personal representatives, heirs
and permitted assigns. For purposes of this Agreement, an "Approved Assignee" is
any entity that controls, is controlled by or is under common control with, any
original Party executing this Agreement, with the word "control" meaning the
power to direct or cause the direction of the management or policies of such
Party or the assignee, as the case may be. An assignment, pledge or transfer of
the control of the original Buyer executing this Agreement, voluntarily,
involuntarily or by operation of law, will constitute an assignment of this
Agreement requiring Seller consent.

      19. RISK OF LOSS. Seller shall bear all risk of loss or damage to the
Property which may occur prior to COE. In the event any part of the Property is
damaged or destroyed prior to the COE, Seller shall notify Buyer of such event
in a written notice that includes a description of the damage and pertinent
insurance information. If the cost to repair any such damage or destruction or
to restore the Property exceeds Fifty Thousand Dollars ($50,000.00) Buyer may,
at Buyer's sole option, by written notice to Seller and Escrow Agent, cancel
this Agreement whereupon Buyer will receive a prompt refund of the Earnest Money
Deposit plus interest and the Parties will be relieved of all further
obligations under this Agreement, except that the indemnities contained in
Sections 7(b) and 16(b) shall survive such termination. If Buyer waives any such
loss or damage to the Property and closes escrow, Seller at COE shall pay Buyer
or credit Buyer against the Additional Funds the amount of any insurance
proceeds payable to Seller as a result of such casualty, or assign to Buyer, as
of COE and in a form acceptable to Buyer, all of Seller's rights or claims for
relief to the same.

      20. REMEDIES.

            (a) Seller's Breach. If Seller breaches this Agreement, Buyer may,
at Buyer's sole option and remedy, either: (i) by written notice to Seller and
Escrow Agent, cancel this Agreement whereupon the Earnest Money Deposit,
including the portion thereof constituting the Non-Refundable Deposit, plus
interest shall be paid immediately by Escrow Agent to Buyer and, except as
otherwise provided in this Agreement, neither of the Parties shall have any
further liability or obligation hereunder; or (ii) seek specific performance
against Seller in which event COE shall be automatically extended as necessary.
Notwithstanding the foregoing, if specific performance is unavailable as a
remedy to Buyer because of Seller's affirmative acts, Buyer shall be entitled to
pursue all rights and remedies available at law or in equity; provided, however,
that damages awarded to Buyer shall in no event exceed the amount of the Earnest
Money Deposit. Except for any damages incurred arising out of Seller's breach of
its warranty set forth in Section 16, a claim by Buyer for attorneys' fees
pursuant to this Agreement, or any other amounts owing from Seller to Buyer
pursuant to Seller's express indemnification of Buyer in this Agreement, the
remedies provided above in this Section for the breach of this Agreement by
Seller shall be Buyer's sole remedy.

            (b) Buyer's Breach. If Buyer breaches this Agreement, Seller may
terminate this Agreement and instruct the Escrow Agent to cancel the escrow
created hereunder in which case the Escrow Agent shall immediately pay over to
Seller the Earnest Money Deposit plus interest as liquidated damages, and not as
a penalty, in full satisfaction of Seller's claim. Promptly following Escrow
Agent's receipt of such instructions from Seller the Escrow Agent

                                       16


shall cancel the escrow. The Parties acknowledge and agree that since it would
be extremely difficult to determine the actual amount of Seller's damages
arising out of a breach by Buyer, the amount of the liquidated damages provided
in this Section constitutes a fair estimate of those damages, which the Parties
have agreed upon in a good-faith effort to make damages certain. Except for any
damages that may be incurred arising out of any investigations, tests and
Studies with respect to the Property that Buyer may elect to undertake, any
damages incurred arising out of Buyer's breach of its warranty set forth in
Section 16, a claim by Seller for attorneys' fees pursuant to this Agreement, or
any other amounts owing from Buyer to Seller pursuant to Buyer's express
indemnification of Seller in this Agreement, the liquidated damages provided in
this Section for the breach of this Agreement by Buyer shall be Seller's sole
remedy.

      21. ATTORNEYS' FEES. In addition to the foregoing remedies, in the event
of litigation arising out of any alleged default or breach of this Agreement,
the prevailing party will be awarded all costs and expenses incurred in the
prosecution or defense of such litigation, including without limitation
reasonable in house and outside attorneys' and legal assistants' fees and
disbursements. For purposes of this Section, "prevailing party" will include,
but not be limited to, a party who withdraws or moves to dismiss a claim in
consideration for payment due, performance owed, or other consideration in
substantial satisfaction of the claim withdrawn or dismissed.

      22. NOTICES.

            (a) Addresses. Any notice or other written communication required or
permitted under this Agreement shall be in writing and shall be given (i) by
personal delivery, (ii) by deposit in the U.S. Mail, marked certified or
registered mail, return receipt requested, with postage prepaid, (iii) by
delivery to a reputable national overnight courier service, or (iv) by tested
telex, or telegram, or facsimile with electronic confirmation, in any case,
addressed to the Parties at the addresses and facsimile numbers set forth below,
or set forth in a notice given by a Party in accordance with this Section.

If to Seller:                 Brainerd Drugstore, LLC
                              c/o Colorado and Santa Fe Real Estate Company
                              2400 Industrial Lane, Suite 2100
                              Broomfield, CO 80020
                              Attn: Judy Lawson
                              Tel.: (303) 466-2500
                              Fax: (303) 466-4202

with copies to:               Colorado and Santa Fe Real Estate Company
                              2400 Industrial Lane, Suite 2100
                              Broomfield, CO 80020
                              Attn: Stephanie J. Griffin
                              Tel.: (303) 466-2500
                              Fax: (303) 466-4202

                                       17


If to Buyer:                  Series A, LLC
                              2555 East Camelback Road
                              Suite 400
                              Phoenix, AZ 85016
                              Attn: Legal Department
                              Tel.: (602) 778-8700
                              Fax: (602) 778-8786

with copies to:               Bennett Wheeler Lytle & Cartwright, PLC
                              3838 N. Central Avenue, Suite 1120
                              Phoenix, AZ 85012
                              Attn: J. Craig Cartwright
                              Tel: (602) 445-3433
                              Fax: (602) 266-9119

If to Escrow Agent:           First American Title Insurance Company
                              2425 E. Camelback Road, Suite 300
                              Phoenix, AZ 85016
                              Attn: Carol Peterson
                              Tel: (602) 567-8100
                              Fax: (602) 567-8101

            (b) Effective Date of Notices. Any such notice to Seller or Buyer
will be deemed to be given and effective: (i) if personally delivered, then on
the date of such delivery, (ii) if sent via overnight courier, then one business
day after the date such notice is sent, (iii) if sent by registered or certified
mail, then three business days following the date on which such notice is
deposited in the United States mail addressed as aforesaid, or (iv) if sent by
telex, telegram or facsimile, then at the time and on the date set forth on the
electronic confirmation sheet, provided that if the time of delivery under
clause (iv) is after 6:00 p.m. Denver, Colorado time, delivery will be deemed
given on the next business day. For purposes of this Agreement, "business day"
will be deemed to mean a day of the week other than a Saturday or Sunday or
other holiday recognized by banking institutions of the State of Colorado. If
escrow has opened, a copy of any notice given to a Party also shall be given to
Escrow Agent by regular U.S. Mail or by any other method provided for in this
Section.

      23. CLOSING COSTS.

            (a) Closing Costs. Seller and Buyer agree to pay closing costs as
indicated in this Agreement and in the escrow instructions attached hereto as
Exhibit G, and by this reference incorporated herein (the "Escrow
Instructions"). At COE, Seller shall pay (i) the costs of releasing any
judgments and any liens and other encumbrances to secure financing and the cost
of recording such releases, (ii) one-half of the fees and costs due Escrow Agent
for its services, (iii) the premium for the standard coverage Owner's Policy,
(iv) all documentary fees, excise fees, transfer taxes and deed taxes assessed
against the Property including the Personalty in connection with this
transaction, and (v) any other costs to be paid by Seller under this Agreement.
At COE, Buyer shall pay (1) the costs of recording any of the Transfer Documents

                                       18


and any documents in connection with any loan obtained by Buyer at COE, (2)
one-half of the fees and costs due Escrow Agent for its services, (3) the
premium to obtain extended coverage title insurance, if any, and the cost of any
endorsements requested by Buyer or Buyer's lender, (4) the cost of the Survey if
Buyer obtains one, and (5) any other costs to be paid by Buyer under this
Agreement. Except as otherwise provided for in this Agreement, Seller and Buyer
will each be solely responsible for and bear all of their own respective
expenses, including, without limitation, expenses of legal counsel, accountants,
and other advisors incurred at any time in connection with pursuing or
consummating the transaction contemplated by this Agreement.

            (b) Real Estate Taxes. To the extent not payable by the Tenant under
the Lease, real estate taxes shall be prorated based upon the current valuation
and latest available tax rates.

            (c) Rents. Current and prepaid rents which have been previously
collected under the Lease shall be apportioned to the date that is one business
day prior to COE with such date being Buyer's day for the purposes of such
calculations. Buyer shall receive a credit at Closing in the amount of any
security deposit held by Seller pursuant to the Lease.

            (d) Prorations. Prorations shall be calculated as of the date that
is one business day prior to COE based upon the latest available information,
including, without limitation, a credit to Buyer for any security deposits and
any rent prepaid by Tenant for the period beginning with and including the date
on which the closing occurs through and including the last day of the month in
which the closing occurs. All other credits to Buyer shall be similarly
prorated. Any other closing costs not specifically designated as the
responsibility of either Party in the Escrow Instructions or in this Agreement
shall be paid by Seller and Buyer according to the usual and customary
allocation of the same by Escrow Agent. Seller agrees that all closing costs
payable by Seller shall be deducted from Seller's proceeds otherwise payable to
Seller at COE. Buyer shall deposit with Escrow Agent sufficient cash to pay all
of Buyer's closing costs. Except as provided in this Section 23(a), Seller and
Buyer shall each bear their own costs in regard to this Agreement.

            (e) Post-Closing Adjustment. If after COE, the Parties discover any
errors in adjustments and apportionments or additional information becomes
available which would render the closing prorations materially inaccurate, the
same shall be corrected as soon after their discovery as possible. The provision
of this Section 23(e) shall survive COE except that no adjustment shall be made
later than two months after COE unless prior to such date the Party seeking the
adjustment shall have delivered a written notice to the other Party specifying
the nature and basis for such claim. In the event that such claim is valid, the
Party against whom the claim is sought shall have ten days in which to remit any
adjustment due.

            (f) Instructions. This Agreement, together with the Escrow
Instructions, shall constitute escrow instructions for the transaction
contemplated by this Agreement. Such escrow instructions shall be construed as
applying to Escrow Agent's engagement.

      24. ESCROW CANCELLATION CHARGES. If escrow fails to close because of
Seller's default, Seller shall be liable for any cancellation of Escrow Agent
charges. If escrow

                                       19


fails to close because of Buyer's default, Buyer shall be liable for any
cancellation charges of Escrow Agent. If escrow fails to close for any other
reason, Seller and Buyer shall each be liable for one-half of any cancellation
charges of Escrow Agent. The provisions of this Section 24 shall survive
cancellation of this Agreement.

      25. APPROVALS. Concerning all matters in this Agreement requiring the
consent or approval of any Party, the Parties agree that any such consent or
approval shall not be unreasonably withheld unless otherwise provided in this
Agreement.

      26. ADDITIONAL ACTS. The Parties agree to execute promptly such other
documents and to perform such other acts as may be reasonably necessary to carry
out the purpose and intent of this Agreement.

      27. GOVERNING LAW/JURISDICTION/VENUE. This Agreement shall be governed by
and construed or enforced in accordance with the internal laws of the State of
Minnesota.

      28. CONSTRUCTION. The terms and provisions of this Agreement represent the
results of negotiations among the Parties, each of which has been represented by
counsel of its own choosing, and neither of which has acted under any duress or
compulsion, whether legal, economic or otherwise. Consequently, the terms and
provisions of this Agreement shall be interpreted and construed in accordance
with their usual and customary meanings, and the Parties each hereby waive the
application of any rule of law which would otherwise be applicable in connection
with the interpretation and construction of this Agreement that ambiguous or
conflicting terms or provisions contained in this Agreement shall be interpreted
or construed against the Party whose attorney prepared the executed Agreement or
portions of the Agreement or any earlier draft of the same.

      29. TIME OF ESSENCE. Time is of the essence with respect to the
performance of this Agreement. However, if this Agreement requires any act to be
done or action to be taken on a date which is not a business day (as defined in
Section 22(b)), such act or action shall be deemed to have been validly done or
taken if done or taken on the next succeeding day which is not a Saturday,
Sunday or legal holiday, and the successive periods shall be deemed extended
accordingly. References in this Agreement to a number of days will be deemed to
refer to calendar and not business days, unless the context clearly indicates
otherwise.

      30. INTERPRETATION. If there is any specific and direct conflict between,
or any ambiguity resulting from, the terms and provisions of this Agreement and
the terms and provisions of any document, instrument or other agreement executed
in connection with this Agreement or to effectuate this Agreement, including any
Exhibits hereto, the same shall be consistently interpreted in such manner as to
give effect to the general purposes and intention as expressed in this Agreement
which shall be deemed to prevail and control.

      31. HEADINGS. The headings of this Agreement are for reference only and
shall not limit or define the meaning of any provision of this Agreement.

                                       20


      32. FAX AND COUNTERPARTS. This Agreement may be executed by facsimile
and/or in any number of counterparts. Each party may rely upon any facsimile or
counterpart copy as if it were one original document.

      33. INCORPORATION OF EXHIBITS BY REFERENCE. All Exhibits to this Agreement
are fully incorporated herein as though set forth at length in this Agreement.

      34. SEVERABILITY. If any provision of this Agreement is determined by a
court to be invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it, or its application, valid and enforceable,
and the invalidity or lack of enforceability of one or more provisions shall not
affect the validity or enforceability of the remainder of this Agreement.

      35. SELLER'S ACCEPTANCE. If a fully-executed original of this Agreement
has not been delivered by Seller to Buyer by 6:00 p.m. Denver, Colorado time on
August 18, 2005, for subsequent delivery to Escrow Agent along with the Earnest
Money Deposit, this Agreement shall automatically be deemed revoked and null and
void.

      36. NO ORAL UNDERSTANDINGS OR WAIVERS. There are and were no verbal or
written representations, warranties, understandings, stipulations, agreements,
or promises pertaining to the subject matter of this Agreement made by either
Party or any agent, employee, or other representative of either Party or by any
broker or any other person representing or purporting to represent either Party,
not incorporated in writing in this Agreement, and neither this Agreement nor
any of the terms, provisions, conditions, representations, or covenants
contained in this Agreement can be modified, changed, terminated, amended,
superseded, waived, or extended except by an appropriately written instrument
duly executed by the Parties. No waiver of any breach of any provision contained
in this Agreement will be deemed a waiver of any preceding or succeeding breach
of that provision or of any other provision contained in this Agreement. No
extension of time for performance of any obligations or acts will be deemed an
extension of the time for performance of any other obligations or acts.

      37. SECTION 1031 EXCHANGE. Each Party shall provide reasonable cooperation
requested by the other in implementing any tax deferred exchange under Section
1031 of the Internal Revenue Code or other exchange (the "Exchange"), including
the execution of reasonably necessary documentation in connection therewith,
including documents providing for an exchanging Party's assignment of this
Agreement to a qualified intermediary; provided that the cooperating Party shall
not be obligated to incur any additional expense or liability beyond its
existing obligations under this Agreement, and the exchange shall not delay the
COE. No assignment of this Agreement in connection with an Exchange shall
relieve the exchanging Party of any obligation under this Agreement.

      38. RECORDING. Neither this Agreement nor any memorandum or evidence of
this Agreement shall be filed for recording with any governmental body; provided
that, a Party may file a notice of lis pendens or equivalent document for
recording in connection with a lawsuit filed by such Party if such Party
determines that such filing is necessary to protect its rights to specific
performance under this Agreement. If Buyer records any portion of this
Agreement, then in addition to receiving the Earnest Money Deposit, Seller shall
be entitled to all remedies

                                       21


available to it at law or in equity, notwithstanding Section 20(b) or any other
provision of this Agreement to the contrary. The provisions of this Section 38
shall survive the termination of this Agreement and the COE.

                                       22


      IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of
the Effective Date.

SELLER:                                         BRAINERD DRUGSTORE, LLC

                                                By: /S/ Sharon K. Eshima
                                                    ----------------------------
                                                     Sharon K. Eshima
                                                Its: Manager

BUYER:                                          SERIES A, LLC

                                                By: /S/ John M. Pons
                                                    ----------------------------
                                                Name: John M. Pons
                                                Title: Authorized Officer

                                       23


                            ESCROW AGENT'S ACCEPTANCE

      The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this _____ day of August, 2005, which for
the purposes of this Agreement shall be deemed to be the date of Opening of
Escrow. Escrow Agent hereby accepts the engagement to handle the escrow
established by this Agreement in accordance with the terms set forth in this
Agreement.

                                          FIRST AMERICAN TITLE INSURANCE COMPANY

                                          By: /S/ Carol Peterson
                                              ----------------------------------
                                          Title: Escrow

                                       24



                FIRST AMENDMENT TO PURCHASE AGREEMENT AND ESCROW
                                  INSTRUCTIONS

      THIS FIRST AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS (this
"Amendment") is entered into by and between BRAINERD DRUGSTORE, LLC, a Colorado
limited liability company (the "Seller"), and SERIES A, LLC, an Arizona
liability company (the "Buyer").

                               W I T N E S E T H:

      WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions dated as of August 18, 2005 (the "Contract"), providing for
the sale by Seller to Buyer of a property located in Brainerd, Minnesota leased
to Walgreen's Co. (the "Property") and being more particularly described in the
Contract; and

      WHEREAS, Seller and Buyer desire to amend the Contract as hereinafter set
forth.

      NOW, THEREFORE, based on these facts and in consideration of the mutual
benefits to be obtained by this Amendment, Seller and Buyer agree as follows:

      1. Amending Provisions. The Contract is hereby amended as follows:

      (a) Sections 4(b) and 7(c) of the Contract are amended to change any date
that refers to August 26, 2005 from August 26 to August 29, 2005.

      (b) There are no other amendments.

      2. Consequence of Amendment. Nothing in this Amendment affects or modifies
any of the provisions of the Contract, except as expressly provided herein. The
Contract, as amended by this Amendment, will continue in full force and effect
and it ratified and affirmed by Seller and Buyer as if originally written as
herein amended.

      3. Miscel1aneous.

      (a) The section headings contained in this Amendment are for convenience
of reference only and are not intended to delineate or limit the meaning of any
provision of this Amendment or to be considered in construing or interpreting
the provisions of this Amendment. Capitalized terms used in this Amendment which
are not otherwise defined herein shall have the same meaning as given to them in
the Contract.

      (b) This Amendment may be executed in any number of counterparts,
separately or together, by Seller and Buyer. If counterparts hereof are executed
separately by Buyer and Seller, when taken together, same will constitute one
(1) original. If the same counterparts are executed by Buyer and Seller, then
each such counterpart shall constitute an original. Seller and/or Buyer may
execute and deliver this Amendment by telephone facsimile transmission, and the
receiving party may rely fully thereon as an original.

                                   Page 1 of 2



      (c) This Amendment embodies the entire agreement and understanding between
Buyer and Seller with respect to its subject matter and supersedes all prior
agreements and understandings, written or oral, between Buyer and Seller related
to that subject matter. This Amendment may be amended, waived or discharged only
by an instrument in writing executed by the party against which enforcement of
the amendment, waiver or discharge is sought.

      (d) The determination that any provision of this Amendment is invalid or
unenforceable will not affect the validity or enforceability of the remaining
provisions or of that provision under other circumstances. In the event of any
determination of invalidity or unenforceability, this Amendment will be
construed as if the invalid or unenforceable provision were not included in this
Amendment.

      EXECUTED as of the [though not necessarily on] the 26th day of August,
2005.

SELLER:                                   BRAINERD DRUGSTORE, LLC

                                          By: /S/ Sharon K. Eshima
                                              ----------------------------------
                                               Sharon K. Eshima
                                          Its: Manager

BUYER:                                    SERIES A, LLC

                                          By: /S/ John M. Pons
                                              ----------------------------------
                                          Name: John M. Pons
                                          Title: Authorized Officer

                                   Page 2 of 2



         SECOND AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

      THIS SECOND AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS (this
"Amendment") is entered into by and between BRAINERD DRUGSTORE, LLC, a Colorado
limited liability company ("Seller"), and SERIES A, LLC, an Arizona limited
liability company ("Buyer").

                               W I T N E S E T H:

      WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions dated August 18, 2005, as amended by a First Amendment to
Purchase Agreement and Escrow Instructions dated as of August 26, 2005
(collectively, the "Contract"), providing for the sale by Seller to Buyer of a
property leased to Walgreen Co. located in Brainerd, Minnesota (the "Property")
and being more particularly described in the Contract; and

      WHEREAS, Seller and Buyer desire to amend the Contract as hereinafter set
forth.

      NOW, THEREFORE, based on these facts and in consideration of the mutual
benefits to be obtained by this Amendment, Seller and Buyer agree as follows:

      1. Amending Provisions. The Contract is hereby amended as follows:

      (a) Section 6(b) of the Contract is hereby amended to allow Seller until
5:00 p.m. Denver, Colorado time on September 2, 2005 to respond to Buyer's
written notice of Defects in Title dated August 31, 2005.

      (b) Section 7(a) of the Contract is amended to extend the Due Diligence
Period to 10:00 a.m. Denver, Colorado time on September 7, 2005.

      (c) There are no other amendments.

      2. Consequence of Amendment. Nothing in this Amendment affects or modifies
any of the provisions of the Contract, except as expressly provided herein. The
Contract, as amended by this Amendment, will continue in full force and effect
and is ratified and affirmed by Seller and Buyer as if originally written as
herein amended.

      3. Miscellaneous.

      (a) The section headings contained in this Amendment are for convenience
of reference only and are not intended to delineate or limit the meaning of any
provision of this Amendment or to be considered in construing or interpreting
the provisions of this Amendment. Capitalized terms used in this Amendment which
are not otherwise defined herein shall have the same meaning as given to them in
the Contract.

      (b) This Amendment may be executed in any number of counterparts,
separately or together, by Seller and Buyer. If counterparts hereof are executed
separately by Buyer and Seller, when taken

                                  Page 1 of 2


together, same will constitute one (1) original. If the same counterparts are
executed by Buyer and Seller, then each such counterpart shall constitute an
original. Seller and/or Buyer may execute and deliver this Amendment by
telephone facsimile transmission, and the receiving party may rely fully thereon
as an original.

      (c) This Amendment embodies the entire agreement and understanding between
Buyer and Seller with respect to its subject matter and supersedes all prior
agreements and understandings, written or oral, between Buyer and Seller related
to that subject matter. This Amendment may be amended, waived or discharged only
by an instrument in writing executed by the party against which enforcement of
the amendment, waiver or discharge is sought.

      (d) The determination that any provision of this Amendment is invalid or
unenforceable will not affect the validity or enforceability of the remaining
provisions or of that provision under other circumstances. In the event of any
determination of invalidity or unenforceability, this Amendment will be
construed as if the invalid or unenforceable provision were not included in this
Amendment.

      EXECUTED as of the 1st day of September, 2005.

                                          SELLER:

                                          BRAINERD DRUGSTORE, LLC

                                          By: /S/ Sharon K. Eshima
                                              ----------------------------------
                                               Sharon K. Eshima
                                          Its: Manager

                                          BUYER:

                                          SERIES A, LLC

                                          By: /S/ John M. Pons
                                              ----------------------------------
                                          Name: John M. Pons
                                          Title: Authorized Officer

                                  Page 2 of 2


                THIRD AMENDMENT TO PURCHASE AGREEMENT AND ESCROW
                         INSTRUCTIONS AND REINSTATEMENT

      THIS THIRD AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS AND
REINSTATEMENT (this "Amendment") is entered into by and between BRAINERD
DRUGSTORE, LLC, a Colorado limited liability company ("Seller"), and SERIES A,
LLC, an Arizona limited liability company ("Buyer").

                               W I T N E S E T H:

      WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions dated August 18, 2005, as amended by a First Amendment to
Purchase Agreement and Escrow Instructions dated as of August 26, 2005, and a
Second Amendment to Purchase Agreement and Escrow Instructions dated as of
September 1, 2005 (collectively, the "Contract"), providing for the sale by
Seller to Buyer of a property leased to Walgreen Co. located in Brainerd,
Minnesota (the "Property") and being more particularly described in the
Contract; and

      WHEREAS, the Due Diligence Period expired September 7, 2005; and

      WHEREAS, Seller and Buyer desire to amend and reinstate the Contract as
hereinafter set forth.

      NOW, THEREFORE, based on these facts and in consideration of the mutual
benefits to be obtained by this Amendment, Seller and Buyer agree as follows:

      1. Amending Provisions. The Contract is hereby amended as follows:

      (a) Section 13 of the Contract is modified by the insertion of a new
subsection (f) as follows:

                  (f) Seller covenants and agrees to use commercially reasonable
      efforts to assist Buyer in its efforts to arrange for a recording in the
      real estate records of Crow Wing County, Minnesota of the Final
      Certificate (the "Certificate") in the condemnation proceeding known as
      State of Minnesota, by its Commissioner of Transportation v. Richard
      Ahrens, et al. (District Court Action CO-02-3229) (the "Condemnation") and
      thereafter to cause the title company to amend the legal description of
      the Real Property in the Commitment to exclude the portion of the Real
      Property taken in the Condemnation, remove the lis pendens exception on
      Schedule B-Section 2 and add to Schedule B-Section 2 an exception for the
      temporary easement created in the Condemnation. If the events described in
      the preceding sentence have not occurred by October 3, 2005, Buyer will
      have a one-time right to extend the COE until October 12, 2005 by giving
      Seller written notice of such extension no later than 5:00 p.m. Denver
      time on October 3, 2005. If Buyer exercises its right to extend the COE as
      herein

                                  Page 1 of 3


      provided and the events described in the first sentence of this subsection
      have not occurred by October 12, 2005, the Parties shall, notwithstanding
      such non-occurrence, close the transactions contemplated by the Contract,
      but Seller shall cause the title company to hold open the Owner's Policy
      and Buyer's lender's loan policy until the Certificate is recorded and
      then to issue the Owner's Policy and loan policy with the modified legal
      description, deletion of the lis pendens exception and addition of the
      exception for the temporary easement, as described above. If the
      Certificate is not recorded within 45 days following COE, Seller shall
      cause the title company to issue the Owner's Policy and the loan policy in
      accordance with the Commitment but will pay the title insurance premiums,
      if any, charged by the title company to endorse such Owner's Policy and
      loan policy following the recording of the Certificate to reflect the
      changes identified in the first sentence of this Section (f).

      (b) If Buyer obtains a new survey of the Real Property or an update of
Seller's existing survey prior to the COE, Seller will reimburse Buyer for
one-half of the cost of such survey or survey update at Closing, if and only if
the COE occurs, up to a maximum reimbursement amount of $2,500.00.

      (c) Upon execution of this Amendment by Seller and Buyer, the Amendment
shall constitute Buyer's agreement to proceed to COE and waive its right to
terminate the Contract under provisions of Section 6 and 7 of the Contract.
Except as set forth in subsections (a) and (b) above and in Seller's response
letter dated September 2, 2005, all matters raised in Buyer's title and survey
objection letter dated August 31, 2005 and conditional acceptance letter dated
September 7, 2005, both issued by Bennett, Wheeler Lytle and Cartwright, shall
be deemed satisfied and waived. The Parties acknowledge that Buyer previously
has deposited with the Escrow Agent the $50,000 additional Earnest Money Deposit
required under Section 4(c). The Contract shall be deemed reinstated effective
as of the date of this Amendment, subject to the terms of this Amendment.

      (d) There are no other amendments.

      2. Consequence of Amendment. Nothing in this Amendment affects or modifies
any of the provisions of the Contract, except as expressly provided herein. The
Contract, as amended by this Amendment, will continue in full force and effect
and is ratified and affirmed by Seller and Buyer as if originally written as
herein amended.

      3. Miscellaneous.

      (a) The section headings contained in this Amendment are for convenience
of reference only and are not intended to delineate or limit the meaning of any
provision of this Amendment or to be considered in construing or interpreting
the provisions of this Amendment. Capitalized terms used in this Amendment which
are not otherwise defined herein shall have the same meaning as given to them in
the Contract.

                                  Page 2 of 3


      (b) This Amendment may be executed in any number of counterparts,
separately or together, by Seller and Buyer. If counterparts hereof are executed
separately by Buyer and Seller, when taken together, same will constitute one
(1) original. If the same counterparts are executed by Buyer and Seller, then
each such counterpart shall constitute an original. Seller and/or Buyer may
execute and deliver this Amendment by telephone facsimile transmission, and the
receiving party may rely fully thereon as an original.

      (c) This Amendment embodies the entire agreement and understanding between
Buyer and Seller with respect to its subject matter and supersedes all prior
agreements and understandings, written or oral, between Buyer and Seller related
to that subject matter. This Amendment may be amended, waived or discharged only
by an instrument in writing executed by the party against which enforcement of
the amendment, waiver or discharge is sought.

      (d) The determination that any provision of this Amendment is invalid or
unenforceable will not affect the validity or enforceability of the remaining
provisions or of that provision under other circumstances. In the event of any
determination of invalidity or unenforceability, this Amendment will be
construed as if the invalid or unenforceable provision were not included in this
Amendment.

      EXECUTED as of (although not necessarily on) the 7th day of September,
2005.

                                          SELLER:

                                          BRAINERD DRUGSTORE, LLC

                                          By: /S/ Sharon K. Eshima
                                              ----------------------------------
                                               Sharon K. Eshima
                                          Its: Manager

                                          BUYER:

                                          SERIES A, LLC

                                          By: /S/ John M. Pons
                                              ----------------------------------
                                          Name: John M. Pons
                                          Title: Authorized Officer

                                  Page 3 of 3

EX-10.4

                                                                    EXHIBIT 10.4

                                                            WALGREENS - BRAINERD
                                                             LOAN NO. 50-2853366

                                 PROMISSORY NOTE

  $3,463,000.00                                                  October 5, 2005

      FOR VALUE RECEIVED, the undersigned, COLE WG BRAINERD MN, LLC, a Delaware
limited liability company ("Maker"), having an address at 2555 East Camelback
Road, Suite 400, Phoenix, Arizona 85016, promises to pay to the order of
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association ("Payee"),
at the office of Payee at Commercial Real Estate Services, 8739 Research Drive
URP - 4, NC 1075, Charlotte, North Carolina 28262, or at such other place as
Payee may designate to Maker in writing from time to time, the principal sum of
THREE MILLION FOUR HUNDRED SIXTY-THREE THOUSAND AND NO/100 DOLLARS
($3,463,000.00), together with interest on so much thereof as is from time to
time outstanding and unpaid, from the date of the advance of the principal
evidenced hereby and as allocated to Fixed Rate Tranche A and Floating Rate
Tranche B (as each term is hereinafter defined) for each such tranche, at the
Note Rate (as hereinafter defined), together with all other amounts due
hereunder or under the other Loan Documents (as defined herein), in lawful money
of the United States of America, which shall at the time of payment be legal
tender in payment of all debts and dues, public and private.

                        ARTICLE I -- TERMS AND CONDITIONS

      1.1 Definitions. The following terms, as used in this Note, shall have the
following meanings, which meanings shall be applicable equally to the singular
and the plural of the terms defined:

            (a) "Business Day" shall mean a day of the year on which banks are
not required or authorized to close in Charlotte, North Carolina.

            (b) "Determination Date" shall mean a date on which the LIBOR-Based
Rate shall be selected as the applicable interest rate in respect of Floating
Rate Tranche B, which date shall be the day that is two (2) London Business Days
prior to the commencement of an Interest Period or, with respect to the first
Interest Period, the date the Loan shall be advanced by Payee.

            (c) "Extended Maturity Date" shall mean October 11, 2035.

            (d) "Fixed Rate Tranche A" shall mean Two Million Eight Hundred
Fourteen Thousand and No/100 Dollars ($2,814,000.00) of the aggregate amount of
the Loan which shall bear interest as set forth in Section 1.3 hereof.

            (e) "Floating Rate Tranche B" shall mean Six Hundred Forty-Nine
Thousand and No/100 Dollars ($649,000.00) of the aggregate amount of the Loan
which shall bear interest at the LIBOR-Based Rate (as hereinafter defined).

            (f) "Interest Period" shall mean initially, the period commencing on
the date hereof and ending on and including the day of the tenth (10th) day of
the calendar month



following the date of this Note, unless principal is advanced on the tenth
(10th) of a month, in which case the first Interest Period shall consist only
such tenth (10th) day. Each Interest Period thereafter shall commence on the
eleventh (11th) day of each calendar month during the term of this Note and
shall end on and include the tenth (10th) day of the next occurring calendar
month. Interest shall accrue from the date on which funds are advanced hereunder
(regardless of the time of day) through and including the day on which funds are
credited pursuant to Section 1.4 hereof.

            (g) "LIBOR-Based Rate" shall mean (i) for the first Interest Period,
an interest rate per annum equal to ___________________________ percent
(_______%) and (ii) for each succeeding Interest Period until Floating Rate
Tranche B is satisfied, an interest rate per annum equal at all times to two
hundred (200) basis points above the one-month LIBOR, in each case as determined
by Payee prior to the commencement of each Interest Period.

            (h) "LIBOR" shall mean with respect to each day during each Interest
Period, the rate for U.S. dollar deposits of that many months maturity as
reported on Telerate page 3750 as of 11:00 a.m., London time, on the second
London Business Day before the relevant Interest Period begins (or if not so
reported, then as determined by Payee from another recognized source or
interbank quotation), rounded up to the nearest one-eighth of one percent
(1/8%).

            (i) "Loan" shall mean that certain loan made by Payee to Maker in
respect of the Property which is evidenced by this Note and secured by, among
other things, the Security Instrument and all other Loan Documents.

            (j) "Loan Documents" shall mean the Security Instrument, this Note
and all other documents now or hereafter evidencing, securing, guarantying,
modifying or otherwise relating to the indebtedness evidenced hereby.

            (k) "London Business Day" shall mean a day of the year on which
dealings in United States dollars are carried on in the London interbank market
and banks are not required or authorized to close in London or in New York, New
York.

            (l) "Maturity Date" shall mean October 11, 2015.

            (m) "Monthly Payment Amount" shall mean the sum of (A) from and
including the First Payment Date through the Maturity Date, an amount equal to
the interest payable under this Note on the portion allocated as Fixed Rate
Tranche A at the Fixed Interest Rate in the amounts for each such Payment Date
set forth on Annex 1 attached hereto and incorporated herein by this reference
or as provided by Payee to Maker in connection with the initial Fixed Interest
Rate Interest Period, plus (B) through and until Floating Rate Tranche B is
satisfied, an amount equal to the interest payable under this Note on the
portion allocated as Floating Rate Tranche B at the LIBOR-Based Rate pursuant to
the provisions of Section 1.2 hereof. Annex 1 is for reference purposes only and
any payment incorrectly referenced thereon or omitted therefrom shall not limit
or reduce Maker's obligations for actual amounts due under this Note in
accordance with its payment terms, and Maker agrees that Payee may substitute a
replacement Annex 1 in the event the attached does not accurately reflect
Maker's scheduled payment obligations.

            (n) "Optional Prepayment Date" shall mean October 11, 2015.

                                       2


            (o) "Optional Prepayment Determination Date" shall mean August 11,
2015.

            (p) "Security Instrument" shall mean that certain mortgage, deed of
trust or deed to secure debt and security agreement from Maker for the benefit
of Payee, dated of even date herewith, covering property located in Crow Wing
County, Minnesota.

      Each of the capitalized terms not otherwise defined in this Note shall
have the respective meaning ascribed to it in the Security Instrument of even
date herewith from Maker to Payee.

      1.2 LIBOR-Based Rate; Pay-Down Date. (a) From the date of the advance of
the principal evidenced hereby through the Pay-Down Date (as hereinafter
defined) for Floating Rate Tranche B, Floating Rate Tranche B shall bear
interest at the LIBOR-Based Rate. The LIBOR-Based Rate shall remain in effect,
subject to the provisions hereof, from and including the first day of the
Interest Period to and excluding the last day of the Interest Period for which
it is determined.

            (b) If requested by Payee, Maker shall immediately confirm the
LIBOR-Based Rate and the duration of the applicable Interest Period by
acknowledging receipt of a written confirmation of the LIBOR-Based Rate and
Interest Period delivered by Payee to Maker. Only one Interest Period may be in
effect at any given time.

            (c) Without limiting the effect of any other provision of this Note,
Maker shall pay to Payee on the last day of each and every Interest Period, so
long as and to the extent that Payee (or its source of funds) may directly or
indirectly be required to maintain reserves against "Eurocurrency liabilities"
under Federal Reserve Regulation D (as at any time amended), additional interest
(as determined by Payee and disclosed to Maker) for each such Interest Period at
an interest rate per annum equal, at all times during such Interest Period for
the principal balance of Floating Rate Tranche B, to the excess of (i) the rate
obtained by dividing LIBOR for such Interest Period by a percentage equal to
100% minus the reserve percentage applicable during such Interest Period under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or if more than one such percentage is so applicable, minus the
daily average of such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) for determining the maximum
reserve requirement (including, without limitation, any marginal reserve
requirement) for Payee (or its source of funds) in respect of liabilities or
assets consisting of or including "Eurocurrency liabilities" under Federal
Reserve Regulation D (as at any time amended) having a term equal to such
Interest Period over (ii) LIBOR for such Interest Period. Terms used in
Regulation D shall have the same meanings when used herein. Each such
determination made by Payee and each such notification by Payee to Maker under
this subparagraph of the amount of additional interest payable hereunder shall
be conclusive as to the matters set forth therein.

            (d) In addition to the payment of interest and fees as aforesaid,
Maker shall, from time to time, upon demand by Payee pay to Payee amounts as
shall be sufficient to compensate Payee for (i) any loss, cost, fee, breakage or
other expense incurred or sustained directly or indirectly by reason of the
liquidation or reemployment of deposits or other funds acquired by Payee to fund
or maintain Floating Rate Tranche B during any Interest Period as a result of
any prepayment of Floating Rate Tranche B or any portion thereof or any attempt
by

                                       3


Maker to rescind the selection of the LIBOR-Based Rate as the applicable
interest rate for Floating Rate Tranche B and (ii) any increased costs incurred
by Payee, by reason of:

            (x) taxes (or the withholding of amounts for taxes) of any nature
      whatsoever, including, without limitation, income, excise and interest
      equalization taxes (other than United States or state income taxes) as
      well as all levies, imports, duties, or fees whether now in existence or
      as the result of a change in, or promulgation of, any treaty, statute or
      regulation or interpretation thereof, or any directive, guideline or
      otherwise, by a central bank or fiscal authority or any other entity
      (whether or not having the force of law) or a change in the basis of, or
      time of payment of, such taxes and other amounts resulting therefrom;

            (y) any reserve or special deposit requirements against or with
      respect to assets or liabilities or deposits outstanding under LIBOR
      (including, without limitation, those imposed under the Monetary Control
      Act of 1978) currently required by, or resulting from a change in, or the
      promulgation of, such requirements by treaty, statute, regulation,
      interpretation thereof, or any directive, guidelines, or otherwise by a
      central bank or fiscal authority (whether or not having the force of law);
      and

            (z) any other costs resulting from compliance with treaties,
      statutes, regulations, interpretations or any directives or guidelines or
      otherwise, promulgated by or of a central bank or fiscal authority or
      other entity with similar authority (whether or not having the force of
      law).

A certificate as to the amount of any such costs prepared by Payee, signed by an
authorized officer of Payee and submitted to Maker shall be conclusive as to the
matters therein set forth.

      (e) The selection at any time of an interest rate based upon LIBOR shall
be expressly conditioned upon the existence of an adequate and fair means of
determining LIBOR and the absence of any legal prohibition against the charging
of interest based on LIBOR.

      (f) On or prior to January 4, 2006 (the "Pay-Down Date"), Maker shall
fully prepay the principal balance of this Note allocated as Floating Rate
Tranche B. Floating Rate Tranche B shall not be deemed to have been paid and/or
satisfied in full until all such additional costs, in addition to the principal
balance thereof and all interest thereon and all other sums due and payable
under the Loan Documents in regards to Floating Rate Tranche B, shall have been
paid.

      1.3 Note Rate; Computation of Interest. The term "Note Rate" as used in
this Note shall mean (a) for Fixed Rate Tranche A, from the date of this Note
through but not including the Optional Prepayment Date, a rate per annum equal
to five and forty-four one-hundredths percent (5.44%) (the "Fixed Interest
Rate"), (b) for Floating Rate Tranche B, from the date of this Note through the
Pay-Down Date and satisfaction of Floating Rate Tranche B, a rate per annum
equal to the LIBOR-Based Rate, and (c) from the Optional Prepayment Date through
and including the date this Note is paid in full, a rate per annum equal to the
greater of (i) the Fixed Interest Rate plus two (2%) percent or (ii) the
Treasury Constant Maturity Yield Index (as hereinafter defined) plus two (2%)
percent ((i) or (ii), as applicable, the "Revised Interest Rate"). Interest
shall be computed hereunder based on a 360-day year and based on the actual
number of days elapsed for

                                       4


any period in which interest is being calculated. For purposes of this Section
1.3, the term "Treasury Constant Maturity Yield Index" shall mean the average
yield for "This Week" as reported by the Federal Reserve Board in Federal
Statistical Release H.15 (519) published during the second full week preceding
the Optional Prepayment Date for instruments having a maturity coterminous with
the remaining term of this Note. If there is no Treasury Constant Maturity Yield
Index for instruments having a maturity coterminous with the remaining term of
this Note, then the index shall be equal to the weighted average yield to
maturity of the Treasury Constant Maturity Yield Indices with maturities next
longer and shorter than such remaining average life to maturity, calculated by
averaging (and rounding upward to the nearest whole multiple of 1/100 of 1% per
annum, if the average is not such a multiple) the yields of the relevant
Treasury Constant Maturity Yield Indices (rounded, if necessary, to the nearest
1/100 of 1% with any figure of 1/200 of 1% or above rounded upward). If such
Release is not available or no longer published, Payee may refer to another
recognized source of financial market information.

      1.4 Payment of Principal and Interest. Payments in federal funds
immediately available at the place designated for payment received by Payee
prior to 2:00 p.m. local time on a day on which Payee is open for business at
said place of payment shall be credited prior to close of business, while other
payments, at the option of Payee, may not be credited until immediately
available to Payee in federal funds at the place designated for payment prior to
2:00 p.m. local time on a day on which Payee is open for business. Interest only
shall be payable in consecutive monthly installments of the Monthly Payment
Amount, beginning on November 11, 2005 (the "First Payment Date"), and
continuing on the eleventh (11th) day of each and every calendar month
thereafter (each, a "Payment Date"). On the Maturity Date or the Optional
Prepayment Date, the entire outstanding principal balance hereof, together with
all accrued but unpaid interest thereon, shall be due and payable in full
provided, however, that in the event that such amounts are not paid on such
date, the Maturity Date shall be extended to the Extended Maturity Date. In
computing the number of days during which interest accrues, the day on which
funds are initially advanced shall be included regardless of the time of day
such advance is made, and the day on which funds are repaid shall be included
unless repayment is credited prior to close of business. Payments in federal
funds immediately available in the place designated for payment received by
Payee prior to 2:00 p.m. local time on a Business Day at said place of payment
shall be credited prior to close of business, while other payments, at the
option of Payee, may not be credited until immediately available to Payee in
federal funds in the place designated for payment prior to 2:00 p.m. local time
at said place of payment on a Business Day.

      1.5 Application of Payments. So long as no Event of Default (as
hereinafter defined) exists hereunder or under any other Loan Document, each
such monthly installment shall be applied, prior to the Optional Prepayment
Date, first, to any amounts hereafter advanced by Payee hereunder or under any
other Loan Document, second, to any late fees and other amounts payable to
Payee, third, to the payment of accrued interest and last to reduction of
principal, and from and after the Optional Prepayment Date, as provided in
Section 2.2 of this Note.

      1.6 Payment of "Short Interest". If the advance of the principal amount
evidenced by this Note is made on a date on or after the first (1st) day of a
calendar month and prior to the eleventh (11th) day of a calendar month, Maker
shall pay to Payee contemporaneously with the execution hereof interest at the
Note Rate for a period from the date hereof through and including

                                       5


the tenth (10th) day of this calendar month. If the advance of the principal
amount evidenced by this Note is made on a date after the eleventh (11th) day of
a calendar month and prior to or on the last day of a calendar month, Maker
shall pay to Payee contemporaneously with the execution hereof interest at the
Note Rate for a period from the date hereof through and including the tenth
(10th) day of the immediately succeeding calendar month.

      1.7 Prepayment; Defeasance.

      (a) This Note may not be prepaid, in whole or in part (except as otherwise
specifically provided herein), at any time prior to the Optional Prepayment
Date. In the event that Maker wishes to have the Security Property (as
hereinafter defined) released from the lien of the Security Instrument prior to
the Optional Prepayment Date, Maker's sole option shall be a Defeasance (as
hereinafter defined) upon satisfaction of the terms and conditions set forth in
Section 1.7(d) hereof. This Note may be prepaid in whole but not in part without
premium or penalty on any of the three (3) Payment Dates occurring immediately
prior to the Maturity Date provided (i) written notice of such prepayment is
received by Payee not more than ninety (90) days and not less than thirty (30)
days prior to the date of such prepayment, and (ii) such prepayment is
accompanied by all interest accrued hereunder through and including the date of
such prepayment and all other sums due hereunder or under the other Loan
Documents. If, upon any such permitted prepayment on any of the three (3)
Payment Dates occurring immediately prior to the Maturity Date, the aforesaid
prior written notice has not been timely received by Payee, there shall be due a
prepayment fee equal to, an amount equal to the lesser of (i) thirty (30) days'
interest computed at the Note Rate on the outstanding principal balance of this
Note so prepaid and (ii) interest computed at the Note Rate on the outstanding
principal balance of this Note so prepaid that would have been payable for the
period from, and including, the date of prepayment through the Maturity Date of
this Note as though such prepayment had not occurred.

      (b) If, prior to the fourth (4th) anniversary of the First Payment Date
(the "Lock-out Expiration Date"), the indebtedness evidenced by this Note shall
have been declared due and payable by Payee pursuant to Article III hereof or
the provisions of any other Loan Document due to a default by Maker, then, in
addition to the indebtedness evidenced by this Note being immediately due and
payable, there shall also then be immediately due and payable a sum equal to the
interest which would have accrued on the principal balance of this Note at the
Note Rate from the date of such acceleration to the Lock-out Expiration Date,
together with a prepayment fee in an amount equal to the Yield Maintenance
Premium (as hereinafter defined) based on the entire indebtedness on the date of
such acceleration. If such acceleration is on or following the Lock-out
Expiration Date, the Yield Maintenance Premium shall also then be immediately
due and payable as though Maker were prepaying the entire indebtedness on the
date of such acceleration. In addition to the amounts described in the two
preceding sentences, in the event of any such acceleration or tender of payment
of such indebtedness occurs or is made on or prior to the first (1st)
anniversary of the date of this Note, there shall also then be immediately due
and payable an additional prepayment fee of three percent (3%) of the principal
balance of this Note. The term "Yield Maintenance Premium" shall mean an amount
equal to the greater of (A) two percent (2.0%) of the principal amount being
prepaid, and (B) the present value of a series of payments each equal to the
Payment Differential (as hereinafter defined) and payable on each

                                       6


Payment Date over the remaining original term of this Note and on the Maturity
Date, discounted at the Reinvestment Yield (as hereinafter defined) for the
number of months remaining as of the date of such prepayment to each such
Payment Date and the Maturity Date. The term "Payment Differential" shall mean
an amount equal to (i) the Note Rate less the Reinvestment Yield, divided by
(ii) twelve (12) and multiplied by (iii) the principal sum outstanding under
this Note after application of the constant monthly payment due under this Note
on the date of such prepayment, provided that the Payment Differential shall in
no event be less than zero. The term "Reinvestment Yield" shall mean an amount
equal to the lesser of (i) the yield on the U.S. Treasury issue (primary issue)
with a maturity date closest to the Maturity Date, or (ii) the yield on the U.S.
Treasury issue (primary issue) with a term equal to the remaining average life
of the indebtedness evidenced by this Note, with each such yield being based on
the bid price for such issue as published in the Wall Street Journal on the date
that is fourteen (14) days prior to the date of such prepayment set forth in the
notice of prepayment (or, if such bid price is not published on that date, the
next preceding date on which such bid price is so published) and converted to a
monthly compounded nominal yield. In the event that any prepayment fee is due
hereunder, Payee shall deliver to Maker a statement setting forth the amount and
determination of the prepayment fee, and, provided that Payee shall have in good
faith applied the formula described above, Maker shall not have the right to
challenge the calculation or the method of calculation set forth in any such
statement in the absence of manifest error, which calculation may be made by
Payee on any day during the fifteen (15) day period preceding the date of such
prepayment. Payee shall not be obligated or required to have actually reinvested
the prepaid principal balance at the Reinvestment Yield or otherwise as a
condition to receiving the prepayment fee.

      (c) Partial prepayments of this Note shall not be permitted, except for
(i) partial prepayments resulting from Payee's election to apply insurance or
condemnation proceeds to reduce the outstanding principal balance of this Note
as provided in the Security Instrument, in which event no prepayment fee or
premium shall be due unless, at the time of either Payee's receipt of such
proceeds or the application of such proceeds to the outstanding principal
balance of this Note, an Event of Default shall have occurred, which Event of
Default is unrelated to the applicable casualty or condemnation, in which event
the applicable prepayment fee or premium shall be due and payable based upon the
amount of the prepayment or (ii) any partial prepayment required on or prior to
the Pay-Down Date pursuant to Section 1.2(f) above, in which event no prepayment
fee or premium shall be due. No notice of prepayment shall be required under the
circumstances specified in subclause (i) of the preceding sentence. No principal
amount repaid may be reborrowed. Any such partial prepayments of principal under
subclause (i) above shall be applied to the unpaid principal balance evidenced
hereby but such application shall not reduce the amount of the fixed monthly
installments required to be paid pursuant to Section 1.4 above. Except as
otherwise expressly provided herein, the prepayment fees provided above shall be
due, to the extent permitted by applicable law, under any and all circumstances
where all or any portion of this Note is paid prior to the Maturity Date,
whether such prepayment is voluntary or involuntary, including, without
limitation, if such prepayment results from Payee's exercise of its rights upon
Maker's default and acceleration of the Maturity Date of this Note (irrespective
of whether foreclosure proceedings have been commenced), and shall be in
addition to any other sums due hereunder or under any of the other Loan
Documents. No tender of a prepayment of this Note

                                       7


with respect to which a prepayment fee is due shall be effective unless such
prepayment is accompanied by the applicable prepayment fee.

      (d) (i) On any Payment Date on or after the later to occur of (x) the
      Lock-out Expiration Date, and (y) the day immediately following the date
      which is two (2) years after the "startup day," within the meaning of
      Section 860G(a)(9) of the Internal Revenue Code of 1986, as amended from
      time to time or any successor statute (the "Code"), of a "real estate
      mortgage investment conduit," within the meaning of Section 860D of the
      Code, that holds this Note, and provided no Event of Default has occurred
      hereunder or under any of the other Loan Documents, at Maker's option,
      Payee shall cause the release of the Security Property from the lien of
      the Security Instrument and the other Loan Documents (a "Defeasance") upon
      the satisfaction of the following conditions:

                        (A) Maker shall give not more than ninety (90) days' or
            less than sixty (60) days' prior written notice to Payee specifying
            the date Maker intends for the Defeasance to be consummated (the
            "Release Date"), which date shall be a Payment Date.

                        (B) All accrued and unpaid interest and all other sums
            due under this Note and under the other Loan Documents up to and
            including the Release Date shall be paid in full on or prior to the
            Release Date.

                        (C) Maker shall deliver to Payee on or prior to the
            Release Date:

                        (1) a sum of money in immediately available funds (the
                  "Defeasance Deposit"), equal to the outstanding principal
                  balance of this Note plus an amount, if any, which together
                  with the outstanding principal balance of this Note, shall be
                  sufficient to enable Payee to purchase, through means and
                  sources customarily employed and available to Payee, for the
                  account of Maker, direct, non-callable obligations of the
                  United States of America that provide for payments prior, but
                  as close as possible, to all successive monthly Payment Dates
                  occurring after the Release Date and to the Maturity Date,
                  with each such payment being equal to or greater than the
                  amount of the corresponding installment of principal and/or
                  interest required to be paid under this Note (including, but
                  not limited to, all amounts due on the Maturity Date) for the
                  balance of the term hereof (the "Defeasance Collateral"), each
                  of which shall be duly endorsed by the holder thereof as
                  directed by Payee or accompanied by a written instrument of
                  transfer in form and substance satisfactory to Payee in its
                  sole discretion (including, without limitation, such
                  instruments as may be required by the depository institution
                  holding such securities or the issuer thereof, as the case may
                  be, to effectuate book-entry transfers and pledges through the
                  book-entry facilities of such institution) in order to perfect
                  upon the delivery of the Defeasance Security Agreement (as
                  hereinafter defined) the first priority security interest in
                  the Defeasance Collateral in

                                       8


                  favor of Payee in conformity with all applicable state and
                  federal laws governing granting of such security interests;

                        (2) a pledge and security agreement, in form and
                  substance satisfactory to a prudent lender, creating a first
                  priority security interest in favor of Payee in the Defeasance
                  Collateral (the "Defeasance Security Agreement"), which shall
                  provide, among other things, that any excess received by Payee
                  from the Defeasance Collateral over the amounts payable by
                  Maker hereunder shall be refunded to Maker promptly after each
                  monthly Payment Date;

                        (3) a certificate of Maker certifying that all of the
                  requirements set forth in this Section 1.7(d)(i) have been
                  satisfied;

                        (4) one or more opinions of counsel for Maker in form
                  and substance and delivered by counsel which would be
                  satisfactory to a prudent lender stating, among other things,
                  that (i) Payee has a perfected first priority security
                  interest in the Defeasance Collateral and that the Defeasance
                  Security Agreement is enforceable against Maker in accordance
                  with its terms, (ii) in the event of a bankruptcy proceeding
                  or similar occurrence with respect to Maker, none of the
                  Defeasance Collateral nor any proceeds thereof will be
                  property of Maker's estate under Section 541 of the U.S.
                  Bankruptcy Code or any similar statute and the grant of
                  security interest therein to Payee shall not constitute an
                  avoidable preference under Section 547 of the U.S. Bankruptcy
                  Code or applicable state law, (iii) the release of the lien of
                  the Security Instrument and the pledge of Defeasance
                  Collateral will not directly or indirectly result in or cause
                  any REMIC Trust that then holds this Note to fail to maintain
                  its status as a REMIC Trust and (iv) the defeasance will not
                  cause any REMIC Trust to be an "investment company" under the
                  Investment Company Act of 1940;

                        (5) evidence in writing from the applicable rating
                  agencies to the effect that the collateral substitution will
                  not result in a downgrading, withdrawal or qualification of
                  the respective ratings in effect immediately prior to such
                  defeasance event for any securities issued in connection with
                  the securitization which are then outstanding;

                        (6) a certificate in form and scope acceptable to Payee
                  in its sole discretion from an acceptable accountant
                  certifying that the Defeasance Collateral will generate
                  amounts sufficient to make all payments of principal and
                  interest due under this Note (including the scheduled
                  outstanding principal balance of the Loan due on the Maturity
                  Date);

                        (7) Maker and any guarantor or indemnitor of Maker's
                  obligations under the Loan Documents for which Maker has
                  personal

                                       9


                  liability executes and delivers to Payee such documents and
                  agreements as Payee shall reasonably require to evidence and
                  effectuate the ratification of such personal liability and
                  guaranty or indemnity, respectively;

                        (8) such other certificates, documents or instruments as
                  Payee may reasonably require;

                        (9) payment of all fees, costs, expenses and charges
                  incurred by Payee in connection with the Defeasance of the
                  Security Property and the purchase of the Defeasance
                  Collateral, including, without limitation, all legal fees and
                  costs and expenses incurred by Payee or its agents in
                  connection with release of the Security Property, review of
                  the proposed Defeasance Collateral and preparation of the
                  Defeasance Security Agreement and related documentation, any
                  revenue, documentary, stamp, intangible or other taxes,
                  charges or fees due in connection with transfer of the Note,
                  assumption of the Note, or substitution of collateral for the
                  Security Property shall be paid on or before the Release Date.
                  Without limiting Maker's obligations with respect thereto,
                  Payee shall be entitled to deduct all such fees, costs,
                  expenses and charges from the Defeasance Deposit to the extent
                  of any portion of the Defeasance Deposit which exceeds the
                  amount necessary to purchase the Defeasance Collateral; and

                        (10) in the event the Amendment (as defined in Section
                  4.35 of the Security Instrument) has been executed, evidence
                  satisfactory to Payee that following the Defeasance of this
                  Loan, the minimum debt service coverage ratio for each of the
                  Additional Loans (as defined in Section 4.35 of the Security
                  Instrument) shall be 1.75 to 1.00 and the maximum loan to
                  value percentage for each of the Additional Loans shall be
                  65%.

                        (D) In connection with the Defeasance Deposit, Maker
            hereby authorizes and directs Payee using the means and sources
            customarily employed and available to Payee to use the Defeasance
            Deposit to purchase for the account of Maker the Defeasance
            Collateral. Furthermore, the Defeasance Collateral shall be arranged
            such that payments received from such Defeasance Collateral shall be
            paid directly to Payee to be applied on account of the indebtedness
            of this Note. Any part of the Defeasance Deposit in excess of the
            amount necessary to purchase the Defeasance Collateral and to pay
            the other and related costs Maker is obligated to pay under this
            Section 1.7 shall be refunded to Maker.

            (ii) Upon compliance with the requirements of Section 1.7(d)(i), the
      Security Property shall be released from the lien of the Security
      Instrument and the other Loan Documents, and the Defeasance Collateral
      shall constitute collateral which shall secure this Note and all other
      obligations under the Loan Documents. Payee will, at Maker's expense,
      execute and deliver any agreements reasonably requested by Maker to
      release the lien of the Security Instrument from the Security Property.

                                       10


            (iii) Upon the release of the Security Property in accordance with
      this Section 1.7(d), Maker shall assign all its obligations and rights
      under this Note, together with the pledged Defeasance Collateral, to a
      newly created successor entity which complies with the terms of Section
      1.33 of the Security Instrument designated by Maker and approved by Payee
      in its sole discretion. Such successor entity shall execute an assumption
      agreement in form and substance satisfactory to Payee in its sole
      discretion pursuant to which it shall assume Maker's obligations under
      this Note and the Defeasance Security Agreement. As conditions to such
      assignment and assumption, Maker shall (x) deliver to Payee an opinion of
      counsel in form and substance and delivered by counsel satisfactory to a
      prudent lender stating, among other things, that such assumption agreement
      is enforceable against Maker and such successor entity in accordance with
      its terms and that this Note and the Defeasance Security Agreement, as so
      assumed, are enforceable against such successor entity in accordance with
      their respective terms, and (y) pay all costs and expenses (including, but
      not limited to, legal fees) incurred by Payee or its agents in connection
      with such assignment and assumption (including, without limitation, the
      review of the proposed transferee and the preparation of the assumption
      agreement and related documentation). Upon such assumption, Maker shall be
      relieved of its obligations hereunder, under the other Loan Documents
      other than as specified in Section 1.7(d)(i)(C)(7) above and under the
      Defeasance Security Agreement.

      1.8 Security. The indebtedness evidenced by this Note and the obligations
created hereby are secured by, among other things, the Security Instrument. All
of the terms and provisions of the Loan Documents are incorporated herein by
reference. Some of the Loan Documents are to be filed for record on or about the
date hereof in the appropriate public records.

                ARTICLE II -- OPTIONAL PREPAYMENT DATE PROVISIONS

      2.1 Optional Prepayment Determination Date. The following subsections
shall apply from and after the Optional Prepayment Determination Date:

      (a) [Reserved].

      (b) For the calendar year in which the Optional Prepayment Determination
Date occurs and for each calendar year thereafter, Maker shall submit to Payee
for Payee's written approval an annual budget (an "Annual Budget") not later
than (i) the Optional Prepayment Determination Date for the calendar year in
which the Optional Prepayment Determination occurs and (ii) sixty (60) days
prior to the commencement of each calendar year thereafter, in form satisfactory
to Payee setting forth in reasonable detail budgeted monthly operating income
and monthly operating capital and other expenses for the Mortgaged Property.
Each Annual Budget shall contain, among other things, limitations on management
fees, third party service fees and other expenses as Maker may reasonably
determine. Payee shall have the right to approve such Annual Budget and in the
event that Payee objects to the proposed Annual Budget submitted by Maker, Payee
shall advise Maker of such objections within fifteen (15) days after receipt
thereof (and deliver to Maker a reasonably detailed description of such
objections) and Maker shall, within three (3) days after receipt of notice of
any such objections, revise such Annual Budget and resubmit the same to Payee.
Payee shall advise Maker of any objections to such revised Annual Budget within
ten (10) days after receipt

                                       11


thereof (and deliver to Maker a reasonably detailed description of such
objections) and Maker shall revise the same in accordance with the process
described in this subsection until Payee approves an Annual Budget, provided,
however, that if Payee shall not advise Maker of its objections to any proposed
Annual Budget within the applicable time period set forth in this subsection,
then such proposed Annual Budget shall be deemed approved by Payee. Each such
Annual Budget approved by Payee in accordance with terms hereof shall
hereinafter be referred to as an "Approved Annual Budget." Until such time that
Payee approves a proposed Annual Budget, the most recently Approved Annual
Budget shall apply; provided, that such Approved Annual Budget shall be adjusted
to reflect actual increases in real estate taxes, insurance premiums and
utilities expenses.

      (c) In the event that Maker must incur an extraordinary operating expense
or capital expense not set forth in the Annual Budget (an "Extraordinary
Expense"), then Maker shall promptly deliver to Payee a reasonably detailed
explanation of such proposed Extraordinary Expense for Payee's approval.

      (d) For the purposes of this Note, "Cash Expenses" shall mean, for any
period, the operating expenses for the operation and maintenance of the
Mortgaged Property as set forth in an Approved Annual Budget to the extent that
such expenses are actually incurred by Maker excluding payments into the Impound
Account and expenses for which Maker shall be reimbursed from, or which shall be
paid for out of, any such account or reserve.

      (e) Notwithstanding the other provisions of this Section 2.1, in the event
that, prior to the Optional Prepayment Determination Date, Maker delivers to
Payee either (i) a written commitment (the "Commitment") for the refinancing of
the loan evidenced by this Note from a Qualified Institutional Lender (as
hereinafter defined), which reasonably provides for the consummation of such
refinance prior to the Optional Prepayment Date or (ii) other evidence in form
and substance satisfactory to Payee in its sole determination of Maker's ability
to refinance the loan evidenced by this Note prior to the Optional Prepayment
Date, then, solely in either such event, the terms of Section 2.1(a), (b), (c)
and (d) of this Note shall be inoperative, provided, however, that upon (x) the
failure of such refinance to be consummated in accordance with the terms of the
Commitment or such other evidence, as applicable, (y) the termination of the
Commitment for any reason or (z) any adverse change in circumstances with
respect to Maker or any principals of Maker, the Mortgaged Property, the
proposed lender or otherwise, as determined by Payee in its sole determination,
which, in Payee's reasonable judgment, significantly decreases the likelihood of
such refinance being consummated prior to the Optional Prepayment Date, the
terms of Section 2.1(a), (b), (c) and (d) of this Note shall immediately become
operative and Maker shall immediately comply with any of the terms thereof
which, except for the operation of this subsection (e), Maker would theretofore
have been obligated to comply. "Qualified Institutional Lender" shall mean a
financial institution or other lender with a long term credit rating which is
not less than investment grade. The determination of whether the conditions set
forth in clause (i) or (ii) above, shall be made and notice of such
determination shall be delivered to Maker, within ten (10) business days
following Payee's receipt of the items set forth in such clauses.

      2.2 Failure to Prepay On or Before Optional Prepayment Date. In the event
that Maker does not prepay the entire principal balance of this Note and any
other amounts outstanding under this Note or any of the other Loan Documents on
or prior to the Optional Prepayment Date,

                                       12


the provisions of Section 2.1(b), (c) and (d) as set forth above shall remain in
full force and effect, and the following subsections also shall apply:

      (a) From and after the Optional Prepayment Date, interest shall accrue on
the unpaid principal balance from time to time outstanding under this Note at
the Revised Interest Rate. Interest accrued at the Revised Interest Rate and not
paid pursuant to this Section 2.2 shall be deferred and added to the principal
balance of this Note and shall earn interest at the Revised Interest Rate to the
extent permitted by applicable law (such accrued interest is hereinafter
referred to as "Accrued Interest"). All of the unpaid principal balance of this
Note, including, without limitation, any Accrued Interest, shall be due and
payable on the Extended Maturity Date.

      (b) Maker shall be obligated to pay, and Payee shall collect from the Rent
Account (as defined in the Security Instrument) to the extent of funds on
deposit in such account, on the Optional Prepayment Date and on the eleventh
(11th) day of each calendar month thereafter to and including the Extended
Maturity Date the following payments from Rents (as defined in the Security
Instrument) received on or before such day in the listed order of priority:

            (i) First, the payment of the Monthly Payment Amount with interest
      computed at the Fixed Interest Rate;

            (ii) Second, payments to the Impound Account (as defined in the
      Security Instrument) in accordance with the terms and conditions of the
      Security Instrument;

            (iii) [Reserved];

            (iv) Fourth, payments for monthly Cash Expenses, less management
      fees payable to affiliates of Maker, pursuant to the terms and conditions
      of the related Approved Annual Budget;

            (v) Fifth, payment for Extraordinary Expenses approved by Payee, if
      any;

            (vi) Sixth, payments to Payee of the balance of the funds then on
      deposit in the Rent Account to be applied to (x) any other amounts due
      under the Loan Documents, (y) Accrued Interest and (z) the reduction of
      the outstanding principal balance of this Note until such principal
      balance is paid in full in whatever proportion and priority as Payee may
      determine.

      (c) Nothing in this Article II shall limit, reduce or otherwise affect
Maker's obligations to make payments of the Monthly Payment Amount (including
interest on the Note as provided in Section 1.3 hereof) payments to the Impound
Account and payments of other amounts due hereunder and under the other Loan
Documents, whether or not Rents (as defined in the Security Instrument) are
available to make such payments.

                             ARTICLE III -- DEFAULT

      3.1 Events of Default. It is hereby expressly agreed that should any
default occur in the

                                       13


payment of principal or interest as stipulated above and such payment is not
made on the date such payment is due, or should any other default not cured
within any applicable grace or notice period occur under any other Loan
Document, then an event of default (an "Event of Default") shall exist
hereunder, and in such event the indebtedness evidenced hereby, including all
sums advanced or accrued hereunder or under any other Loan Document, and all
unpaid interest accrued thereon, shall, at the option of Payee and without
notice to Maker, at once become due and payable and may be collected forthwith,
whether or not there has been a prior demand for payment and regardless of the
stipulated date of maturity.

      3.2 Late Charges. In the event that any payment is not received by Payee
on the date when due, then, in addition to any default interest payments due
hereunder, Maker shall also pay to Payee a late charge in an amount equal to
five percent (5%) of the amount of such overdue payment.

      3.3 Default Interest Rate. So long as any Event of Default exists
hereunder, regardless of whether or not there has been an acceleration of the
indebtedness evidenced hereby, and at all times after maturity of the
indebtedness evidenced hereby (whether by acceleration or otherwise), interest
shall accrue on the outstanding principal balance of this Note, from the date
due until the date credited, at a rate per annum equal to four percent (4%) in
excess of the Note Rate, or, if such increased rate of interest may not be
collected under applicable law, then at the maximum rate of interest, if any,
which may be collected from Maker under applicable law (the "Default Interest
Rate"), and such default interest shall be immediately due and payable.

      3.4 Maker's Agreements. Maker acknowledges that it would be extremely
difficult or impracticable to determine Payee's actual damages resulting from
any late payment or default, and such late charges and default interest are
reasonable estimates of those damages and do not constitute a penalty. The
remedies of Payee in this Note or in the Loan Documents, or at law or in equity,
shall be cumulative and concurrent, and may be pursued singly, successively or
together, in Payee's discretion.

      3.5 Maker to Pay Costs. In the event that this Note, or any part hereof,
is collected by or through an attorney-at-law, Maker agrees to pay all costs of
collection, including, but not limited to, reasonable attorneys' fees.

      3.6 Exculpation. Notwithstanding anything in this Note or the Loan
Documents to the contrary, but subject to the qualifications hereinbelow set
forth, Payee agrees that:

      (a) Maker shall be liable upon the indebtedness evidenced hereby and for
the other obligations arising under the Loan Documents to the full extent (but
only to the extent) of the security therefor, the same being all properties
(whether real or personal), rights, estates and interests now or at any time
hereafter securing the payment of this Note and/or the other obligations of
Maker under the Loan Documents (collectively, the "Security Property");

      (b) if a default occurs in the timely and proper payment of all or any
part of such indebtedness evidenced hereby or in the timely and proper
performance of the other obligations of Maker under the Loan Documents, any
judicial proceedings brought by Payee against Maker shall

                                       14


be limited to the preservation, enforcement and foreclosure, or any thereof, of
the liens, security titles, estates, assignments, rights and security interests
now or at any time hereafter securing the payment of this Note and/or the other
obligations of Maker under the Loan Documents, and no attachment, execution or
other writ of process shall be sought, issued or levied upon any assets,
properties or funds of Maker other than the Security Property, except with
respect to the liability described below in this section; and

            (c) in the event of a foreclosure of such liens, security titles,
estates, assignments, rights or security interests securing the payment of this
Note and/or the other obligations of Maker under the Loan Documents, no judgment
for any deficiency upon the indebtedness evidenced hereby shall be sought or
obtained by Payee against Maker, except with respect to the liability described
below in this section; provided, however, that, notwithstanding the foregoing
provisions of this section, Maker shall be fully and personally liable and
subject to legal action (i) for proceeds paid under any insurance policies (or
paid as a result of any other claim or cause of action against any person or
entity) by reason of damage, loss or destruction to all or any portion of the
Security Property, to the full extent of such proceeds not previously delivered
to Payee, but which, under the terms of the Loan Documents, should have been
delivered to Payee, (ii) for proceeds or awards resulting from the condemnation
or other taking in lieu of condemnation of all or any portion of the Security
Property, to the full extent of such proceeds or awards not previously delivered
to Payee, but which, under the terms of the Loan Documents, should have been
delivered to Payee, (iii) for all tenant security deposits or other refundable
deposits paid to or held by Maker or any other person or entity in connection
with leases of all or any portion of the Security Property which are not applied
in accordance with the terms of the applicable lease or other agreement, (iv)
for rent and other payments received from tenants under leases of all or any
portion of the Security Property paid more than one (1) month in advance, (v)
for rents, issues, profits and revenues of all or any portion of the Security
Property received or applicable to a period after the occurrence of any Event of
Default hereunder or under the Loan Documents, which are not either applied to
the ordinary and necessary expenses of owning and operating the Security
Property or paid to Payee, (vi) for waste committed on the Security Property,
damage to the Security Property as a result of the intentional misconduct or
gross negligence of Maker or any of its principals, officers, general partners
or members, any guarantor, any indemnitor, or any agent or employee of any such
person, or any removal of all or any portion of the Security Property in
violation of the terms of the Loan Documents, to the full extent of the losses
or damages incurred by Payee on account of such occurrence, (vii) for failure to
pay any valid taxes, assessments, mechanic's liens, materialmen's liens or other
liens which could create liens on any portion of the Security Property which
would be superior to the lien or security title of the Security Instrument or
the other Loan Documents, to the full extent of the amount claimed by any such
lien claimant except, with respect to any such taxes or assessments, to the
extent that funds have been deposited with Payee pursuant to the terms of the
Security Instrument specifically for the applicable taxes or assessments and not
applied by Payee to pay such taxes and assessments, (viii) for all obligations
and indemnities of Maker under the Loan Documents relating to hazardous or toxic
substances or radon or compliance with environmental laws and regulations to the
full extent of any losses or damages (including, but not limited to, those
resulting from diminution in value of any Security Property) incurred by Payee
as a result of the existence of such hazardous or toxic substances or radon or
failure to comply with environmental laws or regulations, and (ix) for fraud,
material misrepresentation or failure to disclose a material fact by Maker or
any of its principals, officers, general partners or members, any

                                       15


guarantor, any indemnitor or any agent, employee or other person authorized or
apparently authorized to make statements, representations or disclosures on
behalf of Maker, any principal, officer, general partner or member of Maker, any
guarantor or any indemnitor, to the full extent of any losses, damages and
expenses of Payee on account thereof.

      References herein to particular sections of the Loan Documents shall be
deemed references to such sections as affected by other provisions of the Loan
Documents relating thereto. Nothing contained in this section shall (1) be
deemed to be a release or impairment of the indebtedness evidenced by this Note
or the other obligations of Maker under the Loan Documents or the lien of the
Loan Documents upon the Security Property, or (2) preclude Payee from
foreclosing the Loan Documents in case of any default or from enforcing any of
the other rights of Payee except as stated in this section, or (3) limit or
impair in any way whatsoever (A) any Indemnity and Guaranty Agreements (the
"Indemnity Agreements") or (B) the Environmental Indemnity Agreement (the
"Environmental Indemnity Agreement"), executed and delivered in connection with
the indebtedness evidenced by this Note or release, relieve, reduce, waive or
impair in any way whatsoever, any obligation of any party to the Indemnity
Agreements or the Environmental Indemnity Agreement.

      Notwithstanding the foregoing, the agreement of Payee not to pursue
recourse liability as set forth in subsection (c) above SHALL BECOME NULL AND
VOID and shall be of no further force and effect (i) in the event of a default
by Maker or Indemnitor (as defined in the Security Instrument) of any of the
covenants set forth in Section 1.13 or Section 1.33 of the Security Instrument,
or (ii) if the Security Property or any part thereof shall become an asset in
(A) a voluntary bankruptcy or insolvency proceeding of Maker, or (B) an
involuntary bankruptcy or insolvency proceeding of Maker which is not dismissed
within sixty (60) days of filing.

      Notwithstanding anything to the contrary in this Note, the Security
Instrument or any of the other Loan Documents, Payee shall not be deemed to have
waived any right which Payee may have under Section 506(a), 506(b), 1111(b) or
any other provisions of the U.S. Bankruptcy Code to file a claim for the full
amount of the indebtedness evidenced hereby or secured by the Security
Instrument or any of the other Loan Documents or to require that all collateral
shall continue to secure all of the indebtedness owing to Payee in accordance
with this Note, the Security Instrument and the other Loan Documents.

                        ARTICLE IV -- GENERAL CONDITIONS

      4.1 No Waiver; Amendment. No failure to accelerate the indebtedness
evidenced hereby by reason of default hereunder, acceptance of a partial or past
due payment, or indulgences granted from time to time shall be construed (i) as
a novation of this Note or as a reinstatement of the indebtedness evidenced
hereby or as a waiver of such right of acceleration or of the right of Payee
thereafter to insist upon strict compliance with the terms of this Note, or (ii)
to prevent the exercise of such right of acceleration or any other right granted
hereunder or by any applicable laws; and Maker hereby expressly waives the
benefit of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in conflict
with the foregoing. No extension of the time for the payment of this Note or any
installment due hereunder made by agreement with any person now or hereafter
liable for the payment of this Note shall operate to release, discharge, modify,
change or affect the original liability of Maker under this

                                       16


Note, either in whole or in part, unless Payee agrees otherwise in writing. This
Note may not be changed orally, but only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought.

      4.2 Waivers. Presentment for payment, demand, protest and notice of
demand, protest and nonpayment and all other notices are hereby waived by Maker.
Maker hereby further waives and renounces, to the fullest extent permitted by
law, all rights to the benefits of any moratorium, reinstatement, marshaling,
forbearance, valuation, stay, extension, redemption, appraisement, exemption and
homestead now or hereafter provided by the Constitution and laws of the United
States of America and of each state thereof, both as to itself and in and to all
of its property, real and personal, against the enforcement and collection of
the obligations evidenced by this Note or the other Loan Documents.

      4.3 Limit of Validity. The provisions of this Note and of all agreements
between Maker and Payee, whether now existing or hereafter arising and whether
written or oral, including, but not limited to, the Loan Documents, are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of demand or acceleration of the maturity of this Note or otherwise,
shall the amount contracted for, charged, taken, reserved, paid or agreed to be
paid ("Interest") to Payee for the use, forbearance or detention of the money
loaned under this Note exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, performance or fulfillment of any
provision hereof or of any agreement between Maker and Payee shall, at the time
performance or fulfillment of such provision shall be due, exceed the limit for
Interest prescribed by law or otherwise transcend the limit of validity
prescribed by applicable law, then, ipso facto, the obligation to be performed
or fulfilled shall be reduced to such limit, and if, from any circumstance
whatsoever, Payee shall ever receive anything of value deemed Interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excessive Interest shall be applied to the reduction of the principal balance
owing under this Note in the inverse order of its maturity (whether or not then
due), in which event no prepayment fee or premium shall be due, or, at the
option of Payee, be paid over to Maker, and not to the payment of Interest. All
Interest (including any amounts or payments judicially or otherwise under the
law deemed to be Interest) contracted for, charged, taken, reserved, paid or
agreed to be paid to Payee shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of this Note,
including any extensions and renewals hereof until payment in full of the
principal balance of this Note so that the Interest thereon for such full term
will not exceed at any time the maximum amount permitted by applicable law. To
the extent United States federal law permits a greater amount of interest than
is permitted under the law of the State in which the Security Property is
located, Payee will rely on United States federal law for the purpose of
determining the maximum amount permitted by applicable law. Additionally, to the
extent permitted by applicable law now or hereafter in effect, Payee may, at its
option and from time to time, implement any other method of computing the
maximum lawful rate under the law of the State in which the Security Property is
located or under other applicable law by giving notice, if required, to Maker as
provided by applicable law now or hereafter in effect. This Section 4.3 will
control all agreements between Maker and Payee.

      4.4 Use of Funds. Maker hereby warrants, represents and covenants that no
funds disbursed hereunder shall be used for personal, family or household
purposes.

                                       17


      4.5 Unconditional Payment. Maker is and shall be obligated to pay
principal, interest and any and all other amounts which become payable hereunder
or under the other Loan Documents absolutely and unconditionally and without any
abatement, postponement, diminution or deduction and without any reduction for
counterclaim or setoff. In the event that at any time any payment received by
Payee hereunder shall be deemed by a court of competent jurisdiction to have
been a voidable preference or fraudulent conveyance under any bankruptcy,
insolvency or other debtor relief law, then the obligation to make such payment
shall survive any cancellation or satisfaction of this Note or return thereof to
Maker and shall not be discharged or satisfied with any prior payment thereof or
cancellation of this Note, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof, and such payment
shall be immediately due and payable upon demand.

      4.6 GOVERNING LAW. THIS NOTE SHALL BE INTERPRETED, CONSTRUED AND ENFORCED
ACCORDING TO THE LAWS OF THE STATE IN WHICH THE SECURITY PROPERTY IS LOCATED.

      4.7 WAIVER OF JURY TRIAL. MAKER, TO THE FULL EXTENT PERMITTED BY LAW,
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THE DEBT EVIDENCED BY THIS NOTE OR ANY CONDUCT, ACT OR OMISSION OF
PAYEE OR MAKER, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS,
MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH
PAYEE OR MAKER, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE.

      4.8 Secondary Market. Payee may sell, transfer and deliver the Loan
Documents to one or more investors in the secondary mortgage market. In
connection with such sale, Payee may retain or assign responsibility for
servicing the loan evidenced by this Note or may delegate some or all of such
responsibility and/or obligations to a servicer, including, but not limited to,
any subservicer or master servicer, on behalf of the investors. All references
to Payee herein shall refer to and include, without limitation, any such
servicer, to the extent applicable.

      4.9 Dissemination of Information. If Payee determines at any time to sell,
transfer or assign this Note, the Security Instrument and the other Loan
Documents, and any or all servicing rights with respect thereto, or to grant
participations therein (the "Participations") or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement (the "Securities"), Payee may
forward to each purchaser, transferee, assignee, servicer, participant,
investor, or their respective successors in such Participations and/or
Securities (collectively, the "Investor") or any Rating Agency rating such
Securities, each prospective Investor and each of the foregoing's respective
counsel, all documents and information which Payee now has or may hereafter
acquire relating to the debt evidenced by this Note and to Maker, any guarantor,
any indemnitor and the Security Property,

                                       18


which shall have been furnished by Maker, any guarantor or any indemnitor as
Payee determines necessary or desirable.

                      ARTICLE V -- MISCELLANEOUS PROVISIONS

      5.1 Miscellaneous. The terms and provisions hereof shall be binding upon
and inure to the benefit of Maker and Payee and their respective heirs,
executors, legal representatives, successors, successors-in-title and assigns,
whether by voluntary action of the parties or by operation of law. As used
herein, the terms "Maker" and "Payee" shall be deemed to include their
respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties or
by operation of law. If Maker consists of more than one person or entity, each
shall be jointly and severally liable to perform the obligations of Maker under
this Note. All personal pronouns used herein, whether used in the masculine,
feminine or neuter gender, shall include all other genders; the singular shall
include the plural and vice versa. Titles of articles and sections are for
convenience only and in no way define, limit, amplify or describe the scope or
intent of any provisions hereof. Time is of the essence with respect to all
provisions of this Note. This Note and the other Loan Documents contain the
entire agreements between the parties hereto relating to the subject matter
hereof and thereof and all prior agreements relative hereto and thereto which
are not contained herein or therein are terminated.

      5.2 Maker's Tax Identification Number is 20-1676647.

             [THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       19


            IN WITNESS WHEREOF, Maker has executed this Note as of the date
first written above.

                                   MAKER:

                                   COLE WG BRAINERD MN, LLC,
                                   a Delaware limited liability company

                                   By: Cole REIT Advisors II, LLC,
                                       a Delaware limited liability company,
                                       its manager


                                       By: /S/ John M. Pons
                                           -----------------------------------
                                           John M. Pons, Senior Vice President



                                   Schedule A



                             AUTO DRAFT INFORMATION


If you would like to sign up for our automatic payment drafting service, fill
out and return the enclosed authorization form along with a voided check and
mail to the address listed below. Please continue to send your monthly payments
until you receive written confirmation that the auto-draft service has begun.
You will receive written notification confirming your auto-draft setup and first
auto-draft date within 7 business days of the 15th of the month submitted.

NOTE: REQUESTS MUST BE RECEIVED BY THE 15TH TO BE SET UP FOR THE FOLLOWING
MONTH.

Wachovia Securities
Attention: Customer Service Department
8739 Research Drive - URP4
Charlotte, NC 28288-1075



WACHOVIA
SECURITIES

                                 AUTO DRAFT FORM

I hereby request and authorize Wachovia Bank, National Association, doing
business as Wachovia Securities ("Wachovia Securities"), to draft my account
specified below made payable to the order of Wachovia Securities located in
Charlotte, NC, provided there are sufficient funds in said account to pay the
same upon presentation. I agree that your rights in respect to each such draft
shall be the same as if it were a check drawn on Wachovia Securities and signed
personally by me. This authorization is to remain in effect until revoked by me
in writing and until Wachovia Securities actually receives such notice. I agree
that Wachovia Securities shall be fully protected in honoring any such drafts.

LOAN NUMBER                               NAME OF BORROWING ENTITY
- ---------------------------------------   --------------------------------------
Wachovia Loan # (9 digits)                Borrower Name
BANK'S ROUTING NUMBER FROM CHECK          ACCOUNT # TO BE DRAFTED
- ---------------------------------------   --------------------------------------
Bank Routing Number (9 digits)            Bank Account # (from check)
NAME OF BANK TO BE DRAFTED                LOCATION OF THE BANK
- ---------------------------------------   --------------------------------------
Name of Bank                              City and State

                  PLEASE INCLUDE A VOIDED CHECK WITH THIS FORM

                                 [VOIDED CHECK]

BORROWER'S SIGNATURE                      BORROWER'S NAME
- ---------------------------------------   --------------------------------------
Authorized Signature (as it appears       Print Name
on bank documents)
                                          TODAY'S DATE
                                          --------------------------------------
                                          Date
DAY OF MONTH PAYMENT WILL DRAFT           BORROWER'S FAX NUMBER
- ---------------------------------------   --------------------------------------
Draft Date (Payment due date)             Fax #

TERMS AND CONDITIONS

EFFECTIVE DATE OF DRAFT: The draft will occur on the payment due date, unless
otherwise agreed upon by borrower and servicer. The borrower will receive a
confirmation letter to insure auto-draft set-up and to confirm draft date.

REVOCATION OF THIS AUTHORITY: The authority of Wachovia Securities to transfer
funds from the borrowers account will not cease until Wachovia Securities
receives written notification revoking this authorization agreement. Wachovia
Securities must receive this notice at least 15 days prior to the date on which
you wish the arrangement to end.

DISHONOR: Wachovia Securities shall be under no liability whatsoever if a
transfer of funds cannot be made, whether or not such failure is caused by the
act of omission of the borrower.

INSUFFICIENT FUNDS: If the automatic withdrawal is returned due to insufficient
funds both Wachovia Securities and the borrower's financial institution may
assess a fee.

ERRORS: The borrower has the right to have the amount of any incorrect deduction
immediately corrected by the borrower's financial institution provided the
borrower sends the appropriate notice to the financial institution.

AMOUNT OF DRAFT: Wachovia Securities will withdraw the amount of the current
monthly receivable. This amount may vary due to escrow analyses, interest rate
changes or reserve requirements as applicable.

ACH ROUTING NUMBER: Please contact the financial institution from which the
money will be drafted for this information.

Wachovia Securities is the trade name under which Wachovia Corporation conducts
its investment banking, capital markets and institutional securities business
through First Union Securities, Inc. ("FUSI"), Member NYSE, NASD, SIPC, and
through other bank and non-bank and broker-dealer subsidiaries of Wachovia
Corporation.

EX-10.5

                        ASSIGNMENT OF PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                    MONOGRAM DEVELOPMENT XV, LTD., AS SELLER
                                       AND
                             SERIES A, LLC, AS BUYER

      ASSIGNOR, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, does hereby assign all of its right, title and
interest in that certain Purchase Agreement and Escrow Instructions (the
"Purchase Agreement") described herein, to ASSIGNEE and its successors and
assigns. The Purchase Agreement is described as follows:

      DATE OF AGREEMENT: September 30, 2005

      ORIGINAL BUYER:    Series A, LLC

      ASSIGNED TO:       Cole RA Alliance OH, LLC, a Delaware limited liability
                         company

      PROPERTY ADDRESS:  9 South Union Avenue, Alliance, OH

      ASSIGNOR acknowledges that it is not released from any and all obligations
or liabilities under said Purchase Agreement with the exception of the earnest
money deposit which is currently in escrow.

      ASSIGNEE hereby agrees to assume and be responsible for all obligations
and liabilities under said Purchase Agreement. This Assignment shall be in full
force and effect upon its full execution.

      Executed this 19th day of October, 2005.

ASSIGNOR:                              ASSIGNEE:

SERIES A, LLC,                         COLE RA ALLIANCE OH, LLC,
an Arizona limited liability company   a Delaware limited liability company

                                       By: COLE REIT ADVISORS II, LLC,
                                           a Delaware limited liability company,
By: /s/ John M. Pons                       its Manager
    --------------------
        John M. Pons
        Authorized Officer

                                                     By: /s/ John M. Pons
                                                         -----------------
                                                         John M. Pons
                                                     Its: Senior Vice President


                                                                    EXHIBIT 10.5

                               PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                                     BETWEEN

                          MONOGRAM DEVELOPMENT XV, LTD.

                                    AS SELLER

                                       AND

                                  SERIES A, LLC

                                    AS BUYER

                               SEPTEMBER 28, 2005

Rite Aid
Alliance, OH

                                       1


                   PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

DATED:      Dated to be effective as of September 28, 2005 (the "Effective
            Date").

PARTIES:    This Purchase Agreement and Escrow Instructions is between MONOGRAM
            DEVELOPMENT XV, LTD., an Ohio limited liability company, as
            "Seller", and SERIES A, LLC, an Arizona limited liability company,
            as "Buyer".

      WHEREAS, as of the Effective Date, Seller is the fee title owner of that
certain improved property located at 9 South Union Avenue, Alliance, Ohio, as
legally described on Exhibit A attached hereto (the "Real Property");

      WHEREAS, as of the Effective Date, the Real Property is improved with a
building containing approximately 11,348 square feet (the "Building") which
Building is leased to Rite Aid of Ohio, Inc. ("Tenant"), in accordance with a
written lease (the "Lease"). The Real Property, the Building, the improvements
to the Real Property (the "Improvements"), the personal property, if any, of
Seller located on the Real Property and Seller's interest in the Lease and all
rents issued and profits due or to become due thereunder are hereinafter
collectively referred to as the "Property"; and

      WHEREAS, Buyer desires to purchase the Property from Seller and Seller
desires to sell the Property to Buyer free and clear of all liens, all as more
particularly set forth in this Purchase Agreement and Escrow Instructions (the
"Agreement").

      NOW THEREFORE, in consideration of the promises set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Seller and Buyer (each, a "Party" and,
collectively, the "Parties") hereby agree as follows:

      1. INCORPORATION OF RECITALS. All of the foregoing Recitals are hereby
incorporated as agreements of the Parties.

      2. BINDING AGREEMENT. This Agreement constitutes a binding agreement
between Seller and Buyer for the sale and purchase of the Property subject to
the terms set forth in this Agreement. Subject to the limitations set forth in
this Agreement, this Agreement shall bind and inure to the benefit of the
Parties and their respective successors and assigns. This Agreement supersedes
all other written or verbal agreements between the Parties concerning any
transaction embodied in this Agreement. No claim of waiver or modification
concerning the provision of this Agreement shall be made against a Party unless
based upon a written instrument signed by such Party.

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Alliance, OH

                                       2


      3. INCLUSIONS IN PROPERTY.

            (a) The Property. The term "Property" shall also include the
following:

                  (1) all tenements, hereditaments and appurtenances pertaining
to the Real Property;

                  (2) all Seller's interest in mineral, water and irrigation
rights, if any, running with or otherwise pertaining to the Real Property and
all leases thereof;

                  (3) all interest, if any, of Seller in any road adjoining the
Real Property;

                  (4) all interest, if any, of Seller in any award made or to be
made or settlement in lieu thereof for damage to the Property by reason of
condemnation, eminent domain or exercise of police power;

                  (5) all of Seller's interest in the Building, the Improvements
and any other improvements and fixtures on the Real Property;

                  (6) all of Seller's interest, if any, in any equipment,
machinery and personal property on or used in connection with the Real Property
(the "Personalty");

                  (7) Seller's interest in the Lease and security deposit, if
any, now or hereafter due thereunder; and,

                  (8) all of Seller's interest, to the extent transferable, in
all permits and licenses (the "Permits"), warranties, contractual rights and
intangibles (including rights to the name of the Improvements as well as
architectural/engineering plans) with respect to the operation, maintenance,
repair or improvement of the Property (collectively, the "Contracts").

            (b) The Transfer Documents. Except for the Personalty which shall be
transferred by that certain bill of sale from Seller to Buyer, a specimen of
which is attached hereto as Exhibit B (the "Bill of Sale"), the Lease which is
to be transferred by that certain assignment and assumption of lease, a specimen
of which is attached hereto as Exhibit C (the "Assignment of Lease"), the
Permits and Contracts which are to be transferred by that certain assignment
agreement, a specimen of which is attached hereto as Exhibit D (the "Assignment
Agreement"), all components of the Property shall be transferred and conveyed by
execution and delivery of Seller's special warranty deed, a specimen of which is
attached hereto as Exhibit E (the "Deed"). The Bill of Sale, the Assignment of
Lease, the Assignment Agreement and the Deed are hereinafter collectively
referred to as the "Transfer Documents".

      4. PURCHASE PRICE. The price to be paid by Buyer to Seller for the
Property is Two Million One Hundred Thousand and No/100 Dollars ($2,100,000.00)
(the "Purchase Price"), payable as follows:

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Alliance, OH

                                       3


            (a) Twenty-Five Thousand and No/100 Dollars ($25,000.00) earnest
money (the "Earnest Money Deposit") to be deposited in escrow with Lawyers Title
Insurance Corporation, 1850 North Central Avenue, Suite 300, Phoenix, Arizona
85004, Attention: Mr. Allen Brown ("Escrow Agent") not later than five (5)
business days following the receipt by Escrow Agent of a fully-executed original
of this Agreement (said receipt by Escrow Agent of both a fully-executed
original of this Agreement and the Earnest Money Deposit, the "Opening of
Escrow"), which Earnest Money Deposit is to be held by Escrow Agent until
released to Seller or Buyer as provided herein or paid to Seller at close of
escrow ("COE"); and

            (b) Fifty-Thousand and No/100 Dollars ($50,000.00) additional
earnest money to be deposited in escrow with Escrow Agent two (2) business days
after the expiration of the Study Period (defined below). For purposes of this
Agreement, the additional earnest money deposit shall be added to and become a
part of the Earnest Money Deposit;

            (c) Two Million Twenty-Five Thousand and No/100 Dollars
($2,025,000.00) in additional cash, or other immediately available funds (as may
be increased or decreased by such sums as are required to take into account any
additional deposits, prorations, credits, or other adjustments required by this
Agreement), to be deposited in escrow with Escrow Agent on or before COE (the
"Additional Funds") which is to be held by Escrow Agent until cancellation of
this Agreement as provided herein or paid to Seller at COE.

      5. DISPOSITION OF EARNEST MONEY DEPOSIT. Seller and Buyer hereby instruct
Escrow Agent to place the Earnest Money Deposit in a federally insured
interest-bearing passbook account on behalf of Seller and Buyer. The Earnest
Money Deposit and interest thereon shall be applied as follows:

            (a) if Buyer cancels this Agreement as Buyer is so entitled to do as
provided in this Agreement, the Earnest Money Deposit and all interest earned to
the effective date of withdrawal shall be paid immediately to Buyer;

            (b) if the Earnest Money Deposit is forfeited by Buyer pursuant to
this Agreement, such Earnest Money Deposit and all interest earned to the date
of withdrawal shall be paid to Seller as Seller's agreed and total liquidated
damages, it being acknowledged and agreed that it would be difficult or
impossible to determine Seller's exact damages; and

            (c) if escrow closes, the Earnest Money Deposit and all interest
earned to COE shall be credited to Buyer, automatically applied against the
Purchase Price and paid to Seller at COE.

      6. PRELIMINARY TITLE REPORT AND OBJECTIONS. Within ten (10) days after the
Opening of Escrow, Escrow Agent shall deliver a current Preliminary Title Report
(the "Report") for an ALTA extended coverage title insurance policy (the
"Owner's Policy") on the Property to Buyer and Seller. The Report shall show the
status of title to the Property as of the date of the Report and shall also
describe the requirements of Escrow Agent for the issuance of the Owner's Policy
as described herein. The cost of the Owner's Policy shall be paid by the Seller.
Any additional costs for an extended coverage policy shall be paid by Buyer. In
addition

Rite Aid
Alliance, OH

                                       4


to the Report, Escrow Agent shall simultaneously deliver to Buyer legible copies
of all documents identified in Part Two of Schedule B of the Report. If Buyer is
dissatisfied with any exception to title as shown in the Report, then Buyer may
either, by giving written notice thereof to Escrow Agent (i) on or before
expiration of the Study Period (as defined below) or (ii) ten (10) days from
Buyer's receipt of the Report, whichever is later, (a) cancel this Agreement,
whereupon the Earnest Money Deposit plus interest shall be returned to Buyer
together with all documents deposited in escrow by Buyer, or (b) provisionally
accept the title subject to Seller's agreement to cause the removal of any
disapproved exceptions or objections, in which case Seller shall (at its sole
cost) remove the exceptions or objections (or, if acceptable to Buyer, obtain
title insurance endorsements over the exceptions and objections) before COE.
Seller shall notify Buyer in writing within ten (10) days after receiving
Buyer's written notice of disapproval of any exception, if Seller does not
intend to remove (or endorse over) any such exception and/or objection. Seller's
lack of response shall be deemed as Seller's affirmative commitment to remove
the objectionable exceptions (or obtain title insurance endorsements over said
exceptions and objections, if acceptable to Buyer) prior to COE. In the event
the Report is amended to include new exceptions that are not set forth in a
prior Report, Buyer shall have until the later of (i) the expiration of the
Study Period, or (ii) the date seven (7) days after Buyer's receipt of the
amended Report and copies of the documents identified in the new exceptions or
new requirements, within which to cancel this Agreement and receive a refund of
the Earnest Money Deposit plus interest or to provisionally accept the title
subject to Seller's agreement to cause the removal of any disapproved exceptions
or objections. If Seller serves notice to Buyer that Seller does not intend to
remove such exceptions and objections before COE, Buyer shall, within ten (10)
days thereafter, notify Seller and Escrow Agent in writing of Buyer's election
to either (i) terminate this Agreement, whereupon the Earnest Money Deposit plus
interest shall be returned to Buyer and all obligations shall terminate, or (ii)
Buyer may waive such objections and the transaction shall close as scheduled. If
written notice of dissatisfaction is not timely given by Buyer to Seller
pursuant to this Section 6, then Buyer shall be deemed to have disapproved of
the condition of the title of the Property as shown by the Report, and shall
have elected to terminate this Agreement.

      7. BUYER'S STUDY PERIOD.

            (a) The Study Period. Buyer shall have until 5:00 p.m. MST on
October 7, 2005 (the "Study Period"), at Buyer's sole cost, within which to
conduct and approve any investigations, studies or tests deemed necessary by
Buyer, in Buyer's sole discretion, to determine the feasibility of acquiring the
Property, including, without limitation, Buyer's right to: (i) review and
approve the Survey, the Lease, Seller's operating statements with respect to the
Property, and the Contracts; (ii) meet and confer with Tenant; and, (iii)
obtain, review and approve an environmental study of the Real Property and
Building (collectively, "Buyer's Diligence"). Buyer's Diligence does not include
the right to do sampling, testing or borings without Seller's advance consent
thereto.

            (b) Right of Entry. Subject to the prior rights of the Tenant in the
Property and any rights of the tenant pursuant to the Oil & Gas Lease (as
defined below), Seller hereby grants to Buyer and Buyer's agents, employees and
contractors the right to enter upon the Property, at reasonable times with
reasonable prior notice during the Study Period, to conduct

Rite Aid
Alliance, OH

                                       5


Buyer's Diligence. In consideration therefor, Buyer shall and does hereby agree
to indemnify and hold Seller harmless from any and all liabilities, claims,
losses or damages, including, but not limited to, court costs and attorneys'
fees, which may be incurred by Seller as a direct result of Buyer's Diligence.
Buyer's indemnity and hold harmless obligation shall survive cancellation of
this Agreement or COE.

            (c) Cancellation. Unless Buyer so notifies Seller or Escrow Agent,
in writing, on or before the end of the Study Period of Buyer's acceptance of
Buyer's Diligence and waiver of the contingencies as set forth in this Section
7, this Agreement shall be canceled and the Earnest Money Deposit plus interest
shall be returned immediately to Buyer and, except as otherwise provided in this
Agreement, neither of the Parties shall have any further liability or obligation
under this Agreement.

      8. DELIVERY OF SELLER'S DILIGENCE MATERIALS.

            (a) Deliveries to Buyer. Buyer acknowledges that it has received
from Seller all written information in Seller's possession or the possession of
Seller's agents relating to the leasing, operating, maintenance, construction
(including the Certificate of Occupancy for the Property), repair, zoning
(including any zoning verification letters), platting, engineering, soil tests,
water tests, environmental tests, master planning, architectural drawings and
like matters regarding the Property (collectively, "Seller's Diligence
Materials").

            (b) Delivery by Buyer. If this Agreement is canceled for any reason,
except Seller's willful default hereunder, Buyer agrees to (i) deliver to
Seller, upon payment by Seller to Buyer of Buyer's cost thereof, copies of those
investigations, studies and/or tests which Buyer may have elected to obtain and
(ii) deliver to Seller, at no cost to Seller, Seller's Diligence Materials
provided to Buyer.

      9. THE SURVEY. Seller, at Seller's cost, shall, within fifteen (15) days
of Opening of Escrow, cause a certified ALTA survey of the Real Property,
Building and Improvements (the "Survey") to be completed by a surveyor licensed
in the State of Ohio and delivered to Escrow Agent and Buyer, whereupon the
legal description in the Survey shall control over the description in Exhibit A
attached hereto to the extent they may be inconsistent. The Survey shall set
forth the legal description and boundaries of the Property and all easements,
encroachments and improvements thereon.

      10. IRS SECTION 1445. Seller shall furnish to Buyer in escrow by COE a
sworn affidavit (the "Non-Foreign Affidavit") stating under penalty of perjury
that Seller is not a "foreign person" as such term is defined in Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). If
Seller does not timely furnish the Non-Foreign Affidavit, Buyer may withhold (or
direct Escrow Agent to withhold) from the Earnest Money Deposit and/or the
Additional Funds, an amount equal to the amount required to be so withheld
pursuant to Section 1445(a) of the Code, and such withheld funds shall be
deposited with the Internal Revenue Service as required by such Section 1445(a)
and the regulations promulgated thereunder. The amount withheld, if any, shall
nevertheless be deemed to be part of the Purchase Price paid to Seller.

Rite Aid
Alliance, OH

                                       6


      11. DELIVERY OF POSSESSION. Seller shall deliver possession of the
Property to Buyer at COE subject only to the rights of Tenant under the Lease
and all other encumbrances approved or deemed approved by Buyer pursuant to
Section 6 hereof.

      12. BUYER'S CONDITIONS PRECEDENT. In addition to all other conditions
precedent set forth in this Agreement, Buyer's obligations to perform under this
Agreement and to close escrow are expressly subject to the following:

            (a) the delivery by Seller to Escrow Agent, for delivery to Buyer at
COE, of the executed original Transfer Documents;

            (b) the issuance of the Owner's Policy (or a written commitment
therefor) subject only to those matters approved or deemed approved by Buyer
pursuant to this Agreement;

            (c) the delivery by Seller to Buyer at COE of all security deposits
and pre-paid/abated rents under the Lease, if any, in the form of a credit in
favor of Buyer against the Additional Funds;

            (d) the deposit by Seller with Buyer prior to expiration of the
Study Period of (i) an original estoppel certificate naming Buyer (or its
designee) and Wachovia Bank, National Association as addressees, which
certificate must be reasonably acceptable to Buyer and Seller, and (ii) a
subordination, non-disturbance and attornment agreement, in form and substance
reasonably acceptable to Tenant, for the benefit of Wachovia Bank, National
Association, both executed by Tenant under the Lease;

            (e) the deposit with Escrow Agent and Buyer prior to the expiration
of the Study Period of an executed waiver by Tenant of any right of first
refusal under the Lease;

            (f) the deposit with Escrow Agent of an executed affidavit of Seller
and such other documentation as may be reasonably required by Escrow Agent to
allow for the deletion of the mechanics' lien exception from the Owner's Policy;

            (g) the delivery by Seller to Buyer of the Certificate of Occupancy
for the Improvements or a copy thereof, if available;

            (h) the deposit with Escrow Agent of a letter from Seller to the
lessee under that certain Oil & Gas Lease recorded March 9, 1990 in Volume 911,
Page 451 and re-recorded July 23, 1999 in Imaging No. 1999057057 of the Stark
County, Ohio real property records (the "Oil & Gas Lease") requesting that
future rent under said Oil & Gas Lease be paid to Buyer;

            (i) the deposit with Escrow Agent of a letter from Seller to Tenant
requesting that future rent under the Lease be paid to Buyer; and

Rite Aid
Alliance, OH

                                       7


            (j) delivery to Buyer of originals of the Lease, the Contracts and
Permits, if any, in the possession of Seller or Seller's agents, and any
correspondence with respect thereto, together with such non-proprietary leasing
and property manuals, files and records which are material in connection with
the continued operation, leasing and maintenance of the Property.

If the foregoing conditions have not been satisfied or expressly waived in
writing by Buyer by the specified date or COE as the case may be, such failure
shall not constitute a breach or default by Seller, but Buyer shall have the
right, at Buyer's sole option, by giving written notice to Seller and Escrow
Agent, to cancel this Agreement, whereupon the Earnest Money Deposit plus
interest shall be paid immediately by Escrow Agent to Buyer and, except as
otherwise provided in this Agreement, neither of the Parties shall have any
further liability or obligation under this Agreement.

      13. SELLER'S WARRANTIES. Seller hereby represents and warrants to Buyer as
of the Effective Date and again as of COE that, to the best of Seller's
knowledge:

            (a) there are no unrecorded leases (other than the Lease), liens or
encumbrances which may affect title to the Property;

            (b) to Seller's knowledge, no notice of violation has been issued
with regard to any applicable regulation, ordinance, requirement, covenant,
condition or restriction relating to the present use or occupancy of the
Property by any person, authority or agency having jurisdiction;

            (c) to Seller's knowledge, there are no intended public improvements
which will or could result in any charges being assessed against the Property
which will result in a lien upon the Property;

            (d) to Seller's knowledge, there is no impending or contemplated
condemnation or taking by inverse condemnation of the Property, or any portion
thereof, by any governmental authorities;

            (e) there are no suits or claims pending or to Seller's knowledge,
threatened with respect to or in any manner affecting the Property, nor does
Seller have actual knowledge of any circumstances which should or could
reasonably form the basis for any such suits or claims which have not been
disclosed in writing to Buyer by Seller;

            (f) with the exception of Tenant's right of first refusal under the
Lease, Seller has not entered into and there is not existing any other
agreement, written or oral, under which Seller is or could become obligated to
sell the Property, or any portion thereof, to a third party, and Seller will not
enter into nor execute any such agreement without Buyer's prior written consent;

            (g) Seller has not and will not, without the prior written consent
of Buyer, take any action before any governmental authority having jurisdiction
thereover, the object of which would be to change the present zoning of or other
land-use limitations, upon the Property, or any portion thereof, or its
potential use, and, to Seller's actual knowledge, there are no

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Alliance, OH

                                       8


pending proceedings, the object of which would be to change the present zoning
or other land-use limitations;

            (h) subject to Tenant's right of first refusal under the Lease, this
transaction will not in any way violate any other agreements to which Seller is
a party;

            (i) subject to Tenant's right of first refusal under the Lease,
Seller has full power and authority to execute, deliver and perform under this
Agreement as well as under the Transfer Documents, specimens of which are
attached hereto as Exhibits;

            (j) Seller has no knowledge of any defaults under any of the
Contracts;

            (k) subject to Tenant's right of first refusal under the Lease, no
consent of any third party is required in order for Seller to enter into this
Agreement and perform Seller's obligations hereunder;

            (l) except for any item to be prorated at COE in accordance with
this Agreement, all bills or other charges, costs or expenses arising out of or
in connection with or resulting from Seller's use, ownership, or operation of
the Property up to COE shall be paid in full by Seller;

            (m) all general real estate taxes, assessments and personal property
taxes that have become due with respect to the Property (except for those that
will be prorated at COE) have been paid or will be so paid by Seller prior to
COE;

            (n) from the Effective Date hereof until COE or the earlier
termination of this Agreement, Seller shall (i) operate and maintain the
Property in a manner generally consistent with the manner in which Seller has
operated and maintained the Property prior to the date hereof, and shall perform
in all material respects, its obligations under the Lease, (ii) not amend,
modify or waive any material rights under the Lease, and (iii) maintain the
existing or comparable insurance coverage, if any, for the Improvements which
Seller is obligated to maintain under the Lease;

            (o) to Seller's knowledge, there are no proceedings pending for the
increase of the assessed valuation of the Real Property;

            (r) should Seller receive notice or actual knowledge of any
information regarding any of the matters set forth in this Section 13 after the
Effective Date and prior to COE, Seller will immediately notify Buyer of the
same in writing;

            (s) subject to Tenant's right of first refusal under the Lease, the
execution, delivery and performance of this Agreement and the Transfer
Documents, specimens of which are attached hereto as Exhibits, have not and will
not constitute a breach or default under any other agreement, law or court order
under which Seller is a party or may be bound; and

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            (t) all representations made in this Agreement by Seller shall
survive the execution and delivery of this Agreement and COE for a period of six
(6) months. Seller shall and does hereby indemnify against and hold Buyer
harmless from any loss, damage, liability and expense, together with all court
costs and attorneys' fees which Buyer may incur, by reason of any material
misrepresentation by Seller or any material breach of any of Seller's
warranties. Seller's indemnity and hold harmless obligations shall survive COE
for a period of six (6) months.

      14. BUYER'S WARRANTIES. Buyer hereby represents to Seller as of the
Effective Date and again as of COE that:

            (a) Buyer has full power and authority to execute, deliver and
perform under this Agreement as well as under the Transfer Documents, specimens
of which are attached hereto as Exhibits;

            (b) there are no actions or proceedings pending or to Buyer's
knowledge, threatened against Buyer which may in any manner whatsoever affect
the validity or enforceability of this Agreement or any of the documents,
specimens of which are attached hereto as Exhibits;

            (c) the execution, delivery and performance of this Agreement and
the Transfer Documents, specimens of which are attached hereto as Exhibits, have
not and will not constitute a breach or default under any other agreement, law
or court order under which Buyer is a party or may be bound;

            (d) should Buyer receive notice or knowledge of any information
regarding any of the matters set forth in this Section 14 after the Effective
Date and prior to COE, Buyer will promptly notify Seller of the same in writing;
and

            (e) all representations made in this Agreement by Buyer shall
survive the execution and delivery of this Agreement and COE for a period of six
(6) months. Buyer shall and does hereby indemnify against and hold Seller
harmless from any loss, damage, liability and expense, together with all court
costs and attorneys' fees, if awarded by a court of law, which Seller may incur,
by reason of any material misrepresentation by Buyer or any material breach of
any of Buyer's warranties. Buyer's indemnity and hold harmless obligations shall
survive COE for a period of six (6) months.

      15. RENTS AND DEPOSITS. Seller and Buyer agree that, in addition to all
other conditions and covenants contained herein, Seller shall deposit with Buyer
and Escrow Agent on the day immediately prior to COE Tenant's security deposit
and advance rents paid/abatements, if any, and a statement as to the date to
which all rents have been paid.

      16. BROKER'S COMMISSION. Concerning any brokerage commission, the Parties
agree as follows:

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            (a) the Parties warrant to one another that they have not dealt with
any finder, broker or realtor in connection with this Agreement except Sage
Investment Properties ("Seller's Broker");

            (b) if any person shall assert a claim to a finder's fee or
brokerage commission on account of alleged employment as a finder or broker in
connection with this Agreement (including Seller's Broker), the Party under whom
the finder or broker is claiming shall indemnify and hold the other Party
harmless from and against any such claim and all costs, expenses and liabilities
incurred in connection with such claim or any action or proceeding brought on
such claim, including, but not limited to, counsel and witness fees and court
costs in defending against such claim. The provisions of this subsection shall
survive cancellation of this Agreement or COE; and

            (c) Seller shall be responsible for payment of a commission to
Seller's Broker in an amount equal to two percent (2.0%) of the Purchase Price,
which commission shall be paid at COE.

      17. CLOSE OF ESCROW. COE shall be on or before 5:00 p.m. MST on October
13, 2005, or such earlier date as Buyer may choose by giving not less than five
(5) days prior written notice to Seller and Escrow Agent.

      18. ASSIGNMENT. This Agreement may not be assigned by Seller without the
prior written consent of Buyer which consent shall not be unreasonably withheld.
Buyer may assign its rights under this Agreement to an affiliate of Buyer
without seeking or obtaining Seller's consent. Such assignment shall not become
effective until the assignee executes an instrument whereby such assignee
expressly assumes each of the obligations of Buyer under this Agreement,
including specifically, without limitation, all obligations concerning the
Earnest Money Deposit. Buyer may also designate someone other than Buyer, as
grantee and/or assignee, under the Transfer Documents by providing written
notice of such designation at least five (5) days prior to COE. No assignment
shall release or otherwise relieve Buyer from any obligations hereunder.

      19. RISK OF LOSS. Seller shall bear all risk of loss, damage or taking of
the Property which may occur prior to COE. In the event of any loss, damage or
taking prior to COE, Buyer may, at Buyer's sole option, by written notice to
Seller and Escrow Agent, cancel this Agreement whereupon the Earnest Money
Deposit plus interest shall be paid immediately by Escrow Agent to Buyer and,
except as otherwise provided in this Agreement, neither of the Parties shall
have any further liability or obligation hereunder. In the alternative, Buyer
may attempt to negotiate an appropriate downward adjustment of the Price. If
Seller and Buyer cannot agree upon such a downward adjustment within a
reasonable period (not to exceed ten (10) days from the date Buyer receives
notice of the loss) Buyer may cancel this Agreement as provided above. If Buyer
waives any such loss or damage to the Property and closes escrow, Seller shall
at COE and as a condition precedent thereto, pay Buyer or credit Buyer against
the Additional Funds the amount of any insurance or condemnation proceeds, or
assign to Buyer, as of COE and in a form acceptable to Buyer, all rights or
claims for relief to the same.

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      20. REMEDIES.

            (a) Seller's Breach. If Seller breaches this Agreement, Buyer may,
at Buyer's sole option, either: (i) by written notice to Seller and Escrow
Agent, cancel this Agreement whereupon the Earnest Money Deposit plus interest
shall be paid immediately by Escrow Agent to Buyer and, except as otherwise
provided in this Agreement, neither of the Parties shall have any further
liability or obligation hereunder; or, (ii) seek specific performance against
Seller in which event COE shall be automatically extended as necessary.
Notwithstanding the foregoing, if specific performance is unavailable as a
remedy to Buyer because of Seller's affirmative acts, Buyer shall be entitled to
pursue all rights and remedies available at law or in equity.

            (b) Buyer's Breach. If Buyer breaches this Agreement, as its sole
remedy Seller shall be entitled to retain the Earnest Money Deposit in
accordance with subsection 5(b) as Seller's agreed and total liquidated damages.
Seller hereby waives any right to seek any equitable or legal remedies against
Buyer.

      21. ATTORNEYS' FEES. If there is any litigation to enforce any provisions
or rights arising herein in accordance with Section 20(a), the unsuccessful
party in such litigation, as determined by the court, agrees to pay the
successful party, as determined by the court, all costs and expenses, including,
but not limited to, reasonable attorneys' fees incurred by the successful party,
such fees to be determined by the court.

      22. NOTICES.

            (a) Addresses. Except as otherwise required by law, any notice
required or permitted hereunder shall be in writing and shall be given by
personal delivery, or by deposit in the U.S. Mail, certified or registered,
return receipt requested, postage prepaid, addressed to the Parties at the
addresses set forth below, or at such other address as a Party may designate in
writing pursuant hereto, or tested telex, or telegram, or telecopies (fax), or
any express or overnight delivery service (e.g., Federal Express), delivery
charges prepaid:

if to Seller:             Monogram Development XV, Ltd.
                          c/o Leisure Investments
                          215 N. Main, Suite 221
                          West Bend, WI 53095
                          Attn: William Becker
                          Tel.: (262) 334-1640
                          Fax: (262) 334-1642

with copies to:           Godfrey & Kahn, S.C.
                          North 21 W23350 Ridgeview Pkwy.
                          Waukesha, WI 53188
                          Attn: Paul Griepentrog, Esq.
                          Tel.: (262) 951-7600
                          Fax: (262) 951-7601

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if to Buyer:              Series A, LLC
                          2555 E. Camelback Road, Suite 400
                          Phoenix, AZ 85016
                          Attn: Legal Department
                          Tel.: (602) 778-8700
                          Fax: (602) 778-8780

with copies to:           Bennett Wheeler Lytle & Cartwright, PLC
                          3838 North Central Avenue, Suite 1120
                          Phoenix, AZ 85012
                          Attn: Kevin T. Lytle, Esq.
                          Tel.: (602) 445-3434
                          Fax: (602) 266-9119

If to Escrow Agent:       Lawyers Title Insurance Corporation
                          1850 North Central Avenue, Suite 300
                          Phoenix, AZ 85004
                          Attn: Mr. Allen Brown
                          Tel.: (602) 287-3500
                          Fax: (602) 263-0433

            (b) Effective Date of Notices. Notice shall be deemed to have been
given on the date on which notice is delivered, if notice is given by personal
delivery, telex, telegrams or telecopies, and on the date of deposit in the
mail, if mailed or deposited with the overnight carrier, if used. Notice shall
be deemed to have been received on the date on which the notice is received, if
notice is given by personal delivery, and on the second (2nd) day following
deposit in the U.S. Mail, if notice is mailed. If escrow has opened, a copy of
any notice given to a party shall also be given to Escrow Agent by regular U.S.
Mail or by any other method provided for herein.

      23. CLOSING COSTS.

            (a) Closing Costs. Seller and Buyer agree to pay closing costs as
indicated in this Agreement and in the escrow instructions attached hereto as
Exhibit F, and by this reference incorporated herein (the "Escrow
Instructions"). At COE, Seller shall pay (i) the costs of releasing all liens,
judgments, and other encumbrances that are to be released and of recording such
releases, (ii) one-half of the fees and costs due Escrow Agent for its services,
(iii) the transfer tax associated with the sale of the Property, if any, and
(iv) all other costs to be paid by Seller under this Agreement. Except as
otherwise provided for in this Agreement, Seller and Buyer will each be solely
responsible for and bear all of their own respective expenses, including,
without limitation, expenses of legal counsel, accountants, and other advisors
incurred at any time in connection with pursuing or consummating the transaction
contemplated herein. Real estate taxes shall be prorated based upon the current
valuation and latest available tax rates. All prorations shall be calculated
through escrow as of COE based upon the latest available

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                                       13


information, including, without limitation, a credit to Buyer for any rent
prepaid by Tenant for the period beginning with and including the date on which
the closing occurs through and including the last day of the month in which the
closing occurs. All other credits to Buyer shall be similarly prorated. Any
other closing costs not specifically designated as the responsibility of either
Party in the Escrow Instructions or in this Agreement shall be paid by Seller
and Buyer according to the usual and customary allocation of the same by Escrow
Agent. Seller agrees that all closing costs payable by Seller shall be deducted
from Seller's proceeds otherwise payable to Seller at COE. Buyer shall deposit
with Escrow Agent sufficient cash to pay all of Buyer's closing costs. Except as
provided in this Section 23(a), Seller and Buyer shall each bear their own costs
in regard to this Agreement.

            (b) Post-Closing Adjustment. If after COE, the parties discover any
errors in adjustments and apportionments or additional information becomes
available which would render the closing prorations materially inaccurate, the
same shall be corrected as soon after their discovery as possible. The provision
of this Section 23(b) shall survive COE except that no adjustment shall be made
later than two (2) months after COE unless prior to such date the Party seeking
the adjustment shall have delivered a written notice to the other Party
specifying the nature and basis for such claim. In the event that such claim is
valid, the Party against whom the claim is sought shall have ten (10) days in
which to remit any adjustment due.

            (c) Instructions. This Agreement, together with the Escrow
Instructions, shall constitute escrow instructions for the transaction
contemplated herein. Such escrow instructions shall be construed as applying
principally to Escrow Agent's employment.

      24. ESCROW CANCELLATION CHARGES. If escrow fails to close because of
Seller's default, Seller shall be liable for any cancellation charges of Escrow
Agent. If escrow fails to close because of Buyer's default, Buyer shall be
liable for any cancellation charges of Escrow Agent. If escrow fails to close
for any other reason, Seller and Buyer shall each be liable for one-half of any
cancellation charges of Escrow Agent. The provisions of this Section 24 shall
survive cancellation of this Agreement.

      25. APPROVALS. Concerning all matters in this Agreement requiring the
consent or approval of any Party, the Parties agree that any such consent or
approval shall not be unreasonably withheld unless otherwise provided in this
Agreement.

      26. Intentionally Omitted.

      27. ADDITIONAL ACTS. The Parties agree to execute promptly such other
documents and to perform such other acts as may be reasonably necessary to carry
out the purpose and intent of this Agreement.

      28. GOVERNING LAW. This Agreement shall be governed by and construed or
enforced in accordance with the laws of the State of Ohio.

      29. CONSTRUCTION. The terms and provisions of this Agreement represent the
results of negotiations among the Parties, each of which has been represented by
counsel of its

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                                       14


own choosing, and neither of which has acted under any duress or compulsion,
whether legal, economic or otherwise. Consequently, the terms and provisions of
this Agreement shall be interpreted and construed in accordance with their usual
and customary meanings, and the Parties each hereby waive the application of any
rule of law which would otherwise be applicable in connection with the
interpretation and construction of this Agreement that ambiguous or conflicting
terms or provisions contained in this Agreement shall be interpreted or
construed against the Party whose attorney prepared the executed Agreement or
any earlier draft of the same.

      30. TIME OF ESSENCE. Time is of the essence of this Agreement. However, if
this Agreement requires any act to be done or action to be taken on a date which
is a Saturday, Sunday or legal holiday, such act or action shall be deemed to
have been validly done or taken if done or taken on the next succeeding day
which is not a Saturday, Sunday or legal holiday, and the successive periods
shall be deemed extended accordingly.

      31. INTERPRETATION. If there is any specific and direct conflict between,
or any ambiguity resulting from, the terms and provisions of this Agreement and
the terms and provisions of any document, instrument or other agreement executed
in connection herewith or in furtherance hereof, including any Exhibits hereto,
the same shall be consistently interpreted in such manner as to give effect to
the general purposes and intention as expressed in this Agreement which shall be
deemed to prevail and control.

      32. HEADINGS. The headings of this Agreement are for reference only and
shall not limit or define the meaning of any provision of this Agreement.

      33. FAX AND COUNTERPARTS. This Agreement may be executed by facsimile
and/or in any number of counterparts. Each party may rely upon any facsimile or
counterpart copy as if it were one original document.

      34. INCORPORATION OF EXHIBITS BY REFERENCE. All Exhibits to this Agreement
are fully incorporated herein as though set forth at length herein.

      35. SEVERABILITY. If any provision of this Agreement is unenforceable, the
remaining provisions shall nevertheless be kept in effect.

      36. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the Parties and supersedes all prior agreements, oral or written, with respect
to the subject matter hereof. The provisions of this Agreement shall be
construed as a whole and not strictly for or against any Party.

      37. AS-IS CONDITION. (a) Buyer acknowledges that Buyer will have prior to
COE full and adequate right and opportunity to inspect and review the Property.
Buyer's consummation of COE shall constitute conclusive evidence that Buyer is
satisfied with the title and condition of the Property. In closing and
completing this transaction, Buyer will have relied exclusively upon its own
inspections and reviews, and not upon any representation or warranty of Seller
or its agents or employees, except as specifically set forth herein;

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      (b) Except as expressly set forth herein, Buyer acknowledges and agrees:

            (i) That Seller has made no representation, warranty or guaranty,
            express or implied regarding the condition or state of repair of any
            improvements upon the Property;

            (ii) To accept the Property in its AS-IS / WHERE IS condition with
            all faults; and

            (iii) That the Purchase Price was determined after taking into
            consideration the fact that Buyer is accepting the Property in its
            AS-IS / WHERE IS condition;

      (c) Buyer agrees that, following COE, except as may be set forth herein,
      Seller shall be fully and finally released from any and all claims or
      liabilities against Seller relating to or arising on account of the
      condition of the Property.

      38. TAX DEFERRED EXCHANGE. A material part of the consideration to Buyer
and Seller is that each party has the option to qualify this transaction as part
of a tax deferred exchange under Section 1031 of the Internal Revenue Code. Each
party agrees to cooperate with the other party and execute such documentation as
reasonably requested to allow the other party to effectuate such tax deferred
exchange; provided, however, that neither party shall be required to incur any
additional cost or expense in connection with the other party's exchange.

               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

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            IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as
of the Effective Date.

SELLER:

                                          MONOGRAM DEVELOPMENT XV, LTD.,
                                          an Ohio limited liability company

                                          By: /S/ William Becker
                                              ----------------------------------

                                          Its: President

BUYER:                                    SERIES A, LLC, an Arizona limited
                                          liability company

                                          By: /S/ John M. Pons
                                              ----------------------------------

                                          Its: Senior Vice President

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                            ESCROW AGENT'S ACCEPTANCE

      The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this _____ day of ____________, 2005,
which for the purposes of this Agreement shall be deemed to be the date of
Opening of Escrow. Escrow Agent hereby accepts the engagement to handle the
escrow established by this Agreement in accordance with the terms set forth in
this Agreement.

                                          LAWYERS TITLE INSURANCE CORPORATION

                                          By: /S/ Allen Brown
                                              ----------------------------------

                                          Title: Escrow Agent

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             AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

      This AMENDMENT TO PURCHASE AND ESCROW INSTRUCTIONS ("AMENDMENT") is made
and entered into as of this 13th day of October, 2005, by and between Monogram
Development XV, Ltd. ("SELLER") and Series A, LLC ("BUYER").

      WHEREAS, Buyer and Seller entered into that certain Purchase Agreement and
Escrow Instructions dated September 28, 2005 (the "SALE AGREEMENT"), for the
purchase and sale of that certain parcel of land and the improvements located
thereon (the "PROPERTY") as further described in the Sale Agreement; and

      WHEREAS, Buyer and Seller now desire to amend the Sale Agreement as set
forth herein;

      NOW, THEREFORE, for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and for other consideration
including the mutual covenants and agreements set forth herein, and the parties
hereby agree as follows:

      1. Close of Escrow. The Close of Escrow, as defined in the Sale Agreement,
is hereby extended to October 25, 2005.

      2.Except as expressly amended hereby, the Sale Agreement and all
provisions thereof are and shall remain in full force and effect and binding
upon the parties. In the event of any conflict or inconsistency between the
terms and conditions of this Amendment and the terms and conditions of the Sale
Agreement, the terms and conditions of this Amendment shall control and govern.

      3.All capitalized terms used herein and not otherwise defined in this
Amendment shall have the same meaning given such terms in the Sale Agreement.

      4.This Amendment may be signed in multiple counterparts which, when taken
together, shall constitute one and the same document. This Amendment may be
executed by facsimile signature.

      IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date and year first set forth above.

BUYER:                                    SELLER:

Series A, LLC                             Monogram Development XV, Ltd.
                                          By: Leisure Investments, Inc., sole
                                              member

By: /s/ John M. Pons                      By: /s/ William Becker
    ----------------------------------        ----------------------------------
Its: John M. Pons - Authorized Officer    Its: President

EX-10.6

            ASSIGNMENT OF PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

                         E & R BELL ROAD, LLC, AS SELLER
                                       AND
                             SERIES B, LLC, AS BUYER

      ASSIGNOR, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, does hereby assign all of its right, title and
interest in that certain Purchase Agreement and Escrow Instructions described
herein, to ASSIGNEE and its successors and assigns. The Purchase Agreement and
Escrow Instructions is described as follows:

            DATE OF AGREEMENT:      September 9, 2005

            ORIGINAL BUYER:         Series B, LLC

            ASSIGNED TO:            Cole LZ Glendale AZ, LLC

            PROPERTY ADDRESS:       6976 West Bell Road, Glendale, AZ 85308

      ASSIGNOR acknowledges that it is not released from any and all obligations
or liabilities under said Purchase Agreement and Escrow Instructions with the
exception of the earnest money deposit which is currently in escrow.

      ASSIGNEE hereby agrees to assume and be responsible for all obligations
and liabilities under said Purchase Agreement and Escrow Instructions. This
Assignment shall be in full force and effect upon its full execution.

      Executed this 25th day of October, 2005.

ASSIGNOR:                                 ASSIGNEE:

SERIES B, LLC                             COLE LZ GLENDALE AZ, LLC

                                          By: Cole REIT Advisors II, LLC
By: /s/ John M. Pons_                         its Manager
    -----------------
    John M. Pons
    Authorized Officer

                                          By: /s/ John M. Pons
                                              --------------------
                                              John M. Pons
                                              Senior Vice President



                                                                    EXHIBIT 10.6

                               PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                                     BETWEEN

                              E & R BELL ROAD, LLC

                                    AS SELLER

                                       AND

                                  SERIES B, LLC

                                    AS BUYER

                               September 9, 2005



                               PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

DATED:              Dated to be effective as of September 9, 2005 (the
                    "Effective Date").

PARTIES:            This Purchase Agreement and Escrow Instructions is
                    between E & R Bell Road, LLC, an Arizona limited liability
                    company, as "Seller", and Series B, LLC, an Arizona limited
                    liability company, as "Buyer".

      WHEREAS, as of the Effective Date, Seller is the fee title owner of that
certain parcel of improved property located at 6976 W. Bell Road, Glendale,
Arizona, and legally described on Exhibit A attached hereto (collectively, the
"Real Property");

      WHEREAS, as of the Effective Date, the Real Property is improved with a
building containing approximately 23,000 square feet (the "Building"). The Real
Property, the Building and the improvements to the Real Property (collectively,
the "Improvements") are leased to EBCO, Inc. ("Tenant") in accordance with a
written lease (the "Existing Lease"), which Existing Lease shall be replaced and
superseded as of COE (defined below) by a triple net lease between Tenant and
Buyer, in form acceptable to Buyer, Seller and Tenant (the "New Lease"), as
provided herein. The Real Property, the Building, the Improvements, the personal
property, if any, of Seller located on the Real Property and Seller's interest
in the Existing Lease and all rents issued and profits due or to become due
thereunder are hereinafter collectively referred to as the "Property";

      WHEREAS, Buyer desires to purchase the Property from Seller and Seller
desires to sell the Property to Buyer free and clear of all liens but subject to
the New Lease, all as more particularly set forth in this Purchase Agreement and
Escrow Instructions (the "Agreement"); and

      WHEREAS, Buyer and Seller have entered into that certain Purchase
Agreement and Escrow Instructions (the "Additional Agreement") relating to that
certain real property and improvements located at 5130 N. Highway 89, Flagstaff,
Arizona (the "Additional Property").

      NOW THEREFORE, in consideration of the promises set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Seller and Buyer (each, a "Party" and,
collectively, the "Parties") hereby agree as follows:

      1. INCORPORATION OF RECITALS. All of the foregoing Recitals are hereby
incorporated as agreements of the Parties.

      2. BINDING AGREEMENT. This Agreement constitutes a binding agreement
between Seller and Buyer for the sale and purchase of the Property subject to
the terms set forth in this Agreement. Subject to the limitations set forth in
this Agreement, this Agreement shall

                                        1


bind and inure to the benefit of the Parties and their respective successors and
assigns. This Agreement supersedes all other written or verbal agreements
between the Parties concerning any transaction embodied in this Agreement. No
claim of waiver or modification concerning the provision of this Agreement shall
be made against a Party unless based upon a written instrument signed by such
Party.

      3. INCLUSIONS IN PROPERTY.

            (a) The Property. The term "Property" shall also include the
following:

                  (1) all tenements, hereditaments and appurtenances pertaining
to the Real Property;

                  (2) all interest, if any, of Seller in any mineral, water and
irrigation rights running with or otherwise pertaining to the Real Property;

                  (3) all interest, if any, of Seller in any road adjoining the
Real Property;

                  (4) all interest, if any, of Seller in any award made or to be
made or settlement in lieu thereof for damage to the Property or any portion
thereof by reason of condemnation, eminent domain or exercise of police power;

                  (5) all of Seller's interest in the Building, the Improvements
and any other improvements and fixtures on the Real Property;

                  (6) all of Seller's interest, if any, in any equipment,
machinery and personal property located on and used in connection with the Real
Property (collectively, the "Personalty");

                  (7) the Existing Lease and all security deposits, if any, now
or hereafter due thereunder; and,

                  (8) all of Seller's interest, to the extent transferable, in
all permits and licenses (collectively, the
"Permits"), warranties (specifically including, without limitation, any warranty
related to the roof of the Building), contractual rights and intangibles
(including rights to the architectural/engineering plans) with respect to the
operation, maintenance, repair or improvement of the Property (collectively, the
"Contracts").

            (b) The Transfer Documents. Except for the Personalty, which shall
be transferred by that certain bill of sale from Seller to Buyer, a specimen of
which is attached hereto as Exhibit C (the "Bill of Sale"); the Permits and
Contracts, which are to be transferred by that certain assignment agreement, a
specimen of which is attached hereto as Exhibit D (the "Assignment Agreement");
all components of the Property shall be transferred and conveyed by execution
and delivery by Seller of a special warranty deed, a specimen of which is
attached hereto as Exhibit E (the "Deed"). Upon the execution of the New Lease
by Tenant and Buyer at COE, the Existing Lease shall be terminated by that
certain termination of lease, a specimen of which is attached hereto as Exhibit
F (the "Termination of Existing Lease"). The Bill of Sale,

                                        2


the Assignment Agreement, the Deed and the Termination of Existing Lease are
hereinafter collectively referred to as the "Transfer Documents".

      4. PURCHASE PRICE. The price to be paid by Buyer to Seller for the
Property is Five Million Six Hundred Ninety One Thousand Five Hundred Twenty
Five and no/100 Dollars ($5,691,525.00) (the "Purchase Price"), payable as
follows:

            (a) One Hundred Thousand and no/100 Dollars ($100,000.00) earnest
money (the "Earnest Money Deposit") to be deposited in escrow with Fidelity
National Title Insurance Company, 40 N. Central Avenue, Suite 2850, Phoenix,
Arizona 85004, Attn.: Mary Garcia ("Escrow Agent") not later than three (3)
business days following the receipt by Escrow Agent of a fully-executed original
of this Agreement (said receipt by Escrow Agent of both a fully-executed
original of this Agreement and the Earnest Money Deposit, the "Opening of
Escrow"), which Earnest Money Deposit is to be held by Escrow Agent until
released to Seller or Buyer as provided herein or paid to Seller at close of
escrow ("COE"); and

            (b) Five Million Five Hundred Ninety One Thousand Five Hundred
Twenty Five and no/100 Dollars ($5,591,521.00), in additional cash, or other
immediately available funds (as may be increased or decreased by such sums as
are required to take into account any additional deposits, prorations, credits,
or other adjustments required by this Agreement), to be deposited in escrow with
Escrow Agent on or before COE (the "Additional Funds") which is to be held by
Escrow Agent until cancellation of this Agreement as provided herein or paid to
Seller at COE.

      5. DISPOSITION OF EARNEST MONEY DEPOSIT. Seller and Buyer hereby instruct
Escrow Agent to place the Earnest Money Deposit in a federally insured
interest-bearing passbook account on behalf of Seller and Buyer. The Earnest
Money Deposit and interest thereon shall be applied as follows:

            (a) if Buyer cancels this Agreement as Buyer is so entitled to do as
provided in this Agreement, the Earnest Money Deposit and all interest earned to
the effective date of withdrawal shall be paid immediately to Buyer;

            (b) if the Earnest Money Deposit is forfeited by Buyer pursuant to
this Agreement, such Earnest Money Deposit and all interest earned to the date
of withdrawal shall be paid to Seller pursuant to Section 21(b) below as
Seller's agreed and total liquidated damages, it being acknowledged and agreed
that it would be difficult or impossible to determine Seller's exact damages;
and

            (c) if escrow closes, the Earnest Money Deposit and all interest
earned to COE shall be credited to Buyer, automatically applied against the
Purchase Price and paid to Seller at COE.

      6. PRELIMINARY TITLE REPORT AND OBJECTIONS. (a) Within ten (10) days after
the Opening of Escrow, Escrow Agent shall deliver a current Preliminary Title
Report (the "Report") for an ALTA extended coverage title insurance policy (the
"Owner's Policy") on the Property to Buyer and Seller. The Report shall show the
status of title to the Property as of the date of such Report and shall also
describe the requirements of Escrow Agent for the

                                       3


issuance of an Owner's Policy as described herein. The cost of a standard
Owner's Policy will be paid for by Seller; Buyer shall pay additional costs for
an extended coverage policy. In addition to the Report, Escrow Agent shall
simultaneously deliver to Buyer complete, legible copies of all documents
identified in Part Two of Schedule B of the Report.

            (b) If Buyer is dissatisfied with any exception to title as shown in
the Report (an "Objectionable Report"), then Buyer may, by giving written notice
thereof to Escrow Agent and Seller on or before expiration of the Study Period
(as defined below) or ten (10) days from Buyer's receipt of such Objectionable
Report, whichever is later (provided, however, Buyer shall have not less than
ten (10) days from its receipt of the Survey (as defined in Section 9 below)
corresponding to the Property to object to any matters disclosed on or by such
Survey that were not previously disclosed by seller's existing survey
corresponding to the Property), either (i) terminate this Agreement and the
Additional Agreement, whereupon the Earnest Money Deposit plus interest shall be
returned immediately to Buyer and, except as otherwise provided in this
Agreement, neither of the Parties shall have any further liability or obligation
under this Agreement, or (ii) provisionally accept the title subject to Seller's
agreement to cause the removal of any disapproved exceptions or objectionable
matters. Seller shall be under no obligation to cause the removal of any such
exceptions or matters, but in the event Seller agrees, in its sole discretion,
to do so, Seller shall attempt (at its sole cost) to remove the exceptions or
objections (or, if acceptable to Buyer, obtain title insurance endorsements over
the exceptions and objections) before the Closing Date. If Seller agrees to
attempt to cause the removal of such exceptions or matters but is unable to do
so prior to the Closing Date, Buyer may proceed under option (i) above, or Buyer
may waive such exceptions or objections.

            If Buyer gives notice to Seller of its election of option (ii)
above, Seller shall notify Buyer in writing within five (5) days after receiving
Buyer's written notice of disapproval of any exceptions or objectionable matters
if Seller does not intend to remove (or endorse over) any such exception and/or
objectionable matter. Seller's lack of response shall be deemed as Seller's
decision to not remove the objectionable matters and exceptions (or obtain title
insurance endorsements over said exceptions and objectionable matters, if
acceptable to Buyer) prior to the Closing Date.

            (c) In the event the Report is amended to include new exceptions
that are not set forth in the prior Report, Buyer shall have until the later of
(i) the expiration of the Study Period, or (ii) the date seven (7) days after
Buyer's receipt of the amended Report and copies of the documents identified in
the new exceptions or new requirements (provided, however, Buyer shall have not
less than five (5) days from its receipt of any Survey revised to reflect any
such new exceptions to object to any matters disclosed on or by such revised
Survey related to such new exceptions), within which to either (Y) terminate
this Agreement and the Additional Agreement, whereupon the Earnest Money Deposit
plus interest shall be returned immediately to Buyer and, except as otherwise
provided in this Agreement, neither of the Parties shall have any further
liability or obligation under this Agreement, or (Z) to provisionally accept the
title to the Property subject to Seller's agreement to cause the removal of any
disapproved exceptions or objections. Unless Seller expressly agrees to attempt
to cause the removal of such exceptions or objections, Seller shall be under no
obligation to remove said exceptions or objections.

                                       4


            If Buyer gives notice to Seller of its election of option (Z) above,
Seller shall notify Buyer in writing within five (5) days after receiving
Buyer's written notice of disapproval of any exceptions or objectionable matters
if Seller does not intend to remove (or endorse over) any such exception and/or
objectionable matter. Seller's lack of response shall be deemed as Seller's
decision to not remove the objectionable matters and exceptions (or obtain title
insurance endorsements over said exceptions and objectionable matters, if
acceptable to Buyer) prior to the Closing Date.

            (d) In the event Buyer provisionally accepts title to the Property
pursuant to Sections 6(b) and/or 6(c) above, if Seller serves notice (or is
deemed to have served notice) to Buyer that Seller does not intend to remove
such exceptions and/or objections before COE, Buyer shall, within ten (10) days
after receipt of such notice from Seller, notify Seller and Escrow Agent in
writing of Buyer's election to either (i) terminate this Agreement and the
Additional Agreement, whereupon the Earnest Money Deposit plus interest shall be
returned immediately to Buyer and, except as otherwise provided in this
Agreement, neither of the Parties shall have any further liability or obligation
under this Agreement, or (ii) waive such objections. If written notice of either
satisfaction or dissatisfaction as to the Report is not timely given by Buyer to
Seller pursuant to this Section 6, then Buyer shall be deemed to have
disapproved of the condition of the title of the Property, and shall have
elected to terminate this Agreement and the Additional Agreement, whereupon the
Earnest Money Deposit plus interest shall be returned immediately to Buyer and,
except as otherwise provided in this Agreement, neither of the Parties shall
have any further liability or obligation under this Agreement.

            (e) In the event of a termination of the Additional Agreement by
Buyer pursuant to Section 6 of the Additional Agreement, this Agreement shall be
deemed to be terminated, whereupon the Earnest Money Deposit plus interest shall
be returned immediately to Buyer and, except as otherwise provided in this
Agreement, neither of the Parties shall have any further liability or obligation
under this Agreement.

      7. BUYER'S STUDY PERIOD.

            (a) The Study Period. Buyer shall have until the later of 5:00 p.m.
MST on the thirtieth (30th) day after the Opening of Escrow (the "Study
Period"), at Buyer's sole cost, within which to conduct and approve any
investigations, studies or tests deemed necessary by Buyer, in Buyer's sole
discretion, to determine the feasibility of acquiring the Property, including,
without limitation, Buyer's right to: (i) review and approve the Survey, the
Existing Lease, Seller's operating statements with respect to the Property, and
the Contracts; (ii) meet and confer with Tenant; and, (iii) obtain, review and
approve an environmental study of each of the Property (collectively, "Buyer's
Diligence").

            (b) Right of Entry. Subject to the prior rights of Tenant in the
Property, Seller hereby grants to Buyer and Buyer's agents, employees and
contractors the right to enter upon the Property, during regular business hours
during the Study Period, to conduct Buyer's Diligence. In consideration
therefor, Buyer shall and does hereby agree to indemnify and hold Seller
harmless from any and all liabilities, claims, losses or damages, including, but
not limited to, court costs and attorneys' fees, which may be incurred by Seller
as a direct result of Buyer's

                                       5


Diligence. Buyer's indemnity and hold harmless obligation shall survive
cancellation of this Agreement or COE.

            (c) Cancellation. Unless Buyer so notifies Seller or Escrow Agent,
in writing, on or before the end of the Study Period, of Buyer's acceptance of
the Property and waiver of the contingencies as set forth in this Section 7,
this Agreement and the Additional Agreement shall be canceled and the Earnest
Money Deposit plus all interest accrued thereon shall be returned immediately to
Buyer and, except as otherwise provided in this Agreement, neither of the
Parties shall have any further liability or obligation under this Agreement. In
the event of a cancellation of the Additional Agreement by Buyer pursuant to
Section 7 of the Additional Agreement, this Agreement shall be deemed to be
terminated, whereupon the Earnest Money Deposit plus interest shall be returned
immediately to Buyer and, except as otherwise provided in this Agreement,
neither of the Parties shall have any further liability or obligation under this
Agreement.

            (d) Acceptance. If Buyer notifies Seller or Escrow Agent of Buyer's
acceptance of the Property as provided in Section 7(c) above, the entire Earnest
Money Deposit, as the same may be increased during the term of this Agreement,
shall, except as otherwise expressly provided herein, become non-refundable to
Buyer. Unless Buyer's performance hereunder is excused due to a failure of a
condition of closing (other than as a result of the action or inaction of
Buyer), a breach by Seller of this Agreement or any other reason expressly
provided herein, if Buyer fails to close escrow within the time period set forth
in Section 18 below or if Buyer otherwise breaches this Agreement, the Earnest
Money Deposit shall be forfeited to Seller as provided in Section 5(b) above.

      8. DELIVERY OF SELLER'S DILIGENCE MATERIALS.

            (a) Deliveries to Buyer. Seller agrees to deliver to Buyer
contemporaneously with the Opening of Escrow all information in Seller's
possession or control relating to the leasing, operating, maintenance,
construction, repair, zoning (including any zoning verification letters),
platting, engineering, soil tests, water tests, environmental tests, master
planning, architectural drawings and like matters regarding the Property
(collectively, "Seller's Diligence Materials"), all at no cost to Buyer. From
and after the Opening of Escrow, Seller agrees to provide to Buyer any other
documents or information in the possession or control of Seller or its agents
pertaining to the Property that Buyer may reasonably request in writing.

            (b) Delivery by Buyer. If this Agreement is canceled for any reason,
except Seller's willful default hereunder, Buyer agrees to deliver to Seller (i)
all Seller's Diligence Materials received by Buyer from Seller, and (ii) upon
payment by Seller to Buyer of Buyer's cost thereof, copies of those
investigations, studies and/or tests which Buyer may have elected to obtain.

      9. THE SURVEY. Seller, at Seller's cost, shall, within twenty five (25)
days of Opening of Escrow, cause a certified ALTA survey of the Real Property,
Building and Improvements comprising the Property (the "Survey") to be completed
by a surveyor licensed in the State of Arizona and delivered to Buyer and Escrow
Agent, whereupon the legal description in the Survey shall control over the
description in Exhibit A-1 attached hereto to the extent they

                                       6


may be inconsistent. The Survey shall set forth the legal description and
boundaries of the parcel of Real Property and all easements, encroachments and
improvements thereon.

      10. IRS SECTION 1445. Seller shall furnish to Buyer in escrow by COE a
sworn affidavit (the "Non-Foreign Affidavit") stating under penalty of perjury
that Seller is not a "foreign person" as such term is defined in Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). If
Seller does not timely furnish the Non-Foreign Affidavit, Buyer may withhold (or
direct Escrow Agent to withhold) from the Earnest Money Deposit and/or the
Additional Funds, an amount equal to the amount required to be so withheld
pursuant to Section 1445(a) of the Code, and such withheld funds shall be
deposited with the Internal Revenue Service as required by such Section 1445(a)
and the regulations promulgated thereunder. The amount withheld, if any, shall
nevertheless be deemed to be part of the Purchase Price paid to Seller.

      11. DELIVERY OF POSSESSION. Seller shall deliver possession of the
Property to Buyer at COE subject only to the rights of Tenant under the New
Lease as agreed to by Seller, Tenant and Buyer.

      12. BUYER'S CONDITIONS PRECEDENT. In addition to all other conditions
precedent for Buyer set forth in this Agreement, Buyer's obligations to perform
under this Agreement and to close escrow are expressly subject to the following:

            (a) the delivery by Seller to Escrow Agent, for delivery to Buyer at
COE, of the executed original Transfer Documents;

            (b) the issuance of the Owner's Policy (or a written commitment
therefor) subject only to those matters approved or deemed approved by Buyer
pursuant to this Agreement;

            (c) the delivery by Seller to Buyer at COE of all security deposits
and pre-paid/abated rents under the Existing Lease, if any, in the form of a
credit in favor of Buyer against the Additional Funds;

            (d) the deposit by Seller with Buyer prior to expiration of the
Study Period of (i) an executed original estoppel certificate naming Buyer (or
its designee) and Wachovia Bank, National Association, as addressees, which
certificate must be reasonably acceptable to Buyer, in Tenant's standard form,
and (ii) a subordination, non-disturbance and attornment agreement, in form and
substance reasonably acceptable to Tenant, for the benefit of Wachovia Bank,
National Association, both executed by Tenant with respect to the Existing
Lease;

            (e) the agreement of Buyer, Seller and Tenant to a mutually
agreeable form of New Lease prior to the expiration of the Study Period, and
subsequent to such agreement, the delivery by Tenant to Escrow Agent, no later
than five (5) business days prior to COE, of such New Lease, fully executed by
Tenant;

            (f) the deposit with Escrow Agent and Buyer prior to the expiration
of the Study Period of an executed waiver by Tenant of any right of first
refusal under the Existing Lease;

                                       7


            (f) the deposit with Escrow Agent of an executed affidavit of Seller
and such other documentation as may be reasonably required by Escrow Agent to
allow for the deletion of the mechanics' lien exception from the Owner's Policy;

            (g) the delivery by Seller prior to expiration of the Study Period
to Buyer of the Certificate of Occupancy for the Property;

            (h) the deposit with Escrow Agent of a letter from Seller to Tenant
requesting that future rent under the New Lease be paid to Buyer; and

            (i) delivery to Buyer of fully-executed originals of the Contracts
and Permits, if any, in the possession of Seller or Seller's agents and any
correspondence with respect thereto, together with such non-proprietary leasing
and property manuals, files and records which are material in connection with
the continued operation, leasing and maintenance of the Property.

If the foregoing conditions have not been satisfied by the specified date or COE
as the case may be, and provided that Buyer is not in breach of this Agreement
and is otherwise ready and able to perform its obligations hereunder, then Buyer
shall have the right, at Buyer's sole option, by giving written notice to Seller
and Escrow Agent, to (i) cancel this Agreement and the Additional Agreement, or
(ii) extend COE for up to thirty (30) days during which time Seller shall
endeavor to satisfy any and all unsatisfied condition or conditions. In the
event this Agreement and the Additional Agreement are terminated, the Earnest
Money Deposit plus interest shall be paid immediately by Escrow Agent to Buyer
and, except as otherwise provided in this Agreement, neither of the Parties
shall have any further liability or obligation under this Agreement. In the
event COE is extended as provided above, close of escrow under the Additional
Agreement shall be extended by the same amount of time as COE is extended
hereunder.

In the event of a termination of the Additional Agreement by Buyer pursuant to
Section 12 of the Additional Agreement, this Agreement shall be deemed to be
terminated, whereupon the Earnest Money Deposit plus interest shall be returned
immediately to Buyer and, except as otherwise provided in this Agreement,
neither of the Parties shall have any further liability or obligation under this
Agreement. In the event close of escrow under the Additional Agreement shall be
extended pursuant to Section 12 of the Additional Agreement, COE under this
Agreement shall be deemed to be extended by the same amount of time as close of
escrow under the Additional Agreement is extended.

Nothing contained in this Section 12 shall limit or otherwise modify Buyer's
rights under Section 21(a) of this Agreement in the event of a breach of this
Agreement by Seller.

13. SELLER'S CONDITIONS PRECEDENT. In addition to all other conditions precedent
for Seller set forth in this Agreement, Seller's obligation to perform under
this Agreement and to close escrow are expressly subject to the following:

            (a) prior to COE, the execution, by Buyer, of the New Lease in a
form agreeable to Seller and Tenant and Buyer's delivery of same to Escrow
Agent;

                                       8


            (b) the delivery by Buyer to Escrow Agent prior to COE of all
documents reasonably necessary to close escrow;

            (c) the deposit by Buyer with Escrow Agent of all amounts necessary
to pay the Purchase Price on or before the COE; and

            (d) the Buyer's performance of all of its obligations hereunder so
as to allow COE to timely occur as provided herein.

If the foregoing conditions have not been satisfied by the specified date or
COE, as the case may be, and provided that Seller is not in breach of this
Agreement and all the conditions set forth in Section 12 above have been
satisfied, then Seller shall have the right, at Seller's sole option, by giving
written notice to Buyer and Escrow Agent, to (i) cancel this Agreement and the
Additional Agreement, or (ii) extend COE for up to thirty (30) days during which
time Buyer shall endeavor to satisfy any and all unsatisfied condition or
conditions. In the event this Agreement and the Additional Agreement are
terminated, the Earnest Money Deposit plus interest shall be paid immediately by
Escrow Agent to Seller and, except as otherwise provided in this Agreement,
neither of the Parties shall have any further liability or obligation under this
Agreement. In the event COE is extended as provided above, close of escrow under
the Additional Agreement shall be extended by the same amount of time as COE is
extended hereunder.

In the event of a termination of the Additional Agreement by Seller pursuant to
Section 13 of the Additional Agreement, this Agreement shall be deemed to be
terminated, whereupon the Earnest Money Deposit plus interest shall be paid to
Seller and, except as otherwise provided in this Agreement, neither of the
Parties shall have any further liability or obligation under this Agreement. In
the event close of escrow under the Additional Agreement shall be extended
pursuant to Section 13 of the Additional Agreement, COE under this Agreement
shall be deemed to be extended by the same amount of time as close of escrow
under the Additional Agreement is extended.

Nothing contained in this Section 13 shall limit or otherwise modify Seller's
rights under Section 21(b) of this Agreement in the event of a breach of this
Agreement by Buyer.

      14. SELLER'S WARRANTIES. Seller hereby represents and warrants to Buyer as
of the Effective Date and again as of COE that:

            (a) to Seller's actual knowledge, there are no unrecorded leases
(other than the Existing Lease), liens or encumbrances which may affect title to
the Property;

            (b) to Seller's actual knowledge, no notice of violation has been
issued with regard to any applicable regulation, ordinance, requirement,
covenant, condition or restriction relating to the present use or occupancy of
the Property by any person, authority or agency having jurisdiction;

            (c) to Seller's actual knowledge, there are no intended public
improvements which will or could result in any charges being assessed against
the Property which will result in a lien upon the Property;

                                       9


            (d) to Seller's actual knowledge, there is no impending or
contemplated condemnation or taking by inverse condemnation of the Property, or
any portion thereof, by any governmental authorities;

            (e) there are no suits or claims pending or to Seller's actual
knowledge, threatened with respect to or in any manner affecting the Property,
nor does Seller know of any circumstances which should or could reasonably form
the basis for any such suits or claims which have not been disclosed in writing
to Buyer by Seller;

            (f) Seller has not entered into and there is not existing any other
agreement, written or oral, under which Seller is or could become obligated to
sell the Property, or any portion thereof, to a third party and Seller will not
enter into nor execute any such agreement without Buyer's prior written consent;

            (g) Seller has not and will not, without the prior written consent
of Buyer, take any action before any governmental authority having jurisdiction
thereover, the object of which would be to change the present zoning of or other
land-use limitations, upon the Property, or any portion thereof, or its
potential use, and, to Seller's actual knowledge, there are no pending
proceedings, the object of which would be to change the present zoning or other
land-use limitations;

            (h) this transaction will not in any way violate any other
agreements to which Seller is a party;

            (i) Seller has full power and authority to execute, deliver and
perform under this Agreement as well as under the Transfer Documents, specimens
of which are attached hereto as Exhibits;

            (j) no default of Seller exists under any of the Contracts and, to
Seller's knowledge, no default of any of the other parties exists under any of
the Contracts;

            (k) no consent of any third party is required in order for Seller to
enter into this Agreement and perform Seller's obligations hereunder;

            (l) except for any item to be prorated at COE in accordance with
this Agreement, all bills or other charges, costs or expenses arising out of or
in connection with or resulting from Seller's use, ownership, or operation of
the Property up to COE shall be paid in full by Seller;

            (m) all general real estate taxes, assessments and personal property
taxes that have become due with respect to the Property (except for those that
will be prorated at COE) have been paid or will be so paid by Seller prior to
COE;

            (n) between the Effective Date and COE or any earlier termination of
this Agreement, Seller shall not execute or enter into any lease with respect to
the Property, or terminate, amend, modify, extend or waive any rights under the
Existing Lease without Buyer's prior written consent, which consent may be
withheld at Buyer's discretion;

            (o) Seller agrees that, between the Effective Date and COE or any
earlier termination of this Agreement, Seller shall, at its sole cost:

                  (1) continue to operate the Property as heretofore operated by
Seller;

                                       10


                  (2) maintain or cause Tenant to maintain the Property in its
current condition and perform required and routine maintenance and make
replacements of each part of the Property that is tangible property (whether
real or personal) and perform repairs or make replacements to any broken,
defective or disfunctioning portion of the Property that is tangible property
(whether real or personal) as the relevant conditions require;

                  (3) pay or cause Tenant to pay (as applicable) prior to COE,
all sums due for work, materials or services furnished or otherwise incurred in
the ownership, use or operation of the Property up to COE;

                  (4) comply or cause Tenant to comply with all governmental
requirements applicable to the Property;

                  (5) except as required by a governmental agency, not place or
permit to be placed on any portion of the Property any new improvements of any
kind or remove or permit any improvements to be removed from the Property
without the prior written consent of Buyer;

                  (6) not restrict, rezone, file or modify any development plan
or zoning plan or establish or participate in the establishment of any
improvement district with respect to all or any portion of the Property without
Buyer's prior written consent; and

                  (7) without Buyer's prior written consent, Seller shall not,
by voluntary or intentional act or omission to act, further cause or create any
easement, encumbrance, or mechanic's or materialmen's liens, and/or similar
liens or encumbrances to arise or to be imposed upon the Property or any portion
thereof that effects title thereto;

            (p) Seller has no actual knowledge that there exists or has existed,
and Seller itself has not caused any generation, production, location,
transportation, storage, treatment, discharge, disposal, release or threatened
release upon, under or about the Property of any Hazardous Materials. "Hazardous
Materials" shall mean any flammables, explosives, radioactive materials,
hazardous wastes, hazardous and toxic substances or related materials, asbestos
or any material containing asbestos (including, without limitation, vinyl
asbestos tile), or any other substance or material, defined as a "hazardous
substance" by any federal, state, or local environmental law, ordinance, rule or
regulation including, without limitation, the Federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, the
Federal Hazardous Materials Transportation Act, as amended, the Federal Resource
Conservation and Recovery Act, as amended, and the rules and regulations adopted
and promulgated pursuant to each of the foregoing;

            (q) to Seller's actual knowledge, there is not now, nor has there
ever been, on or in the Property or any portion thereof underground storage
tanks, any asbestos-containing materials or any polychlorinated biphenyls,
including those used in hydraulic oils, electric transformers, or other
equipment. Seller hereby assigns to Buyer, effective as of COE, all claims,
counterclaims, defenses, or actions, whether at common law, or pursuant to any
other applicable federal or state or other laws which Seller may have against
any third parties relating to the existence of any Hazardous Materials in, at,
on, under or about the Property (including

                                       11

Hazardous Materials released on the Property prior to COE and continuing in
existence on the Property at COE);

            (r) to Seller's actual knowledge, there are no proceedings pending
for the increase of the assessed valuation of the Property or any portion
thereof;

            (s) should Seller receive notice or actual knowledge of any
information regarding any of the matters set forth in this Section 13 after the
Effective Date and prior to COE, Seller will immediately notify Buyer of the
same in writing;

            (t) the execution, delivery and performance of this Agreement and
the Transfer Documents, specimens of which are attached hereto as Exhibits, have
not and will not constitute a breach or default under any other agreement, law
or court order under which Seller is a party or may be bound; and

            (u) all representations made in this Agreement by Seller shall
survive the execution and delivery of this Agreement and COE. Seller shall and
does hereby indemnify against and hold Buyer harmless from any loss, damage,
liability and expense, together with all court costs and attorneys' fees which
Buyer may incur, by reason of any material misrepresentation by Seller or any
material breach of any of Seller's warranties. Seller's indemnity and hold
harmless obligations shall survive COE.

      15. BUYER'S WARRANTIES. Buyer hereby represents to Seller as of the
Effective Date and again as of COE that:

            (a) Buyer has full power and authority to execute, deliver and
perform under this Agreement as well as under the Transfer Documents, specimens
of which are attached hereto as Exhibits;

            (b) there are no actions or proceedings pending or to Buyer's
knowledge, threatened against Buyer which may in any manner whatsoever affect
the validity or enforceability of this Agreement or any of the documents,
specimens of which are attached hereto as Exhibits, or impact Buyer's ability to
fulfill its obligations contained herein;

            (c) the execution, delivery and performance of this Agreement and
the Transfer Documents, specimens of which are attached hereto as Exhibits, have
not and will not constitute a breach or default under any other agreement, law
or court order under which Buyer is a party or may be bound;

            (d) should Buyer receive notice or knowledge of any information
regarding any of the matters set forth in this Section 15 after the Effective
Date and prior to COE, Buyer will promptly notify Seller of the same in writing;
and

            (e) all representations made in this Agreement by Buyer shall
survive the execution and delivery of this Agreement and COE. Buyer shall and
does hereby indemnify against and hold Seller harmless from any loss, damage,
liability and expense, together with all court costs and attorneys' fees which
Seller may incur, by reason of any material misrepresentation by Buyer or any
material breach of any of Buyer's warranties. Buyer's indemnity and hold
harmless obligations shall survive COE.

      16. RENTS AND DEPOSITS. Seller and Buyer agree that, in addition to all
other conditions and covenants contained herein, Seller shall deliver to Buyer
and Escrow Agent not later than the day immediately prior to COE information,
certified by Seller to be true and

                                       12


accurate as of the date thereof and as of the date of COE, with respect to (i)
the amount of Tenant's security deposit under the Existing Lease, if any, and
(ii) prepaid and/or abated rents, including, without limitation, the amount
thereof and the date to which such rents have been paid.

      17. BROKER'S COMMISSION. Concerning any brokerage commission, the Parties
agree as follows:

            (a) the Parties warrant to one another that they have not dealt with
any finder, broker or realtor in connection with this Agreement except Staubach
Investment Sales ("Broker");

            (b) if any person shall assert a claim to a finder's fee or
brokerage commission on account of alleged employment as a finder or broker in
connection with this Agreement (including Broker), the Party under whom the
finder or broker is claiming shall indemnify and hold the other Party harmless
from and against any such claim and all costs, expenses and liabilities incurred
in connection with such claim or any action or proceeding brought on such claim,
including, but not limited to, counsel and witness fees and court costs in
defending against such claim. The provisions of this subsection shall survive
cancellation of this Agreement or COE; and

            (c) Seller shall be responsible for payment of a commission to
Broker in an amount equal to One Hundred Thousand and no/100 Dollars
($100,000.00), which commission shall be paid at COE.

      18. CLOSE OF ESCROW. COE shall be on or before 5:00 p.m. MST on the
fifteenth (15th) day after the expiration of the Study Period (as such Study
Period may be extended pursuant to Section 6(b) hereof) or such earlier date as
Buyer may choose by giving written notice thereof to Seller and Escrow Agent.
Notwithstanding the foregoing, the Parties acknowledge and agree that COE for
the Property shall occur simultaneously with close of escrow for the Additional
Property, and thus COE may be adjusted to ensure such a simultaneous closing
with the Additional Property. Buyer may extend the COE date as to the Property
for up to an additional thirty (30) days upon delivery of written notice to
extend the COE date to Escrow Agent prior to the original COE date and by
depositing an additional Fifty Thousand and no/100 Dollars ($50,000.00) of
earnest money with Escrow Agent, provided, however, Buyer must also elect to
extend the close of escrow of the Additional Property for an identical period of
time as provided in Section 18 of the Additional Agreement. For purposes of this
Agreement, any additional earnest money deposited with Escrow Agent pursuant to
this Section 18 shall be added to and become a part of the Earnest Money
Deposit.

      19. ASSIGNMENT. Either Party may assign its rights under this Agreement to
an affiliate of such Party, or as required under an Exchange (defined below),
without seeking or obtaining the other Party's consent. Such assignment shall
not become effective until the assignee executes an instrument whereby such
assignee expressly assumes each of the obligations of the assigning Party under
this Agreement. Buyer may also designate someone other than Buyer, as grantee
and/or assignee, under the Transfer Documents by providing written notice of
such designation at least five (5) days prior to COE. No assignment shall
release or otherwise relieve either Party from any obligations hereunder.

                                       13


      20. RISK OF LOSS. Seller shall bear all risk of loss, damage or taking of
the Property which may occur prior to COE. In the event of any loss, damage or
taking with respect to the Property prior to COE, Buyer may, at Buyer's sole
option, by written notice to Seller and Escrow Agent, terminate this Agreement
and the Additional Agreement, whereupon the Earnest Money Deposit plus interest
shall be paid immediately to Buyer and, except as otherwise provided in this
Agreement, neither of the Parties shall have any further liability or obligation
hereunder. In the alternative, Buyer may attempt to negotiate an appropriate
downward adjustment of the Purchase Price. If Seller and Buyer cannot agree upon
such a downward adjustment within a reasonable period (not to exceed ten (10)
days from the date Buyer receives notice of the loss) Buyer may terminate this
Agreement and the Additional Agreement as provided above. If Buyer waives any
such loss or damage to any such Property and closes escrow, Seller shall at COE
and as a condition precedent thereto, pay Buyer or credit Buyer against the
Additional Funds the amount of any insurance or condemnation proceeds, or assign
to Buyer, as of COE and in a form acceptable to Buyer, all rights or claims for
relief to the same.

            In the event of a termination of the Additional Agreement by Buyer
pursuant to Section 20 of the Additional Agreement, this Agreement shall be
deemed to be terminated, whereupon the Earnest Money Deposit plus interest shall
be returned immediately to Buyer and, except as otherwise provided in this
Agreement, neither of the Parties shall have any further liability or obligation
under this Agreement.

      21. REMEDIES.

            (a) Seller's Breach. If Seller breaches this Agreement, Seller shall
also be deemed to have breached the Additional Agreement and Buyer may, at
Buyer's sole option, either: (i) by written notice to Seller and Escrow Agent,
cancel this Agreement and the Additional Agreement in its entirety whereupon the
Earnest Money Deposit plus interest shall be paid immediately by Escrow Agent to
Buyer and, except as otherwise provided in this Agreement, neither of the
Parties shall have any further liability or obligation hereunder; or, (ii) seek
specific performance against Seller in which event COE shall be automatically
extended as necessary. Notwithstanding the foregoing, if specific performance is
unavailable as a remedy to Buyer because of Seller's affirmative acts, Buyer
shall be entitled to pursue all rights and remedies available at law or in
equity. This limitation of damages does not apply to the indemnification under
Section 17. Any breach by Seller of the Additional Agreement shall also be
deemed to be a breach of this Agreement, and Buyer shall be entitled to exercise
the rights as provided above. Buyer may seek specific performance against Seller
with respect to the Property only if Buyer simultaneously seeks specific
performance under the Additional Agreement with respect to the Additional
Property.

            (b) Buyer's Breach. If Buyer breaches this Agreement, Buyer shall
also be deemed to have breached the Additional Agreement and as Seller's sole
remedy for breach of this Agreement Seller shall be entitled to retain the
Earnest Money Deposit in accordance with subsection 5(b) as Seller's agreed and
total liquidated damages. Seller hereby waives any right to seek any equitable
or legal remedies against Buyer. This limitation of damages does not apply to
the indemnification under Sections 7(b) and 17.

      22. ATTORNEYS' FEES. If there is any litigation to enforce any provisions
or rights arising herein in accordance with Section 21, the unsuccessful party
in such litigation, as

                                       14


determined by the court, agrees to pay the successful party, as determined by
the court, all costs and expenses, including, but not limited to, reasonable
attorneys' fees incurred by the successful party, such fees to be determined by
the court.

      23. NOTICES.

            (a) Addresses. Except as otherwise required by law, any notice
required or permitted hereunder shall be in writing and shall be given by
personal delivery, or by deposit in the U.S. Mail, certified or registered,
return receipt requested, postage prepaid, addressed to the Parties at the
addresses set forth below, or at such other address as a Party may designate in
writing pursuant hereto, or tested telex, or telegram, or telecopies (fax), or
any express or overnight delivery service (e.g., Federal Express), delivery
charges prepaid:

if to Seller:                         E & R Bell Road, LLC
                                      4135 E. Cotton Center Blvd.
                                      Phoenix, AZ 85040
                                      Attn: Ron Hernandez
                                      Tel.: (602) 426-5292, ext. 2209
                                      Fax:  (602) 470-2476

with copies to:                       Alan R. Costello, Esq.
                                      Costello Law Firm
                                      1440 E. Missouri Avenue, Suite C-170
                                      Phoenix, AZ 85014
                                      Tel:  (602) 248-4339
                                      Fax:  (602) 248-8164

if to Buyer:                          Series B, LLC
                                      2555 E. Camelback Road, Suite 400
                                      Phoenix, AZ  85016
                                      Attn: Legal Department
                                      Tel.: (602) 778-8700
                                      Fax:  (602) 778-8767

with copies to:                       Bennett Wheeler Lytle & Cartwright, PLC
                                      3838 N. Central Avenue, Suite 1120
                                      Phoenix, AZ  85012
                                      Attn: J. Craig Cartwright, Esq.
                                      Tel.: (602) 445-3433
                                      Fax:  (602) 266-9119

if to Escrow Agent:                   Fidelity National Title Insurance Company
                                      40 N. Central Avenue, Suite 2850
                                      Phoenix, AZ 85004
                                      Attn: Mary Garcia
                                      Tel.: (602) 343-7571
                                      Fax:  (602) 343-7564

                                       15


            (b) Effective Date of Notices. Notice shall be deemed to have been
given on the date on which such notice is delivered, if notice is given by
personal delivery, telex, telegrams or telecopies, and on the date of deposit in
the mail, if mailed or deposited with the overnight carrier, if used. Notice
shall be deemed to have been received on the date on which the notice is
received, if notice is given by personal delivery, and on the second (2nd) day
following deposit in the U.S. Mail, if notice is mailed. If escrow has opened, a
copy of any notice given to a party shall also be given to Escrow Agent by
regular U.S. Mail or by any other method provided for herein.

      24. CLOSING COSTS.

            (a) Closing Costs. Seller and Buyer agree to pay closing costs as
indicated in this Agreement and in the escrow instructions attached hereto as
Exhibit G, and by this reference incorporated herein (the "Escrow
Instructions"). At COE, Seller shall pay (i) the costs of releasing all liens,
judgments, and other encumbrances that are to be released and of recording such
releases, (ii) one-half the fees and costs due Escrow Agent for its services
(the remaining one-half to be paid by Buyer), (iii) the transfer tax associated
with the sale of the Property, if any, and (iv) all other costs to be paid by
Seller under this Agreement. Except as otherwise provided for in this Agreement,
Seller and Buyer will each be solely responsible for and bear all of their own
respective expenses, including, without limitation, expenses of legal counsel,
accountants, and other advisors incurred at any time in connection with pursuing
or consummating the transaction contemplated herein. Real estate taxes shall be
prorated based upon the current valuation and latest available tax rates. All
prorations shall be calculated through escrow as of COE based upon the latest
available information, including, without limitation, a credit to Buyer for any
rent prepaid by Tenant for the period beginning with and including the date on
which the closing occurs through and including the last day of the month in
which the closing occurs. All other credits to Buyer shall be similarly
prorated. Any other closing costs not specifically designated as the
responsibility of either Party in the Escrow Instructions or in this Agreement
shall be paid by Seller and Buyer according to the usual and customary
allocation of the same by Escrow Agent. Seller agrees that all closing costs
payable by Seller shall be deducted from Seller's proceeds otherwise payable to
Seller at COE. Buyer shall deposit with Escrow Agent sufficient cash to pay all
of Buyer's closing costs. Except as provided in this Section 24(a), Seller and
Buyer shall each bear their own costs in regard to this Agreement.

            (b) Post-Closing Adjustment. If after COE, the parties discover any
errors in adjustments and apportionments or additional information becomes
available which would render the closing prorations materially inaccurate, the
same shall be corrected as soon after their discovery as possible. The provision
of this Section 24(b) shall survive COE except that no adjustment shall be made
later than two (2) months after COE unless prior to such date the Party seeking
the adjustment shall have delivered a written notice to the other Party
specifying the nature and basis for such claim. In the event that such claim is
valid, the Party against whom the claim is sought shall have ten (10) days in
which to remit any adjustment due.

            (c) Instructions. This Agreement, together with the Escrow
Instructions, shall constitute escrow instructions for the transaction
contemplated herein. Such escrow instructions shall be construed as applying
principally to Escrow Agent's employment.

                                       16


      25. ESCROW CANCELLATION CHARGES. If escrow fails to close because of
Seller's default, Seller shall be liable for any cancellation charges of Escrow
Agent. If escrow fails to close because of Buyer's default, Buyer shall be
liable for any cancellation charges of Escrow Agent. If escrow fails to close
for any other reason, Seller and Buyer shall each be liable for one-half of any
cancellation charges of Escrow Agent. The provisions of this Section 25 shall
survive cancellation of this Agreement.

      26. APPROVALS. Concerning all matters in this Agreement requiring the
consent or approval of any Party, the Parties agree that any such consent or
approval shall not be unreasonably withheld unless otherwise provided in this
Agreement.

      27. RELEASES. Except as expressly provided in this Agreement, Seller and
anyone claiming through Seller hereby releases Tenant from any and all claims of
whatever kind or nature, in law or equity, whether now known or unknown to
Seller, whether contingent or matured, that Seller may now have or hereafter
acquire against Tenant for any costs, loss, liability, damage, expenses, demand,
action or cause of action arising from or related to the Existing Lease arising
from events occurring prior to COE.

      28. ADDITIONAL ACTS. The Parties agree to execute promptly such other
documents and to perform such other acts as may be reasonably necessary to carry
out the purpose and intent of this Agreement.

      29. GOVERNING LAW/JURISDICTION/VENUE. This Agreement shall be governed by
and construed or enforced in accordance with the laws of the State of Arizona.
In regard to any litigation which may arise in regard to this Agreement, the
Parties shall and do hereby submit to the jurisdiction of and the Parties hereby
agree that the proper venue shall be in the Superior Court of Arizona in
Maricopa County, Arizona.

      30. CONSTRUCTION. The terms and provisions of this Agreement represent the
results of negotiations among the Parties, each of which has been represented by
counsel of its own choosing, and neither of which has acted under any duress or
compulsion, whether legal, economic or otherwise. Consequently, the terms and
provisions of this Agreement shall be interpreted and construed in accordance
with their usual and customary meanings, and the Parties each hereby waive the
application of any rule of law which would otherwise be applicable in connection
with the interpretation and construction of this Agreement that ambiguous or
conflicting terms or provisions contained in this Agreement shall be interpreted
or construed against the Party whose attorney prepared the executed Agreement or
any earlier draft of the same.

      31. TIME OF ESSENCE. Time is of the essence of this Agreement. However, if
this Agreement requires any act to be done or action to be taken on a date which
is a Saturday, Sunday or legal holiday, such act or action shall be deemed to
have been validly done or taken if done or taken on the next succeeding day
which is not a Saturday, Sunday or legal holiday, and the successive periods
shall be deemed extended accordingly.

      32. INTERPRETATION. If there is any specific and direct conflict between,
or any ambiguity resulting from, the terms and

                                       17


provisions of this Agreement and the terms and provisions of any document,
instrument or other agreement executed in connection herewith or in furtherance
hereof, including any Exhibits hereto, the same shall be consistently
interpreted in such manner as to give effect to the general purposes and
intention as expressed in this Agreement which shall be deemed to prevail and
control.

      33. HEADINGS. The headings of this Agreement are for reference only and
shall not limit or define the meaning of any provision of this Agreement.

      34. FAX AND COUNTERPARTS. This Agreement may be executed by facsimile
and/or in any number of counterparts. Each party may rely upon any facsimile or
counterpart copy as if it were one original document.

      35. INCORPORATION OF EXHIBITS BY REFERENCE. All Exhibits to this Agreement
are fully incorporated herein as though set forth at length herein.

      36. SEVERABILITY. If any provision of this Agreement is unenforceable, the
remaining provisions shall nevertheless be kept in effect.

      37. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the Parties and supersedes all prior agreements, oral or written, with respect
to the subject matter hereof. The provisions of this Agreement shall be
construed as a whole and not strictly for or against any Party.

      38. SEC S-X 3-14 Audit. Seller acknowledges that Buyer may elect to assign
all of its right, title and interest in and to this Agreement to a publicly
registered company ("Registered Company") promoted by the Buyer. In the event
Buyer's assignee under this Agreement is a Registered Company, such Registered
Company will be required to make certain filings with the U.S. Securities and
Exchange Commission required under SEC Rule S-X 3-14 (the "SEC Filings") that
relate to the most recent pre-acquisition fiscal year (the "Audited Year") for
the Property. To assist the Registered Company with the preparation of the SEC
Filings, Seller agrees to provide Buyer with financial information regarding the
Property for the Audited Year requested by Buyer and/or Buyer's auditors. Such
information may include, but is not limited to, bank statements, operating
statements, general ledgers, cash receipts schedules, invoices for expenses and
capital improvements, insurance documentation, and accounts receivable aging
related to the Property, provided such information is in the possession or
control of Seller or its affiliates ("SEC Filing Information"). Seller shall
deliver the SEC Filing Information requested by Buyer prior to the expiration of
the Study Period, and Seller agrees to cooperate with Buyer and Buyer's auditors
regarding any inquiries by Buyer or Buyer's auditors following receipt of such
information, including delivery by Seller of an executed representation letter
prior to COE in form and substance requested by Buyer's auditors ("SEC Filings
Letter"). A sample SEC Filings Letter is attached to the Purchase Agreement as
Exhibit G; however, Buyer's auditors may require additions and/or revisions to
such letter following review of the SEC Filing Information provided by Seller.
Seller consents to the disclosure of the SEC Filing Information in any SEC
Filings by the Registered Company. Buyer shall reimburse Seller for Seller's
reasonable costs associated with providing the SEC Filing Information. The
provisions of this Section 38 shall survive the COE for a period of one (1)
year.

                                       18


      39. TAX-FREE EXCHANGE. The parties acknowledge that one or both of the
parties may be entering into this transaction as part of an IRC Section 1031 Tax
Deferred Exchange (an "Exchange") for the benefit of such party or parties. Each
party agrees to assist and cooperate in any such Exchange for the benefit of the
other provided the cooperating party shall incur no liability, cost or expense
and will execute any and all documents, subject to its reasonable approval of
its counsel, as are reasonably necessary in connection with the Exchange.

      IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of
the Effective Date.

SELLER:                                   E & R BELL ROAD, LLC

                                          By: /s/ Ronald Hernandez
                                              ---------------------
                                               Ronald Hernandez
                                          Its: Manager/Member

BUYER:                                    SERIES B, LLC

                                          By: /S/ John M. Pons
                                              ------------------------
                                               John M. Pons
                                          Its: Authorized Officer

                            ACKNOWLEDGEMENT OF TENANT

      The undersigned hereby acknowledges and agrees that it will execute and
deliver to Buyer at COE, as lessee thereunder, the New Lease and all other
documents contemplated thereby and reasonably required by Escrow Agent, Seller
and/or Buyer.

                                          EBCO, INC.

                                          By: /S/ Ronald Hernandez
                                              ------------------------
                                              Ronald Hernandez
                                          Its: Vice President & C.F.O.

                                       19


                            ESCROW AGENT'S ACCEPTANCE

      The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this _____ day of ____________, 20__,
which for the purposes of this Agreement shall be deemed to be the date of
Opening of Escrow. Escrow Agent hereby accepts the engagement to handle the
escrow established by this Agreement in accordance with the terms set forth in
this Agreement.

                                          FIDELITY NATIONAL TITLE INSURANCE
                                          COMPANY

                                          By: /S/ M. Burton
                                              -----------------
                                          Title: Asst. Commercial Escrow Officer

                                       20

EX-10.7

                                                                    EXHIBIT 10.7

                                                               LA-Z BOY GLENDALE
                                                             LOAN NO. 50-2853609

                                 PROMISSORY NOTE

$4,553,000.00                                                   October 25, 2005

      FOR VALUE RECEIVED, the undersigned, COLE LZ GLENDALE AZ, LLC, a Delaware
limited liability company ("Maker"), having an address at 2555 East Camelback
Road, Suite 400, Phoenix, Arizona 85016, promises to pay to the order of
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association ("Payee"),
at the office of Payee at Commercial Real Estate Services, 8739 Research Drive
URP - 4, NC 1075, Charlotte, North Carolina 28262, or at such other place as
Payee may designate to Maker in writing from time to time, the principal sum of
FOUR MILLION FIVE HUNDRED FIFTY-THREE THOUSAND AND NO/100 DOLLARS
($4,553,000.00), together with interest on so much thereof as is from time to
time outstanding and unpaid, from the date of the advance of the principal
evidenced hereby and as allocated to Fixed Rate Tranche A and Floating Rate
Tranche B (as each term is hereinafter defined) for each such tranche, at the
Note Rate (as hereinafter defined), together with all other amounts due
hereunder or under the other Loan Documents (as defined herein), in lawful money
of the United States of America, which shall at the time of payment be legal
tender in payment of all debts and dues, public and private.

                        ARTICLE I -- TERMS AND CONDITIONS

      1.1 Definitions. The following terms, as used in this Note, shall have the
following meanings, which meanings shall be applicable equally to the singular
and the plural of the terms defined:

            (a) "Business Day" shall mean a day of the year on which banks are
not required or authorized to close in Charlotte, North Carolina.

            (b) "Determination Date" shall mean a date on which the LIBOR-Based
Rate shall be selected as the applicable interest rate in respect of Floating
Rate Tranche B, which date shall be the day that is two (2) London Business Days
prior to the commencement of an Interest Period or, with respect to the first
Interest Period, the date the Loan shall be advanced by Payee.

            (c) "Extended Maturity Date" shall mean November 11, 2030.

            (d) "Fixed Rate Tranche A" shall mean Three Million Four Hundred
Fifteen Thousand and No/100 Dollars ($3,415,000.00) of the aggregate amount of
the Loan which shall bear interest as set forth in Section 1.3 hereof.

            (e) "Floating Rate Tranche B" shall mean One Million One Hundred
Thirty-Eight Thousand and No/100 Dollars ($1,138,000.00) of the aggregate amount
of the Loan which shall bear interest at the LIBOR-Based Rate (as hereinafter
defined).

            (f) "Interest Period" shall mean initially, the period commencing on
the date hereof and ending on and including the day of the tenth (10th) day of
the calendar month



following the date of this Note, unless principal is advanced on the tenth
(10th) of a month, in which case the first Interest Period shall consist only
such tenth (10th) day. Each Interest Period thereafter shall commence on the
eleventh (11th) day of each calendar month during the term of this Note and
shall end on and include the tenth (10th) day of the next occurring calendar
month. Interest shall accrue from the date on which funds are advanced hereunder
(regardless of the time of day) through and including the day on which funds are
credited pursuant to Section 1.4 hereof.

            (g) "LIBOR-Based Rate" shall mean (i) for the first Interest Period,
an interest rate per annum equal to ______________________________ percent
(______%) and (ii) for each succeeding Interest Period until Floating Rate
Tranche B is satisfied, an interest rate per annum equal at all times to two
hundred (200) basis points above the one-month LIBOR, in each case as determined
by Payee prior to the commencement of each Interest Period.

            (h) "LIBOR" shall mean with respect to each day during each Interest
Period, the rate for U.S. dollar deposits of that many months maturity as
reported on Telerate page 3750 as of 11:00 a.m., London time, on the second
London Business Day before the relevant Interest Period begins (or if not so
reported, then as determined by Payee from another recognized source or
interbank quotation), rounded up to the nearest one-eighth of one percent
(1/8%).

            (i) "Loan" shall mean that certain loan made by Payee to Maker in
respect of the Property which is evidenced by this Note and secured by, among
other things, the Security Instrument and all other Loan Documents.

            (j) "Loan Documents" shall mean the Security Instrument, this Note
and all other documents now or hereafter evidencing, securing, guarantying,
modifying or otherwise relating to the indebtedness evidenced hereby.

            (k) "London Business Day" shall mean a day of the year on which
dealings in United States dollars are carried on in the London interbank market
and banks are not required or authorized to close in London or in New York, New
York.

            (l) "Maturity Date" shall mean November 11, 2010.

            (m) "Monthly Payment Amount" shall mean the sum of (A) from and
including the First Payment Date through the Maturity Date, an amount equal to
the interest payable under this Note on the portion allocated as Fixed Rate
Tranche A at the Fixed Interest Rate in the amounts for each such Payment Date
set forth on Annex 1 attached hereto and incorporated herein by this reference
or as provided by Payee to Maker in connection with the initial Fixed Interest
Rate Interest Period, plus (B) through and until Floating Rate Tranche B is
satisfied, an amount equal to the interest payable under this Note on the
portion allocated as Floating Rate Tranche B at the LIBOR-Based Rate pursuant to
the provisions of Section 1.2 hereof. Annex 1 is for reference purposes only and
any payment incorrectly referenced thereon or omitted therefrom shall not limit
or reduce Maker's obligations for actual amounts due under this Note in
accordance with its payment terms, and Maker agrees that Payee may substitute a
replacement Annex 1 in the event the attached does not accurately reflect
Maker's scheduled payment obligations.

            (n) "Optional Prepayment Date" shall mean November 11, 2010.



            (o) "Optional Prepayment Determination Date" shall mean September
11, 2010.

            (p) "Security Instrument" shall mean that certain mortgage, deed of
trust or deed to secure debt and security agreement from Maker for the benefit
of Payee, dated of even date herewith, covering property located in Maricopa
County, Arizona.

      Each of the capitalized terms not otherwise defined in this Note shall
have the respective meaning ascribed to it in the Security Instrument of even
date herewith from Maker to Payee.

      1.2 LIBOR-Based Rate; Pay-Down Date. (a) From the date of the advance of
the principal evidenced hereby through the Pay-Down Date (as hereinafter
defined) for Floating Rate Tranche B, Floating Rate Tranche B shall bear
interest at the LIBOR-Based Rate. The LIBOR-Based Rate shall remain in effect,
subject to the provisions hereof, from and including the first day of the
Interest Period to and excluding the last day of the Interest Period for which
it is determined.

            (b) If requested by Payee, Maker shall immediately confirm the
LIBOR-Based Rate and the duration of the applicable Interest Period by
acknowledging receipt of a written confirmation of the LIBOR-Based Rate and
Interest Period delivered by Payee to Maker. Only one Interest Period may be in
effect at any given time.

            (c) Without limiting the effect of any other provision of this Note,
Maker shall pay to Payee on the last day of each and every Interest Period, so
long as and to the extent that Payee (or its source of funds) may directly or
indirectly be required to maintain reserves against "Eurocurrency liabilities"
under Federal Reserve Regulation D (as at any time amended), additional interest
(as determined by Payee and disclosed to Maker) for each such Interest Period at
an interest rate per annum equal, at all times during such Interest Period for
the principal balance of Floating Rate Tranche B, to the excess of (i) the rate
obtained by dividing LIBOR for such Interest Period by a percentage equal to
100% minus the reserve percentage applicable during such Interest Period under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or if more than one such percentage is so applicable, minus the
daily average of such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) for determining the maximum
reserve requirement (including, without limitation, any marginal reserve
requirement) for Payee (or its source of funds) in respect of liabilities or
assets consisting of or including "Eurocurrency liabilities" under Federal
Reserve Regulation D (as at any time amended) having a term equal to such
Interest Period over (ii) LIBOR for such Interest Period. Terms used in
Regulation D shall have the same meanings when used herein. Each such
determination made by Payee and each such notification by Payee to Maker under
this subparagraph of the amount of additional interest payable hereunder shall
be conclusive as to the matters set forth therein.

            (d) In addition to the payment of interest and fees as aforesaid,
Maker shall, from time to time, upon demand by Payee pay to Payee amounts as
shall be sufficient to compensate Payee for (i) any loss, cost, fee, breakage or
other expense incurred or sustained directly or indirectly by reason of the
liquidation or reemployment of deposits or other funds acquired by Payee to fund
or maintain Floating Rate Tranche B during any Interest Period as a



result of any prepayment of Floating Rate Tranche B or any portion thereof or
any attempt by Maker to rescind the selection of the LIBOR-Based Rate as the
applicable interest rate for Floating Rate Tranche B and (ii) any increased
costs incurred by Payee, by reason of:

            (x) taxes (or the withholding of amounts for taxes) of any nature
      whatsoever, including, without limitation, income, excise and interest
      equalization taxes (other than United States or state income taxes) as
      well as all levies, imports, duties, or fees whether now in existence or
      as the result of a change in, or promulgation of, any treaty, statute or
      regulation or interpretation thereof, or any directive, guideline or
      otherwise, by a central bank or fiscal authority or any other entity
      (whether or not having the force of law) or a change in the basis of, or
      time of payment of, such taxes and other amounts resulting therefrom;

            (y) any reserve or special deposit requirements against or with
      respect to assets or liabilities or deposits outstanding under LIBOR
      (including, without limitation, those imposed under the Monetary Control
      Act of 1978) currently required by, or resulting from a change in, or the
      promulgation of, such requirements by treaty, statute, regulation,
      interpretation thereof, or any directive, guidelines, or otherwise by a
      central bank or fiscal authority (whether or not having the force of law);
      and

            (z) any other costs resulting from compliance with treaties,
      statutes, regulations, interpretations or any directives or guidelines or
      otherwise, promulgated by or of a central bank or fiscal authority or
      other entity with similar authority (whether or not having the force of
      law).

A certificate as to the amount of any such costs prepared by Payee, signed by an
authorized officer of Payee and submitted to Maker shall be conclusive as to the
matters therein set forth.

      (e) The selection at any time of an interest rate based upon LIBOR shall
be expressly conditioned upon the existence of an adequate and fair means of
determining LIBOR and the absence of any legal prohibition against the charging
of interest based on LIBOR.

      (f) On or prior to January 25, 2006 (the "Pay-Down Date"), Maker shall
fully prepay the principal balance of this Note allocated as Floating Rate
Tranche B. Floating Rate Tranche B shall not be deemed to have been paid and/or
satisfied in full until all such additional costs, in addition to the principal
balance thereof and all interest thereon and all other sums due and payable
under the Loan Documents in regards to Floating Rate Tranche B, shall have been
paid.

      1.3 Note Rate; Computation of Interest. The term "Note Rate" as used in
this Note shall mean (a) for Fixed Rate Tranche A, from the date of this Note
through but not including the Optional Prepayment Date, a rate per annum equal
to ____________________ percent (____%) (the "Fixed Interest Rate"), (b) for
Floating Rate Tranche B, from the date of this Note through the Pay-Down Date
and satisfaction of Floating Rate Tranche B, a rate per annum equal to the
LIBOR-Based Rate, and (c) from the Optional Prepayment Date through and
including the date this Note is paid in full, a rate per annum equal to the
greater of (i) the Fixed Interest Rate plus two (2%) percent or (ii) the
Treasury Constant Maturity Yield Index (as hereinafter defined) plus two (2%)
percent ((i) or (ii), as applicable, the "Revised Interest Rate"). Interest
shall be



computed hereunder based on a 360-day year and based on the actual number of
days elapsed for any period in which interest is being calculated. For purposes
of this Section 1.3, the term "Treasury Constant Maturity Yield Index" shall
mean the average yield for "This Week" as reported by the Federal Reserve Board
in Federal Statistical Release H.15 (519) published during the second full week
preceding the Optional Prepayment Date for instruments having a maturity
coterminous with the remaining term of this Note. If there is no Treasury
Constant Maturity Yield Index for instruments having a maturity coterminous with
the remaining term of this Note, then the index shall be equal to the weighted
average yield to maturity of the Treasury Constant Maturity Yield Indices with
maturities next longer and shorter than such remaining average life to maturity,
calculated by averaging (and rounding upward to the nearest whole multiple of
1/100 of 1% per annum, if the average is not such a multiple) the yields of the
relevant Treasury Constant Maturity Yield Indices (rounded, if necessary, to the
nearest 1/100 of 1% with any figure of 1/200 of 1% or above rounded upward). If
such Release is not available or no longer published, Payee may refer to another
recognized source of financial market information.

      1.4 Payment of Principal and Interest. Payments in federal funds
immediately available at the place designated for payment received by Payee
prior to 2:00 p.m. local time on a day on which Payee is open for business at
said place of payment shall be credited prior to close of business, while other
payments, at the option of Payee, may not be credited until immediately
available to Payee in federal funds at the place designated for payment prior to
2:00 p.m. local time on a day on which Payee is open for business. Interest only
shall be payable in consecutive monthly installments of the Monthly Payment
Amount, beginning on December 11, 2005 (the "First Payment Date"), and
continuing on the eleventh (11th) day of each and every calendar month
thereafter (each, a "Payment Date"). On the Maturity Date or the Optional
Prepayment Date, the entire outstanding principal balance hereof, together with
all accrued but unpaid interest thereon, shall be due and payable in full
provided, however, that in the event that such amounts are not paid on such
date, the Maturity Date shall be extended to the Extended Maturity Date. In
computing the number of days during which interest accrues, the day on which
funds are initially advanced shall be included regardless of the time of day
such advance is made, and the day on which funds are repaid shall be included
unless repayment is credited prior to close of business. Payments in federal
funds immediately available in the place designated for payment received by
Payee prior to 2:00 p.m. local time on a Business Day at said place of payment
shall be credited prior to close of business, while other payments, at the
option of Payee, may not be credited until immediately available to Payee in
federal funds in the place designated for payment prior to 2:00 p.m. local time
at said place of payment on a Business Day.

      1.5 Application of Payments. So long as no Event of Default (as
hereinafter defined) exists hereunder or under any other Loan Document, each
such monthly installment shall be applied, prior to the Optional Prepayment
Date, first, to any amounts hereafter advanced by Payee hereunder or under any
other Loan Document, second, to any late fees and other amounts payable to
Payee, third, to the payment of accrued interest and last to reduction of
principal, and from and after the Optional Prepayment Date, as provided in
Section 2.2 of this Note.

      1.6 Payment of "Short Interest". If the advance of the principal amount
evidenced by this Note is made on a date on or after the first (1st) day of a
calendar month and prior to the eleventh (11th) day of a calendar month, Maker
shall pay to Payee contemporaneously with the



execution hereof interest at the Note Rate for a period from the date hereof
through and including the tenth (10th) day of this calendar month. If the
advance of the principal amount evidenced by this Note is made on a date after
the eleventh (11th) day of a calendar month and prior to or on the last day of a
calendar month, Maker shall pay to Payee contemporaneously with the execution
hereof interest at the Note Rate for a period from the date hereof through and
including the tenth (10th) day of the immediately succeeding calendar month.

      1.7 Prepayment; Defeasance.

      (a) This Note may not be prepaid, in whole or in part (except as otherwise
specifically provided herein), at any time prior to the Optional Prepayment
Date. In the event that Maker wishes to have the Security Property (as
hereinafter defined) released from the lien of the Security Instrument prior to
the Optional Prepayment Date, Maker's sole option shall be a Defeasance (as
hereinafter defined) upon satisfaction of the terms and conditions set forth in
Section 1.7(d) hereof. This Note may be prepaid in whole but not in part without
premium or penalty on any of the three (3) Payment Dates occurring immediately
prior to the Maturity Date provided (i) written notice of such prepayment is
received by Payee not more than ninety (90) days and not less than thirty (30)
days prior to the date of such prepayment, and (ii) such prepayment is
accompanied by all interest accrued hereunder through and including the date of
such prepayment and all other sums due hereunder or under the other Loan
Documents. If, upon any such permitted prepayment on any of the three (3)
Payment Dates occurring immediately prior to the Maturity Date, the aforesaid
prior written notice has not been timely received by Payee, there shall be due a
prepayment fee equal to, an amount equal to the lesser of (i) thirty (30) days'
interest computed at the Note Rate on the outstanding principal balance of this
Note so prepaid and (ii) interest computed at the Note Rate on the outstanding
principal balance of this Note so prepaid that would have been payable for the
period from, and including, the date of prepayment through the Maturity Date of
this Note as though such prepayment had not occurred.

      (b) If, prior to the fourth (4th) anniversary of the First Payment Date
(the "Lock-out Expiration Date"), the indebtedness evidenced by this Note shall
have been declared due and payable by Payee pursuant to Article III hereof or
the provisions of any other Loan Document due to a default by Maker, then, in
addition to the indebtedness evidenced by this Note being immediately due and
payable, there shall also then be immediately due and payable a sum equal to the
interest which would have accrued on the principal balance of this Note at the
Note Rate from the date of such acceleration to the Lock-out Expiration Date,
together with a prepayment fee in an amount equal to the Yield Maintenance
Premium (as hereinafter defined) based on the entire indebtedness on the date of
such acceleration. If such acceleration is on or following the Lock-out
Expiration Date, the Yield Maintenance Premium shall also then be immediately
due and payable as though Maker were prepaying the entire indebtedness on the
date of such acceleration. In addition to the amounts described in the two
preceding sentences, in the event of any such acceleration or tender of payment
of such indebtedness occurs or is made on or prior to the first (1st)
anniversary of the date of this Note, there shall also then be immediately due
and payable an additional prepayment fee of three percent (3%) of the principal
balance of this Note. The term "Yield Maintenance Premium" shall mean an amount
equal to the greater of (A) two percent (2.0%) of the principal amount being
prepaid, and (B) the present value of a series of



payments each equal to the Payment Differential (as hereinafter defined) and
payable on each Payment Date over the remaining original term of this Note and
on the Maturity Date, discounted at the Reinvestment Yield (as hereinafter
defined) for the number of months remaining as of the date of such prepayment to
each such Payment Date and the Maturity Date. The term "Payment Differential"
shall mean an amount equal to (i) the Note Rate less the Reinvestment Yield,
divided by (ii) twelve (12) and multiplied by (iii) the principal sum
outstanding under this Note after application of the constant monthly payment
due under this Note on the date of such prepayment, provided that the Payment
Differential shall in no event be less than zero. The term "Reinvestment Yield"
shall mean an amount equal to the lesser of (i) the yield on the U.S. Treasury
issue (primary issue) with a maturity date closest to the Maturity Date, or (ii)
the yield on the U.S. Treasury issue (primary issue) with a term equal to the
remaining average life of the indebtedness evidenced by this Note, with each
such yield being based on the bid price for such issue as published in the Wall
Street Journal on the date that is fourteen (14) days prior to the date of such
prepayment set forth in the notice of prepayment (or, if such bid price is not
published on that date, the next preceding date on which such bid price is so
published) and converted to a monthly compounded nominal yield. In the event
that any prepayment fee is due hereunder, Payee shall deliver to Maker a
statement setting forth the amount and determination of the prepayment fee, and,
provided that Payee shall have in good faith applied the formula described
above, Maker shall not have the right to challenge the calculation or the method
of calculation set forth in any such statement in the absence of manifest error,
which calculation may be made by Payee on any day during the fifteen (15) day
period preceding the date of such prepayment. Payee shall not be obligated or
required to have actually reinvested the prepaid principal balance at the
Reinvestment Yield or otherwise as a condition to receiving the prepayment fee.

            (c) Partial prepayments of this Note shall not be permitted,
except for (i) partial prepayments resulting from Payee's election to apply
insurance or condemnation proceeds to reduce the outstanding principal balance
of this Note as provided in the Security Instrument, in which event no
prepayment fee or premium shall be due unless, at the time of either Payee's
receipt of such proceeds or the application of such proceeds to the outstanding
principal balance of this Note, an Event of Default shall have occurred, which
Event of Default is unrelated to the applicable casualty or condemnation, in
which event the applicable prepayment fee or premium shall be due and payable
based upon the amount of the prepayment or (ii) any partial prepayment required
on or prior to the Pay-Down Date pursuant to Section 1.2(f) above, in which
event no prepayment fee or premium shall be due. No notice of prepayment shall
be required under the circumstances specified in subclause (i) of the preceding
sentence. No principal amount repaid may be reborrowed. Any such partial
prepayments of principal under subclause (i) above shall be applied to the
unpaid principal balance evidenced hereby but such application shall not reduce
the amount of the fixed monthly installments required to be paid pursuant to
Section 1.4 above. Except as otherwise expressly provided herein, the prepayment
fees provided above shall be due, to the extent permitted by applicable law,
under any and all circumstances where all or any portion of this Note is paid
prior to the Maturity Date, whether such prepayment is voluntary or involuntary,
including, without limitation, if such prepayment results from Payee's exercise
of its rights upon Maker's default and acceleration of the Maturity Date of this
Note (irrespective of whether foreclosure proceedings have been commenced), and
shall be in addition to any other sums due hereunder or under any of the other
Loan Documents. No tender of a prepayment of this Note



with respect to which a prepayment fee is due shall be effective unless such
prepayment is accompanied by the applicable prepayment fee.

      (d) (i) On any Payment Date on or after the later to occur of (x) the
      Lock-out Expiration Date, and (y) the day immediately following the date
      which is two (2) years after the "startup day," within the meaning of
      Section 860G(a)(9) of the Internal Revenue Code of 1986, as amended from
      time to time or any successor statute (the "Code"), of a "real estate
      mortgage investment conduit," within the meaning of Section 860D of the
      Code, that holds this Note, and provided no Event of Default has occurred
      hereunder or under any of the other Loan Documents, at Maker's option,
      Payee shall cause the release of the Security Property from the lien of
      the Security Instrument and the other Loan Documents (a "Defeasance") upon
      the satisfaction of the following conditions:

                  (A) Maker shall give not more than ninety (90) days' or less
          than sixty (60) days' prior written notice to Payee specifying the
          date Maker intends for the Defeasance to be consummated (the "Release
          Date"), which date shall be a Payment Date.

                  (B) All accrued and unpaid interest and all other sums due
          under this Note and under the other Loan Documents up to and including
          the Release Date shall be paid in full on or prior to the Release
          Date.

                  (C) Maker shall deliver to Payee on or prior to the Release
          Date:

                  (1) a sum of money in immediately available funds (the
              "Defeasance Deposit"), equal to the outstanding principal balance
              of this Note plus an amount, if any, which together with the
              outstanding principal balance of this Note, shall be sufficient to
              enable Payee to purchase, through means and sources customarily
              employed and available to Payee, for the account of Maker, direct,
              non-callable obligations of the United States of America that
              provide for payments prior, but as close as possible, to all
              successive monthly Payment Dates occurring after the Release Date
              and to the Maturity Date, with each such payment being equal to or
              greater than the amount of the corresponding installment of
              principal and/or interest required to be paid under this Note
              (including, but not limited to, all amounts due on the Maturity
              Date) for the balance of the term hereof (the "Defeasance
              Collateral"), each of which shall be duly endorsed by the holder
              thereof as directed by Payee or accompanied by a written
              instrument of transfer in form and substance satisfactory to Payee
              in its sole discretion (including, without limitation, such
              instruments as may be required by the depository institution
              holding such securities or the issuer thereof, as the case may be,
              to effectuate book-entry transfers and pledges through the
              book-entry facilities of such institution) in order to perfect
              upon the delivery of the Defeasance Security Agreement (as
              hereinafter defined) the first priority security interest in the
              Defeasance Collateral in



              favor of Payee in conformity with all applicable state and federal
              laws governing granting of such security interests;

                  (2) a pledge and security agreement, in form and substance
              satisfactory to a prudent lender, creating a first priority
              security interest in favor of Payee in the Defeasance Collateral
              (the "Defeasance Security Agreement"), which shall provide, among
              other things, that any excess received by Payee from the
              Defeasance Collateral over the amounts payable by Maker hereunder
              shall be refunded to Maker promptly after each monthly Payment
              Date;

                  (3) a certificate of Maker certifying that all of the
              requirements set forth in this Section 1.7(d)(i) have been
              satisfied;

                  (4) one or more opinions of counsel for Maker in form and
              substance and delivered by counsel which would be satisfactory to
              a prudent lender stating, among other things, that (i) Payee has a
              perfected first priority security interest in the Defeasance
              Collateral and that the Defeasance Security Agreement is
              enforceable against Maker in accordance with its terms, (ii) in
              the event of a bankruptcy proceeding or similar occurrence with
              respect to Maker, none of the Defeasance Collateral nor any
              proceeds thereof will be property of Maker's estate under Section
              541 of the U.S. Bankruptcy Code or any similar statute and the
              grant of security interest therein to Payee shall not constitute
              an avoidable preference under Section 547 of the U.S. Bankruptcy
              Code or applicable state law, (iii) the release of the lien of the
              Security Instrument and the pledge of Defeasance Collateral will
              not directly or indirectly result in or cause any REMIC Trust that
              then holds this Note to fail to maintain its status as a REMIC
              Trust and (iv) the defeasance will not cause any REMIC Trust to be
              an "investment company" under the Investment Company Act of 1940;

                  (5) evidence in writing from the applicable rating agencies to
              the effect that the collateral substitution will not result in a
              downgrading, withdrawal or qualification of the respective ratings
              in effect immediately prior to such defeasance event for any
              securities issued in connection with the securitization which are
              then outstanding;

                  (6) a certificate in form and scope acceptable to Payee in its
              sole discretion from an acceptable accountant certifying that the
              Defeasance Collateral will generate amounts sufficient to make all
              payments of principal and interest due under this Note (including
              the scheduled outstanding principal balance of the Loan due on the
              Maturity Date);

                  (7) Maker and any guarantor or indemnitor of Maker's
              obligations under the Loan Documents for which Maker has personal



              liability executes and delivers to Payee such documents and
              agreements as Payee shall reasonably require to evidence and
              effectuate the ratification of such personal liability and
              guaranty or indemnity, respectively;

                  (8) such other certificates, documents or instruments as Payee
              may reasonably require;

                  (9) payment of all fees, costs, expenses and charges incurred
              by Payee in connection with the Defeasance of the Security
              Property and the purchase of the Defeasance Collateral, including,
              without limitation, all legal fees and costs and expenses incurred
              by Payee or its agents in connection with release of the Security
              Property, review of the proposed Defeasance Collateral and
              preparation of the Defeasance Security Agreement and related
              documentation, any revenue, documentary, stamp, intangible or
              other taxes, charges or fees due in connection with transfer of
              the Note, assumption of the Note, or substitution of collateral
              for the Security Property shall be paid on or before the Release
              Date. Without limiting Maker's obligations with respect thereto,
              Payee shall be entitled to deduct all such fees, costs, expenses
              and charges from the Defeasance Deposit to the extent of any
              portion of the Defeasance Deposit which exceeds the amount
              necessary to purchase the Defeasance Collateral; and

                  (10) in the event the Amendment (as defined in Section 4.35 of
              the Security Instrument) has been executed, evidence satisfactory
              to Payee that following the Defeasance of this Loan, the minimum
              debt service coverage ratio for each of the Additional Loans (as
              defined in Section 4.35 of the Security Instrument) shall be 1.75
              to 1.00 and the maximum loan to value percentage for each of the
              Additional Loans shall be 65%.

                  (D) In connection with the Defeasance Deposit, Maker hereby
          authorizes and directs Payee using the means and sources customarily
          employed and available to Payee to use the Defeasance Deposit to
          purchase for the account of Maker the Defeasance Collateral.
          Furthermore, the Defeasance Collateral shall be arranged such that
          payments received from such Defeasance Collateral shall be paid
          directly to Payee to be applied on account of the indebtedness of this
          Note. Any part of the Defeasance Deposit in excess of the amount
          necessary to purchase the Defeasance Collateral and to pay the other
          and related costs Maker is obligated to pay under this Section 1.7
          shall be refunded to Maker.

          (ii) Upon compliance with the requirements of Section 1.7(d)(i), the
      Security Property shall be released from the lien of the Security
      Instrument and the other Loan Documents, and the Defeasance Collateral
      shall constitute collateral which shall secure this Note and all other
      obligations under the Loan Documents. Payee will, at Maker's expense,
      execute and deliver any agreements reasonably requested by Maker to
      release the lien of the Security Instrument from the Security Property.



          (iii) Upon the release of the Security Property in accordance with
      this Section 1.7(d), Maker shall assign all its obligations and rights
      under this Note, together with the pledged Defeasance Collateral, to a
      newly created successor entity which complies with the terms of Section
      1.33 of the Security Instrument designated by Maker and approved by Payee
      in its sole discretion. Such successor entity shall execute an assumption
      agreement in form and substance satisfactory to Payee in its sole
      discretion pursuant to which it shall assume Maker's obligations under
      this Note and the Defeasance Security Agreement. As conditions to such
      assignment and assumption, Maker shall (x) deliver to Payee an opinion of
      counsel in form and substance and delivered by counsel satisfactory to a
      prudent lender stating, among other things, that such assumption agreement
      is enforceable against Maker and such successor entity in accordance with
      its terms and that this Note and the Defeasance Security Agreement, as so
      assumed, are enforceable against such successor entity in accordance with
      their respective terms, and (y) pay all costs and expenses (including, but
      not limited to, legal fees) incurred by Payee or its agents in connection
      with such assignment and assumption (including, without limitation, the
      review of the proposed transferee and the preparation of the assumption
      agreement and related documentation). Upon such assumption, Maker shall be
      relieved of its obligations hereunder, under the other Loan Documents
      other than as specified in Section 1.7(d)(i)(C)(7) above and under the
      Defeasance Security Agreement.

      1.8 Security. The indebtedness evidenced by this Note and the obligations
created hereby are secured by, among other things, the Security Instrument. All
of the terms and provisions of the Loan Documents are incorporated herein by
reference. Some of the Loan Documents are to be filed for record on or about the
date hereof in the appropriate public records.

                ARTICLE II -- OPTIONAL PREPAYMENT DATE PROVISIONS

      2.1 Optional Prepayment Determination Date. The following subsections
shall apply from and after the Optional Prepayment Determination Date:

      (a) [Reserved].

      (b) For the calendar year in which the Optional Prepayment Determination
Date occurs and for each calendar year thereafter, Maker shall submit to Payee
for Payee's written approval an annual budget (an "Annual Budget") not later
than (i) the Optional Prepayment Determination Date for the calendar year in
which the Optional Prepayment Determination occurs and (ii) sixty (60) days
prior to the commencement of each calendar year thereafter, in form satisfactory
to Payee setting forth in reasonable detail budgeted monthly operating income
and monthly operating capital and other expenses for the Mortgaged Property.
Each Annual Budget shall contain, among other things, limitations on management
fees, third party service fees and other expenses as Maker may reasonably
determine. Payee shall have the right to approve such Annual Budget and in the
event that Payee objects to the proposed Annual Budget submitted by Maker, Payee
shall advise Maker of such objections within fifteen (15) days after receipt



thereof (and deliver to Maker a reasonably detailed description of such
objections) and Maker shall, within three (3) days after receipt of notice of
any such objections, revise such Annual Budget and resubmit the same to Payee.
Payee shall advise Maker of any objections to such revised Annual Budget within
ten (10) days after receipt thereof (and deliver to Maker a reasonably detailed
description of such objections) and Maker shall revise the same in accordance
with the process described in this subsection until Payee approves an Annual
Budget, provided, however, that if Payee shall not advise Maker of its
objections to any proposed Annual Budget within the applicable time period set
forth in this subsection, then such proposed Annual Budget shall be deemed
approved by Payee. Each such Annual Budget approved by Payee in accordance with
terms hereof shall hereinafter be referred to as an "Approved Annual Budget."
Until such time that Payee approves a proposed Annual Budget, the most recently
Approved Annual Budget shall apply; provided, that such Approved Annual Budget
shall be adjusted to reflect actual increases in real estate taxes, insurance
premiums and utilities expenses.

      (c) In the event that Maker must incur an extraordinary operating expense
or capital expense not set forth in the Annual Budget (an "Extraordinary
Expense"), then Maker shall promptly deliver to Payee a reasonably detailed
explanation of such proposed Extraordinary Expense for Payee's approval.

      (d) For the purposes of this Note, "Cash Expenses" shall mean, for any
period, the operating expenses for the operation and maintenance of the
Mortgaged Property as set forth in an Approved Annual Budget to the extent that
such expenses are actually incurred by Maker excluding payments into the Impound
Account and expenses for which Maker shall be reimbursed from, or which shall be
paid for out of, any such account or reserve.

      (e) Notwithstanding the other provisions of this Section 2.1, in the event
that, prior to the Optional Prepayment Determination Date, Maker delivers to
Payee either (i) a written commitment (the "Commitment") for the refinancing of
the loan evidenced by this Note from a Qualified Institutional Lender (as
hereinafter defined), which reasonably provides for the consummation of such
refinance prior to the Optional Prepayment Date or (ii) other evidence in form
and substance satisfactory to Payee in its sole determination of Maker's ability
to refinance the loan evidenced by this Note prior to the Optional Prepayment
Date, then, solely in either such event, the terms of Section 2.1(a), (b), (c)
and (d) of this Note shall be inoperative, provided, however, that upon (x) the
failure of such refinance to be consummated in accordance with the terms of the
Commitment or such other evidence, as applicable, (y) the termination of the
Commitment for any reason or (z) any adverse change in circumstances with
respect to Maker or any principals of Maker, the Mortgaged Property, the
proposed lender or otherwise, as determined by Payee in its sole determination,
which, in Payee's reasonable judgment, significantly decreases the likelihood of
such refinance being consummated prior to the Optional Prepayment Date, the
terms of Section 2.1(a), (b), (c) and (d) of this Note shall immediately become
operative and Maker shall immediately comply with any of the terms thereof
which, except for the operation of this subsection (e), Maker would theretofore
have been obligated to comply. "Qualified Institutional Lender" shall mean a
financial institution or other lender with a long term credit rating which is
not less than investment grade. The determination of whether the conditions set
forth in clause (i) or (ii) above, shall be made and notice of such
determination shall be delivered to Maker, within ten (10) business days
following Payee's receipt of the items set forth in such clauses.

      2.2 Failure to Prepay On or Before Optional Prepayment Date. In the event
that Maker does not prepay the entire principal balance of this Note and any
other amounts outstanding under this Note or any of the other Loan Documents on
or prior to the Optional Prepayment Date,



the provisions of Section 2.1(b), (c) and (d) as set forth above shall remain in
full force and effect, and the following subsections also shall apply:

      (a) From and after the Optional Prepayment Date, interest shall accrue on
the unpaid principal balance from time to time outstanding under this Note at
the Revised Interest Rate. Interest accrued at the Revised Interest Rate and not
paid pursuant to this Section 2.2 shall be deferred and added to the principal
balance of this Note and shall earn interest at the Revised Interest Rate to the
extent permitted by applicable law (such accrued interest is hereinafter
referred to as "Accrued Interest"). All of the unpaid principal balance of this
Note, including, without limitation, any Accrued Interest, shall be due and
payable on the Extended Maturity Date.

      (b) Maker shall be obligated to pay, and Payee shall collect from the Rent
Account (as defined in the Security Instrument) to the extent of funds on
deposit in such account, on the Optional Prepayment Date and on the eleventh
(11th) day of each calendar month thereafter to and including the Extended
Maturity Date the following payments from Rents (as defined in the Security
Instrument) received on or before such day in the listed order of priority:

            (i) First, the payment of the Monthly Payment Amount with interest
      computed at the Fixed Interest Rate;

            (ii) Second, payments to the Impound Account (as defined in the
      Security Instrument) in accordance with the terms and conditions of the
      Security Instrument;

            (iii) [Reserved];

            (iv) Fourth, payments for monthly Cash Expenses, less management
      fees payable to affiliates of Maker, pursuant to the terms and conditions
      of the related Approved Annual Budget;

            (v) Fifth, payment for Extraordinary Expenses approved by Payee, if
      any;

            (vi) Sixth, payments to Payee of the balance of the funds then on
      deposit in the Rent Account to be applied to (x) any other amounts due
      under the Loan Documents, (y) Accrued Interest and (z) the reduction of
      the outstanding principal balance of this Note until such principal
      balance is paid in full in whatever proportion and priority as Payee may
      determine.

      (c) Nothing in this Article II shall limit, reduce or otherwise affect
Maker's obligations to make payments of the Monthly Payment Amount (including
interest on the Note as provided in Section 1.3 hereof) payments to the Impound
Account and payments of other amounts due hereunder and under the other Loan
Documents, whether or not Rents (as defined in the Security Instrument) are
available to make such payments.

                             ARTICLE III -- DEFAULT

      3.1 Events of Default. It is hereby expressly agreed that should any
default occur in the



payment of principal or interest as stipulated above and such payment is not
made on the date such payment is due, or should any other default not cured
within any applicable grace or notice period occur under any other Loan
Document, then an event of default (an "Event of Default") shall exist
hereunder, and in such event the indebtedness evidenced hereby, including all
sums advanced or accrued hereunder or under any other Loan Document, and all
unpaid interest accrued thereon, shall, at the option of Payee and without
notice to Maker, at once become due and payable and may be collected forthwith,
whether or not there has been a prior demand for payment and regardless of the
stipulated date of maturity.

      3.2 Late Charges. In the event that any payment is not received by Payee
on the date when due, then, in addition to any default interest payments due
hereunder, Maker shall also pay to Payee a late charge in an amount equal to
five percent (5%) of the amount of such overdue payment.

      3.3 Default Interest Rate. So long as any Event of Default exists
hereunder, regardless of whether or not there has been an acceleration of the
indebtedness evidenced hereby, and at all times after maturity of the
indebtedness evidenced hereby (whether by acceleration or otherwise), interest
shall accrue on the outstanding principal balance of this Note, from the date
due until the date credited, at a rate per annum equal to four percent (4%) in
excess of the Note Rate, or, if such increased rate of interest may not be
collected under applicable law, then at the maximum rate of interest, if any,
which may be collected from Maker under applicable law (the "Default Interest
Rate"), and such default interest shall be immediately due and payable.

      3.4 Maker's Agreements. Maker acknowledges that it would be
extremely difficult or impracticable to determine Payee's actual damages
resulting from any late payment or default, and such late charges and default
interest are reasonable estimates of those damages and do not constitute a
penalty. The remedies of Payee in this Note or in the Loan Documents, or at law
or in equity, shall be cumulative and concurrent, and may be pursued singly,
successively or together, in Payee's discretion.

      3.5 Maker to Pay Costs. In the event that this Note, or any part hereof,
is collected by or through an attorney-at-law, Maker agrees to pay all costs of
collection, including, but not limited to, reasonable attorneys' fees.

      3.6 Exculpation. Notwithstanding anything in this Note or the Loan
Documents to the contrary, but subject to the qualifications hereinbelow set
forth, Payee agrees that:

      (a) Maker shall be liable upon the indebtedness evidenced hereby and for
the other obligations arising under the Loan Documents to the full extent (but
only to the extent) of the security therefor, the same being all properties
(whether real or personal), rights, estates and interests now or at any time
hereafter securing the payment of this Note and/or the other obligations of
Maker under the Loan Documents (collectively, the "Security Property");

      (b) if a default occurs in the timely and proper payment of all or any
part of such indebtedness evidenced hereby or in the timely and proper
performance of the other obligations of Maker under the Loan Documents, any
judicial proceedings brought by Payee against Maker shall



be limited to the preservation, enforcement and foreclosure, or any thereof, of
the liens, security titles, estates, assignments, rights and security interests
now or at any time hereafter securing the payment of this Note and/or the other
obligations of Maker under the Loan Documents, and no attachment, execution or
other writ of process shall be sought, issued or levied upon any assets,
properties or funds of Maker other than the Security Property, except with
respect to the liability described below in this section; and

            (c) in the event of a foreclosure of such liens, security titles,
estates, assignments, rights or security interests securing the payment of this
Note and/or the other obligations of Maker under the Loan Documents, no judgment
for any deficiency upon the indebtedness evidenced hereby shall be sought or
obtained by Payee against Maker, except with respect to the liability described
below in this section; provided, however, that, notwithstanding the foregoing
provisions of this section, Maker shall be fully and personally liable and
subject to legal action (i) for proceeds paid under any insurance policies (or
paid as a result of any other claim or cause of action against any person or
entity) by reason of damage, loss or destruction to all or any portion of the
Security Property, to the full extent of such proceeds not previously delivered
to Payee, but which, under the terms of the Loan Documents, should have been
delivered to Payee, (ii) for proceeds or awards resulting from the condemnation
or other taking in lieu of condemnation of all or any portion of the Security
Property, to the full extent of such proceeds or awards not previously delivered
to Payee, but which, under the terms of the Loan Documents, should have been
delivered to Payee, (iii) for all tenant security deposits or other refundable
deposits paid to or held by Maker or any other person or entity in connection
with leases of all or any portion of the Security Property which are not applied
in accordance with the terms of the applicable lease or other agreement, (iv)
for rent and other payments received from tenants under leases of all or any
portion of the Security Property paid more than one (1) month in advance, (v)
for rents, issues, profits and revenues of all or any portion of the Security
Property received or applicable to a period after the occurrence of any Event of
Default hereunder or under the Loan Documents, which are not either applied to
the ordinary and necessary expenses of owning and operating the Security
Property or paid to Payee, (vi) for waste committed on the Security Property,
damage to the Security Property as a result of the intentional misconduct or
gross negligence of Maker or any of its principals, officers, general partners
or members, any guarantor, any indemnitor, or any agent or employee of any such
person, or any removal of all or any portion of the Security Property in
violation of the terms of the Loan Documents, to the full extent of the losses
or damages incurred by Payee on account of such occurrence, (vii) for failure to
pay any valid taxes, assessments, mechanic's liens, materialmen's liens or other
liens which could create liens on any portion of the Security Property which
would be superior to the lien or security title of the Security Instrument or
the other Loan Documents, to the full extent of the amount claimed by any such
lien claimant except, with respect to any such taxes or assessments, to the
extent that funds have been deposited with Payee pursuant to the terms of the
Security Instrument specifically for the applicable taxes or assessments and not
applied by Payee to pay such taxes and assessments, (viii) for all obligations
and indemnities of Maker under the Loan Documents relating to hazardous or toxic
substances or radon or compliance with environmental laws and regulations to the
full extent of any losses or damages (including, but not limited to, those
resulting from diminution in value of any Security Property) incurred by Payee
as a result of the existence of such hazardous or toxic substances or radon or
failure to comply with environmental laws or regulations, and (ix) for fraud,
material misrepresentation or failure to disclose a material fact by Maker or
any of its principals, officers, general partners or members, any



guarantor, any indemnitor or any agent, employee or other person authorized or
apparently authorized to make statements, representations or disclosures on
behalf of Maker, any principal, officer, general partner or member of Maker, any
guarantor or any indemnitor, to the full extent of any losses, damages and
expenses of Payee on account thereof.

      References herein to particular sections of the Loan Documents shall be
deemed references to such sections as affected by other provisions of the Loan
Documents relating thereto. Nothing contained in this section shall (1) be
deemed to be a release or impairment of the indebtedness evidenced by this Note
or the other obligations of Maker under the Loan Documents or the lien of the
Loan Documents upon the Security Property, or (2) preclude Payee from
foreclosing the Loan Documents in case of any default or from enforcing any of
the other rights of Payee except as stated in this section, or (3) limit or
impair in any way whatsoever (A) any Indemnity and Guaranty Agreements (the
"Indemnity Agreements") or (B) the Environmental Indemnity Agreement (the
"Environmental Indemnity Agreement"), executed and delivered in connection with
the indebtedness evidenced by this Note or release, relieve, reduce, waive or
impair in any way whatsoever, any obligation of any party to the Indemnity
Agreements or the Environmental Indemnity Agreement.

      Notwithstanding the foregoing, the agreement of Payee not to pursue
recourse liability as set forth in subsection (c) above SHALL BECOME NULL AND
VOID and shall be of no further force and effect (i) in the event of a default
by Maker or Indemnitor (as defined in the Security Instrument) of any of the
covenants set forth in Section 1.13 or Section 1.33 of the Security Instrument,
or (ii) if the Security Property or any part thereof shall become an asset in
(A) a voluntary bankruptcy or insolvency proceeding of Maker, or (B) an
involuntary bankruptcy or insolvency proceeding of Maker which is not dismissed
within sixty (60) days of filing.

      Notwithstanding anything to the contrary in this Note, the Security
Instrument or any of the other Loan Documents, Payee shall not be deemed to have
waived any right which Payee may have under Section 506(a), 506(b), 1111(b) or
any other provisions of the U.S. Bankruptcy Code to file a claim for the full
amount of the indebtedness evidenced hereby or secured by the Security
Instrument or any of the other Loan Documents or to require that all collateral
shall continue to secure all of the indebtedness owing to Payee in accordance
with this Note, the Security Instrument and the other Loan Documents.

                        ARTICLE IV -- GENERAL CONDITIONS

      4.1 No Waiver; Amendment. No failure to accelerate the indebtedness
evidenced hereby by reason of default hereunder, acceptance of a partial or past
due payment, or indulgences granted from time to time shall be construed (i) as
a novation of this Note or as a reinstatement of the indebtedness evidenced
hereby or as a waiver of such right of acceleration or of the right of Payee
thereafter to insist upon strict compliance with the terms of this Note, or (ii)
to prevent the exercise of such right of acceleration or any other right granted
hereunder or by any applicable laws; and Maker hereby expressly waives the
benefit of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in conflict
with the foregoing. No extension of the time for the payment of this Note or any
installment due hereunder made by agreement with any person now or hereafter
liable for the payment of this Note shall operate to release, discharge, modify,
change or affect the original liability of Maker under this



Note, either in whole or in part, unless Payee agrees otherwise in writing. This
Note may not be changed orally, but only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought.

      4.2 Waivers. Presentment for payment, demand, protest and notice of
demand, protest and nonpayment and all other notices are hereby waived by Maker.
Maker hereby further waives and renounces, to the fullest extent permitted by
law, all rights to the benefits of any moratorium, reinstatement, marshaling,
forbearance, valuation, stay, extension, redemption, appraisement, exemption and
homestead now or hereafter provided by the Constitution and laws of the United
States of America and of each state thereof, both as to itself and in and to all
of its property, real and personal, against the enforcement and collection of
the obligations evidenced by this Note or the other Loan Documents.

      4.3 Limit of Validity. The provisions of this Note and of all agreements
between Maker and Payee, whether now existing or hereafter arising and whether
written or oral, including, but not limited to, the Loan Documents, are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of demand or acceleration of the maturity of this Note or otherwise,
shall the amount contracted for, charged, taken, reserved, paid or agreed to be
paid ("Interest") to Payee for the use, forbearance or detention of the money
loaned under this Note exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, performance or fulfillment of any
provision hereof or of any agreement between Maker and Payee shall, at the time
performance or fulfillment of such provision shall be due, exceed the limit for
Interest prescribed by law or otherwise transcend the limit of validity
prescribed by applicable law, then, ipso facto, the obligation to be performed
or fulfilled shall be reduced to such limit, and if, from any circumstance
whatsoever, Payee shall ever receive anything of value deemed Interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excessive Interest shall be applied to the reduction of the principal balance
owing under this Note in the inverse order of its maturity (whether or not then
due), in which event no prepayment fee or premium shall be due, or, at the
option of Payee, be paid over to Maker, and not to the payment of Interest. All
Interest (including any amounts or payments judicially or otherwise under the
law deemed to be Interest) contracted for, charged, taken, reserved, paid or
agreed to be paid to Payee shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of this Note,
including any extensions and renewals hereof until payment in full of the
principal balance of this Note so that the Interest thereon for such full term
will not exceed at any time the maximum amount permitted by applicable law. To
the extent United States federal law permits a greater amount of interest than
is permitted under the law of the State in which the Security Property is
located, Payee will rely on United States federal law for the purpose of
determining the maximum amount permitted by applicable law. Additionally, to the
extent permitted by applicable law now or hereafter in effect, Payee may, at its
option and from time to time, implement any other method of computing the
maximum lawful rate under the law of the State in which the Security Property is
located or under other applicable law by giving notice, if required, to Maker as
provided by applicable law now or hereafter in effect. This Section 4.3 will
control all agreements between Maker and Payee.

      4.4 Use of Funds. Maker hereby warrants, represents and covenants that no
funds disbursed hereunder shall be used for personal, family or household
purposes.



      4.5 Unconditional Payment. Maker is and shall be obligated to pay
principal, interest and any and all other amounts which become payable hereunder
or under the other Loan Documents absolutely and unconditionally and without any
abatement, postponement, diminution or deduction and without any reduction for
counterclaim or setoff. In the event that at any time any payment received by
Payee hereunder shall be deemed by a court of competent jurisdiction to have
been a voidable preference or fraudulent conveyance under any bankruptcy,
insolvency or other debtor relief law, then the obligation to make such payment
shall survive any cancellation or satisfaction of this Note or return thereof to
Maker and shall not be discharged or satisfied with any prior payment thereof or
cancellation of this Note, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof, and such payment
shall be immediately due and payable upon demand.

      4.6 GOVERNING LAW. THIS NOTE SHALL BE INTERPRETED, CONSTRUED AND ENFORCED
ACCORDING TO THE LAWS OF THE STATE IN WHICH THE SECURITY PROPERTY IS LOCATED.

      4.7 WAIVER OF JURY TRIAL. MAKER, TO THE FULL EXTENT PERMITTED BY LAW,
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THE DEBT EVIDENCED BY THIS NOTE OR ANY CONDUCT, ACT OR OMISSION OF
PAYEE OR MAKER, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS,
MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH
PAYEE OR MAKER, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE.

      4.8 Secondary Market. Payee may sell, transfer and deliver the Loan
Documents to one or more investors in the secondary mortgage market. In
connection with such sale, Payee may retain or assign responsibility for
servicing the loan evidenced by this Note or may delegate some or all of such
responsibility and/or obligations to a servicer, including, but not limited to,
any subservicer or master servicer, on behalf of the investors. All references
to Payee herein shall refer to and include, without limitation, any such
servicer, to the extent applicable.

      4.9 Dissemination of Information. If Payee determines at any time to sell,
transfer or assign this Note, the Security Instrument and the other Loan
Documents, and any or all servicing rights with respect thereto, or to grant
participations therein (the "Participations") or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement (the "Securities"), Payee may
forward to each purchaser, transferee, assignee, servicer, participant,
investor, or their respective successors in such Participations and/or
Securities (collectively, the "Investor") or any Rating Agency rating such
Securities, each prospective Investor and each of the foregoing's respective
counsel, all documents and information which Payee now has or may hereafter
acquire relating to the debt evidenced by this Note and to Maker, any guarantor,
any indemnitor and the Security Property,



which shall have been furnished by Maker, any guarantor or any indemnitor as
Payee determines necessary or desirable.

                      ARTICLE V -- MISCELLANEOUS PROVISIONS

      5.1 Miscellaneous. The terms and provisions hereof shall be binding upon
and inure to the benefit of Maker and Payee and their respective heirs,
executors, legal representatives, successors, successors-in-title and assigns,
whether by voluntary action of the parties or by operation of law. As used
herein, the terms "Maker" and "Payee" shall be deemed to include their
respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties or
by operation of law. If Maker consists of more than one person or entity, each
shall be jointly and severally liable to perform the obligations of Maker under
this Note. All personal pronouns used herein, whether used in the masculine,
feminine or neuter gender, shall include all other genders; the singular shall
include the plural and vice versa. Titles of articles and sections are for
convenience only and in no way define, limit, amplify or describe the scope or
intent of any provisions hereof. Time is of the essence with respect to all
provisions of this Note. This Note and the other Loan Documents contain the
entire agreements between the parties hereto relating to the subject matter
hereof and thereof and all prior agreements relative hereto and thereto which
are not contained herein or therein are terminated.

      5.2 Maker's Tax Identification Number is 20-1676647.

             [THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]



      IN WITNESS WHEREOF, Maker has executed this Note as of the date first
written above.

                                     MAKER:

                                     COLE LZ GLENDALE AZ, LLC,
                                     a Delaware limited liability company

                                     By: Cole REIT Advisors II, LLC,
                                         a Delaware limited liability company,
                                         its manager

                                         By: /S/ John M. Pons
                                             -----------------------------------
                                             John M. Pons, Senior Vice President



                                           Schedule A



                             AUTO DRAFT INFORMATION

If you would like to sign up for our automatic payment drafting service, fill
out and return the enclosed authorization form along with a voided check and
mail to the address listed below. Please continue to send your monthly payments
until you receive written confirmation that the auto-draft service has begun.
You will receive written notification confirming your auto-draft setup and first
auto-draft date within 7 business days of the 15th of the month submitted.

NOTE: REQUESTS MUST BE RECEIVED BY THE 15TH TO BE SET UP FOR THE FOLLOWING
MONTH.

WACHOVIA SECURITIES
Attention: Customer Service Department
8739 Research Drive - URP4
Charlotte, NC 28288-1075



WACHOVIA
SECURITIES

                                 AUTO DRAFT FORM

I hereby request and authorize Wachovia Bank, National Association, doing
business as Wachovia Securities ("Wachovia Securities"), to draft my account
specified below made payable to the order of Wachovia Securities located in
Charlotte, NC, provided there are sufficient funds in said account to pay the
same upon presentation. I agree that your rights in respect to each such draft
shall be the same as if it were a check drawn on Wachovia Securities and signed
personally by me. This authorization is to remain in effect until revoked by me
in writing and until Wachovia Securities actually receives such notice. I agree
that Wachovia Securities shall be fully protected in honoring any such drafts.

LOAN NUMBER                               NAME OF BORROWING ENTITY
- ------------------------------------      ----------------------------
Wachovia Loan # (9 digits)                Borrower Name
BANK'S ROUTING NUMBER FROM CHECK          ACCOUNT # TO BE DRAFTED
- ------------------------------------      ----------------------------
Bank Routing Number (9 digits)            Bank Account # (from check)
NAME OF BANK TO BE DRAFTED                LOCATION OF THE BANK
- ------------------------------------      ----------------------------
Name of Bank                              City and State

                  PLEASE INCLUDE A VOIDED CHECK WITH THIS FORM

                                 [VOIDED CHECK]

BORROWER'S SIGNATURE                                      BORROWER'S NAME
- -----------------------------------------------------     ---------------
Authorized Signature (as it appears on bank documents)    Print Name
                                                          TODAY'S DATE
                                                          ---------------
                                                          Date

DAY OF MONTH PAYMENT WILL DRAFT                           BORROWER'S FAX NUMBER
- ------------------------------------                      ----------------------
Draft Date (Payment due date)                             Fax #

TERMS AND CONDITIONS

EFFECTIVE DATE OF DRAFT: The draft will occur on the payment due date, unless
otherwise agreed upon by borrower and servicer. The borrower will receive a
confirmation letter to insure auto-draft set-up and to confirm draft date.

REVOCATION OF THIS AUTHORITY: The authority of Wachovia Securities to transfer
funds from the borrowers account will not cease until Wachovia Securities
receives written notification revoking this authorization agreement. Wachovia
Securities must receive this notice at least 15 days prior to the date on which
you wish the arrangement to end.

DISHONOR: Wachovia Securities shall be under no liability whatsoever if a
transfer of funds cannot be made, whether or not such failure is caused by the
act of omission of the borrower. INSUFFICIENT FUNDS: If the automatic withdrawal
is returned due to insufficient funds both Wachovia Securities and the
borrower's financial institution may assess a fee.

ERRORS: The borrower has the right to have the amount of any incorrect deduction
immediately corrected by the borrower's financial institution provided the
borrower sends the appropriate notice to the financial institution.

AMOUNT OF DRAFT: Wachovia Securities will withdraw the amount of the current
monthly receivable. This amount may vary due to escrow analyses, interest rate
changes or reserve requirements as applicable.

ACH ROUTING NUMBER: Please contact the financial institution from which the
money will be drafted for this information.

Wachovia Securities is the trade name under which Wachovia Corporation conducts
its investment banking, capital markets and institutional securities business
through First Union Securities, Inc. ("FUSI"), Member NYSE, NASD, SIPC, and
through other bank and non-bank and broker-dealer subsidiaries of Wachovia
Corporation.

EX-10.8

                                                                   Exhibit 10.8

            ASSIGNMENT OF PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

         TEACHERS' RETIREMENT SYSTEM OF THE STATE OF KENTUCKY, AS SELLER

                                       AND

                             SERIES A, LLC, AS BUYER

      ASSIGNOR, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, does hereby assign all of its right, title and
interest in that certain Purchase Agreement and Escrow Instructions described
herein, to ASSIGNEE and its successors and assigns. The Purchase Agreement and
Escrow Instructions is described as follows:

      DATE OF AGREEMENT:         September 1, 2005

      ORIGINAL BUYER:            Series A, LLC

      ASSIGNED TO:               Cole WG  St. Louis MO Portfolio, LLC

      PROPERTY ADDRESS:          500 HOWDERSHELL ROAD, FLORISSANT, ST. LOUIS
                                 6071 TELEGRAPH ROAD, ST. LOUIS, MO
                                 11590 GRAVOIS ROAD, ST. LOUIS, MO

      ASSIGNOR acknowledges that it is not released from any and all obligations
or liabilities under said Purchase Agreement and Escrow Instructions with the
exception of the earnest money deposit which is currently in escrow.

      ASSIGNEE hereby agrees to assume and be responsible for all obligations
and liabilities under said Purchase Agreement and Escrow Instructions. This
Assignment shall be in full force and effect upon its full execution.

      Executed this 1st day of November, 2005.

ASSIGNOR:                                  ASSIGNEE:

SERIES A, LLC                              COLE WG ST. LOUIS MO PORTFOLIO, LLC

                                           By: Cole REIT Advisors II, LLC
By: /S/ John M. Pons                           its Manager
    -----------------
    John M. Pons
    Authorized Officer

                                               By: /S/ John M. Pons
                                                   --------------------
                                                   John M. Pons
                                                   Senior Vice President





                               PURCHASE AGREEMENT

                             AND ESCROW INSTRUCTIONS

                                     BETWEEN

                         TEACHERS' RETIREMENT SYSTEM OF

                              THE STATE OF KENTUCKY

                                    AS SELLER

                                       AND

                                  SERIES A, LLC

                                    AS BUYER

                               September 1, 2005

05-163081.1
Walgreens
St.Louis, MO Portfolio



                   PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

DATED:                Dated to be effective as of September 1, 2005 (the
                      "Effective Date").

PARTIES:              This Purchase Agreement and Escrow Instructions is between
                      Teachers' Retirement System of the State of Kentucky as
                      "Seller", and Series A, LLC, as "Buyer".

      WHEREAS, as of the Effective Date, Seller is the fee title owner of
certain improved real properties located at (i) 6071 Telegraph Road, St. Louis,
Missouri (the "Telegraph Road Property"), (ii) 11590 Gravois Road, St. Louis,
Missouri (the "Gravois Road Property"), and (iii) 500 Howdershell Road,
Florissant, Missouri (the "Howdershell Road Property"), as such real properties
are legally described on Exhibits A-1, A-2 and A-3 attached hereto (each a "Real
Property" and collectively, the "Real Properties");

      WHEREAS, as of the Effective Date, each Real Property is improved with a
building containing approximately 15,120 square feet (each a "Building" and
collectively, the "Buildings") which Buildings are leased to Walgreen Co.
("Tenant") in accordance with written leases (each a "Lease" and collectively,
the "Leases"). The Real Properties, the Buildings, the improvements to the Real
Properties (the "Improvements"), the personal property, if any, of Seller
located on the Real Properties and Seller's interest in the Leases and all
rents, issues and profits due or to become due thereunder are hereinafter
collectively referred to as the "Properties"; and

      WHEREAS, Buyer desires to purchase the Properties from Seller and Seller
desires to sell the Properties to Buyer free and clear of all liens, all as more
particularly set forth in this Purchase Agreement and Escrow Instructions (the
"Agreement").

      NOW THEREFORE, in consideration of the promises set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Seller and Buyer (the "Parties" or a "Party")
hereby agree as follows:

      1. INCORPORATION OF RECITALS. All of the foregoing Recitals are hereby
incorporated as agreements of the Parties.

      2. BINDING AGREEMENT. This Agreement constitutes a binding agreement
between Seller and Buyer for the sale and purchase of the Properties subject to
the terms set forth in this Agreement. Subject to the limitations set forth in
this Agreement, this Agreement shall bind and inure to the benefit of the
Parties and their respective successors and assigns. This Agreement supersedes
all other written or verbal agreements between the Parties concerning any
transaction embodied in this Agreement. No claim of waiver or modification
concerning the provision of this Agreement shall be made against a Party unless
based upon a written instrument signed by such Party.

05-163081.1
Walgreens
St.Louis, MO Portfolio



      3. INCLUSIONS IN PROPERTIES.

            (a) The Properties. The term "Properties" shall also include the
following:

                  (1) all tenements, hereditaments and appurtenances pertaining
to the Real Properties;

                  (2) all interest of Seller, if any, in mineral, water and
irrigation rights, if any, running with or otherwise pertaining to the Real
Properties;

                  (3) all interest, if any, of Seller in any road adjoining the
Real Properties;

                  (4) all interest, if any, of Seller in any award made or to be
made or settlement in lieu thereof for damage to the Properties by reason of
condemnation, eminent domain or exercise of police power;

                  (5) all of Seller's interest in the Buildings, the
Improvements and any other improvements and fixtures on the Real Properties;

                  (6) all of Seller's interest, if any, in any equipment,
machinery and personal property on or used in connection with the Real
Properties (the "Personalty");

                  (7) the Leases and security deposits, if any, now or hereafter
due thereunder; and,

                  (8) all of Seller's interest, to the extent transferable, in
all permits and licenses (the "Permits"), warranties, contractual rights and
intangibles (including rights to the name of the improvements as well as
architectural/engineering plans) with respect to the operation, maintenance,
repair or improvement of the Properties (the "Contracts").

            (b) The Transfer Documents. Except for the Personalty which shall be
transferred by that certain bill of sale from Seller to Buyer, a specimen of
which is attached hereto as Exhibit B (the "Bill of Sale"), the Leases, each of
which is to be transferred by that certain assignment and assumption of lease, a
specimen of which is attached hereto as Exhibit C (the "Assignments of Leases"),
the Permits and Contracts which are to be transferred by that certain assignment
agreement, a specimen of which is attached hereto as Exhibit D (the "Assignment
Agreement"), all components of each of the Properties shall be transferred and
conveyed by execution and delivery of Seller's special warranty deed, a specimen
of which is attached hereto as Exhibit E (the "Deeds"). The Bill of Sale, the
Assignments of Leases, the Assignment Agreement and the Deeds are hereinafter
collectively referred to as the "Transfer Documents".

      4. PURCHASE PRICE. The price to be paid by Buyer to Seller for the
Properties is SIXTEEN MILLION EIGHT HUNDRED SIXTY THOUSAND FOUR HUNDRED
SIXTY-FIVE and NO/100 DOLLARS ($16,860,465.00) (the "Purchase Price"), payable
as follows:

05-163081.1
Walgreens
St.Louis, MO Portfolio

                                       2


            (a) One Hundred Fifty Thousand and no/100 Dollars ($150,000.00)
earnest money (the "Earnest Money Deposit") to be deposited in escrow with
Lawyers Title Insurance Company, 1850 North Central Avenue, Suite 300, Phoenix,
Arizona 85004, Attention: Allen Brown ("Escrow Agent") within five (5) business
days of the delivery of a fully-executed original of this Agreement to Escrow
Agent (the "Opening of Escrow") by Buyer, which Earnest Money Deposit is to be
held by Escrow Agent until released to Seller or Buyer as provided herein or
paid to Seller at close of escrow ("COE"); and

            (b) Sixteen Million Seven Hundred Ten Thousand Four Hundred
Sixty-five and no/100 Dollars ($16,710,465.00) in additional cash, or other
immediately available funds (as may be increased or decreased by such sums as
are required to take into account any additional deposits, prorations, credits,
or other adjustments required by this Agreement), to be deposited in escrow with
Escrow Agent on or before COE (the "Additional Funds") which is to be held by
Escrow Agent until cancellation of this Agreement as provided herein or paid to
Seller at COE.

      5. DISPOSITION OF EARNEST MONEY DEPOSIT. Seller and Buyer hereby instruct
Escrow Agent to place the Earnest Money Deposit in a federally insured
interest-bearing passbook account on behalf of Seller and Buyer. The Earnest
Money Deposit and interest thereon shall be applied as follows:

            (a) if Buyer cancels this Agreement as Buyer is so entitled to do as
provided in this Agreement, the Earnest Money Deposit and all interest earned to
the effective date of withdrawal shall be paid immediately to Buyer;

            (b) if the Earnest Money Deposit is forfeited by Buyer pursuant to
this Agreement, such Earnest Money Deposit and all interest earned to the date
of withdrawal shall be paid to Seller as Seller's agreed and total liquidated
damages, it being acknowledged and agreed that it would be difficult or
impossible to determine Seller's exact damages; and

            (c) if escrow closes, the Earnest Money Deposit and all interest
earned to COE shall be credited to Buyer, automatically applied against the
Purchase Price and paid to Seller at COE.

      6. PRELIMINARY TITLE REPORTS AND OBJECTIONS. Within ten (10) days after
the Opening of Escrow, Escrow Agent shall deliver current Preliminary Title
Reports (the "Reports") for an ALTA extended coverage title insurance policy
(each an "Owner's Policy" and collectively, the "Owner's Policies") on each of
the Properties to Buyer and Seller. Each Report shall show the status of title
to the Property corresponding thereto as of the date of such Report and shall
also describe the requirements of Escrow Agent for the issuance of the Owner's
Policy with respect to such Property as described herein. The cost of standard
Owner's Policies shall be paid by Buyer. Buyer shall pay any additional costs
for an extended coverage policy and any endorsements required by Buyer. In
addition to the Reports, Escrow Agent shall simultaneously deliver to Buyer
legible copies of all documents identified in Part Two of Schedule B of the
Reports. If Buyer is dissatisfied with any exception to title as shown in the
Reports, then Buyer may either cancel this Agreement by giving written notice of
cancellation to Escrow Agent (i) on or before expiration of the Study Period (as
defined below) or (ii) ten (10) days from Buyer's receipt of the Reports,
whichever is later, whereupon the Earnest Money Deposit plus interest

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shall be returned to Buyer together with all documents deposited in escrow by
Buyer, or Buyer may provisionally accept the title subject to Seller's agreement
(Seller being under no obligation to agree) to cause the removal of any
disapproved exceptions or objections, in which case Seller shall (at its sole
cost) remove the exceptions or objections (or, if acceptable to Buyer, obtain
title insurance endorsements over the exceptions and objections) before COE.
Seller shall notify Buyer in writing within five (5) days after receiving
Buyer's written notice of disapproval of any exception, if Seller does not
intend to remove (or endorse over) any such exception and/or objection. Seller's
lack of response shall be deemed as Seller's intention to not remove the
objectionable exceptions (or obtain title insurance endorsements over said
exceptions and objections, if acceptable to Buyer) prior to COE. In the event
any Report is amended to include new exceptions that are not set forth in a
prior Report, Buyer shall have until the later of (i) the expiration of the
Study Period, or (ii) the date seven (7) days after Buyer's receipt of the
amended Report and copies of the documents identified in the new exceptions or
new requirements, within which to cancel this Agreement and receive a refund of
the Earnest Money Deposit plus interest or to provisionally accept the title
subject to Seller's agreement (Seller being under no obligation to agree) to
cause the removal of any disapproved exceptions or objections. If Seller serves
notice to Buyer that Seller does not intend to remove such exceptions and
objections before COE, Buyer shall, within ten (10) days thereafter, notify
Seller and Escrow Agent in writing of Buyer's election to either (i) terminate
this Agreement, whereupon the Earnest Money Deposit plus interest shall be
returned to Buyer and all obligations shall terminate, or (ii) Buyer may waive
such objections and the transaction shall close as scheduled. If written notice
of dissatisfaction as to such new exceptions is not timely given by Buyer to
Seller, then Buyer shall be deemed to have disapproved of the condition of the
title of the Properties as shown by the Reports, and shall have elected to
terminate this Agreement.

      7. BUYER'S STUDY PERIOD.

            (a) The Study Period. Buyer shall have until the later of 5:00 p.m.
MST on the thirtieth (30th) day after the Opening of Escrow or thirty (30) days
from Buyer's receipt of all deliveries of Studies (as defined herein) (the
"Study Period"), at Buyer's sole cost, within which to conduct and approve any
investigations, studies or tests deemed necessary by Buyer, in Buyer's sole
discretion, to determine the feasibility of acquiring the Properties (the
"Studies"). The Studies shall include, but not be limited to, Buyer's right to:
(i) review and approve the Surveys (as defined below), the Leases and the
Contracts; (ii) meet and confer with Tenant; and, (iii) obtain, review and
approve environmental studies of the Real Properties and Buildings.

            (b) Right of Entry. Subject to the prior rights of the Tenant of the
Properties and the terms of the Leases, Seller hereby grants to Buyer and
Buyer's agents, employees and contractors the right to enter upon the
Properties, at any time or times during the Study Period, to conduct the
Studies. In consideration therefor, Buyer shall and does hereby agree to
indemnify and hold Seller harmless from any and all liabilities, claims, losses
or damages, including, but not limited to, court costs and attorneys' fees,
which may be incurred by Seller as a direct result of the Studies. Buyer's
indemnity and hold harmless obligation shall survive cancellation of this
Agreement or COE.

            (c) Cancellation. Unless Buyer so notifies Seller or Escrow Agent,
in writing, on or before the end of the Study Period of Buyer's acceptance of
the Studies and waiver of the

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contingencies as set forth in this Section 7, this Agreement shall be canceled
and the Earnest Money Deposit plus interest shall be returned immediately to
Buyer and, except as otherwise provided in this Agreement, neither of the
Parties shall have any further liability or obligation under this Agreement.

      8. DELIVERY OF STUDIES.

            (a) Deliveries to Buyer. Seller agrees to deliver to Buyer
contemporaneously with the Opening of Escrow all information in Seller's
possession or control relating to the leasing, operating, maintenance,
construction, repair, zoning (including any zoning verification letters),
platting, engineering, soil tests, water tests, environmental tests,
construction (including a copy of the Certificate of Occupancy for each of the
Properties), master planning, architectural drawings and like matters regarding
the Properties, all at no cost to Buyer. The foregoing deliveries shall include,
but not be limited to, copies of: (i) all of the Leases and all of the owner's
title insurance policies delivered to Seller; (ii) a list of all claims or suits
by or against Seller regarding the Properties for the last thirty-six (36)
months; (iii) each of the site plans with respect to the Properties attached to
the Leases; and (iv) any other documents or other information in the possession
of Seller or its agents pertaining to the Properties that Buyer may reasonably
request in writing.

            (b) Delivery by Buyer. If this Agreement is canceled for any reason,
except Seller's willful default hereunder, Buyer agrees to deliver to Seller
upon payment by Seller to Buyer of Buyer's cost thereof, copies of those Studies
which Buyer may have elected to obtain.

      9. THE SURVEYS. Buyer, at Buyer's cost, may cause certified ALTA surveys
of the Real Properties, Buildings and Improvements (each a "Survey" and
collectively, the "Surveys") to be completed by a surveyor licensed in the State
of Missouri and deposited with Escrow Agent, whereupon the legal description in
the Survey shall control over the applicable description in Exhibits A-1, A-2 or
A-3 attached hereto to the extent they may be inconsistent. Each Survey shall
set forth the legal description and boundaries of the Property shown thereon and
all easements, encroachments and improvements thereon. Seller shall furnish
Buyer with a copy of each of the surveys Seller obtained in connection with its
prior purchase of the Properties.

      10. IRS SECTION 1445. Seller shall furnish to Buyer in escrow by COE a
sworn affidavit (the "Non-Foreign Affidavit") stating under penalty of perjury
that Seller is not a "foreign person" as such term is defined in Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). If
Seller does not timely furnish the Non-Foreign Affidavit, Buyer may withhold (or
direct Escrow Agent to withhold) from the Earnest Money Deposit and/or the
Additional Funds, an amount equal to the amount required to be so withheld
pursuant to Section 1445(a) of the Code, and such withheld funds shall be
deposited with the Internal Revenue Service as required by such Section 1445(a)
and the regulations promulgated thereunder. The amount withheld, if any, shall
nevertheless be deemed to be part of the Purchase Price paid to Seller.

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      11. DELIVERY OF POSSESSION. Seller shall deliver possession of the
Properties to Buyer at COE subject only to the rights of Tenant under the Leases
as approved by Buyer as part of the Studies and the easements reflected in the
Reports.

      12. CONDITIONS PRECEDENT.

            (a) Buyer's Conditions Precedent. In addition to all other
conditions precedent set forth in this Agreement, Buyer's obligations to perform
under this Agreement and to close escrow are expressly subject to the following:

                  (1) the delivery by Seller to Escrow Agent, for delivery to
Buyer at COE, of the executed original Transfer Documents;

                  (2) the issuance of the Owner's Policies (or a written
commitment therefor) subject only to those matters approved or deemed approved
by Buyer pursuant to this Agreement;

                  (3) the delivery by Seller to Buyer at COE of all security
deposits and pre-paid/abated rents under the Leases, if any, in the form of a
credit in favor of Buyer against the Additional Funds;

                  (4) the deposit by Seller with Buyer prior to expiration of
the Study Period of executed original estoppel certificates reasonably
acceptable to Buyer, in Tenant's standard form, without any punch list items
remaining, executed by Tenant with respect to each of the Leases; (5) the
deposit with Escrow Agent and Buyer prior to the expiration of the Study Period
of an executed waiver by Tenant of any right of first refusal under each of the
Leases;

                  (6) the deposit with Escrow Agent of executed affidavits of
Seller and such other documentation as may be reasonably required by Escrow
Agent to allow for the deletion of the mechanics' lien exception from each of
the Owner's Policies;

                  (7) the delivery by Seller to Buyer of a copy of each of the
Certificates of Occupancy for the Improvements;

                  (8) the delivery by Seller to Buyer of a copy of Seller's
owner's title insurance policies for each of the Properties;

                  (9) the deposit with Escrow Agent of letters from Seller to
Tenant requesting that future rent under each of the Leases be paid to Buyer;
and

                  (10) delivery to Buyer of originals of the Leases, the
Contracts, and Permits, if any, in the possession of Seller or Seller's agents
and any correspondence with respect thereto, together with such non-proprietary
leasing and property manuals, files and records which are material in connection
with the continued operation, leasing and maintenance of the Properties.

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If the foregoing conditions have not been satisfied by the specified date or COE
as the case may be, then Buyer shall have the right, at Buyer's sole option, by
giving written notice to Seller and Escrow Agent, to cancel this Agreement,
whereupon the Earnest Money Deposit plus interest shall be paid immediately by
Escrow Agent to Buyer and, except as otherwise provided in this Agreement,
neither of the Parties shall have any further liability or obligation under this
Agreement.

            (b) Seller's Conditions Precedent. In addition to all other
conditions precedent set forth in this Agreement, Seller's obligations to
perform under this Agreement and to close escrow are expressly subject to the
following:

                  (1) Seller's receipt of an executed written waiver from Tenant
of its right of first refusal under each of the Leases;

                  (2) the COE with respect to all three of the Properties in one
contemporaneous closing transaction such that Seller shall be under no
obligation to close with respect to any one of the Properties without a
contemporaneous closing of the other two Properties; it being specifically
agreed that Buyer's termination of this Agreement with respect to any one or
more Properties during the Study Period or for any other reason permitted herein
shall constitute a termination with respect to all three Properties.
Notwithstanding the foregoing, the event Tenant exercises its right of first
refusal with respect to any one or more of the Properties, this Agreement shall
continue with respect to the remaining Properties with a corresponding reduction
in the Purchase Price pursuant to the agreed allocation of the Purchase Price
among the three Properties as set forth herein.

      13. SELLER'S WARRANTIES. Seller hereby represents and warrants to Buyer as
of the Effective Date and shall be deemed to represent again as of COE (unless
an intervening event occurs which causes such representation or warranty to
become untrue or inaccurate as of the COE and Seller so informs Buyer in writing
thereof prior to COE) that:

            (a) intentionally omitted;

            (b) to Seller's knowledge, but without investigation or inquiry, no
notice of violation has been issued with regard to any applicable regulation,
ordinance, requirement, covenant, condition or restriction relating to the
present use or occupancy of any of the Properties by any person, authority or
agency having jurisdiction;

            (c) to Seller's knowledge, but without investigation or inquiry,
there are no intended public improvements which will or could result in any
charges being assessed against any of the Properties which will result in a lien
upon such Property;

            (d) to Seller's knowledge, but without investigation or inquiry,
there is no impending or contemplated condemnation or taking by inverse
condemnation of any of the Properties, or any portion thereof, by any
governmental authorities;

            (e) to Seller's knowledge, but without investigation or inquiry,
there are no suits or claims pending or to Seller's knowledge, but without
investigation or inquiry, threatened with respect to or in any manner affecting
any of the Properties, nor does Seller know of any

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circumstances which should or could reasonably form the basis for any such suits
or claims which have not been disclosed in writing to Buyer by Seller;

            (f) Seller has not entered into and there is not existing any other
agreement, written or oral, under which Seller is or could become obligated to
sell any of the Properties, or any portion thereof, to a third party other than
Tenant pursuant to the right of first refusal granted in the Leases, and Seller
will not enter into nor execute any such agreement without Buyer's prior written
consent;

            (g) Seller has not and will not, without the prior written consent
of Buyer, take any action before any governmental authority having jurisdiction
thereover, the object of which would be to change the present zoning of or other
land-use limitations, upon any of the Properties, or any portion thereof, or its
potential use, and, to Seller's knowledge but without investigation or inquiry,
there are no pending proceedings, the object of which would be to change the
present zoning or other land-use limitations;

            (h) the execution of this Agreement and the performance of Seller's
obligations hereunder will not violate any agreement to which Seller is a party;

            (i) Seller has full power and authority to execute, deliver and
perform under this Agreement as well as under the Transfer Documents, specimens
of which are attached hereto as Exhibits;

            (j) prior to COE or any earlier termination of this Agreement,
Seller will not enter into or execute any employment, management or service
contract with respect to any of the Real Properties without Buyer's prior
written consent, which consent shall not be unreasonably withheld, provided that
any such contract so entered by Seller with Buyer's consent shall provide that
such contract can be terminated by Seller, or Seller's successor, at any time
without penalty, upon not more than thirty (30) days' prior written notice to
the other party thereto. When any such contracts are fully executed, Seller
shall deliver a copy thereof to Buyer;

            (k) no default of Seller exists under any of the Contracts and, to
Seller's knowledge, but without investigation or inquiry, no default of the
other parties exists under any of the Contracts. Between the Effective Date and
COE, or any earlier termination of this Agreement, Seller, without Buyer's prior
written consent which consent will not be unreasonably withheld, shall not
amend, modify or terminate any Contract or waive any substantial right
thereunder;

            (l) intentionally omitted;

            (m) no consent of any third party (other than Tenant's waiver of its
right of first refusal) is required in order for Seller to enter into this
Agreement and perform Seller's obligations hereunder. Without limiting the
generality of the foregoing, to Seller's knowledge, but without investigation or
inquiry, no consent of any third party is required in order for Seller to assign
to Buyer the Contracts or the Leases;

            (n) except for any item to be prorated at COE in accordance with
this Agreement or to be paid by Tenant pursuant to the terms of the Leases, all
bills or other charges,

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costs or expenses arising out of or in connection with or resulting from
Seller's use, ownership, or operation of the Properties up to COE shall be paid
in full by Seller;

            (o) all general real estate taxes, assessments and personal property
taxes that have become due with respect to the Properties (except for those that
will be paid by Tenant or prorated at COE) have been paid or will be so paid by
Seller prior to COE;

            (p) between the Effective Date and COE or any earlier termination of
this Agreement, Seller shall not execute or enter into any lease with respect to
any of the Properties, or terminate, amend, modify, extend or waive any rights
under any of the Leases without Buyer's prior written consent, which consent may
be withheld at Buyer's discretion;

            (q) from the Effective Date hereof until COE or the earlier
termination of this Agreement, Seller shall (i) perform in all material
respects, its obligations under the Leases, (ii) not amend, modify or waive any
material rights under the Leases, and (iii) maintain the existing or comparable
insurance coverage, if any, for the Improvements which Seller is obligated to
maintain under the Leases;

            (r) other than as set forth in the environmental reports furnished
to Buyer by Seller, Seller has no actual knowledge (but Seller has conducted no
investigation or inquiry) that there exists or has existed, and Seller itself
has not caused any generation, production, location, transportation, storage,
treatment, discharge, disposal, release or threatened release upon, under or
about any of the Properties of any Hazardous Materials. "Hazardous Materials"
shall mean any flammables, explosives, radioactive materials, hazardous wastes,
hazardous and toxic substances or related materials, asbestos or any material
containing asbestos (including, without limitation, vinyl asbestos tile), or any
other substance or material, defined as a "hazardous substance" by any federal,
state, or local environmental law, ordinance, rule or regulation including,
without limitation, the Federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, the Federal Hazardous
Materials Transportation Act, as amended, the Federal Resource Conservation and
Recovery Act, as amended, and the rules and regulations adopted and promulgated
pursuant to each of the foregoing;

            (s) other than as set forth in the environmental reports furnished
to Buyer by Seller, to Seller's actual knowledge, but without investigation or
inquiry, there is not now, nor has there ever been, on or in any of the
Properties underground storage tanks, any asbestos-containing materials or any
polychlorinated biphenyls, including those used in hydraulic oils, electric
transformers, or other equipment. Seller hereby assigns to Buyer, effective as
of COE, all claims, counterclaims, defenses, or actions, whether at common law,
or pursuant to any other applicable federal or state or other laws which Seller
may have against any third parties relating to the existence of any Hazardous
Materials in, at, on, under or about the Properties (including Hazardous
Materials released on the Properties prior to COE and continuing in existence on
the Properties at COE);

            (t) to Seller's knowledge, but without investigation or inquiry,
there are no proceedings pending for the increase of the assessed valuation of
any of the Real Properties;

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            (u) should Seller receive notice or knowledge of any information
regarding any of the matters set forth in this Section 13 after the Effective
Date and prior to COE, Seller will immediately notify Buyer of the same in
writing;

            (v) the execution, delivery and performance of this Agreement and
the Transfer Documents, specimens of which are attached hereto as Exhibits, have
not and will not constitute a breach or default under any other agreement, law
or court order under which Seller is a party or may be bound; and

            (w) all representations made in this Agreement by Seller shall
survive the execution and delivery of this Agreement and COE for a period of one
(1) year following COE.

      14. BUYER'S WARRANTIES. Buyer hereby represents to Seller as of the
Effective Date and again as of COE that:

            (a) Buyer has full power and authority to execute, deliver and
perform under this Agreement as well as under the Transfer Documents, specimens
of which are attached hereto as Exhibits;

            (b) there are no actions or proceedings pending or to Buyer's
knowledge, after due inquiry, threatened against Buyer which may in any manner
whatsoever affect the validity or enforceability of this Agreement or any of the
documents, specimens of which are attached hereto as Exhibits;

            (c) the execution, delivery and performance of this Agreement and
the Transfer Documents, specimens of which are attached hereto as Exhibits, have
not and will not constitute a breach or default under any other agreement, law
or court order under which Buyer is a party or may be bound;

            (d) should Buyer receive notice or knowledge of any information
regarding any of the matters set forth in this Section 14 after the Effective
Date and prior to COE, Buyer will promptly notify Seller of the same in writing;
and

            (e) all representations made in this Agreement by Buyer shall
survive the execution and delivery of this Agreement and COE for a period of one
(1) year following COE.

      15. RENTS AND DEPOSITS. Seller and Buyer agree that, in addition to all
other conditions and covenants contained herein, Seller shall deposit with Buyer
and Escrow Agent on the day immediately prior to COE Tenant's security deposits
and advance rents paid/abatements, if any, and a statement as to the date to
which all rents have been paid. Notwithstanding the foregoing, prepaid rent for
the month in which COE occurs shall be prorated between the Parties at closing.

      16. BROKER'S COMMISSION. Concerning any brokerage commission, the Parties
agree as follows:

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            (a) the Parties warrant to one another that they have not dealt with
any finder, broker or realtor in connection with this Agreement except Klarfeld
Real Estate Co., Inc. ("Klarfeld") and Commercial Real Estate Advisors, LLC
("Advisors");

            (b) if any person shall assert a claim to a finder's fee or
brokerage commission on account of alleged employment as a finder or broker in
connection with this Agreement (including Karfeld and/or Advisors), the Party
under whom the finder or broker is claiming shall indemnify and hold the other
Party harmless from and against any such claim and all costs, expenses and
liabilities incurred in connection with such claim or any action or proceeding
brought on such claim, including, but not limited to, counsel and witness fees
and court costs in defending against such claim. The provisions of this
subsection shall survive cancellation of this Agreement or COE; and

            (c) Seller shall be responsible for payment of a commission to
Klarfeld in an amount equal to $295,058.00 and Seller shall be responsible for
payment of a commission to Advisors in an amount equal to $168,605.00, which
commissions shall be paid at COE in accordance with the separate written
agreement between Seller, Klarfeld and Advisors.

      17. CLOSE OF ESCROW. COE shall be on or before 5:00 p.m. MST on the
thirtieth (30th) day after the expiration of the Study Period or such earlier
date as Buyer may choose by giving not less than five (5) days prior written
notice to Seller and Escrow Agent. Buyer may extend the COE date for up to an
additional thirty (30) days upon delivery of written notice to extend the COE
date to Escrow Agent prior to the original COE date and by depositing an
additional One Hundred Fifty Thousand and no/100 Dollars ($150,000.00) of
earnest money with Escrow Agent. For purposes of this Agreement, any additional
earnest money deposited with Escrow Agent pursuant to this Section 17 shall be
added to and become a part of the Earnest Money Deposit.

      18. ASSIGNMENT. This Agreement may not be assigned by Seller without the
prior written consent of Buyer which consent shall not be unreasonably withheld.
Buyer may assign its rights under this Agreement to an affiliate of Buyer
without seeking or obtaining Seller's consent. Such assignment shall not become
effective until the assignee executes an instrument whereby such assignee
expressly assumes each of the obligations of Buyer under this Agreement,
including specifically, without limitation, all obligations concerning the
Earnest Money Deposit. No assignment shall release or otherwise relieve Buyer
from any obligations hereunder.

      19. RISK OF LOSS. Seller shall bear all risk of loss, damage or taking of
any of the Properties which may occur prior to COE. In the event of any loss,
damage or taking prior to COE, Buyer may, at Buyer's sole option, by written
notice to Seller and Escrow Agent, cancel this Agreement whereupon the Earnest
Money Deposit plus interest shall be paid immediately by Escrow Agent to Buyer
and, except as otherwise provided in this Agreement, neither of the Parties
shall have any further liability or obligation hereunder. In the alternative,
Buyer may attempt to negotiate an appropriate downward adjustment of the
Purchase Price. If Seller and Buyer cannot agree upon such a downward adjustment
within a reasonable period (not to exceed ten (10) days from the date Buyer
receives notice of the loss) Buyer may cancel this Agreement as provided above.
If Buyer waives any such loss or damage to the Properties and closes escrow,

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Seller shall at COE and as a condition precedent thereto, pay Buyer or credit
Buyer against the Additional Funds the amount of any insurance or condemnation
proceeds, or assign to Buyer, as of COE and in a form acceptable to Buyer, all
rights or claims for relief to the same provided the Purchase Price is not
affected thereby.

      20. REMEDIES.

            (a) Seller's Breach. If Seller breaches this Agreement, Buyer may,
at Buyer's sole option, either: (i) by written notice to Seller and Escrow
Agent, cancel this Agreement whereupon the Earnest Money Deposit plus interest
shall be paid immediately by Escrow Agent to Buyer and, except as otherwise
provided in this Agreement, neither of the Parties shall have any further
liability or obligation hereunder; or, (ii) seek specific performance against
Seller in which event COE shall be automatically extended as necessary.
Notwithstanding the foregoing, if specific performance is unavailable as a
remedy to Buyer because of Seller's affirmative acts, Buyer shall be entitled to
pursue all rights and remedies available at law or in equity.

            (b) Buyer's Breach. If Buyer breaches this Agreement, as its sole
remedy Seller shall be entitled to retain the Earnest Money Deposit in
accordance with subsection 5(b) as Seller's agreed and total liquidated damages.
Seller hereby waives any right to seek any equitable or legal remedies against
Buyer.

      21. ATTORNEYS' FEES. If there is any litigation to enforce any provisions
or rights arising herein in accordance with Section 20(a), the unsuccessful
party in such litigation, as determined by the court, agrees to pay the
successful party, as determined by the court, all costs and expenses, including,
but not limited to, reasonable attorneys' fees incurred by the successful party,
such fees to be determined by the court.

      22. NOTICES.

            (a) Addresses. Except as otherwise required by law, any notice
required or permitted hereunder shall be in writing and shall be given by
personal delivery, or by deposit in the U.S. Mail, certified or registered,
return receipt requested, postage prepaid, addressed to the Parties at the
addresses set forth below, or at such other address as a Party may designate in
writing pursuant hereto, or tested telex, or telegram, or telecopies (fax), or
any express or overnight delivery service (e.g., Federal Express), delivery
charges prepaid:

if to Seller:                    Teachers Retirement System of Kentucky
                                 Attn: Edward T. Wilson
                                 Capstone Realty Advisors, LLC
                                 642 South 4th Avenue, Suite 100
                                 Louisville, Kentucky 40202
                                 Tel.: (502) 581-9912
                                 Fax: (502) 583-0708

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with copies to:                  Leo F. Camp, Esq.
                                 Wyatt, Tarrant & Combs, LLP
                                 500 W. Jefferson Street, Suite 2700
                                 Louisville, Kentucky 40202
                                 Tel.:  (502) 562-7552
                                 Fax:  (502) 589-0309

if to Buyer:                     Series A, LLC
                                 2555 E. Camelback Road, Suite 400
                                 Phoenix, AZ  85016
                                 Attn: Legal Department
                                 Tel.: (602) 778-8700
                                 Fax: (602) 778-8767

with copies to:                  Bennett Wheeler Lytle & Cartwright, PLC
                                 3838 N. Central Avenue, Suite 1120
                                 Phoenix, AZ  85012
                                 Attn: Kevin T. Lytle, Esq.
                                 Tel.: (602) 445-3434
                                 Fax: (602) 266-9119

If to Escrow Agent:              Lawyers Title Insurance Company
                                 1850 North Central Avenue, Suite 300
                                 Phoenix, AZ 85004
                                 Attn:    Allen Brown
                                 Tel.: (602) 287-3500
                                 Fax: (602) 263-0433

            (b) Effective Date of Notices. Notice shall be deemed to have been
given on the date on which notice is delivered, if notice is given by personal
delivery, telex, telegrams or telecopies, and on the date of deposit in the
mail, if mailed or deposited with the overnight carrier, if used. Notice shall
be deemed to have been received on the date on which the notice is received, if
notice is given by personal delivery, and on the second (2nd) day following
deposit in the U.S. Mail, if notice is mailed. If escrow has opened, a copy of
any notice given to a party shall also be given to Escrow Agent by regular U.S.
Mail or by any other method provided for herein.

      23. CLOSING COSTS.

            (a) Closing Costs. Seller and Buyer agree to pay closing costs as
indicated in this Agreement and in the escrow instructions attached hereto as
Exhibit F, and by this reference incorporated herein (the "Escrow
Instructions"). At COE, Seller shall pay (i) the costs of releasing all liens,
judgments, and other encumbrances that are to be released and of recording such
releases, (ii) one-half of the fees and costs due Escrow Agent for its services
provided

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St.Louis, MO Portfolio


                                       13


Seller's share shall not exceed $2,250.00, and (iii) all other costs to be paid
by Seller under this Agreement. At COE, Buyer shall pay (i) the transfer tax
associated with the sale of the Properties, if any, (ii) all premiums and
expenses related to issuance of the Reports and the Owner's Policies, (iii) all
Survey charges, (iv) all costs and expenses related to Buyer's environmental
examination of the Properties, and (v) one-half of the fees and costs due Escrow
Agent for its services. Except as otherwise provided for in this Agreement,
Seller and Buyer will each be solely responsible for and bear all of their own
respective expenses, including, without limitation, expenses of legal counsel,
accountants, and other advisors incurred at any time in connection with pursuing
or consummating the transaction contemplated herein. All prorations shall be
calculated through escrow as of COE based upon the latest available information,
including, without limitation, a credit to Buyer for any rent prepaid by Tenant
for the period beginning with and including the date on which the closing occurs
through and including the last day of the month in which the closing occurs. All
other credits to Buyer shall be similarly prorated. Any other closing costs not
specifically designated as the responsibility of either Party in the Escrow
Instructions or in this Agreement shall be paid by Seller and Buyer according to
the usual and customary allocation of the same in Missouri commercial practice.
Seller agrees that all closing costs payable by Seller shall be deducted from
Seller's proceeds otherwise payable to Seller at COE. Buyer shall deposit with
Escrow Agent sufficient cash to pay all of Buyer's closing costs. Except as
provided in this Section 23(a), Seller and Buyer shall each bear their own costs
in regard to this Agreement.

            (b) Post-Closing Adjustment. If after COE, the parties discover any
errors in adjustments and apportionments or additional information becomes
available which would render the closing prorations materially inaccurate, the
same shall be corrected as soon after their discovery as possible. The provision
of this Section 23(b) shall survive COE except that no adjustment shall be made
later than two (2) months after COE unless prior to such date the Party seeking
the adjustment shall have delivered a written notice to the other Party
specifying the nature and basis for such claim. In the event that such claim is
valid, the Party against whom the claim is sought shall have ten (10) days in
which to remit any adjustment due.

            (c) Instructions. This Agreement, together with the Escrow
Instructions, shall constitute escrow instructions for the transaction
contemplated herein. Such Escrow Instructions shall be construed as applying
principally to Escrow Agent's employment.

      24. ESCROW CANCELLATION CHARGES. If escrow fails to close because of
Seller's default, Seller shall be liable for any cancellation of Escrow Agent
charges not to exceed $4,500.00. If escrow fails to close because of Buyer's
default, Buyer shall be liable for any cancellation charges of Escrow Agent. If
escrow fails to close for any other reason, Seller and Buyer shall each be
liable for one-half of any cancellation charges of Escrow Agent. The provisions
of this Section 24 shall survive cancellation of this Agreement.

      25. APPROVALS. Concerning all matters in this Agreement requiring the
consent or approval of any Party, the Parties agree that any such consent or
approval shall not be unreasonably withheld unless otherwise provided in this
Agreement.

      26. ALLOCATION OF PURCHASE PRICE AMONG PROPERTIES. Subject to the
provisions of Section 12(b)(2), and for purposes of allocating the Purchase
Price among the three

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St.Louis, MO Portfolio


                                       14


Properties for purposes of Walgreens' right of first refusal, transfer tax
purposes, affidavits of value and/or consideration, and other proper purposes in
connection with COE, Seller and Buyer agree that the $16,860,465 Purchase Price
shall be allocated among the Properties as follows:

                                 
(a) Telegraph Road Property     --     $5,201,549

(b) Gravois Road Property       --     $6,325,581

(c) Howdershell Road Property   --     $5,333,335



      27. ADDITIONAL ACTS. The Parties agree to execute promptly such other
documents and to perform such other acts as may be reasonably necessary to carry
out the purpose and intent of this Agreement.

      28. GOVERNING LAW/JURISDICTION/VENUE. This Agreement shall be governed by
and construed or enforced in accordance with the laws of the State of Missouri.
In regard to any litigation which may arise in regard to this Agreement, the
Parties shall and do hereby submit to the jurisdiction of and the Parties hereby
agree that the proper venue shall be in the United States District Court for the
District of Missouri in St. Louis and in the state courts in the county in which
the respective Property is located.

      29. CONSTRUCTION. The terms and provisions of this Agreement represent the
results of negotiations among the Parties, each of which has been represented by
counsel of its own choosing, and neither of which has acted under any duress or
compulsion, whether legal, economic or otherwise. Consequently, the terms and
provisions of this Agreement shall be interpreted and construed in accordance
with their usual and customary meanings, and the Parties each hereby waive the
application of any rule of law which would otherwise be applicable in connection
with the interpretation and construction of this Agreement that ambiguous or
conflicting terms or provisions contained in this Agreement shall be interpreted
or construed against the Party whose attorney prepared the executed Agreement or
any earlier draft of the same.

      30. TIME OF ESSENCE. Time is of the essence of this Agreement. However, if
this Agreement requires any act to be done or action to be taken on a date which
is a Saturday, Sunday or legal holiday, such act or action shall be deemed to
have been validly done or taken if done or taken on the next succeeding day
which is not a Saturday, Sunday or legal holiday, and the successive periods
shall be deemed extended accordingly.

      31. INTERPRETATION. If there is any specific and direct conflict between,
or any ambiguity resulting from, the terms and provisions of this Agreement and
the terms and provisions of any document, instrument or other agreement executed
in connection herewith or in furtherance hereof, including any Exhibits hereto,
the same shall be consistently interpreted in such manner as to give effect to
the general purposes and intention as expressed in this Agreement which shall be
deemed to prevail and control.

      32. HEADINGS. The headings of this Agreement are for reference only and
shall not limit or define the meaning of any provision of this Agreement.

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                                       15


      33. FAX AND COUNTERPARTS. This Agreement may be executed by facsimile
and/or in any number of counterparts. Each party may rely upon any facsimile or
counterpart copy as if it were one original document.

      34. INCORPORATION OF EXHIBITS BY REFERENCE. All Exhibits to this Agreement
are fully incorporated herein as though set forth at length herein.

      35. SEVERABILITY. If any provision of this Agreement is unenforceable, the
remaining provisions shall nevertheless be kept in effect.

      36. SELLER'S ACCEPTANCE. If a fully-executed original of this Agreement
has not been delivered by Seller to Buyer by 5:00 p.m. M.S.T. on __________,
August ____, 2005, for subsequent delivery to Escrow Agent, this Agreement shall
automatically be deemed revoked and null and void.

      37. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the Parties and supersedes all prior agreements, oral or written, with respect
to the subject matter hereof. The provisions of this Agreement shall be
construed as a whole and not strictly for or against any Party.

      IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of
the Effective Date.

SELLER:                          TEACHERS' RETIREMENT SYSTEM OF
                                  THE STATE OF KENTUCKY, an independent
                                  agency and instrumentality of the Commonwealth
                                  of Kentucky

                                 By: /S/ Gary L. Harbin
                                     ------------------------------
                                 Its: Executive Secretary

BUYER:                           SERIES A, LLC,
                                   an Arizona limited liability company

                                 By: /S/ Blair D. Koblenz
                                     ------------------------------
                                     Blair D. Koblenz
                                 Its:Executive Vice President

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St.Louis, MO Portfolio


                                       16


                            ESCROW AGENT'S ACCEPTANCE

      The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this _____ day of August, 2005, which for
the purposes of this Agreement shall be deemed to be the date of Opening of
Escrow. Escrow Agent hereby accepts the engagement to handle the escrow
established by this Agreement in accordance with the terms set forth in this
Agreement.

                                 LAWYERS TITLE INSURANCE COMPANY

                                 By: /S/ Allen S. Brown
                                     ------------------------------

                                 Name: Allen S. Brown
                                 Title: Escrow Agent

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St.Louis, MO Portfolio


                                       17


                         AMENDMENT TO PURCHASE AGREEMENT

      This Amendment to Purchase Agreement (this "Amendment") is made and
entered into effective as of the 15th day of September, 2005, by and between
TEACHERS' RETIREMENT SYSTEM OF THE STATE OF KENTUCKY ("Seller") and SERIES A,
LLC ("Buyer") and provides as follows:

                                   WITNESSETH:

      WHEREAS, Seller and Buyer entered into that certain Purchase Agreement
dated as of September 1, 2005 (the "Purchase Agreement"); and

      WHEREAS, Seller and Buyer desire to amend the Purchase Agreement as
hereinafter set forth.

      NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties hereto hereby agree as follows:

      1. Section 4 of the Purchase Agreement is hereby amended by deleting the
entirety thereof and substituting the following in lieu thereof:

            4.    PURCHASE PRICE. The price to be paid by Buyer to Seller for
                  the Properties is SIXTEEN MILLION FOUR HUNDRED THOUSAND and
                  NO/100 DOLLARS ($16,400,000.00) (the "Purchase Price"),
                  payable as follows:

                  One Hundred Fifty Thousand and no/100 Dollars ($150,000.00)
                  earnest money (the "Earnest Money Deposit") to be deposited in
                  escrow with Lawyers Title Insurance Company, 1850 North
                  Central Avenue, Suite 300, Phoenix, Arizona 85004, Attention:
                  Allen Brown ("Escrow Agent") within five (5) business days of
                  the delivery of a fully-executed original of this Agreement to
                  Escrow Agent (the "Opening of Escrow") by Buyer, which Earnest
                  Money Deposit is to be held by Escrow Agent until released to
                  Seller or Buyer as provided herein or paid to Seller at close
                  of escrow ("COE"); and

                  Sixteen Million Two Hundred Fifty Thousand and No/100 Dollars
                  ($16,250,000.00) in additional cash, or other immediately
                  available funds (as may be increased or decreased by such sums
                  as are required to take into account any additional deposits,
                  prorations, credits, or other adjustments required by this
                  Agreement), to be deposited in escrow with Escrow Agent on or
                  before COE (the "Additional Funds") which is to be held by
                  Escrow Agent until cancellation of this Agreement as provided
                  herein or paid to Seller at COE.

      2. Section 26 of the Purchase Agreement is hereby amended by deleting the
entirety thereof and substituting the following in lieu thereof:



            26.   ALLOCATION OF PURCHASE PRICE AMONG PROPERTIES. Subject to the
                  provisions of Section 12(b)(2), and for purposes of allocating
                  the Purchase Price among the three Properties for purposes of
                  Walgreens' right of first refusal, transfer tax purposes,
                  affidavits of value and/or consideration, and other proper
                  purposes in connection with COE, Seller and Buyer agree that
                  the $16,400,000 Purchase Price shall be allocated among the
                  Properties as follows:

                  Telegraph Road Property     --       $5,059,426

                  Gravois Road Property       --       $6,152,942

                  Howdershell Road Property   --       $5,187,632

      3. Except as specifically amended herein, all of the terms and provisions
of the Purchase Agreement are hereby ratified and affirmed to be in full force
and effect as of the date hereof. To the extent of any conflict between the
Purchase Agreement and this Amendment, the terms and provisions of this
Amendment shall govern and control.

      4. This Amendment may be executed in one or more counterparts, each of
which shall be an original, but all of which when taken together shall
constitute one and the same instrument binding on all parties. Delivery of a
signed counterpart by facsimile transmission shall be effective as delivery of a
manually signed counterpart of this Agreement.

      IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date set forth above.

BUYER:                               SELLER:

SERIES A, LLC, an Arizona limited    TEACHERS' RETIREMENT SYSTEM OF THE STATE OF
liability company                    KENTUCKY, an independent agency and
                                     instrumentality of the Commonwealth of
                                     Kentucky

By: /S/ John M. Pons
    ---------------------
     John M. Pons
     Its Authorized Officer          By: /S/ Gary L. Harbin
                                         -------------------
                                     Printed Name: Gary L. Harbin
                                     Its: President

                                       2


                     SECOND AMENDMENT TO PURCHASE AGREEMENT

      This Second Amendment to Purchase Agreement (this "Amendment") is made and
entered into effective as of the 3rd day of October, 2005, by and between
TEACHERS' RETIREMENT SYSTEM OF THE STATE OF KENTUCKY ("Seller") and SERIES A,
LLC ("Buyer") and provides as follows:

                                   WITNESSETH:

      WHEREAS, Seller and Buyer entered into that certain Purchase Agreement
dated as of September 1, 2005 and amended pursuant to that Amendment to Purchase
Agreement dated as of September 28, 2005 (as amended, the "Purchase Agreement");
and

      WHEREAS, Seller and Buyer desire to amend the Purchase Agreement as
hereinafter set forth.

      NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties hereto hereby agree as follows:

      1. Section 7(a) of the Purchase Agreement is hereby amended by deleting
the entirety thereof and substituting the following in lieu thereof:

                  The Study Period. Buyer shall have until 5:00 p.m. MST on
                  October 5, 2005 (the "Study Period"), at Buyer's sole cost,
                  within which to conduct and approve any investigations,
                  studies or tests deemed necessary by Buyer, in Buyer's sole
                  discretion, to determine the feasibility of acquiring the
                  Properties (the "Studies"). The Studies shall include, but not
                  be limited to, Buyer's right to: (i) review and approve the
                  Surveys (as defined below), the Leases and the Contracts; (ii)
                  meet and confer with Tenant; and, (iii) obtain, review and
                  approve environmental studies of the Real Properties and
                  Buildings.

      2. Section 17 of the Purchase Agreement is hereby amended by deleting the
entirety thereof and substituting the following in lieu thereof:

                  COE shall be on or before 5:00 p.m. MST on November 2, 2005 or
                  such earlier date as Buyer may choose by giving not less than
                  five (5) days prior written notice to Seller and Escrow Agent.
                  Buyer may extend the COE date for up to an additional thirty
                  (30) days upon delivery of written notice to extend the COE
                  date to Escrow Agent prior to the original COE date and by
                  depositing an additional One Hundred Fifty Thousand and no/100
                  Dollars ($150,000.00) of earnest money with Escrow Agent. For
                  purposes of this Agreement, any additional earnest money
                  deposited with Escrow Agent pursuant to this Section 17 shall
                  be added to and become a part of the Earnest Money Deposit.

      3. Except as specifically amended herein, all of the terms and provisions
of the Purchase Agreement are hereby ratified and affirmed to be in full force
and effect as of the date hereof. To the extent of any conflict between the
Purchase Agreement and this Amendment, the terms and provisions of this
Amendment shall govern and control.



         4. This Amendment may be executed in one or more counterparts, each of
which shall be an original, but all of which when taken together shall
constitute one and the same instrument binding on all parties. Delivery of a
signed counterpart by facsimile transmission shall be effective as delivery of a
manually signed counterpart of this Agreement.

      IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date set forth above.

BUYER:                               SELLER:

SERIES A, LLC, an Arizona limited    TEACHERS' RETIREMENT SYSTEM OF THE STATE OF
liability company                    KENTUCKY, an independent agency and
                                     instrumentality of the Commonwealth of
                                     Kentucky

By: /S/ John M. Pons
    ---------------------
      John M. Pons
      Its Authorized Officer         By: /S/ Gary L. Harbin
                                         --------------------------
                                     Printed Name: Gary L. Harbin
                                     Its: President

                                       2

EX-10.9

                                                                    EXHIBIT 10.9

              WALGREENS - FLORISSANT, ST. LOUIS (GRAVOIS), ST. LOUIS (TELEGRAPH)
                                                             LOAN NO. 50-2853642

                                 PROMISSORY NOTE

$13,120,000.00                                                  November 2, 2005

      FOR VALUE RECEIVED, the undersigned, COLE WG ST. LOUIS MO PORTFOLIO, LLC,
a Delaware limited liability company ("Maker"), having an address at 2555 East
Camelback Road, Suite 400, Phoenix, Arizona 85016, promises to pay to the order
of WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association
("Payee"), at the office of Payee at Commercial Real Estate Services, 8739
Research Drive URP - 4, NC 1075, Charlotte, North Carolina 28262, or at such
other place as Payee may designate to Maker in writing from time to time, the
principal sum of THIRTEEN MILLION ONE HUNDRED TWENTY THOUSAND AND NO/100 DOLLARS
($13,120,000.00), together with interest on so much thereof as is from time to
time outstanding and unpaid, from the date of the advance of the principal
evidenced hereby and as allocated to Fixed Rate Tranche A and Floating Rate
Tranche B (as each term is hereinafter defined) for each such tranche, at the
Note Rate (as hereinafter defined), together with all other amounts due
hereunder or under the other Loan Documents (as defined herein), in lawful money
of the United States of America, which shall at the time of payment be legal
tender in payment of all debts and dues, public and private.

                        ARTICLE I -- TERMS AND CONDITIONS

      1.1 Definitions. The following terms, as used in this Note, shall have the
following meanings, which meanings shall be applicable equally to the singular
and the plural of the terms defined:

            (a) "Business Day" shall mean a day of the year on which banks are
not required or authorized to close in Charlotte, North Carolina.

            (b) "Determination Date" shall mean a date on which the LIBOR-Based
Rate shall be selected as the applicable interest rate in respect of Floating
Rate Tranche B, which date shall be the day that is two (2) London Business Days
prior to the commencement of an Interest Period or, with respect to the first
Interest Period, the date the Loan shall be advanced by Payee.

            (c) "Extended Maturity Date" shall mean November 11, 2035.

            (d) "Fixed Rate Tranche A" shall mean Ten Million Six Hundred Sixty
Thousand and No/100 Dollars ($10,660,000.00) of the aggregate amount of the Loan
which shall bear interest as set forth in Section 1.3 hereof.

            (e) "Floating Rate Tranche B" shall mean Two Million Four Hundred
Sixty Thousand and No/100 Dollars ($2,460,000.00) of the aggregate amount of the
Loan which shall bear interest at the LIBOR-Based Rate (as hereinafter defined).

            (f) "Interest Period" shall mean initially, the period commencing on
the date hereof and ending on and including the day of the tenth (10th) day of
the calendar month



following the date of this Note, unless principal is advanced on the tenth
(10th) of a month, in which case the first Interest Period shall consist only
such tenth (10th) day. Each Interest Period thereafter shall commence on the
eleventh (11th) day of each calendar month during the term of this Note and
shall end on and include the tenth (10th) day of the next occurring calendar
month. Interest shall accrue from the date on which funds are advanced hereunder
(regardless of the time of day) through and including the day on which funds are
credited pursuant to Section 1.4 hereof.

            (g) "LIBOR-Based Rate" shall mean (i) for the first Interest Period,
an interest rate per annum equal to six and nine one-hundredths percent (6.09%)
and (ii) for each succeeding Interest Period until Floating Rate Tranche B is
satisfied, an interest rate per annum equal at all times to two hundred (200)
basis points above the one-month LIBOR, in each case as determined by Payee
prior to the commencement of each Interest Period.

            (h) "LIBOR" shall mean with respect to each day during each Interest
Period, the rate for U.S. dollar deposits of that many months maturity as
reported on Telerate page 3750 as of 11:00 a.m., London time, on the second
London Business Day before the relevant Interest Period begins (or if not so
reported, then as determined by Payee from another recognized source or
interbank quotation), rounded up to the nearest one-eighth of one percent
(1/8%).

            (i) "Loan" shall mean that certain loan made by Payee to Maker in
respect of the Property which is evidenced by this Note and secured by, among
other things, the Security Instrument and all other Loan Documents.

            (j) "Loan Documents" shall mean the Security Instrument, this Note
and all other documents now or hereafter evidencing, securing, guarantying,
modifying or otherwise relating to the indebtedness evidenced hereby.

            (k) "London Business Day" shall mean a day of the year on which
dealings in United States dollars are carried on in the London interbank market
and banks are not required or authorized to close in London or in New York, New
York.

            (l) "Maturity Date" shall mean November 11, 2015.

            (m) "Monthly Payment Amount" shall mean the sum of (A) from and
including the First Payment Date through the Maturity Date, an amount equal to
the interest payable under this Note on the portion allocated as Fixed Rate
Tranche A at the Fixed Interest Rate in the amounts for each such Payment Date
set forth on Annex 1 attached hereto and incorporated herein by this reference
or as provided by Payee to Maker in connection with the initial Fixed Interest
Rate Interest Period, plus (B) through and until Floating Rate Tranche B is
satisfied, an amount equal to the interest payable under this Note on the
portion allocated as Floating Rate Tranche B at the LIBOR-Based Rate pursuant to
the provisions of Section 1.2 hereof. Annex 1 is for reference purposes only and
any payment incorrectly referenced thereon or omitted therefrom shall not limit
or reduce Maker's obligations for actual amounts due under this Note in
accordance with its payment terms, and Maker agrees that Payee may substitute a
replacement Annex 1 in the event the attached does not accurately reflect
Maker's scheduled payment obligations.

            (n) "Optional Prepayment Date" shall mean November 11, 2015.

                                       2


            (o) "Optional Prepayment Determination Date" shall mean September
11, 2015.

            (p) "Security Instrument" shall mean that certain mortgage, deed of
trust or deed to secure debt and security agreement from Maker for the benefit
of Payee, dated of even date herewith, covering property located in St. Louis
County, Missouri.

      Each of the capitalized terms not otherwise defined in this Note shall
have the respective meaning ascribed to it in the Security Instrument of even
date herewith from Maker to Payee.

      1.2 LIBOR-Based Rate; Pay-Down Date. (a) From the date of the advance of
the principal evidenced hereby through the Pay-Down Date (as hereinafter
defined) for Floating Rate Tranche B, Floating Rate Tranche B shall bear
interest at the LIBOR-Based Rate. The LIBOR-Based Rate shall remain in effect,
subject to the provisions hereof, from and including the first day of the
Interest Period to and excluding the last day of the Interest Period for which
it is determined.

            (b) If requested by Payee, Maker shall immediately confirm the
LIBOR-Based Rate and the duration of the applicable Interest Period by
acknowledging receipt of a written confirmation of the LIBOR-Based Rate and
Interest Period delivered by Payee to Maker. Only one Interest Period may be in
effect at any given time.

            (c) Without limiting the effect of any other provision of this Note,
Maker shall pay to Payee on the last day of each and every Interest Period, so
long as and to the extent that Payee (or its source of funds) may directly or
indirectly be required to maintain reserves against "Eurocurrency liabilities"
under Federal Reserve Regulation D (as at any time amended), additional interest
(as determined by Payee and disclosed to Maker) for each such Interest Period at
an interest rate per annum equal, at all times during such Interest Period for
the principal balance of Floating Rate Tranche B, to the excess of (i) the rate
obtained by dividing LIBOR for such Interest Period by a percentage equal to
100% minus the reserve percentage applicable during such Interest Period under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or if more than one such percentage is so applicable, minus the
daily average of such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) for determining the maximum
reserve requirement (including, without limitation, any marginal reserve
requirement) for Payee (or its source of funds) in respect of liabilities or
assets consisting of or including "Eurocurrency liabilities" under Federal
Reserve Regulation D (as at any time amended) having a term equal to such
Interest Period over (ii) LIBOR for such Interest Period. Terms used in
Regulation D shall have the same meanings when used herein. Each such
determination made by Payee and each such notification by Payee to Maker under
this subparagraph of the amount of additional interest payable hereunder shall
be conclusive as to the matters set forth therein.

            (d) In addition to the payment of interest and fees as aforesaid,
Maker shall, from time to time, upon demand by Payee pay to Payee amounts as
shall be sufficient to compensate Payee for (i) any loss, cost, fee, breakage or
other expense incurred or sustained directly or indirectly by reason of the
liquidation or reemployment of deposits or other funds acquired by Payee to fund
or maintain Floating Rate Tranche B during any Interest Period as a

                                       3


result of any prepayment of Floating Rate Tranche B or any portion thereof or
any attempt by Maker to rescind the selection of the LIBOR-Based Rate as the
applicable interest rate for Floating Rate Tranche B and (ii) any increased
costs incurred by Payee, by reason of:

            (x) taxes (or the withholding of amounts for taxes) of any nature
      whatsoever, including, without limitation, income, excise and interest
      equalization taxes (other than United States or state income taxes) as
      well as all levies, imports, duties, or fees whether now in existence or
      as the result of a change in, or promulgation of, any treaty, statute or
      regulation or interpretation thereof, or any directive, guideline or
      otherwise, by a central bank or fiscal authority or any other entity
      (whether or not having the force of law) or a change in the basis of, or
      time of payment of, such taxes and other amounts resulting therefrom;

            (y) any reserve or special deposit requirements against or with
      respect to assets or liabilities or deposits outstanding under LIBOR
      (including, without limitation, those imposed under the Monetary Control
      Act of 1978) currently required by, or resulting from a change in, or the
      promulgation of, such requirements by treaty, statute, regulation,
      interpretation thereof, or any directive, guidelines, or otherwise by a
      central bank or fiscal authority (whether or not having the force of law);
      and

            (z) any other costs resulting from compliance with treaties,
      statutes, regulations, interpretations or any directives or guidelines or
      otherwise, promulgated by or of a central bank or fiscal authority or
      other entity with similar authority (whether or not having the force of
      law).

A certificate as to the amount of any such costs prepared by Payee, signed by an
authorized officer of Payee and submitted to Maker shall be conclusive as to the
matters therein set forth.

      (e) The selection at any time of an interest rate based upon LIBOR shall
be expressly conditioned upon the existence of an adequate and fair means of
determining LIBOR and the absence of any legal prohibition against the charging
of interest based on LIBOR.

      (f) On or prior to February 2, 2006 (the "Pay-Down Date"), Maker shall
fully prepay the principal balance of this Note allocated as Floating Rate
Tranche B. Floating Rate Tranche B shall not be deemed to have been paid and/or
satisfied in full until all such additional costs, in addition to the principal
balance thereof and all interest thereon and all other sums due and payable
under the Loan Documents in regards to Floating Rate Tranche B, shall have been
paid.

      1.3 Note Rate; Computation of Interest. The term "Note Rate" as used in
this Note shall mean (a) for Fixed Rate Tranche A, from the date of this Note
through but not including the Optional Prepayment Date, a rate per annum equal
to five and forty-eight one-hundredths percent (5.48%) (the "Fixed Interest
Rate"), (b) for Floating Rate Tranche B, from the date of this Note through the
Pay-Down Date and satisfaction of Floating Rate Tranche B, a rate per annum
equal to the LIBOR-Based Rate, and (c) from the Optional Prepayment Date through
and including the date this Note is paid in full, a rate per annum equal to the
greater of (i) the Fixed Interest Rate plus two (2%) percent or (ii) the
Treasury Constant Maturity Yield Index (as hereinafter defined) plus two (2%)
percent ((i) or (ii), as applicable, the "Revised Interest Rate"). Interest
shall be

                                       4


computed hereunder based on a 360-day year and based on the actual number of
days elapsed for any period in which interest is being calculated. For purposes
of this Section 1.3, the term "Treasury Constant Maturity Yield Index" shall
mean the average yield for "This Week" as reported by the Federal Reserve Board
in Federal Statistical Release H.15 (519) published during the second full week
preceding the Optional Prepayment Date for instruments having a maturity
coterminous with the remaining term of this Note. If there is no Treasury
Constant Maturity Yield Index for instruments having a maturity coterminous with
the remaining term of this Note, then the index shall be equal to the weighted
average yield to maturity of the Treasury Constant Maturity Yield Indices with
maturities next longer and shorter than such remaining average life to maturity,
calculated by averaging (and rounding upward to the nearest whole multiple of
1/100 of 1% per annum, if the average is not such a multiple) the yields of the
relevant Treasury Constant Maturity Yield Indices (rounded, if necessary, to the
nearest 1/100 of 1% with any figure of 1/200 of 1% or above rounded upward). If
such Release is not available or no longer published, Payee may refer to another
recognized source of financial market information.

      1.4 Payment of Principal and Interest. Payments in federal funds
immediately available at the place designated for payment received by Payee
prior to 2:00 p.m. local time on a day on which Payee is open for business at
said place of payment shall be credited prior to close of business, while other
payments, at the option of Payee, may not be credited until immediately
available to Payee in federal funds at the place designated for payment prior to
2:00 p.m. local time on a day on which Payee is open for business. Interest only
shall be payable in consecutive monthly installments of the Monthly Payment
Amount, beginning on December 11, 2005 (the "First Payment Date"), and
continuing on the eleventh (11th) day of each and every calendar month
thereafter (each, a "Payment Date"). On the Maturity Date or the Optional
Prepayment Date, the entire outstanding principal balance hereof, together with
all accrued but unpaid interest thereon, shall be due and payable in full
provided, however, that in the event that such amounts are not paid on such
date, the Maturity Date shall be extended to the Extended Maturity Date. In
computing the number of days during which interest accrues, the day on which
funds are initially advanced shall be included regardless of the time of day
such advance is made, and the day on which funds are repaid shall be included
unless repayment is credited prior to close of business. Payments in federal
funds immediately available in the place designated for payment received by
Payee prior to 2:00 p.m. local time on a Business Day at said place of payment
shall be credited prior to close of business, while other payments, at the
option of Payee, may not be credited until immediately available to Payee in
federal funds in the place designated for payment prior to 2:00 p.m. local time
at said place of payment on a Business Day.

      1.5 Application of Payments. So long as no Event of Default (as
hereinafter defined) exists hereunder or under any other Loan Document, each
such monthly installment shall be applied, prior to the Optional Prepayment
Date, first, to any amounts hereafter advanced by Payee hereunder or under any
other Loan Document, second, to any late fees and other amounts payable to
Payee, third, to the payment of accrued interest and last to reduction of
principal, and from and after the Optional Prepayment Date, as provided in
Section 2.2 of this Note.

      1.6 Payment of "Short Interest". If the advance of the principal amount
evidenced by this Note is made on a date on or after the first (1st) day of a
calendar month and prior to the eleventh (11th) day of a calendar month, Maker
shall pay to Payee contemporaneously

                                       5


with the execution hereof interest at the Note Rate for a period from the date
hereof through and including the tenth (10th) day of this calendar month. If the
advance of the principal amount evidenced by this Note is made on a date after
the eleventh (11th) day of a calendar month and prior to or on the last day of a
calendar month, Maker shall pay to Payee contemporaneously with the execution
hereof interest at the Note Rate for a period from the date hereof through and
including the tenth (10th) day of the immediately succeeding calendar month.

      1.7 Prepayment; Defeasance.

      (a) This Note may not be prepaid, in whole or in part (except as otherwise
specifically provided herein), at any time prior to the Optional Prepayment
Date. In the event that Maker wishes to have the Security Property (as
hereinafter defined) released from the lien of the Security Instrument prior to
the Optional Prepayment Date, Maker's sole option shall be a Defeasance (as
hereinafter defined) upon satisfaction of the terms and conditions set forth in
Section 1.7(d) hereof. This Note may be prepaid in whole but not in part without
premium or penalty on any of the three (3) Payment Dates occurring immediately
prior to the Maturity Date provided (i) written notice of such prepayment is
received by Payee not more than ninety (90) days and not less than thirty (30)
days prior to the date of such prepayment, and (ii) such prepayment is
accompanied by all interest accrued hereunder through and including the date of
such prepayment and all other sums due hereunder or under the other Loan
Documents. If, upon any such permitted prepayment on any of the three (3)
Payment Dates occurring immediately prior to the Maturity Date, the aforesaid
prior written notice has not been timely received by Payee, there shall be due a
prepayment fee equal to, an amount equal to the lesser of (i) thirty (30) days'
interest computed at the Note Rate on the outstanding principal balance of this
Note so prepaid and (ii) interest computed at the Note Rate on the outstanding
principal balance of this Note so prepaid that would have been payable for the
period from, and including, the date of prepayment through the Maturity Date of
this Note as though such prepayment had not occurred.

      (b) If, prior to the fourth (4th) anniversary of the First Payment Date
(the "Lock-out Expiration Date"), the indebtedness evidenced by this Note shall
have been declared due and payable by Payee pursuant to Article III hereof or
the provisions of any other Loan Document due to a default by Maker, then, in
addition to the indebtedness evidenced by this Note being immediately due and
payable, there shall also then be immediately due and payable a sum equal to the
interest which would have accrued on the principal balance of this Note at the
Note Rate from the date of such acceleration to the Lock-out Expiration Date,
together with a prepayment fee in an amount equal to the Yield Maintenance
Premium (as hereinafter defined) based on the entire indebtedness on the date of
such acceleration. If such acceleration is on or following the Lock-out
Expiration Date, the Yield Maintenance Premium shall also then be immediately
due and payable as though Maker were prepaying the entire indebtedness on the
date of such acceleration. In addition to the amounts described in the two
preceding sentences, in the event of any such acceleration or tender of payment
of such indebtedness occurs or is made on or prior to the first (1st)
anniversary of the date of this Note, there shall also then be immediately due
and payable an additional prepayment fee of three percent (3%) of the principal
balance of this Note. The term "Yield Maintenance Premium" shall mean an amount
equal to the greater of (A) two percent (2.0%) of the principal amount being
prepaid, and (B) the present value of a series of

                                       6


payments each equal to the Payment Differential (as hereinafter defined) and
payable on each Payment Date over the remaining original term of this Note and
on the Maturity Date, discounted at the Reinvestment Yield (as hereinafter
defined) for the number of months remaining as of the date of such prepayment to
each such Payment Date and the Maturity Date. The term "Payment Differential"
shall mean an amount equal to (i) the Note Rate less the Reinvestment Yield,
divided by (ii) twelve (12) and multiplied by (iii) the principal sum
outstanding under this Note after application of the constant monthly payment
due under this Note on the date of such prepayment, provided that the Payment
Differential shall in no event be less than zero. The term "Reinvestment Yield"
shall mean an amount equal to the lesser of (i) the yield on the U.S. Treasury
issue (primary issue) with a maturity date closest to the Maturity Date, or (ii)
the yield on the U.S. Treasury issue (primary issue) with a term equal to the
remaining average life of the indebtedness evidenced by this Note, with each
such yield being based on the bid price for such issue as published in the Wall
Street Journal on the date that is fourteen (14) days prior to the date of such
prepayment set forth in the notice of prepayment (or, if such bid price is not
published on that date, the next preceding date on which such bid price is so
published) and converted to a monthly compounded nominal yield. In the event
that any prepayment fee is due hereunder, Payee shall deliver to Maker a
statement setting forth the amount and determination of the prepayment fee, and,
provided that Payee shall have in good faith applied the formula described
above, Maker shall not have the right to challenge the calculation or the method
of calculation set forth in any such statement in the absence of manifest error,
which calculation may be made by Payee on any day during the fifteen (15) day
period preceding the date of such prepayment. Payee shall not be obligated or
required to have actually reinvested the prepaid principal balance at the
Reinvestment Yield or otherwise as a condition to receiving the prepayment fee.

      (c) Partial prepayments of this Note shall not be permitted, except for
(i) partial prepayments resulting from Payee's election to apply insurance or
condemnation proceeds to reduce the outstanding principal balance of this Note
as provided in the Security Instrument, in which event no prepayment fee or
premium shall be due unless, at the time of either Payee's receipt of such
proceeds or the application of such proceeds to the outstanding principal
balance of this Note, an Event of Default shall have occurred, which Event of
Default is unrelated to the applicable casualty or condemnation, in which event
the applicable prepayment fee or premium shall be due and payable based upon the
amount of the prepayment or (ii) any partial prepayment required on or prior to
the Pay-Down Date pursuant to Section 1.2(f) above, in which event no prepayment
fee or premium shall be due. No notice of prepayment shall be required under the
circumstances specified in subclause (i) of the preceding sentence. No principal
amount repaid may be reborrowed. Any such partial prepayments of principal under
subclause (i) above shall be applied to the unpaid principal balance evidenced
hereby but such application shall not reduce the amount of the fixed monthly
installments required to be paid pursuant to Section 1.4 above. Except as
otherwise expressly provided herein, the prepayment fees provided above shall be
due, to the extent permitted by applicable law, under any and all circumstances
where all or any portion of this Note is paid prior to the Maturity Date,
whether such prepayment is voluntary or involuntary, including, without
limitation, if such prepayment results from Payee's exercise of its rights upon
Maker's default and acceleration of the Maturity Date of this Note (irrespective
of whether foreclosure proceedings have been commenced), and shall be in
addition to any other sums due hereunder or under any of the other Loan
Documents. No tender of a prepayment of this

                                       7


Note with respect to which a prepayment fee is due shall be effective unless
such prepayment is accompanied by the applicable prepayment fee.

            (d) (i) On any Payment Date on or after the later to occur of (x)
      the Lock-out Expiration Date, and (y) the day immediately following the
      date which is two (2) years after the "startup day," within the meaning of
      Section 860G(a)(9) of the Internal Revenue Code of 1986, as amended from
      time to time or any successor statute (the "Code"), of a "real estate
      mortgage investment conduit," within the meaning of Section 860D of the
      Code (a "REMIC Trust"), that holds this Note, and provided no Event of
      Default has occurred hereunder or under any of the other Loan Documents,
      at Maker's option, Payee shall cause the release of the Security Property
      from the lien of the Security Instrument and the other Loan Documents (a
      "Defeasance") upon the satisfaction of the following conditions:

                        (A) Maker shall give not more than ninety (90) days' or
            less than sixty (60) days' prior written notice to Payee specifying
            the date Maker intends for the Defeasance to be consummated (the
            "Release Date"), which date shall be a Payment Date.

                        (B) All accrued and unpaid interest and all other sums
            due under this Note and under the other Loan Documents up to and
            including the Release Date shall be paid in full on or prior to the
            Release Date.

                        (C) Maker shall deliver to Payee on or prior to the
            Release Date:

                        (1) a sum of money in immediately available funds (the
                  "Defeasance Deposit"), equal to the outstanding principal
                  balance of this Note plus an amount, if any, which together
                  with the outstanding principal balance of this Note, shall be
                  sufficient to enable Payee to purchase, through means and
                  sources customarily employed and available to Payee, for the
                  account of Maker, direct, non-callable obligations of the
                  United States of America that provide for payments prior, but
                  as close as possible, to all successive monthly Payment Dates
                  occurring after the Release Date and to the Maturity Date,
                  with each such payment being equal to or greater than the
                  amount of the corresponding installment of principal and/or
                  interest required to be paid under this Note (including, but
                  not limited to, all amounts due on the Maturity Date) for the
                  balance of the term hereof (the "Defeasance Collateral"), each
                  of which shall be duly endorsed by the holder thereof as
                  directed by Payee or accompanied by a written instrument of
                  transfer in form and substance satisfactory to Payee in its
                  sole discretion (including, without limitation, such
                  instruments as may be required by the depository institution
                  holding such securities or the issuer thereof, as the case may
                  be, to effectuate book-entry transfers and pledges through the
                  book-entry facilities of such institution) in order to perfect
                  upon the delivery of the Defeasance Security Agreement (as
                  hereinafter defined) the first priority security interest in
                  the Defeasance Collateral in

                                       8


                  favor of Payee in conformity with all applicable state and
                  federal laws governing granting of such security interests;

                        (2) a pledge and security agreement, in form and
                  substance satisfactory to a prudent lender, creating a first
                  priority security interest in favor of Payee in the Defeasance
                  Collateral (the "Defeasance Security Agreement"), which shall
                  provide, among other things, that any excess received by Payee
                  from the Defeasance Collateral over the amounts payable by
                  Maker hereunder shall be refunded to Maker promptly after each
                  monthly Payment Date;

                        (3) a certificate of Maker certifying that all of the
                  requirements set forth in this Section 1.7(d)(i) have been
                  satisfied;

                        (4) one or more opinions of counsel for Maker in form
                  and substance and delivered by counsel which would be
                  satisfactory to a prudent lender stating, among other things,
                  that (i) Payee has a perfected first priority security
                  interest in the Defeasance Collateral and that the Defeasance
                  Security Agreement is enforceable against Maker in accordance
                  with its terms, (ii) in the event of a bankruptcy proceeding
                  or similar occurrence with respect to Maker, none of the
                  Defeasance Collateral nor any proceeds thereof will be
                  property of Maker's estate under Section 541 of the U.S.
                  Bankruptcy Code or any similar statute and the grant of
                  security interest therein to Payee shall not constitute an
                  avoidable preference under Section 547 of the U.S. Bankruptcy
                  Code or applicable state law, (iii) the release of the lien of
                  the Security Instrument and the pledge of Defeasance
                  Collateral will not directly or indirectly result in or cause
                  any REMIC Trust that then holds this Note to fail to maintain
                  its status as a REMIC Trust and (iv) the defeasance will not
                  cause any REMIC Trust to be an "investment company" under the
                  Investment Company Act of 1940;

                        (5) evidence in writing from the applicable rating
                  agencies to the effect that the collateral substitution will
                  not result in a downgrading, withdrawal or qualification of
                  the respective ratings in effect immediately prior to such
                  defeasance event for any securities issued in connection with
                  the securitization which are then outstanding;

                        (6) a certificate in form and scope acceptable to Payee
                  in its sole discretion from an acceptable accountant
                  certifying that the Defeasance Collateral will generate
                  amounts sufficient to make all payments of principal and
                  interest due under this Note (including the scheduled
                  outstanding principal balance of the Loan due on the Maturity
                  Date);

                        (7) Maker and any guarantor or indemnitor of Maker's
                  obligations under the Loan Documents for which Maker has
                  personal

                                       9


                  liability executes and delivers to Payee such documents and
                  agreements as Payee shall reasonably require to evidence and
                  effectuate the ratification of such personal liability and
                  guaranty or indemnity, respectively;

                        (8) such other certificates, documents or instruments as
                  Payee may reasonably require;

                        (9) payment of all fees, costs, expenses and charges
                  incurred by Payee in connection with the Defeasance of the
                  Security Property and the purchase of the Defeasance
                  Collateral, including, without limitation, all legal fees and
                  costs and expenses incurred by Payee or its agents in
                  connection with release of the Security Property, review of
                  the proposed Defeasance Collateral and preparation of the
                  Defeasance Security Agreement and related documentation, any
                  revenue, documentary, stamp, intangible or other taxes,
                  charges or fees due in connection with transfer of the Note,
                  assumption of the Note, or substitution of collateral for the
                  Security Property shall be paid on or before the Release Date.
                  Without limiting Maker's obligations with respect thereto,
                  Payee shall be entitled to deduct all such fees, costs,
                  expenses and charges from the Defeasance Deposit to the extent
                  of any portion of the Defeasance Deposit which exceeds the
                  amount necessary to purchase the Defeasance Collateral; and

                        (10) in the event the Amendment (as defined in Section
                  4.35 of the Security Instrument) has been executed, evidence
                  satisfactory to Payee that following the Defeasance of this
                  Loan, the minimum debt service coverage ratio for each of the
                  Additional Loans (as defined in Section 4.35 of the Security
                  Instrument) shall be 1.75 to 1.00 and the maximum loan to
                  value percentage for each of the Additional Loans shall be
                  65%.

                        (D) In connection with the Defeasance Deposit, Maker
            hereby authorizes and directs Payee using the means and sources
            customarily employed and available to Payee to use the Defeasance
            Deposit to purchase for the account of Maker the Defeasance
            Collateral. Furthermore, the Defeasance Collateral shall be arranged
            such that payments received from such Defeasance Collateral shall be
            paid directly to Payee to be applied on account of the indebtedness
            of this Note. Any part of the Defeasance Deposit in excess of the
            amount necessary to purchase the Defeasance Collateral and to pay
            the other and related costs Maker is obligated to pay under this
            Section 1.7 shall be refunded to Maker.

            (ii) Upon compliance with the requirements of Section 1.7(d)(i), the
      Security Property shall be released from the lien of the Security
      Instrument and the other Loan Documents, and the Defeasance Collateral
      shall constitute collateral which shall secure this Note and all other
      obligations under the Loan Documents. Payee will, at Maker's expense,
      execute and deliver any agreements reasonably requested by Maker to
      release the lien of the Security Instrument from the Security Property.

                                       10


            (iii) Upon the release of the Security Property in accordance with
      this Section 1.7(d), Maker shall assign all its obligations and rights
      under this Note, together with the pledged Defeasance Collateral, to a
      newly created successor entity which complies with the terms of Section
      1.33 of the Security Instrument designated by Maker and approved by Payee
      in its sole discretion. Such successor entity shall execute an assumption
      agreement in form and substance satisfactory to Payee in its sole
      discretion pursuant to which it shall assume Maker's obligations under
      this Note and the Defeasance Security Agreement. As conditions to such
      assignment and assumption, Maker shall (x) deliver to Payee an opinion of
      counsel in form and substance and delivered by counsel satisfactory to a
      prudent lender stating, among other things, that such assumption agreement
      is enforceable against Maker and such successor entity in accordance with
      its terms and that this Note and the Defeasance Security Agreement, as so
      assumed, are enforceable against such successor entity in accordance with
      their respective terms, and (y) pay all costs and expenses (including, but
      not limited to, legal fees) incurred by Payee or its agents in connection
      with such assignment and assumption (including, without limitation, the
      review of the proposed transferee and the preparation of the assumption
      agreement and related documentation). Upon such assumption, Maker shall be
      relieved of its obligations hereunder, under the other Loan Documents
      other than as specified in Section 1.7(d)(i)(C)(7) above and under the
      Defeasance Security Agreement.

      (e)   (i)   Provided no Event of Default shall have occurred and remain
      uncured, in connection with a Release (as that term is defined in Section
      4.37 of the Security Instrument) and upon satisfaction of the conditions
      set forth in Section 4.37 of the Security Instrument, Maker shall have the
      right at any time after the later to occur of (x) the Lock-out Expiration
      Date, and (y) the day immediately following the date which is two (2)
      years after the "startup day," within the meaning of Section 860G(a) (9)
      of the Code of a REMIC Trust that holds this Note to voluntarily defease a
      portion of the Loan and obtain a release of the lien of the Security
      Instrument as to a Release Parcel (as that term is defined in the Security
      Instrument) by providing Payee with the Partial Defeasance Collateral
      (hereinafter, a "Partial Defeasance Event") upon satisfaction of the
      following conditions precedent:

                  (A) Maker shall provide Payee not less than forty-five (45)
            (but not more than ninety (90)) days notice (or a shorter period of
            time if permitted by Payee in its sole discretion) specifying a date
            (the "Partial Defeasance Date") on which the Partial Defeasance
            Event is to occur;

                  (B) Maker shall pay to Payee (x) all payments of principal and
            interest due on the Loan to and including the Partial Defeasance
            Date and (y) all other sums then due under this Note, the Security
            Instrument and the other Loan Documents;

                  (C) Maker shall deposit the Partial Defeasance Collateral
            (hereinafter defined) into the Defeasance Collateral Account and
            otherwise comply with the provisions of Section 1.7(f) hereof;

                                       11


                  (D) Payee shall prepare, at Maker's sole cost and expense, all
            necessary documents to modify, amend and restate the Note and issue
            two substitute notes, one note having a principal balance equal to
            the Release Amount (as that term is defined in Section 4.37 of the
            Security Instrument) for the applicable Release Parcel, which shall
            be paid pursuant to the provisions of Section 4.37 of the Security
            Instrument (the "Defeased Note"), and the other note having a
            principal balance equal to the excess of (x) the unpaid balance of
            the original principal amount of the Loan, over (y) the amount of
            the Defeased Note (the "Undefeased Note"). The Defeased Note and
            Undefeased Note shall have identical terms as this Note except for
            the principal balance; and, in connection therewith, the Monthly
            Payment Amount and the amount of each such payment applied to
            principal thereafter shall be divided between the Defeased Note and
            the Undefeased Note in the same proportion as the unpaid principal
            balance (in each case immediately after the Partial Defeasance
            Event) of the Defeased Note and the Undefeased Note, as the case may
            be, bears to the aggregate principal balance due under the Defeased
            Note and the Undefeased Note immediately after the Partial
            Defeasance Event. The Defeased Note and the Undefeased Note shall be
            cross defaulted and cross collateralized unless the rating agencies
            shall require otherwise or unless a successor entity that is not an
            affiliate of Maker is established pursuant to Section 1.7(d)(iii)
            hereof. A Defeased Note may not be the subject of any further
            defeasance;

                  (E) Maker shall execute and deliver to Payee a Defeasance
            Security Agreement in respect of the Defeasance Collateral Account
            and the Partial Defeasance Collateral;

                  (F) Maker shall deliver to Payee an opinion of counsel for
            Maker that is standard in commercial lending transactions and
            subject only to customary qualifications, assumptions and exceptions
            opining, among other things, that (1) Payee has a perfected first
            priority security interest in the Partial Defeasance Collateral and
            the Defeasance Collateral Account and that the Defeasance Security
            Agreement is enforceable against Maker in accordance with its terms,
            (2) in the event of a bankruptcy proceeding or similar occurrence
            with respect to Maker, none of the Partial Defeasance Collateral nor
            any proceeds thereof will be Security Property of Maker's estate
            under Section 541 of the U.S. Bankruptcy Code or any similar statute
            and the grant of security interest therein to Payee shall not
            constitute an avoidable preference under Section 547 of the U.S.
            Bankruptcy Code or applicable state law, (3) the release of the lien
            of the Security Instrument on the Release Parcel and the pledge of
            the Partial Defeasance Collateral will not directly or indirectly
            result in or cause any REMIC Trust that then holds the Note to fail
            to maintain its status as a REMIC Trust, and (4) the

                                       12


            defeasance will not cause any REMIC Trust to be an "investment
            company" under the Investment Company Act of 1940;

                  (G) Maker shall deliver to Payee a no-downgrade confirmation
            from the rating agencies with respect to such partial defeasance;

                  (H) Maker shall deliver to Payee a certificate in form and
            scope acceptable to Payee in its sole discretion from an accountant
            which would be acceptable to a reasonably prudent lender certifying
            that the Defeasance Collateral will generate amounts sufficient to
            make all payments of principal and interest due under this Note
            (including the scheduled outstanding principal balance of the Loan
            due on the Maturity Date);

                  (I) Payee shall have received, at Maker's sole cost and
            expense, one or more endorsements to the title insurance policy
            delivered to Payee in connection with the closing of the Loan
            insuring that, after giving effect to the Release, the lien of the
            Security Instrument insured thereunder continues to be a first
            priority lien on the remaining Security Property, subject only to
            Permitted Encumbrances (as defined in the Security Instrument) and
            such other evidence that a reasonably prudent lender may require,
            that the Undefeased Note will continue to be secured by the Security
            Instrument;

                  (J) Maker shall pay all costs and expenses of Payee incurred
            in connection with the Partial Defeasance Event, including Payee's
            reasonable attorneys' fees and expenses;

                  (K) The debt service coverage ratio for the twelve (12) month
            period immediately after the Release with respect to the remaining
            Security Property as applied to the debt service under the
            Undefeased Note shall be equal to or greater than 1.50:1.00;

                  (L) The loan to value ratio with respect to the remaining
            Security Property and the debt evidenced by the Undefeased Note
            shall be less than or equal to 65%; and

                  (M) In the event the Amendment (as defined in Section 4.35 of
            the Security Instrument) has been executed, evidence satisfactory to
            Payee that following the Partial Defeasance Event, the minimum debt
            service coverage ratio for each of the Additional Loans (as defined
            in Section 4.35 of the Security Instrument) shall be 1.75 to 1.00
            and the maximum loan to value percentage for each of the Additional
            Loans shall be 65%.

                                       13


            (ii) If maker has elected to make a partial defeasance and the
      requirements of this section 1.7(E) and section 4.37 Of the security
      instrument have been satisfied, the applicable release parcel shall be
      released from the lien of the security instrument. In connection with the
      release of the lien, maker shall submit to payee, not less than thirty
      (30) days prior to the partial defeasance date (or such shorter time as is
      acceptable to payee in its sole discretion), a release of lien (and
      related Loan Documents) for execution by Payee. Such release shall be in a
      form appropriate in the jurisdiction in which the applicable Release
      Parcel is located and shall contain standard provisions protecting the
      rights of the releasing lender. In addition, Maker shall provide all other
      documentation Payee reasonably requires to be delivered by Maker in
      connection with such release, together with an officer's certificate
      certifying that such documentation (i) is in compliance with all
      applicable legal requirements, and (ii) will effect such release in
      accordance with the terms of the Security Instrument. Maker shall pay all
      costs, taxes and expenses associated with the release of the lien of the
      Security Instrument, including Payee's reasonable attorneys' fees. Maker
      shall cause title to the Release Parcel so released from the lien of the
      Security Instrument to be transferred to and held by a person or entity
      other than Maker. Except as set forth in this Section 1.7, no repayment,
      prepayment or defeasance of all or any portion of the Note shall cause,
      give rise to a right to require, or otherwise result in, the release of
      the lien of the Security Instrument from the Security Property.

            (iii) Upon compliance with the requirements of Section 1.7(e)(i) and
      Section 4.37 of the Security Instrument, the applicable Release Parcel
      shall be released from the lien of the Security Instrument and the other
      Loan Documents, and the Partial Defeasance Collateral shall constitute
      collateral which shall secure the Defeased Note and all other obligations
      under the Loan Documents. Payee will, at Maker's expense, execute and
      deliver any agreements reasonably requested by Maker (x) to release the
      lien of the Security Instrument and the other Loan Documents from the
      applicable Release Parcel and (y) the Maker from all obligations with
      respect to the applicable Release Parcel.

            (iv) Upon the release of the Release Parcel in accordance with this
      Section 1.7(e), Maker may elect to assign, or at Payee's sole and absolute
      discretion, Payee may require Maker to assign, all of its obligations and
      rights under the Defeased Note, together with the pledged Partial
      Defeasance Collateral, to a successor borrower. Such successor borrower
      shall execute an assignment and assumption agreement in form and substance
      satisfactory to Payee in its sole and absolute discretion pursuant to
      which it shall assume Maker's obligations under the Defeased Note and the
      Defeasance Security Agreement. As conditions to such assignment and
      assumption, Maker shall (A) deliver to Payee one or more opinions of
      counsel in form and substance and delivered by counsel which would be
      satisfactory to a prudent Payee stating, among other things, that such
      assignment and assumption agreement is enforceable against Maker and the
      successor borrower in accordance with its terms and that the Defeased
      Note, the Defeasance Security Agreement and the other Loan Documents, as
      so assigned and assumed, are enforceable against the successor borrower in
      accordance with their respective terms, and opining to such other matters
      relating to successor borrower and its organizational structure as Payee
      may require, and (B) pay all fees, costs and expenses incurred by Payee or
      its agents in connection with such assignment and assumption (including,

                                       14


      without limitation, legal fees and expenses and for the review of the
      proposed transferee and the preparation of the assignment and assumption
      agreement and related certificates, documents and instruments and any fees
      payable to any rating agencies and their counsel in connection with the
      issuance of the confirmation referred to in subsection (e)(i)(G) above).
      Upon such assignment and assumption, Maker shall be relieved of its
      obligations hereunder, under the Defeased Note and under the Defeasance
      Security Agreement.

      (f) On or before the date on which Maker delivers the Defeasance
Collateral or Partial Defeasance Collateral, Maker shall open at any institution
which would be acceptable to a prudent lender acting in its reasonable
discretion the defeasance collateral account (the "Defeasance Collateral
Account"). The Defeasance Collateral Account shall contain only (i) Defeasance
Collateral or Partial Defeasance Collateral, and (ii) cash from interest and
principal paid on the Defeasance Collateral or Partial Defeasance Collateral.
All cash from interest and principal payments paid on the Defeasance Collateral
or Partial Defeasance Collateral shall be paid over to Payee on each Payment
Date and applied first to accrued and unpaid interest and then to principal.
Maker shall cause the institution at which the Defeasance Collateral or Partial
Defeasance Collateral is deposited to enter an agreement with Maker and Payee,
satisfactory to Payee in its sole discretion, pursuant to which such institution
shall agree to hold and distribute the Defeasance Collateral or Partial
Defeasance Collateral in accordance with this Note. The Maker or successor
borrower, as applicable, shall be the owner of the Defeasance Collateral Account
and shall report all income accrued on the Defeasance Collateral or Partial
Defeasance Collateral for federal, state and local income tax purposes in its
income tax return. Maker shall prepay all cost and expenses associated with
opening and maintaining the Defeasance Collateral Account. Payee shall not in
any way be liable by reason of any insufficiency in the Defeasance Collateral
Account.

      (g) For purposes herein, "Partial Defeasance Collateral" shall mean direct
non-callable obligations of the United States of America or other obligations
which are "government securities" within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940, to the extent the applicable rating agencies
rating the Secondary Market Transaction (as hereinafter defined) have confirmed
in writing that such obligations will not cause a downgrade, withdrawal or
qualification of the initial, or, if higher, then applicable ratings of the
Secondary Market Transaction, that provide for (i) on or prior to, but as close
as possible to, the Business Day immediately preceding all Payments Dates and
other scheduled payment dates, if any, under the Defeased Note after the Partial
Defeasance Date and up to and including the Maturity Date, and (ii) in amounts
equal to or greater than the scheduled defeasance payments relating to such
Payment Dates.

      (h) For purposes herein, "Secondary Market Transaction" shall mean the
sale, transfer and delivery of the Note and the Loan Documents to one or more
investors in the secondary mortgage market.

      1.8 Security. The indebtedness evidenced by this Note and the obligations
created hereby are secured by, among other things, the Security Instrument. All
of the terms and provisions of the Loan Documents are incorporated herein by
reference. Some of the Loan Documents are to be filed for record on or about the
date hereof in the appropriate public records.

                                       15


                ARTICLE II -- OPTIONAL PREPAYMENT DATE PROVISIONS

      2.1 Optional Prepayment Determination Date. The following subsections
shall apply from and after the Optional Prepayment Determination Date:

      (a) [Reserved].

      (b) For the calendar year in which the Optional Prepayment Determination
Date occurs and for each calendar year thereafter, Maker shall submit to Payee
for Payee's written approval an annual budget (an "Annual Budget") not later
than (i) the Optional Prepayment Determination Date for the calendar year in
which the Optional Prepayment Determination occurs and (ii) sixty (60) days
prior to the commencement of each calendar year thereafter, in form satisfactory
to Payee setting forth in reasonable detail budgeted monthly operating income
and monthly operating capital and other expenses for the Mortgaged Property.
Each Annual Budget shall contain, among other things, limitations on management
fees, third party service fees and other expenses as Maker may reasonably
determine. Payee shall have the right to approve such Annual Budget and in the
event that Payee objects to the proposed Annual Budget submitted by Maker, Payee
shall advise Maker of such objections within fifteen (15) days after receipt
thereof (and deliver to Maker a reasonably detailed description of such
objections) and Maker shall, within three (3) days after receipt of notice of
any such objections, revise such Annual Budget and resubmit the same to Payee.
Payee shall advise Maker of any objections to such revised Annual Budget within
ten (10) days after receipt thereof (and deliver to Maker a reasonably detailed
description of such objections) and Maker shall revise the same in accordance
with the process described in this subsection until Payee approves an Annual
Budget, provided, however, that if Payee shall not advise Maker of its
objections to any proposed Annual Budget within the applicable time period set
forth in this subsection, then such proposed Annual Budget shall be deemed
approved by Payee. Each such Annual Budget approved by Payee in accordance with
terms hereof shall hereinafter be referred to as an "Approved Annual Budget."
Until such time that Payee approves a proposed Annual Budget, the most recently
Approved Annual Budget shall apply; provided, that such Approved Annual Budget
shall be adjusted to reflect actual increases in real estate taxes, insurance
premiums and utilities expenses.

      (c) In the event that Maker must incur an extraordinary operating expense
or capital expense not set forth in the Annual Budget (an "Extraordinary
Expense"), then Maker shall promptly deliver to Payee a reasonably detailed
explanation of such proposed Extraordinary Expense for Payee's approval.

      (d) For the purposes of this Note, "Cash Expenses" shall mean, for any
period, the operating expenses for the operation and maintenance of the
Mortgaged Property as set forth in an Approved Annual Budget to the extent that
such expenses are actually incurred by Maker excluding payments into the Impound
Account and expenses for which Maker shall be reimbursed from, or which shall be
paid for out of, any such account or reserve.

      (e) Notwithstanding the other provisions of this Section 2.1, in the event
that, prior to the Optional Prepayment Determination Date, Maker delivers to
Payee either (i) a written commitment (the "Commitment") for the refinancing of
the loan evidenced by this Note from a Qualified Institutional Lender (as
hereinafter defined), which reasonably provides for the

                                       16


consummation of such refinance prior to the Optional Prepayment Date or (ii)
other evidence in form and substance satisfactory to Payee in its sole
determination of Maker's ability to refinance the loan evidenced by this Note
prior to the Optional Prepayment Date, then, solely in either such event, the
terms of Section 2.1(a), (b), (c) and (d) of this Note shall be inoperative,
provided, however, that upon (x) the failure of such refinance to be consummated
in accordance with the terms of the Commitment or such other evidence, as
applicable, (y) the termination of the Commitment for any reason or (z) any
adverse change in circumstances with respect to Maker or any principals of
Maker, the Mortgaged Property, the proposed lender or otherwise, as determined
by Payee in its sole determination, which, in Payee's reasonable judgment,
significantly decreases the likelihood of such refinance being consummated prior
to the Optional Prepayment Date, the terms of Section 2.1(a), (b), (c) and (d)
of this Note shall immediately become operative and Maker shall immediately
comply with any of the terms thereof which, except for the operation of this
subsection (e), Maker would theretofore have been obligated to comply.
"Qualified Institutional Lender" shall mean a financial institution or other
lender with a long term credit rating which is not less than investment grade.
The determination of whether the conditions set forth in clause (i) or (ii)
above, shall be made and notice of such determination shall be delivered to
Maker, within ten (10) business days following Payee's receipt of the items set
forth in such clauses.

      2.2 Failure to Prepay On or Before Optional Prepayment Date. In the event
that Maker does not prepay the entire principal balance of this Note and any
other amounts outstanding under this Note or any of the other Loan Documents on
or prior to the Optional Prepayment Date, the provisions of Section 2.1(b), (c)
and (d) as set forth above shall remain in full force and effect, and the
following subsections also shall apply:

      (a) From and after the Optional Prepayment Date, interest shall accrue on
the unpaid principal balance from time to time outstanding under this Note at
the Revised Interest Rate. Interest accrued at the Revised Interest Rate and not
paid pursuant to this Section 2.2 shall be deferred and added to the principal
balance of this Note and shall earn interest at the Revised Interest Rate to the
extent permitted by applicable law (such accrued interest is hereinafter
referred to as "Accrued Interest"). All of the unpaid principal balance of this
Note, including, without limitation, any Accrued Interest, shall be due and
payable on the Extended Maturity Date.

      (b) Maker shall be obligated to pay, and Payee shall collect from the Rent
Account (as defined in the Security Instrument) to the extent of funds on
deposit in such account, on the Optional Prepayment Date and on the eleventh
(11th) day of each calendar month thereafter to and including the Extended
Maturity Date the following payments from Rents (as defined in the Security
Instrument) received on or before such day in the listed order of priority:

            (i) First, the payment of the Monthly Payment Amount with interest
      computed at the Fixed Interest Rate;

            (ii) Second, payments to the Impound Account (as defined in the
      Security Instrument) in accordance with the terms and conditions of the
      Security Instrument;

            (iii) [Reserved];

                                       17


            (iv) Fourth, payments for monthly Cash Expenses, less management
      fees payable to affiliates of Maker, pursuant to the terms and conditions
      of the related Approved Annual Budget;

            (v) Fifth, payment for Extraordinary Expenses approved by Payee, if
      any;

            (vi) Sixth, payments to Payee of the balance of the funds then on
      deposit in the Rent Account to be applied to (x) any other amounts due
      under the Loan Documents, (y) Accrued Interest and (z) the reduction of
      the outstanding principal balance of this Note until such principal
      balance is paid in full in whatever proportion and priority as Payee may
      determine.

      (c) Nothing in this Article II shall limit, reduce or otherwise affect
Maker's obligations to make payments of the Monthly Payment Amount (including
interest on the Note as provided in Section 1.3 hereof) payments to the Impound
Account and payments of other amounts due hereunder and under the other Loan
Documents, whether or not Rents (as defined in the Security Instrument) are
available to make such payments.

                             ARTICLE III -- DEFAULT

      3.1 Events of Default. It is hereby expressly agreed that should any
default occur in the payment of principal or interest as stipulated above and
such payment is not made on the date such payment is due, or should any other
default not cured within any applicable grace or notice period occur under any
other Loan Document, then an event of default (an "Event of Default") shall
exist hereunder, and in such event the indebtedness evidenced hereby, including
all sums advanced or accrued hereunder or under any other Loan Document, and all
unpaid interest accrued thereon, shall, at the option of Payee and without
notice to Maker, at once become due and payable and may be collected forthwith,
whether or not there has been a prior demand for payment and regardless of the
stipulated date of maturity.

      3.2 Late Charges. In the event that any payment is not received by Payee
on the date when due, then, in addition to any default interest payments due
hereunder, Maker shall also pay to Payee a late charge in an amount equal to
five percent (5%) of the amount of such overdue payment.

      3.3 Default Interest Rate. So long as any Event of Default exists
hereunder, regardless of whether or not there has been an acceleration of the
indebtedness evidenced hereby, and at all times after maturity of the
indebtedness evidenced hereby (whether by acceleration or otherwise), interest
shall accrue on the outstanding principal balance of this Note, from the date
due until the date credited, at a rate per annum equal to four percent (4%) in
excess of the Note Rate, or, if such increased rate of interest may not be
collected under applicable law, then at the maximum rate of interest, if any,
which may be collected from Maker under applicable law (the "Default Interest
Rate"), and such default interest shall be immediately due and payable.

      3.4 Maker's Agreements. Maker acknowledges that it would be extremely
difficult or impracticable to determine Payee's actual damages resulting from
any late payment or default, and

                                       18


such late charges and default interest are reasonable estimates of those damages
and do not constitute a penalty. The remedies of Payee in this Note or in the
Loan Documents, or at law or in equity, shall be cumulative and concurrent, and
may be pursued singly, successively or together, in Payee's discretion.

      3.5 Maker to Pay Costs. In the event that this Note, or any part hereof,
is collected by or through an attorney-at-law, Maker agrees to pay all costs of
collection, including, but not limited to, reasonable attorneys' fees.

      3.6 Exculpation. Notwithstanding anything in this Note or the Loan
Documents to the contrary, but subject to the qualifications hereinbelow set
forth, Payee agrees that:

      (a) Maker shall be liable upon the indebtedness evidenced hereby and for
the other obligations arising under the Loan Documents to the full extent (but
only to the extent) of the security therefor, the same being all properties
(whether real or personal), rights, estates and interests now or at any time
hereafter securing the payment of this Note and/or the other obligations of
Maker under the Loan Documents (collectively, the "Security Property");

      (b) if a default occurs in the timely and proper payment of all or any
part of such indebtedness evidenced hereby or in the timely and proper
performance of the other obligations of Maker under the Loan Documents, any
judicial proceedings brought by Payee against Maker shall be limited to the
preservation, enforcement and foreclosure, or any thereof, of the liens,
security titles, estates, assignments, rights and security interests now or at
any time hereafter securing the payment of this Note and/or the other
obligations of Maker under the Loan Documents, and no attachment, execution or
other writ of process shall be sought, issued or levied upon any assets,
properties or funds of Maker other than the Security Property, except with
respect to the liability described below in this section; and

            (c) in the event of a foreclosure of such liens, security titles,
estates, assignments, rights or security interests securing the payment of this
Note and/or the other obligations of Maker under the Loan Documents, no judgment
for any deficiency upon the indebtedness evidenced hereby shall be sought or
obtained by Payee against Maker, except with respect to the liability described
below in this section; provided, however, that, notwithstanding the foregoing
provisions of this section, Maker shall be fully and personally liable and
subject to legal action (i) for proceeds paid under any insurance policies (or
paid as a result of any other claim or cause of action against any person or
entity) by reason of damage, loss or destruction to all or any portion of the
Security Property, to the full extent of such proceeds not previously delivered
to Payee, but which, under the terms of the Loan Documents, should have been
delivered to Payee, (ii) for proceeds or awards resulting from the condemnation
or other taking in lieu of condemnation of all or any portion of the Security
Property, to the full extent of such proceeds or awards not previously delivered
to Payee, but which, under the terms of the Loan Documents, should have been
delivered to Payee, (iii) for all tenant security deposits or other refundable
deposits paid to or held by Maker or any other person or entity in connection
with leases of all or any portion of the Security Property which are not applied
in accordance with the terms of the applicable lease or other agreement, (iv)
for rent and other payments received from tenants under leases of all or any
portion of the Security Property paid more than one (1) month in advance, (v)
for rents, issues, profits and

                                       19


revenues of all or any portion of the Security Property received or applicable
to a period after the occurrence of any Event of Default hereunder or under the
Loan Documents, which are not either applied to the ordinary and necessary
expenses of owning and operating the Security Property or paid to Payee, (vi)
for waste committed on the Security Property, damage to the Security Property as
a result of the intentional misconduct or gross negligence of Maker or any of
its principals, officers, general partners or members, any guarantor, any
indemnitor, or any agent or employee of any such person, or any removal of all
or any portion of the Security Property in violation of the terms of the Loan
Documents, to the full extent of the losses or damages incurred by Payee on
account of such occurrence, (vii) for failure to pay any valid taxes,
assessments, mechanic's liens, materialmen's liens or other liens which could
create liens on any portion of the Security Property which would be superior to
the lien or security title of the Security Instrument or the other Loan
Documents, to the full extent of the amount claimed by any such lien claimant
except, with respect to any such taxes or assessments, to the extent that funds
have been deposited with Payee pursuant to the terms of the Security Instrument
specifically for the applicable taxes or assessments and not applied by Payee to
pay such taxes and assessments, (viii) for all obligations and indemnities of
Maker under the Loan Documents relating to hazardous or toxic substances or
radon or compliance with environmental laws and regulations to the full extent
of any losses or damages (including, but not limited to, those resulting from
diminution in value of any Security Property) incurred by Payee as a result of
the existence of such hazardous or toxic substances or radon or failure to
comply with environmental laws or regulations, and (ix) for fraud, material
misrepresentation or failure to disclose a material fact by Maker or any of its
principals, officers, general partners or members, any guarantor, any indemnitor
or any agent, employee or other person authorized or apparently authorized to
make statements, representations or disclosures on behalf of Maker, any
principal, officer, general partner or member of Maker, any guarantor or any
indemnitor, to the full extent of any losses, damages and expenses of Payee on
account thereof.

      References herein to particular sections of the Loan Documents shall be
deemed references to such sections as affected by other provisions of the Loan
Documents relating thereto. Nothing contained in this section shall (1) be
deemed to be a release or impairment of the indebtedness evidenced by this Note
or the other obligations of Maker under the Loan Documents or the lien of the
Loan Documents upon the Security Property, or (2) preclude Payee from
foreclosing the Loan Documents in case of any default or from enforcing any of
the other rights of Payee except as stated in this section, or (3) limit or
impair in any way whatsoever (A) any Indemnity and Guaranty Agreements (the
"Indemnity Agreements") or (B) the Environmental Indemnity Agreement (the
"Environmental Indemnity Agreement"), executed and delivered in connection with
the indebtedness evidenced by this Note or release, relieve, reduce, waive or
impair in any way whatsoever, any obligation of any party to the Indemnity
Agreements or the Environmental Indemnity Agreement.

      Notwithstanding the foregoing, the agreement of Payee not to pursue
recourse liability as set forth in subsection (c) above SHALL BECOME NULL AND
VOID and shall be of no further force and effect (i) in the event of a default
by Maker or Indemnitor (as defined in the Security Instrument) of any of the
covenants set forth in Section 1.13 or Section 1.33 of the Security Instrument,
or (ii) if the Security Property or any part thereof shall become an asset in
(A) a voluntary bankruptcy or insolvency proceeding of Maker, or (B) an
involuntary bankruptcy or insolvency proceeding of Maker which is not dismissed
within sixty (60) days of filing.

                                       20


      Notwithstanding anything to the contrary in this Note, the Security
Instrument or any of the other Loan Documents, Payee shall not be deemed to have
waived any right which Payee may have under Section 506(a), 506(b), 1111(b) or
any other provisions of the U.S. Bankruptcy Code to file a claim for the full
amount of the indebtedness evidenced hereby or secured by the Security
Instrument or any of the other Loan Documents or to require that all collateral
shall continue to secure all of the indebtedness owing to Payee in accordance
with this Note, the Security Instrument and the other Loan Documents.

                        ARTICLE IV -- GENERAL CONDITIONS

      4.1 No Waiver; Amendment. No failure to accelerate the indebtedness
evidenced hereby by reason of default hereunder, acceptance of a partial or past
due payment, or indulgences granted from time to time shall be construed (i) as
a novation of this Note or as a reinstatement of the indebtedness evidenced
hereby or as a waiver of such right of acceleration or of the right of Payee
thereafter to insist upon strict compliance with the terms of this Note, or (ii)
to prevent the exercise of such right of acceleration or any other right granted
hereunder or by any applicable laws; and Maker hereby expressly waives the
benefit of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in conflict
with the foregoing. No extension of the time for the payment of this Note or any
installment due hereunder made by agreement with any person now or hereafter
liable for the payment of this Note shall operate to release, discharge, modify,
change or affect the original liability of Maker under this Note, either in
whole or in part, unless Payee agrees otherwise in writing. This Note may not be
changed orally, but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification or discharge is sought.

      4.2 Waivers. Presentment for payment, demand, protest and notice of
demand, protest and nonpayment and all other notices are hereby waived by Maker.
Maker hereby further waives and renounces, to the fullest extent permitted by
law, all rights to the benefits of any moratorium, reinstatement, marshaling,
forbearance, valuation, stay, extension, redemption, appraisement, exemption and
homestead now or hereafter provided by the Constitution and laws of the United
States of America and of each state thereof, both as to itself and in and to all
of its property, real and personal, against the enforcement and collection of
the obligations evidenced by this Note or the other Loan Documents.

      4.3 Limit of Validity. The provisions of this Note and of all agreements
between Maker and Payee, whether now existing or hereafter arising and whether
written or oral, including, but not limited to, the Loan Documents, are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of demand or acceleration of the maturity of this Note or otherwise,
shall the amount contracted for, charged, taken, reserved, paid or agreed to be
paid ("Interest") to Payee for the use, forbearance or detention of the money
loaned under this Note exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, performance or fulfillment of any
provision hereof or of any agreement between Maker and Payee shall, at the time
performance or fulfillment of such provision shall be due, exceed the limit for
Interest prescribed by law or otherwise transcend the limit of validity
prescribed by applicable law, then, ipso facto, the obligation to be performed
or fulfilled shall be reduced to such limit, and if, from any circumstance
whatsoever, Payee shall ever receive anything of value deemed

                                       21


Interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive Interest shall be applied to the reduction of the
principal balance owing under this Note in the inverse order of its maturity
(whether or not then due), in which event no prepayment fee or premium shall be
due, or, at the option of Payee, be paid over to Maker, and not to the payment
of Interest. All Interest (including any amounts or payments judicially or
otherwise under the law deemed to be Interest) contracted for, charged, taken,
reserved, paid or agreed to be paid to Payee shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of this Note, including any extensions and renewals hereof until payment in
full of the principal balance of this Note so that the Interest thereon for such
full term will not exceed at any time the maximum amount permitted by applicable
law. To the extent United States federal law permits a greater amount of
interest than is permitted under the law of the State in which the Security
Property is located, Payee will rely on United States federal law for the
purpose of determining the maximum amount permitted by applicable law.
Additionally, to the extent permitted by applicable law now or hereafter in
effect, Payee may, at its option and from time to time, implement any other
method of computing the maximum lawful rate under the law of the State in which
the Security Property is located or under other applicable law by giving notice,
if required, to Maker as provided by applicable law now or hereafter in effect.
This Section 4.3 will control all agreements between Maker and Payee.

      4.4 Use of Funds. Maker hereby warrants, represents and covenants that no
funds disbursed hereunder shall be used for personal, family or household
purposes.

      4.5 Unconditional Payment. Maker is and shall be obligated to pay
principal, interest and any and all other amounts which become payable hereunder
or under the other Loan Documents absolutely and unconditionally and without any
abatement, postponement, diminution or deduction and without any reduction for
counterclaim or setoff. In the event that at any time any payment received by
Payee hereunder shall be deemed by a court of competent jurisdiction to have
been a voidable preference or fraudulent conveyance under any bankruptcy,
insolvency or other debtor relief law, then the obligation to make such payment
shall survive any cancellation or satisfaction of this Note or return thereof to
Maker and shall not be discharged or satisfied with any prior payment thereof or
cancellation of this Note, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof, and such payment
shall be immediately due and payable upon demand.

      4.6 GOVERNING LAW. THIS NOTE SHALL BE INTERPRETED, CONSTRUED AND ENFORCED
ACCORDING TO THE LAWS OF THE STATE IN WHICH THE SECURITY PROPERTY IS LOCATED.

      4.7 WAIVER OF JURY TRIAL. MAKER, TO THE FULL EXTENT PERMITTED BY LAW,
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THE DEBT EVIDENCED BY THIS NOTE OR ANY CONDUCT, ACT OR OMISSION OF
PAYEE OR MAKER, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS,
MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS

                                       22


AFFILIATED WITH PAYEE OR MAKER, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE.

      4.8 Secondary Market. Payee may sell, transfer and deliver the Loan
Documents to one or more investors in the secondary mortgage market. In
connection with such sale, Payee may retain or assign responsibility for
servicing the loan evidenced by this Note or may delegate some or all of such
responsibility and/or obligations to a servicer, including, but not limited to,
any subservicer or master servicer, on behalf of the investors. All references
to Payee herein shall refer to and include, without limitation, any such
servicer, to the extent applicable.

      4.9 Dissemination of Information. If Payee determines at any time to sell,
transfer or assign this Note, the Security Instrument and the other Loan
Documents, and any or all servicing rights with respect thereto, or to grant
participations therein (the "Participations") or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement (the "Securities"), Payee may
forward to each purchaser, transferee, assignee, servicer, participant,
investor, or their respective successors in such Participations and/or
Securities (collectively, the "Investor") or any Rating Agency rating such
Securities, each prospective Investor and each of the foregoing's respective
counsel, all documents and information which Payee now has or may hereafter
acquire relating to the debt evidenced by this Note and to Maker, any guarantor,
any indemnitor and the Security Property, which shall have been furnished by
Maker, any guarantor or any indemnitor as Payee determines necessary or
desirable.

                      ARTICLE V -- MISCELLANEOUS PROVISIONS

      5.1 Miscellaneous. The terms and provisions hereof shall be binding upon
and inure to the benefit of Maker and Payee and their respective heirs,
executors, legal representatives, successors, successors-in-title and assigns,
whether by voluntary action of the parties or by operation of law. As used
herein, the terms "Maker" and "Payee" shall be deemed to include their
respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties or
by operation of law. If Maker consists of more than one person or entity, each
shall be jointly and severally liable to perform the obligations of Maker under
this Note. All personal pronouns used herein, whether used in the masculine,
feminine or neuter gender, shall include all other genders; the singular shall
include the plural and vice versa. Titles of articles and sections are for
convenience only and in no way define, limit, amplify or describe the scope or
intent of any provisions hereof. Time is of the essence with respect to all
provisions of this Note. This Note and the other Loan Documents contain the
entire agreements between the parties hereto relating to the subject matter
hereof and thereof and all prior agreements relative hereto and thereto which
are not contained herein or therein are terminated.

      5.2 Maker's Tax Identification Number is 20-1676647.

             [THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       23


      IN WITNESS WHEREOF, Maker has executed this Note as of the date first
written above.

                                     MAKER:

                                     COLE WG ST. LOUIS MO PORTFOLIO, LLC,
                                     a Delaware limited liability company

                                     By: Cole REIT Advisors II, LLC,
                                         a Delaware limited liability company,
                                         its manager

                                     By: /S/ John M. Pons
                                         ---------------------------------
                                         John M. Pons, Senior Vice President



                                   Schedule A

                                   LOAN TERMS

                                                                             
Original Principal Amount                                                       $10,660,000.00
Note Rate % (Per Annum)                                                                 5.480%
Original Amortization Term (Months)                                                        999
Monthly Payment Amount (Excluding IO Period)                                        $48,680.67
Note Date                                                                            11/2/2005
First Pay Date                                                                      12/11/2005
Original Loan Term (Months)                                                                120
Scheduled Maturity Date                                                             11/11/2015
Interest Accrual Basis During Amortization Periods                                  ACTUAL/360
Interest Only (IO) Periods (Months)                                                        120
Interest Accrual Basis During IO Period                                             ACTUAL/360





COLE WALGREENS FLORISSANT MO                                              502853642
                                           INTEREST     PRINCIPAL
                    ACCRUAL               COMPONENT    COMPONENT OF  ENDING UNPAID
 PAY                DAYS IN  SCHEDULED   OF SCHEDULED   SCHEDULED      PRINCIPAL
PERIOD   PAY DATE   PERIOD    PAYMENT       PAYMENT       PAYMENT       BALANCE
                                                   
    0   11/11/2005      9    $     0.00   $14,604.21      $0.00      $10,660,000.00
    1   12/11/2005     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
    2   1/11/2006      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
    3   2/11/2006      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
    4   3/11/2006      28    $45,435.29   $45,435.29      $0.00      $10,660,000.00
    5   4/11/2006      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
    6   5/11/2006      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
    7   6/11/2006      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
    8   7/11/2006      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
    9   8/11/2006      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
   10   9/11/2006      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
   11   10/11/2006     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
   12   11/11/2006     31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
   13   12/11/2006     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
   14   1/11/2007      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
   15   2/11/2007      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
   16   3/11/2007      28    $45,435.29   $45,435.29      $0.00      $10,660,000.00
   17   4/11/2007      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
   18   5/11/2007      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
   19   6/11/2007      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
   20   7/11/2007      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
   21   8/11/2007      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
   22   9/11/2007      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
   23   10/11/2007     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00




                                                
24   11/11/2007     31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
25   12/11/2007     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
26   1/11/2008      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
27   2/11/2008      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
28   3/11/2008      29    $47,057.98   $47,057.98      $0.00      $10,660,000.00
29   4/11/2008      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
30   5/11/2008      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
31   6/11/2008      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
32   7/11/2008      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
33   8/11/2008      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
34   9/11/2008      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
35   10/11/2008     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
36   11/11/2008     31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
37   12/11/2008     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
38   1/11/2009      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
39   2/11/2009      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
40   3/11/2009      28    $45,435.29   $45,435.29      $0.00      $10,660,000.00
41   4/11/2009      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
42   5/11/2009      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
43   6/11/2009      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
44   7/11/2009      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
45   8/11/2009      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
46   9/11/2009      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
47   10/11/2009     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
48   11/11/2009     31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
49   12/11/2009     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
50   1/11/2010      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
51   2/11/2010      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
52   3/11/2010      28    $45,435.29   $45,435.29      $0.00      $10,660,000.00
53   4/11/2010      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
54   5/11/2010      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
55   6/11/2010      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
56   7/11/2010      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
57   8/11/2010      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
58   9/11/2010      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
59   10/11/2010     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
60   11/11/2010     31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
61   12/11/2010     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
62   1/11/2011      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
63   2/11/2011      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
64   3/11/2011      28    $45,435.29   $45,435.29      $0.00      $10,660,000.00
65   4/11/2011      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
66   5/11/2011      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
67   6/11/2011      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
68   7/11/2011      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
69   8/11/2011      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
70   9/11/2011      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
71   10/11/2011     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00





                                                 
 72   11/11/2011     31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 73   12/11/2011     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
 74   1/11/2012      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 75   2/11/2012      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 76   3/11/2012      29    $47,057.98   $47,057.98      $0.00      $10,660,000.00
 77   4/11/2012      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 78   5/11/2012      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
 79   6/11/2012      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 80   7/11/2012      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
 81   8/11/2012      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 82   9/11/2012      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 83   10/11/2012     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
 84   11/11/2012     31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 85   12/11/2012     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
 86   1/11/2013      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 87   2/11/2013      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 88   3/11/2013      28    $45,435.29   $45,435.29      $0.00      $10,660,000.00
 89   4/11/2013      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 90   5/11/2013      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
 91   6/11/2013      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 92   7/11/2013      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
 93   8/11/2013      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 94   9/11/2013      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 95   10/11/2013     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
 96   11/11/2013     31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 97   12/11/2013     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
 98   1/11/2014      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
 99   2/11/2014      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
100   3/11/2014      28    $45,435.29   $45,435.29      $0.00      $10,660,000.00
101   4/11/2014      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
102   5/11/2014      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
103   6/11/2014      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
104   7/11/2014      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
105   8/11/2014      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
106   9/11/2014      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
107   10/11/2014     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
108   11/11/2014     31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
109   12/11/2014     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
110   1/11/2015      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
111   2/11/2015      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
112   3/11/2015      28    $45,435.29   $45,435.29      $0.00      $10,660,000.00
113   4/11/2015      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
114   5/11/2015      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
115   6/11/2015      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
116   7/11/2015      30    $48,680.67   $48,680.67      $0.00      $10,660,000.00
117   8/11/2015      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
118   9/11/2015      31    $50,303.36   $50,303.36      $0.00      $10,660,000.00
119   10/11/2015     30    $48,680.67   $48,680.67      $0.00      $10,660,000.00





                                                           
120   11/11/2015       31  $10,710,303.36   $   50,303.36   $10,660,000.00   $0.00
120                 3,652  $16,586,060.28   $5,926,060.28   $10,660,000.00






                             AUTO DRAFT INFORMATION

If you would like to sign up for our automatic payment drafting service, fill
out and return the enclosed authorization form along with a voided check and
mail to the address listed below. Please continue to send your monthly payments
until you receive written confirmation that the auto-draft service has begun.
You will receive written notification confirming your auto-draft setup and first
auto-draft date within 7 business days of the 15th of the month submitted.

NOTE: REQUESTS MUST BE RECEIVED BY THE 15TH TO BE SET UP FOR THE FOLLOWING
MONTH.

WACHOVIA SECURITIES
Attention: Customer Service Department
8739 Research Drive - URP4
Charlotte, NC 28288-1075



WACHOVIA
SECURITIES

                                 AUTO DRAFT FORM

I hereby request and authorize Wachovia Bank, National Association, doing
business as Wachovia Securities ("Wachovia Securities"), to draft my account
specified below made payable to the order of Wachovia Securities located in
Charlotte, NC, provided there are sufficient funds in said account to pay the
same upon presentation. I agree that your rights in respect to each such draft
shall be the same as if it were a check drawn on Wachovia Securities and signed
personally by me. This authorization is to remain in effect until revoked by me
in writing and until Wachovia Securities actually receives such notice. I agree
that Wachovia Securities shall be fully protected in honoring any such drafts.

LOAN NUMBER                              NAME OF BORROWING ENTITY
Wachovia Loan # (9 digits)               Borrower Name
BANK'S ROUTING NUMBER FROM CHECK         ACCOUNT # TO BE DRAFTED
Bank Routing Number (9 digits)           Bank Account # (from check)
NAME OF BANK TO BE DRAFTED               LOCATION OF THE BANK
Name of Bank                             City and State

      PLEASE INCLUDE A VOIDED CHECK WITH THIS FORM

                                 [VOIDED CHECK]

          ROUTING #   ACCOUNT #

BORROWER'S SIGNATURE                     BORROWER'S NAME
Authorized Signature (as it appears      Print Name
on bank documents)                       TODAY'S DATE
                                         Date
DAY OF MONTH PAYMENT WILL DRAFT          BORROWER'S FAX NUMBER
Draft Date (Payment due date)            Fax #

TERMS AND CONDITIONS

EFFECTIVE DATE OF DRAFT: The draft will occur on the payment due date, unless
otherwise agreed upon by borrower and servicer. The borrower will receive a
confirmation letter to insure auto-draft set-up and to confirm draft date.

REVOCATION OF THIS AUTHORITY: The authority of Wachovia Securities to transfer
funds from the borrowers account will not cease until Wachovia Securities
receives written notification revoking this authorization agreement. Wachovia
Securities must receive this notice at least 15 days prior to the date on which
you wish the arrangement to end.

DISHONOR: Wachovia Securities shall be under no liability whatsoever if a
transfer of funds cannot be made, whether or not such failure is caused by the
act of omission of the borrower.

INSUFFICIENT FUNDS: If the automatic withdrawal is returned due to insufficient
funds both Wachovia Securities and the borrower's financial institution may
assess a fee.

ERRORS: The borrower has the right to have the amount of any incorrect deduction
immediately corrected by the borrower's financial institution provided the
borrower sends the appropriate notice to the financial institution.

AMOUNT OF DRAFT: Wachovia Securities will withdraw the amount of the current
monthly receivable. This amount may vary due to escrow analyses, interest rate
changes or reserve requirements as applicable.

ACH ROUTING NUMBER: Please contact the financial institution from which the
money will be drafted for this information.

CHAR1\849903v4

Wachovia Securities is the trade name under which Wachovia Corporation conducts
its investment banking, capital markets and institutional securities business
though First Union Securities, Inc. ("FUSI"), Member NYSE, NASD, SIPC, and
through other bank and non-bank and broker-dealer subsidiaries of Wachovia
Corporation.

EX-31.1

                                                                    EXHIBIT 31.1

                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 I, Christopher H. Cole, certify that:

      1.    I have reviewed this quarterly report on Form 10-Q of Cole Credit
            Property Trust II, 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) 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 subsidiary, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

            b)    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

            c)    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 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.

                                         /s/ Christopher H. Cole
                                -----------------------------------------------
                                           Christopher H. Cole
                                  Chief Executive Officer and President

 Date: November 14, 2005

                                       26

EX-31.2

                                                                    EXHIBIT 31.2

                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Blair D. Koblenz, certify that:

      1.    I have reviewed this quarterly report on Form 10-Q of Cole Credit
            Property Trust II, 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) 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)    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

            c)    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 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.

                                                /s/ Blair D. Koblenz
                                     ------------------------------------------
                                                 Blair D. Koblenz
                                            Executive Vice President and
                                              Chief Financial Officer

 Date: November 14, 2005

                                       27

EX-32.1

                                                                    EXHIBIT 32.1

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF 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 Credit Property Trust II, 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, 2005 (the "Report") fully complies with
      the requirements of Section 13(a) or Section 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/ Christopher H. Cole
                                ------------------------------------------------
                                              Christopher H. Cole
                                         Chief Executive Officer and
                                                 President

                                              /s/ Blair D. Koblenz
                                ------------------------------------------------
                                                Blair D. Koblenz
                                          Executive Vice President and
                                            Chief Financial Officer

 Date: November 14, 2005

      The foregoing certification is being furnished with the Company's 10-Q for
the period ended September 30, 2005 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 information 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.

                                       28