10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2005
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

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 Number)
2555 East Camelback Road, Suite 400 Phoenix, Arizona, 85016 (Address of principal executive offices; zip code)	(602) 778-8700 (Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Exchange on Which Registered
None	None

Securities registered pursuant to Section 12(g) of the Act: None

      Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Security Act.     Yes o          No þ

      Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.     Yes o          No þ

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

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     þ

      Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated file in Rule 12b-2 of the Exchange Act. (Check one.)

Large accelerated filer o          Accelerated filer o          Non-accelerated filer 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

      The aggregate market value of the voting stock held by nonaffiliates: $56,201,384

      While there is no established market for the Registrant’s shares of voting stock, the Registrant has offered and sold shares of its voting stock pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933 at a price of $10.00 per share. Accordingly, we have used $10.00 per share to determine the aggregate market value set forth above. The number of shares of common stock outstanding as of March 22, 2006 was approximately 5,629,687.

Documents Incorporated by Reference:

      The Registrant incorporates by reference portions of the Cole Credit Property Trust II, Inc. Definitive Proxy Statement for the 2006 Annual Meeting of Stockholders (into Items 10, 11, 12, 13 and 14 of Part III).

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
PART I
	ITEM 1. BUSINESS
	ITEM 1A. RISK FACTORS
	ITEM 1B. UNRESOLVED STAFF COMMENTS
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
	ITEM 6. SELECTED FINANCIAL DATA
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
	ITEM 9A. CONTROLS AND PROCEDURES
	ITEM 9B. OTHER INFORMATION
PART III
	ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	ITEM 11. EXECUTIVE COMPENSATION
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
PART IV
	ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
SIGNATURES
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF OPERATIONS
		CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
		CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE III -- REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
EXHIBIT INDEX
EX-3.1 FIFTH ARTICLE OF AMENDMENT AND RESTATEMENT
EX-10.35 PURCHASE AND SALE AGREEMENT
EX-10.36 PROMISSORY NOTE
EX-10.37 REAL ESTATE CONTRACT
EX-10.38 PROMISSORY NOTE
EX-10.39 PURCHASE AGREEMENT
EX-10.40 PRONISSORY NOTE
EX-10.41 MASTER PURCHASE AGREEMENT
EX-10.42 PROMISSORY NOTE
EX-10.43 PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
EX-10.44 PROMISSORY NOTE BETWEEN COLE ST CROSSVILLE TN, LLC
EX-10.45 PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
EX-10.46 PROMISSORY NOTE
EX-10.47 AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY
EX-10.48 PROMISSORY NOTE
EX-10.49 LOAN AGREEMENT
EX-10.50 PROMISSORY NOTE
EX-10.51 SECURITY AGREEMENT
EX-10.52 PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
EX-10.53 PURCHASE AND SALE AGREEMENT
EX-10.54 PROMISSORY NOTE
EX-10.55 CONTRACT OF SALE
EX-10.56 PROMISSORY NOTE
EX-10.57 LOAN AGREEMENT
EX-10.58 PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
EX-10.59 PROMISSORY NOTE BETWEEN COLE CV SCIOTO TRAIL OH, LLC, AND WACHOVIA BANK, NATIONAL ASSOCIATION, DATED MARCH 8, 2006
EX-14.1 CODE OF BUSINESS CONDUCT
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

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

      Certain statements contained in this Annual Report on Form 10-K of Cole Credit Property Trust II, Inc. other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the Securities and Exchange Commission (“SEC”). We make no representation or warranty (express or implied) about the accuracy of any such forward-looking statements contained in this Form 10-K, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. See the section captioned “Item 1A -Risk Factors” beginning on page 13 of this Annual Report on Form 10-K.

      Any such forward-looking statements are subject to unknown risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations, provide distributions to stockholders, and maintain the value of our real estate properties, may be significantly hindered.

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PART I

ITEM 1. BUSINESS

Formation

      Cole Credit Property Trust II, Inc. (the “Company,” “we,” “our,” or “us”) is a Maryland corporation formed on September 29, 2004, that intends to qualify as a real estate investment trust (“REIT”) beginning with the year ended December 31, 2005. We were organized to acquire and operate commercial real estate primarily consisting of high quality, freestanding, single-tenant properties net leased to investment grade and other creditworthy tenants located throughout the United States. As of December 31, 2005, we owned 14 properties located in ten states, comprising approximately 455,000 rentable square feet. At December 31, 2005, these properties were 100% leased.

      Substantially all of our business is conducted through our operating partnership, Cole Operating Partnership II, LP, a Delaware limited partnership organized in 2004 (“Cole OP II”). We own a 99.9% interest in Cole OP II as its general partner. The remaining 0.1% of Cole OP II is held as a limited partner’s interest by Cole REIT Advisors II, LLC (“Cole Advisors”), which is our affiliated advisor.

      Cole Advisors, pursuant to a contractual arrangement, is responsible for managing our affairs on a day-to-day basis and for identifying and making acquisitions and investments on our behalf. The agreement with Cole Advisors is for a one-year term and is reconsidered on an annual basis by our board of directors.

      On June 27, 2005, we commenced a public offering on a “best efforts” basis of up to 45 million shares of common stock offered at a price of $10.00 per share, subject to certain volume and other discounts, pursuant to a Registration Statement on Form S-11 filed with the SEC under the Securities Act (the “Offering”). The Registration Statement also covered up to 5 million shares available pursuant to a distribution reinvestment plan under which our stockholders may elect to have their distributions reinvested in additional shares of our common stock at $9.50 per share.

      We commenced our principal operations on September 23, 2005, when we issued the initial 486,000 shares of our common stock in the Offering. Prior to such date, we were considered a development stage company. As of December 31, 2005, we had accepted subscriptions for 2,832,387 shares of our common stock, including 20,000 shares owned by Cole Holdings Corporation (“Cole Holdings”) for aggregate gross proceeds of approximately $28.3 million before offering costs and selling commissions of approximately $2.8 million. As of December 31, 2005, we were authorized to issue 10,000,000 shares of preferred stock, but had none issued and outstanding. As of March 22, 2006, the Company had raised approximately $56.2 million in offering proceeds through the issuance of 5,629,687 million shares of the Company’s common stock. As of March 22, 2006, approximately $393.8 million in shares (39,378,625 million shares) remained available for sale to the public under the Offering, exclusive of shares available under the Company’s distribution reinvestment plan.

      On May 2, 2005, we granted to the independent members of our board of directors options to purchase a total of 10,000 shares of our common stock at an exercise price of $9.15 per share under our Independent Directors’ Stock Option Plan. These options vest on May 2, 2006, and expire on May 2, 2015. As of December 31, 2005, all 10,000 stock options were outstanding and none had been exercised.

      We admit new stockholders pursuant to the Offering at least monthly. All subscription proceeds are held in a separate account until the subscribing investors are admitted as stockholders. Upon admission of new stockholders, subscription proceeds are released to us and may be utilized as consideration for investments and the payment or reimbursement of dealer manager fees, selling commissions, organization and offering expenses, and operating expenses. We also have used, and may continue to use, a portion of the net proceeds from the Offering to fund all or part of our distributions to stockholders. Such distributions may constitute a return of capital and reduce the amount of capital we ultimately invest in properties. Until required for use, net offering proceeds are held in short-term, liquid investments.

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      Our common stock is not currently listed on a national exchange or inter-dealer quotation system. We will seek to list our stock for trading on a national securities exchange or for quotation on The Nasdaq National Market only if a majority of our independent directors believe listing would be in the best interest of our stockholders. We do not intend to list our shares at this time. We do not anticipate that there will be any market for our common stock until our shares are listed or quoted. In the event we do not obtain listing prior to the tenth anniversary of the completion or termination of the Offering, our charter requires that we either: (1) seek stockholder approval of an extension or amendment of this listing deadline; or (2) seek stockholder approval to adopt a plan of liquidation of the company.

Investment Objectives and Policies

      Our objective is to invest primarily in high quality, freestanding, income-generating properties, net leased to investment grade and other creditworthy tenants. We may also invest in mortgage loans or other investments related to real property or entities or joint ventures that make similar investments. Our primary investment objectives are:

•  to provide current income to our stockholders through the payment of cash distributions; and

•  to preserve and return our stockholders’ capital contributions.

      We also seek capital gain from our investments.

      We cannot assure investors that we will attain these objectives or that our capital will not decrease.

      Decisions relating to the purchase or sale of our investments are made by our advisor, Cole Advisors, subject to approval by our board of directors, including a majority of our independent directors. Our board of directors may revise our investment policies without the concurrence of our stockholders. Our independent directors will review our investment policies at least annually to determine that our policies are in the best interest of our stockholders.

Acquisition and Investment Policies

Primary Investments

      We invest primarily in high quality, income-generating properties, net leased to investment grade and other creditworthy tenants. Our investments may be direct investments in such properties or in other entities that own or invest in, directly or indirectly, interests in such properties. We will seek to acquire a portfolio of real estate that is diversified by geographical location and by type and size of property. We anticipate that our properties will consist of real estate primarily improved for use as retail establishments, principally freestanding, single-tenant properties.

      Many of our properties are, and we expect will be, leased to tenants in the chain or franchise retail industry, including but not limited to home improvement stores, convenience stores, drug stores and restaurant properties. Our advisor monitors industry trends and invests in properties that serve to provide a favorable return balanced with risk. Our management will primarily target retail businesses with established track records.

      We believe that our focus on the acquisition of freestanding, single-tenant properties net leased to investment grade and other creditworthy tenants presents lower investment risks and greater stability than other sectors of today’s commercial real estate market. Unlike funds that invest in a limited number of multi-tenant properties, we plan to acquire a diversified portfolio with a large number of single-tenant properties. As a result, lower than expected results of operations from one or a few investments will not necessarily preclude our ability to realize our investment objectives of cash flow and preservation of capital from our overall portfolio. Our management believes that freestanding retail properties, as opposed to investments in shopping centers, malls or other large retail complexes as a whole, offer a distinct investment advantage since these properties generally offer superior locations that are less dependent on the financial stability of adjoining tenants. In addition, since we intend to acquire properties that are geographically diverse, we expect to minimize the potential adverse impact of economic downturns in local

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markets. Our management believes that a portfolio consisting primarily of freestanding, single-tenant properties, net leased to investment grade and other creditworthy tenants diversified geographically and by tenant business sector will enhance our liquidity opportunities for investors by making the sale of individual properties, multiple properties or our investment portfolio as a whole attractive to institutional investors and by making a possible listing of our shares attractive to the public investment community.

      There is no limitation in the number, size or type of properties that we may acquire or on the percentage of net proceeds of the Offering that may be invested in a single property. The number and mix of properties will depend upon real estate market conditions and other circumstances existing at the time of acquisition of properties and the amount of proceeds raised in the Offering.

      We apply credit underwriting criteria to the tenants of existing properties and when re-leasing properties in our portfolio. Tenants of our properties typically are large national or super-regional retail chains that are creditworthy entities having significant net worth and operating income. Generally these tenants are experienced multi-unit operators with a proven track record in order to meet the credit tests applied by our advisor.

      A tenant will be considered “investment grade” when the tenant has a debt rating by Moody’s of Baa3 or better or a credit rating by Standard & Poor’s of BBB- or better, or its payments are guaranteed by a company with such rating.

      Other creditworthy tenants have financial profiles that our advisor believes meet our investment objectives. In making such determination, our advisor will look to factors that may include the financial condition of the tenant and/or guarantor, the operating history of the property with such tenant, the tenant’s market share and track record within its industry segment, the general health and outlook of the tenant’s industry segment, and the lease length and terms at the time of the acquisition.

Other Possible Investments

      Although we expect that most of our property acquisitions will be of the type described above, we may make other investments. For example, we are not limited to investments in single-tenant properties or properties leased to investment grade tenants. We may invest in other commercial properties, such as shopping centers, business and industrial parks, manufacturing facilities, office buildings and warehouse and distribution facilities, or in other entities that make such investments or own such properties, in order to reduce overall portfolio risks or enhance overall portfolio returns if our advisor determines that it would be advantageous to do so. Further, to the extent that our advisor determines it is in our best interest, due to the state of the real estate market, in order to diversify our investment portfolio or otherwise, we will make or invest in mortgage loans secured by the same types of commercial properties that we intend to acquire. It is the policy of our board of directors to limit our investments in properties other than freestanding, single-tenant properties to 20% of our investment portfolio.

      Our criteria for investing in mortgage loans will be substantially the same as those involved in our investment in properties.

      We do not intend to make loans to other persons (other than mortgage loans) to underwrite securities of other issuers or to engage in the purchase and sale of any types of investments other than interests in real estate.

Joint Venture Investments

      We may enter into joint ventures, partnerships, co-tenancies and other co-ownership arrangements for the acquisition, development or improvement of properties with affiliates of our advisor, including other real estate programs sponsored by affiliates of our advisor. We may also enter into such arrangements with real estate developers, owners and other unaffiliated third parties. In determining whether to invest in a particular arrangement of this type, Cole Advisors will evaluate the real property that such joint venture or other entity owns or is being formed to own under the same criteria for the selection of our real estate property investments.

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      We may enter into joint ventures with other Cole-sponsored real estate programs only if a majority of our directors not otherwise interested in the transaction and a majority of our independent directors approve the transaction as being fair and reasonable to us. In addition, the investment by each joint venture partner must be substantially on the same terms and conditions as those received in other joint ventures.

Acquisition of Properties from Affiliates

      We may acquire properties or interests in properties from or in co-ownership arrangements with entities affiliated with our advisor, including properties acquired from affiliates of our advisor engaged in construction and development of commercial real properties. We will not acquire any property from an affiliate unless a majority of our directors not otherwise interested in the transaction and a majority of our independent directors determine that the transaction is fair and reasonable to us. The purchase price that we will pay for any property we acquire from affiliates of our advisor, including property developed by an affiliate as well as property held by an affiliate that has already been developed, will not exceed the current appraised value of the property. In addition, the price of the property we acquire from an affiliate may not exceed the cost of the property to the affiliate, unless a majority of our directors and a majority of our independent directors determine that substantial justification for the excess exists and the excess is reasonable.

Investment Decisions

      Cole Advisors has substantial discretion with respect to the selection of specific investments and the purchase and sale of our properties, subject to the approval of our board of directors. In pursuing our investment objectives and making investment decisions for us, Cole Advisors evaluates the proposed terms of the purchase against all aspects of the transaction, including the condition and financial performance of the property, the terms of existing leases and the creditworthiness of the tenant, terms of the lease and property and location characteristics. Because the factors considered, including the specific weight we place on each factor, will vary for each potential investment, we do not, and are not able to, assign a specific weight or level of importance to any particular factor.

      In addition to procuring and reviewing an independent valuation estimate and property condition report, our advisor also considers the following:

•  unit level store performance;

•  property location, visibility and access;

•  age of the property, physical condition and curb appeal;

•  neighboring property uses;

•  local market conditions including vacancy rates;

•  area demographics, including trade area population and average household income;

•  neighborhood growth patterns and economic conditions;

•  presence of demand generators; and

•  lease terms.

      Our advisor considers properties leased and/or guaranteed by companies that maintain an investment grade rating by either Standard and Poor’s or Moody’s Investor Services. Our advisor also considers non-rated and non-investment grade rated tenants that we consider creditworthy.

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      Generally, we will condition our obligation to close the purchase of any investment on the delivery and verification of certain documents from the seller or developer, including, where appropriate:

•  plans and specifications;

•  surveys;

•  evidence of marketable title, subject to such liens and encumbrances as are acceptable to Cole Advisors;

•  financial statements covering recent operations of properties having operating histories;

•  title and liability insurance policies; and

•  tenant estoppel certificates.

      We generally do not purchase any property unless and until we also obtain what is generally referred to as a “Phase I” environmental site assessment and are generally satisfied with the environmental status of the property. However, we may purchase a property without obtaining such assessment if our advisor determines it is not warranted. A Phase I environmental site assessment basically consists of a visual survey of the building and the property in an attempt to identify areas of potential environmental concerns, visually observing neighboring properties to assess surface conditions or activities that may have an adverse environmental impact on the property, and contacting local governmental agency personnel who perform a regulatory agency file search in an attempt to determine any known environmental concerns in the immediate identity of the property. A Phase I environmental site assessment does not generally include any sampling or testing of soil, ground water or building materials from the property and may not reveal all environmental hazards on a property.

Borrowing Policies

      We believe that utilizing borrowing is consistent with our investment objective of maximizing the return to investors. By operating on a leveraged basis, we will have more funds available for investment in properties. This will allow us to make more investments than would otherwise be possible, resulting in a more diversified portfolio. The number of properties that we can acquire will be affected by the amount of funds available to us. Accordingly, borrowing funds will allow us to increase our diversification. There is no limitation on the amount we may borrow against any single improved property. However, under our charter, we are required to limit our borrowings to 60% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our gross assets, unless excess borrowing is approved by a majority of the independent directors and will be disclosed to our stockholders in our next quarterly report, along with a justification for such excess borrowing. During the year ended December 31, 2005, our independent directors approved borrowings in excess of this limitation since we are in the process of raising equity capital under the Offering to acquire additional properties for our portfolio. However, we anticipate that our overall leverage following our Offering stage will be within our charter limit. To the extent that we do not obtain mortgage loans on our properties, our ability to acquire additional properties will be restricted.

      We may not borrow money from any of our directors or from our advisor or its affiliates unless such loan is approved by a majority of the directors not otherwise interested in the transaction (including a majority of the independent directors) as fair, competitive and commercially reasonable and no less favorable to us than comparable loans between unaffiliated parties. As of December 31, 2005, we have borrowed an aggregate of $4,453,000 from our advisor’s affiliates. Our board of directors, including a majority of our independent directors, not otherwise interested in the transaction approved each of these loans as being fair, competitive, and commercially reasonable to the Company and no less favorable to the Company than between unaffiliated parties under the same circumstances.

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Conflicts of Interest

      We are subject to various conflicts of interest arising out of our relationship with Cole Advisors, our advisor, and its affiliates, including conflicts related to the arrangements pursuant to which Cole Advisors and its affiliates will be compensated by us. The agreements and compensation arrangements between us and our advisor and its affiliates were not determined by arm’s-length negotiations. Some of the conflicts of interest in our transactions with our advisor and its affiliates, and the limitations on our advisor adopted to address these conflicts, are described below.

      Our advisor and its affiliates have and will continue to try to balance our interests with their duties to other Cole-sponsored programs. However, to the extent that our advisor or its affiliates take actions that are more favorable to other entities than to us, these actions could have a negative impact on our financial performance and, consequently, on distributions to our stockholders and the value of our stock. In addition, our directors, officers and certain of our stockholders may engage for their own account in business activities of the types conducted or to be conducted by our subsidiaries and us.

      Our independent directors have an obligation to function on our behalf in all situations in which a conflict of interest may arise, and all of our directors have a fiduciary obligation to act on behalf of our stockholders.

Interests in Other Real Estate Programs

      An affiliate of our advisor acts as an advisor to, and our officers and certain of our directors act as officers and directors of, Cole Credit Property Trust I, Inc., which is a real estate investment trust that has similar investment objectives to us. Affiliates of our officers and entities owned or managed by such affiliates also may acquire or develop real estate for their own accounts, and have done so in the past. Furthermore, affiliates of our officers and entities owned or managed by such affiliates intend to form additional real estate investment entities in the future, whether public or private, which can be expected to have the same investment objectives and policies as we do and which may be involved in the same geographic area, and such persons may be engaged in sponsoring one or more of such entities at approximately the same time as our shares of common stock are being offered. Our advisor, its affiliates and affiliates of our officers are not obligated to present to us any particular investment opportunity that comes to their attention, even if such opportunity is of a character that might be suitable for investment by us. Our advisor and its affiliates likely will experience conflicts of interest as they simultaneously perform services for us and other affiliated real estate programs.

      Any affiliated entity, whether or not currently existing, could compete with us in the sale or operation of the properties. We will seek to achieve any operating efficiency or similar savings that may result from affiliated management of competitive properties. However, to the extent that affiliates own or acquire property that is adjacent, or in close proximity, to a property we own, our property may compete with the affiliate’s property for tenants or purchasers.

      Every transaction that we enter into with our advisor or its affiliates is subject to an inherent conflict of interest. Our board of directors may encounter conflicts of interest in enforcing our rights against any affiliate in the event of a default by or disagreement with an affiliate or in invoking powers, rights or options pursuant to any agreement between us and our advisor or any of its affiliates.

Other Activities of Cole Advisors and its Affiliates

      We rely on Cole Advisors for the day-to-day operation of our business pursuant to an advisory agreement. As a result of the interests of members of its management in other Cole-sponsored programs and the fact that they have also engaged and will continue to engage in other business activities, Cole Advisors and its affiliates will have conflicts of interest in allocating their time between us and other Cole-sponsored programs and other activities in which they are involved. However, Cole Advisors believes that it and its affiliates have sufficient personnel to discharge fully their responsibilities to all of the Cole-sponsored programs and other ventures in which they are involved.

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      In addition, each of our executive officers, including Christopher H. Cole, who also serves as the chairman of our board of directors, also serves as an officer of our advisor, our property manager, our dealer manager and/or other affiliated entities. As a result, these individuals owe fiduciary duties to these other entities which may conflict with the fiduciary duties that they owe to us and our stockholders.

      We may purchase properties or interests in properties from affiliates of Cole Advisors. The prices we pay to affiliates of our advisor for these properties will not be the subject of arm’s-length negotiations, which could mean that the acquisitions may be on terms less favorable to us than those negotiated with unaffiliated parties. However, our charter provides that the purchase price of any property we acquire from an affiliate may not exceed its fair market value as determined by a competent independent appraiser. In addition, the price must be approved by a majority of our directors who have no financial interest in the transaction, including a majority of our independent directors. If the price to us exceeds the cost paid by our affiliate, our board of directors must determine that there is substantial justification for the excess cost.

Competition in Acquiring, Leasing and Operating of Properties

      Conflicts of interest will exist to the extent that we may acquire properties in the same geographic areas where properties owned by other Cole-sponsored programs are located. In such a case, a conflict could arise in the leasing of properties in the event that we and another Cole-sponsored program were to compete for the same tenants in negotiating leases, or a conflict could arise in connection with the resale of properties in the event that we and another Cole-sponsored program were to attempt to sell similar properties at the same time. Conflicts of interest may also exist at such time as we or our affiliates managing property on our behalf seek to employ developers, contractors or building managers, as well as under other circumstances. Cole Advisors will seek to reduce conflicts relating to the employment of developers, contractors or building managers by making prospective employees aware of all such properties seeking to employ such persons. In addition, Cole Advisors will seek to reduce conflicts that may arise with respect to properties available for sale or rent by making prospective purchasers or tenants aware of all such properties. However, these conflicts cannot be fully avoided in that there may be established differing compensation arrangements for employees at different properties or differing terms for resales or leasing of the various properties.

Affiliated Dealer Manager

      Since Cole Capital Corporation (“Cole Capital”), our dealer manager, is an affiliate of Cole Advisors, we did not have the benefit of an independent due diligence review and investigation of the type normally performed by an unaffiliated, independent underwriter in connection with the Offering.

Affiliated Property Manager

      Our properties are, and we anticipate that properties we acquire will be, managed and leased by our affiliated property manager, Cole Realty Advisors, Inc., f/k/a Fund Realty Advisors, Inc. (“Cole Realty”), pursuant to a property management and leasing agreement. Our agreement with Cole Realty has a one year term. We expect Cole Realty to also serve as property manager for properties owned by affiliated real estate programs, some of which may be in competition with our properties. Management fees to be paid to our property manager are based on a percentage of the rental income received by the managed properties.

Lack of Separate Representation

      Morris, Manning & Martin, LLP acts, and may in the future act, as counsel to us, Cole Advisors, and certain of our respective affiliates. There is a possibility that in the future the interests of the various parties may become adverse, and under the Code of Professional Responsibility of the legal profession, Morris, Manning & Martin, LLP may be precluded from representing any one or all of such parties. In the event that a dispute were to arise between us, Cole Advisors, or any of our respective affiliates, separate counsel for such matters will be retained as and when appropriate.

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Joint Ventures with Affiliates of Cole Advisors

      We expect to enter into joint ventures with other Cole-sponsored programs (as well as other parties) for the acquisition, development or improvement of properties. Cole Advisors and its affiliates may have conflicts of interest in determining that Cole-sponsored programs should enter into any particular joint venture agreement. The co-venturer may have economic or business interests or goals that are or which may become inconsistent with our business interests or goals. In addition, should any such joint venture be consummated, Cole Advisors may face a conflict in structuring the terms of the relationship between our interests and the interest of the co-venturer and in managing the joint venture. Since Cole Advisors and its affiliates will control both us and any affiliated co-venturer, agreements and transactions between the co-venturers with respect to any such joint venture will not have the benefit of arm’s-length negotiation of the type normally conducted between unrelated co-venturers.

Receipt of Fees and Other Compensation by Cole Advisors and Its Affiliates

      A transaction involving the purchase and sale of properties may result in the receipt of commissions, fees and other compensation by Cole Advisors and its affiliates, including acquisition and advisory fees, the dealer manager fee, property management and leasing fees, real estate brokerage commissions and participation in nonliquidating net sale proceeds. However, the fees and compensation payable to Cole Advisors and its affiliates relating to the net sale proceeds from the sale of properties will only be payable after the return to the stockholders of their capital contributions plus cumulative returns on such capital. Subject to oversight by our board of directors, Cole Advisors will have considerable discretion with respect to all decisions relating to the terms and timing of all transactions. Therefore, Cole Advisors may have conflicts of interest concerning certain actions taken on our behalf, particularly due to the fact that such fees will generally be payable to Cole Advisors and its affiliates regardless of the quality of the properties acquired or the services provided to us.

Certain Conflict Resolution Procedures

      Every transaction that we enter into with Cole Advisors or its affiliates will be subject to an inherent conflict of interest. Our board of directors may encounter conflicts of interest in enforcing our rights against any affiliate in the event of a default by or disagreement with an affiliate or in invoking powers, rights or options pursuant to any agreement between us and Cole Advisors or any of its affiliates.

      In order to reduce or to eliminate certain potential conflicts of interest, our charter contains a number of restrictions relating to (1) transactions we enter into with Cole Advisors and its affiliates, (2) certain future offerings, and (3) allocation of investment opportunities among affiliated entities. These restrictions include, among others, the following:

•  We will not purchase or lease properties in which Cole Advisors, any of our directors or any of their respective affiliates has an interest without a determination by a majority of the directors, including a majority of the independent directors not otherwise interested in such transaction, that such transaction is fair and reasonable to us and at a price to us no greater than the cost of the property to the seller or lessor unless there is substantial justification for any amount that exceeds such cost and such excess amount is determined to be reasonable. In no event will we acquire any such property at an amount in excess of its appraised value. We will not sell or lease properties to Cole Advisors, any of our directors or any of their respective affiliates unless a majority of the directors, including a majority of the independent directors not otherwise interested in the transaction, determines that the transaction is fair and reasonable to us.

•  We will not make any loans to Cole Advisors, any of our directors or any of their respective affiliates, except that we may make or invest in mortgage loans involving Cole Advisors, our directors or their respective affiliates, provided that an appraisal of the underlying property is obtained from an independent appraiser and the transaction is approved as fair and reasonable to us and on terms no less favorable to us than those available from third parties. In addition, Cole Advisors, any of our directors and any of their respective affiliates will not make loans to us or to

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	joint ventures in which we are a joint venture partner unless approved by a majority of the directors, including a majority of the independent directors not otherwise interested in the transaction, as fair, competitive and commercially reasonable, and no less favorable to us than comparable loans between unaffiliated parties.
•	Cole Advisors and its affiliates will be entitled to reimbursement, at cost, for actual expenses incurred by them on behalf of us or joint ventures in which we are a joint venture partner; provided, however, Cole Advisors must reimburse us for the amount, if any, by which our total operating expenses, including the advisor asset management fee, paid during the previous fiscal year exceeded the greater of: (i) 2.0% of our average invested assets for that fiscal year, or (ii) 25.0% of our net income, before any additions to reserves for depreciation, bad debts or other similar non-cash reserves and before any gain from the sale of our assets, for that fiscal year.
•	In the event that an investment opportunity becomes available that is suitable, under all of the factors considered by Cole Advisors, for both us and one or more other entities affiliated with Cole Advisors, and for which more than one of such entities has sufficient uninvested funds, then the entity that has had the longest period of time elapse since it was offered an investment opportunity will first be offered such investment opportunity. It will be the duty of our board of directors, including the independent directors, to insure that this method is applied fairly to us. In determining whether or not an investment opportunity is suitable for more than one program, Cole Advisors, subject to approval by our board of directors, shall examine, among others, the following factors:

•  the anticipated cash flow of the property to be acquired and the cash requirements of each program;

•  the effect of the acquisition on diversification of each program’s investments by type of property, geographic area and tenant concentration;

•  the policy of each program relating to leverage of properties;

•  the income tax effects of the purchase to each program;

•  the size of the investment; and

•  the amount of funds available to each program and the length of time such funds have been available for investment.

•  If a subsequent development, such as a delay in the closing of a property or a delay in the construction of a property, causes any such investment, in the opinion of Cole Advisors, to be more appropriate for a program other than the program that committed to make the investment, Cole Advisors may determine that another program affiliated with Cole Advisors or its affiliates will make the investment. Our board of directors has a duty to ensure that the method used by Cole Advisors for the allocation of the acquisition of properties by two or more affiliated programs seeking to acquire similar types of properties is applied fairly to us.

      We will not accept goods or services from Cole Advisors or its affiliates or enter into any other transaction with Cole Advisors or its affiliates unless a majority of our directors, including a majority of the independent directors, not otherwise interested in the transaction approve such transaction as fair and reasonable to us and on terms and conditions not less favorable to us than those available from unaffiliated third parties.

Employees

      We have no direct employees. The employees of Cole Advisors and other affiliates of our advisor provide services for us related to acquisition, property management, asset management, accounting, investor relations, and all other administrative services. The employees of Cole Capital, our affiliated dealer manager, provide wholesale brokerage services.

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      We are dependent on our advisor and its affiliates for services that are essential to us, including the sale of shares of our common stock, asset acquisition decisions, property management and other general administrative responsibilities. In the event that these companies were unable to provide these services to us, we would be required to obtain such services from other sources.

      We reimburse Cole Advisors and its affiliates for expenses incurred in connection with its provision of administrative services to us, including personnel costs, subject to certain limitations. During the year ended December 31, 2005, no amounts were reimbursed to Cole Advisors for such services.

Insurance

      We believe that our properties are adequately insured.

Competition

      As we purchase properties to build our portfolio, we are in competition with other potential buyers for the same properties, and may have to pay more to purchase the property if there were no other potential acquirers or will have to locate another property that meets our investment criteria. Although our properties are currently 100% leased and we intend to acquire properties subject to existing leases, the leasing of real estate is highly competitive in the current market, and we may experience competition for tenants from owners and managers of competing projects. As a result, we may have to provide free rent, incur charges for tenant improvements, or offer other inducements, or we might not be able to timely lease the space, all of which may have an adverse impact on our results of operations. At the time we elect to dispose of our properties, we will also be in competition with sellers of similar properties to locate suitable purchasers for its properties.

Concentration of Credit Risk

      At December 31, 2005 and December 31, 2004, we had cash on deposit in one financial institution in excess of federally insured levels; however, we have not experienced any losses in such accounts. We limit investment of cash investments to financial institutions with high credit standing; therefore, we believe we are not exposed to any significant credit risk on cash.

      Our tenants are generally of “investment grade” quality. One tenant in the drugstore industry, and one tenant in the automotive supply industry accounted for approximately 34% and 31%, of our gross annualized base rental revenues, respectively, as of December 31, 2005. Tenants in the drugstore, and automotive supply industries comprised approximately 44% and 31%, respectively, of our gross annualized base rental revenues as of December 31, 2005.

Litigation

      In the ordinary course of business, we may become subject to litigation or claims. There are no material pending legal proceedings or proceedings known to be contemplated against us.

Available Information

      We electronically file an annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports with the SEC. We have also filed a registration statement and supplements to our prospectus in connection with our Offering with the SEC. Copies of our filings with the SEC may be obtained from the SEC’s website, at http://www.sec.gov. Access to these filings is free of charge.

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ITEM 1A. RISK FACTORS

      Set forth below are investment risks that we believe are material to our investors.

Risks Related to an Investment in Cole Credit Property Trust II, Inc.

We have a limited operating history and limited established financing sources, and the prior performance of real estate investment programs sponsored by affiliates of our advisor may not be an indication of our future results.

      We have a limited operating history and stockholders should not rely upon the past performance of other real estate investment programs sponsored by affiliates of our advisor to predict our future results. We were incorporated in September 2004. As of December 31, 2005, we had raised approximately $25.3 million of net offering proceeds, of which we had used approximately $19.4 million to purchase 14 properties with an aggregate purchase price of approximately $91.8 million. Although Mr. Cole and other members of our advisor’s management have significant experience in the acquisition, finance, management and development of commercial real estate, this is the first publicly offered REIT sponsored by Mr. Cole or his affiliates. Accordingly, the prior performance of real estate investment programs sponsored by affiliates of Mr. Cole and our advisor may not be indicative of our future results.

      Presently, both we and our advisor have limited resources. If our capital resources, or those of our advisor, are insufficient to support our operations, we will not be successful.

      Stockholders should consider our prospects in light of the risks, uncertainties and difficulties frequently encountered by companies that are, like us, in their early stage of development. To be successful in this market, we must, among other things:

•  identify and acquire investments that further our investment strategies;

•  increase awareness of the Cole Credit Property Trust II, Inc. name within the investment products market;

•  expand and maintain our network of licensed securities brokers and other agents;

•  attract, integrate, motivate and retain qualified personnel to manage our day-to-day operations;

•  respond to competition for our targeted real estate properties and other investments as well as for potential investors; and

•  continue to build and expand our operations structure to support our business.

      We cannot guarantee that we will succeed in achieving these goals, and our failure to do so could cause stockholders to lose all or a portion of their investment.

Because we are conducting a blind pool offering, an investor will not have the opportunity to evaluate all of our investments before we make them, which makes an investment in us more speculative.

      We have acquired only a limited number of properties. We have not identified any additional properties or investments that we may make. Additionally, we do not provide stockholders with information to evaluate our investments prior to our acquisition of properties. We seek to invest substantially all of the offering proceeds available for investment, after the payment of fees and expenses, in the acquisition of freestanding, single-tenant commercial properties net leased to investment grade or other creditworthy tenants. We may also, in the discretion of our advisor, invest in other types of real estate or in entities that invest in real estate. In addition, our advisor may make or invest in mortgage loans or participations therein on our behalf if our board of directors determines, due to the state of the real estate market or in order to diversify our investment portfolio or otherwise, that such investments are advantageous to us. We have established policies relating to the creditworthiness of tenants of our properties, but our board of directors will have wide discretion in implementing these policies, and you do not have the opportunity to evaluate potential tenants.

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There is no public trading market for our shares, and there may never be one; therefore, it will be difficult for an investor to sell their shares.

      There is currently no public market for our shares, and there may never be one. An investor may not sell their shares unless the buyer meets applicable suitability and minimum purchase standards. Our charter also prohibits the ownership of more than 9.8% of our stock, unless exempted by our board of directors, which may inhibit large investors from desiring to purchase an investor’s shares. Moreover, our share redemption program includes numerous restrictions that would limit a stockholders ability to sell their shares to us. Our board of directors could choose to amend, suspend or terminate our share redemption program upon 30 days’ notice. Therefore, it may be difficult for an investor to sell its shares promptly or at all. If an investor is able to sell its shares, it likely will have to sell them at a substantial discount to the price it paid for the shares. It also is likely that an investor’s shares would not be accepted as the primary collateral for a loan. An investor should purchase the shares only as a long-term investment because of the illiquid nature of the shares.

If we, through Cole Advisors, are unable to find suitable investments, then we may not be able to achieve our investment objectives or pay distributions.

      Our ability to achieve our investment objectives and to pay distributions is dependent upon the performance of Cole Advisors, our advisor, in acquiring our investments, selecting tenants for our properties and securing independent financing arrangements. We currently own a limited number of properties and have limited operations and independent financing. An investor will be able to evaluate the terms of our current investments prior to making an investment, but no opportunity to evaluate the terms of transactions or other economic or financial data concerning any of our future investments. An investor must rely almost entirely on the management ability of Cole Advisors and the oversight of our board of directors. We cannot be sure that Cole Advisors will be successful in obtaining suitable investments on financially attractive terms or that, if it makes investments on our behalf, our objectives will be achieved. If we, through Cole Advisors, are unable to find suitable investments, we will hold the proceeds of the Offering in an interest-bearing account, invest the proceeds in short-term, investment-grade investments. In such an event, our ability to pay distributions to our stockholders would be adversely affected.

We may suffer from delays in locating suitable investments, which could adversely affect our ability to make distributions and the value of a stockholders investment.

      We could suffer from delays in locating suitable investments, particularly as a result of our reliance on our advisor at times when management of our advisor is simultaneously seeking to locate suitable investments for other affiliated programs. Additionally, as a public company, we are subject to the ongoing reporting requirements under the Exchange Act. Pursuant to the Exchange Act, we may be required to file with the SEC financial statements of properties we acquire or, in certain cases, financial statements of the tenants of the acquired properties. To the extent any required financial statements are not available or cannot be obtained, we will not be able to acquire the property. As a result, we may not be able to acquire certain properties that otherwise would be a suitable investment. We could suffer delays in our property acquisitions due to these reporting requirements. Delays we encounter in the selection, acquisition and, in the event we develop properties, development of income-producing properties likely would adversely affect our ability to make distributions and the value of an investors overall returns. In such event, we may pay all or a substantial portion of our distributions from the proceeds of the Offering or from borrowings in anticipation of future cash flow, which may constitute a return of a stockholders capital. Distributions from the proceeds of the Offering or from borrowings also could reduce the amount of capital we ultimately invest in properties. This, in turn, would reduce the value of an investors investment. In particular, where we acquire properties prior to the start of construction or during the early stages of construction, it will typically take several months to complete construction and rent available space. Therefore, an investor could suffer delays in the receipt of cash distributions attributable to those particular properties.

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If we are unable to raise substantial funds, we will be limited in the number and type of investments we may make and the value of an investor’s investment in us will fluctuate with the performance of the specific properties we acquire.

      The Offering is being made on a best efforts basis, whereby the brokers participating in the offering are only required to use their best efforts to sell our shares and have no firm commitment or obligation to purchase any of the shares. As a result, the amount of proceeds we raise in the Offering may be substantially less than the amount we would need to achieve a broadly diversified property portfolio. If we are unable to raise substantially more than this amount, we will make fewer investments resulting in less diversification in terms of the number of investments owned, the geographic regions in which our investments are located and the types of investments that we make. In such event, the likelihood of our profitability being affected by the performance of any one of our investments will increase. Additionally, we are not limited in the number or size of our investments or the percentage of net proceeds we may dedicate to a single investment. An investor’s investment in our shares will be subject to greater risk to the extent that we lack a diversified portfolio of investments. In addition, our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, and our financial condition and ability to pay distributions could be adversely affected.

If our advisor loses or is unable to obtain key personnel, our ability to implement our investment strategies could be delayed or hindered, which could adversely affect our ability to make distributions and the value of an investor’s investment.

      Our success depends to a significant degree upon the contributions of certain of our executive officers and other key personnel of our advisor, including Christopher H. Cole, Blair D. Koblenz, Jonathan T. Albro, John M. Pons, Sean D. Leahy, D. Kirk McAllaster, Jr. and Christopher T. Robertson, each of whom would be difficult to replace. Our advisor does not have an employment agreement with any of these key personnel and we cannot guarantee that all, or any particular one of these individuals, will remain affiliated with us and/or our advisor. If any of our key personnel were to cease their affiliation with our advisor, our operating results could suffer. Further, we do not intend to separately maintain key person life insurance on Mr. Cole or any other person. We believe that our future success depends, in large part, upon our advisor’s ability to hire and retain highly skilled managerial, operational and marketing personnel. Competition for such personnel is intense, and we cannot assure stockholders that our advisor will be successful in attracting and retaining such skilled personnel. If our advisor loses or is unable to obtain the services of key personnel or does not establish or maintain appropriate strategic relationships, our ability to implement our investment strategies could be delayed or hindered, and the value of an investor’s investment may decline.

Our rights and the rights of our stockholders to recover claims against our officers, directors and our advisor are limited, which could reduce an investor’s and our recovery against them if they cause us to incur losses.

      Maryland law provides that a director has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in the corporation’s best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our charter, in the case of our directors, officers, employees and agents, and the advisory agreement, in the case of our advisor, require us to indemnify our directors, officers, employees and agents and our advisor and its affiliates for actions taken by them in good faith and without negligence or misconduct. Additionally, our charter limits the liability of our directors and officers for monetary damages to the maximum extent permitted under Maryland law. As a result, we and our stockholders may have more limited rights against our directors, officers, employees and agents, and our advisor and its affiliates, than might otherwise exist under common law, which could reduce our stockholders and our recovery against them. In addition, we may be obligated to fund the defense costs incurred by our directors, officers,

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employees and agents or our advisor in some cases, which would decrease the cash otherwise available for distribution to our stockholders.

Risks Related to Conflicts of Interest

Cole Advisors faces conflicts of interest relating to the purchase and leasing of properties, and such conflicts may not be resolved in our favor, which could adversely affect our investment opportunities.

      Affiliates of our advisor may sponsor other real estate investment programs in the future. We may buy properties at the same time as one or more of the other Cole-sponsored programs managed by officers and key personnel of Cole Advisors. There is a risk that Cole Advisors will choose a property that provides lower returns to us than a property purchased by another Cole-sponsored program. We cannot be sure that officers and key personnel acting on behalf of Cole Advisors and on behalf of managers of other Cole-sponsored programs will act in our best interests when deciding whether to allocate any particular property to us. In addition, we may acquire properties in geographic areas where other Cole-sponsored programs own properties. Also, we may acquire properties from, or sell properties to, other Cole-sponsored programs. If one of the other Cole-sponsored programs attracts a tenant that we are competing for, we could suffer a loss of revenue due to delays in locating another suitable tenant. An investor will not have the opportunity to evaluate the manner in which these conflicts of interest are resolved before or after making its investment. Similar conflicts of interest may apply if our advisor determines to make or purchase mortgage loans or participations in mortgage loans on our behalf, since other Cole-sponsored programs may be competing with us for these investments.

Cole Advisors will face conflicts of interest relating to joint ventures, which could result in a disproportionate benefit to the other venture partners at our expense.

      We may enter into joint ventures with other Cole-sponsored programs for the acquisition, development or improvement of properties. Cole Advisors may have conflicts of interest in determining which Cole-sponsored program should enter into any particular joint venture agreement. The co-venturer may have economic or business interests or goals that are or may become inconsistent with our business interests or goals. In addition, Cole Advisors may face a conflict in structuring the terms of the relationship between our interests and the interest of the affiliated co-venturer and in managing the joint venture. Since Cole Advisors and its affiliates will control both the affiliated co-venturer and, to a certain extent, us, agreements and transactions between the co-venturers with respect to any such joint venture will not have the benefit of arm’s-length negotiation of the type normally conducted between unrelated co-venturers, which may result in the co-venturer receiving benefits greater than the benefits that we receive. In addition, we may assume liabilities related to the joint venture that exceed the percentage of our investment in the joint venture.

We may participate in Tenant-in-Common Programs with affiliates of our advisor that will not be the result of arm’s-length negotiations and will result in conflicts of interest.

      Cole Capital Partners, LLC (“Cole Capital Partners”), an affiliate of our advisor, has developed a program to facilitate the acquisition of real estate properties to be owned in co-tenancy arrangements with persons who are looking to invest proceeds from a sale of real estate to qualify for like-kind exchange treatment under Section 1031 of the Internal Revenue Code (a “Tenant-in-Common Program”). Tenant-in-Common Programs are structured as the acquisition of real estate owned in co-tenancy arrangements with other investors in the property (“Tenant-in-Common Participants”) who are seeking to defer taxes under Section 1031 of the Internal Revenue Code. When Cole Capital Partners develops such a program, it generally organizes a new entity (a “Cole Exchange Entity”) to acquire all or part of a property. We may participate in the program by either co-investing in the property with the Cole Exchange Entity or by purchasing a co-tenancy interest from the Cole Exchange Entity, generally at the Cole Exchange Entity’s cost. In that event, as an owner of tenant-in-common interests in properties, we will be subject to the risks inherent in the ownership of co-tenancy interests with unrelated third parties. Our purchase of co-tenancy interests will present conflicts of interest between us and affiliates of our

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advisor. The business interests of Cole Capital Partners and the Cole Exchange Entity may be adverse to, or to the detriment of, our interests. Further, any agreement that we enter into with a Cole Exchange Entity will not be negotiated in an arm’s-length transaction and, as a result of the affiliation between our advisor, Cole Capital Partners and the Cole Exchange Entity, our advisor may be reluctant to enforce the agreements against such entities.

Cole Advisors and its officers and employees and certain of our key personnel face competing demands relating to their time, and this may cause our operating results to suffer.

      Cole Advisors and its officers and employees and certain of our key personnel and their respective affiliates are key personnel, general partners and sponsors of other real estate programs having investment objectives and legal and financial obligations similar to ours and may have other business interests as well. Because these persons have competing demands on their time and resources, they may have conflicts of interest in allocating their time between our business and these other activities. During times of intense activity in other programs and ventures, they may devote less time and fewer resources to our business than is necessary or appropriate. If this occurs, the return on your investment may suffer.

Our officers and some of our directors face conflicts of interest related to the positions they hold with affiliated entities, which could hinder our ability to successfully implement our business strategy and to generate returns to stockholders.

      Our executive officers and certain of our directors are also officers and directors of our advisor, our property manager, our dealer manager and other affiliated entities. As a result, these individuals owe fiduciary duties to these other entities and their stockholders and limited partners, which fiduciary duties may conflict with the duties that they owe to our stockholders and us. Their loyalties to these other entities could result in actions or inactions that are detrimental to our business, which could harm the implementation of our business strategy and our investment and leasing opportunities. Conflicts with our business and interests are most likely to arise from involvement in activities related to (i) allocation of new investments and management time and services between us and the other entities, (ii) our purchase of properties from, or sale of properties, to affiliated entities, (iii) the timing and terms of the investment in or sale of an asset, (iv) development of our properties by affiliates, (v) investments with affiliates of our advisor, (vi) compensation to our advisor, and (vii) our relationship with our dealer manager and property manager. If we do not successfully implement our business strategy, we may be unable to generate cash needed to make distributions to stockholders and to maintain or increase the value of our assets.

Cole Advisors faces conflicts of interest relating to the incentive fee structure under our advisory agreement, which could result in actions that are not in the long-term best interests of our stockholders.

      Under our advisory agreement, Cole Advisors is entitled to fees that are structured in a manner intended to provide incentives to our advisor to perform in our best interests and in the best interests of our stockholders. However, because our advisor does not maintain a significant equity interest in us and is entitled to receive substantial minimum compensation regardless of performance, our advisor’s interests are not wholly aligned with those of our stockholders. In that regard, our advisor could be motivated to recommend riskier or more speculative investments in order for us to generate the specified levels of performance or sales proceeds that would entitle our advisor to fees. In addition, our advisor’s entitlement to fees upon the sale of our assets and to participate in sale proceeds could result in our advisor recommending sales of our investments at the earliest possible time at which sales of investments would produce the level of return that would entitle the advisor to compensation relating to such sales, even if continued ownership of those investments might be in our best long-term interest. Our advisory agreement will require us to pay a performance-based termination fee to our advisor in the event that we terminate the advisor prior to the listing of our shares for trading on an exchange or, absent such listing, in respect of its participation in net sales proceeds. To avoid paying this fee, our independent directors may decide against terminating the advisory agreement prior to our listing of our shares or disposition of our investments even if, but for the termination fee, termination of the advisory agreement would be in our

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best interest. In addition, the requirement to pay the fee to the advisor at termination could cause us to make different investment or disposition decisions than we would otherwise make, in order to satisfy our obligation to pay the fee to the terminated advisor. Moreover, our advisor has the right to terminate the advisory agreement upon a change of control and thereby trigger the payment of the performance fee, which could have the effect of delaying, deferring or preventing the change of control.

There is no separate counsel for us and our affiliates, which could result in conflicts of interest.

      Morris, Manning & Martin, LLP acts as legal counsel to us and also represents our advisor and some of its affiliates. There is a possibility in the future that the interests of the various parties may become adverse and, under the Code of Professional Responsibility of the legal profession, Morris, Manning & Martin, LLP may be precluded from representing any one or all of such parties. If any situation arises in which our interests appear to be in conflict with those of our advisor or its affiliates, additional counsel may be retained by one or more of the parties to assure that their interests are adequately protected. Moreover, should a conflict of interest not be readily apparent, Morris, Manning & Martin, LLP may inadvertently act in derogation of the interest of the parties, which could affect our ability to meet our investment objectives.

Risks Related to Our Offering and Our Corporate Structure

The limit on the number of shares a person may own may discourage a takeover that could otherwise result in a premium price to our stockholders.

      Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, no person may own more than 9.8% in value of our outstanding common stock and more than 9.8% in value or number, whichever is more restrictive, of any class of our outstanding stock. This restriction may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for holders of our common stock.

Our charter permits our board of directors to issue stock with terms that may subordinate the rights of common stockholders or discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.

      Our charter permits our board of directors to issue up to 100,000,000 shares of stock. In addition, our board of directors, without any action by our stockholders, may amend our charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series of stock that we have authority to issue. Our board of directors may classify or reclassify any unissued common stock or preferred stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions and other distributions, qualifications and terms or conditions of redemption of any such stock. Thus, our board of directors could authorize the issuance of preferred stock with terms and conditions that could have a priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock. Preferred stock could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for holders of our common stock.

Maryland law prohibits certain business combinations, which may make it more difficult for us to be acquired.

      Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations

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include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:

•  any person who beneficially owns 10.0% or more of the voting power of the corporation’s shares; or

•  an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10.0% or more of the voting power of the then-outstanding voting stock of the corporation.

      A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which he or she otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board.

      After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least:

•  80.0% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and

•  two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

      These super-majority vote requirements do not apply if the corporation’s stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. The business combination statute permits various exemptions from its provisions, including business combinations that are exempted by the board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has exempted any business combination involving Cole Advisors or any affiliate of Cole Advisors. Consequently, the five-year prohibition and the super-majority vote requirements will not apply to business combinations between us and Cole Advisors or any affiliate of Cole Advisors. As a result, Cole Advisors and any affiliate of Cole Advisors may be able to enter into business combinations with us that may not be in the best interest of our stockholders, without compliance with the super-majority vote requirements and the other provisions of the statute. The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

If we are required to register as an investment company under the Investment Company Act, we could not continue our business, which may significantly reduce the value of a stockholders investment.

      We are not registered as an investment company under the Investment Company Act of 1940, as amended (Investment Company Act), pursuant to an exemption in Section 3(c)(5)(C) of the Investment Company Act and certain No-Action Letters from the SEC. Pursuant to this exemption, (1) at least 55% of our assets must consist of real estate fee interests or loans secured exclusively by real estate or both, (2) at least 25% of our assets must consist of loans secured primarily by real estate (this percentage will be reduced by the amount by which the percentage in (1) above is increased); and (3) up to 20% of our assets may consist of miscellaneous investments. We intend to monitor compliance with these requirements on an ongoing basis. If we were obligated to register as an investment company, we would have to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:

•  limitations on capital structure;

•  restrictions on specified investments;

•  prohibitions on transactions with affiliates; and

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•  compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations.

      In order to maintain our exemption from regulation under the Investment Company Act, we must engage primarily in the business of buying real estate, and these investments must be made within a year after the offering ends. If we are unable to invest a significant portion of the proceeds of the Offering in properties within one year of the termination of the Offering, we may avoid being required to register as an investment company by temporarily investing any unused proceeds in government securities with low returns. This would reduce the cash available for distribution to investors and possibly lower a stockholders return.

      To maintain compliance with the Investment Company Act exemption, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income or loss generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire interests in companies that we would otherwise want to acquire and would be important to our investment strategy. If we were required to register as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court was to require enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

Stockholders are bound by the majority vote on matters on which they are entitled to vote, and therefore, their vote on a particular matter may be superceded by the vote of others.

      Stockholders may vote on certain matters at any annual or special meeting of stockholders, including the election of directors. However, they are bound by the majority vote on matters requiring approval of a majority of the stockholders even if they do not vote with the majority on any such matter.

If stockholders do not agree with the decisions of our board of directors, they only have limited control over changes in our policies and operations and may not be able to change such policies and operations.

      Our board of directors determines our major policies, including our policies regarding financing, growth, debt capitalization, REIT qualification and distributions. Our board of directors may amend or revise these and other policies without a vote of the stockholders. Under the Maryland General Corporation Law and our charter, our stockholders have a right to vote only on the following:

•  the election or removal of directors;

•  any amendment of our charter (including a change in our investment objectives), except that our board of directors may amend our charter without stockholder approval to increase or decrease the aggregate number of our shares, to increase or decrease the number of our shares of any class or series that we have the authority to issue or to classify or reclassify any unissued shares by setting or changing the preferences, conversion or other rights, restrictions, limitations as to distributions, qualifications or terms and conditions of redemption of such shares, provided however, that any such amendment does not adversely affect the rights, preferences and privileges of the stockholders;

•  our liquidation or dissolution; and

•  any merger, consolidation or sale or other disposition of substantially all of our assets.

      All other matters are subject to the discretion of our board of directors.

Stockholders are limited in their ability to sell shares pursuant to our share redemption program and may have to hold their shares for an indefinite period of time.

      Our board of directors could choose to amend the terms of our share redemption program without stockholder approval. Our board is also free to terminate the program upon 30 days’ notice. In addition, the share redemption program includes numerous restrictions that would limit a stockholder’s ability to sell

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their shares. Generally, a stockholder must have held their shares for at least one year in order to participate in our share redemption program. Subject to funds being available, we will limit the number of shares redeemed pursuant to our share redemption program as follows: (1) during any calendar year, we will not redeem in excess of 3.0% of the weighted average number of shares outstanding during the prior calendar year; and (2) funding for the redemption of shares will be limited to the net proceeds we receive from the sale of shares under our distribution reinvestment plan. These limits might prevent us from accommodating all redemption requests made in any year. These restrictions severely limit a stockholder’s ability to sell their shares should they require liquidity and limit their ability to recover the value they invested or the fair amount value of their shares.

We established the offering price on an arbitrary basis; as a result, the actual value of a stockholder’s investment may be substantially less than what a stockholder would pay.

      Our board of directors has arbitrarily determined the selling price of the shares, and such price bears no relationship to our book or asset values, or to any other established criteria for valuing issued or outstanding shares. Because the offering price is not based upon any independent valuation, the offering price may not be indicative of the proceeds that a stockholder would receive upon liquidation.

Because the dealer manager is one of our affiliates, investors do not have the benefit of an independent review of the prospectus or us, as is customarily performed in underwritten offerings.

      The dealer manager, Cole Capital, is one of our affiliates and did not make an independent review of us or the Offering. Accordingly, stockholders must rely on their own broker-dealer to make an independent review of the terms of the Offering. If the stockholders broker-dealer did not conduct such a review, the stockholders will not have the benefit of an independent review of the terms of the Offering.

A stockholder’s interests will be diluted if we issue additional shares.

      Existing stockholders and potential investors in the Offering do not have preemptive rights to any shares issued by us in the future. Our charter currently has authorized 100,000,000 shares of stock, of which 90,000,000 shares are designated as common stock and 10,000,000 are designated as preferred stock. Subject to any limitations set forth under Maryland law, our board of directors may increase the number of authorized shares of stock, increase or decrease the number of shares of any class or series of stock designated or reclassify any unissued shares without the necessity of obtaining stockholder approval. All of such shares may be issued in the discretion of our board of directors. Therefore, in the event that we (1) sell additional shares in the Offering or sell additional shares in the future, including those issued pursuant to our distribution reinvestment plan, (2) sell securities that are convertible into shares of our common stock, (3) issue shares of our common stock in a private offering of securities to institutional investors, (4) issue shares of our common stock upon the exercise of the options granted to our independent directors, (5) issue shares to our advisor, its successors or assigns, in payment of an outstanding fee obligation as set forth under our advisory agreement, or (6) issue shares of our common stock to sellers of properties acquired by us in connection with an exchange of limited partnership interests of Cole OP II, existing stockholders and investors purchasing shares in the Offering will likely experience dilution of their equity investment in us. In addition, the partnership agreement for Cole OP II contains provisions that would allow, under certain circumstances, other entities, including other Cole-sponsored programs, to merge into or cause the exchange or conversion of their interest for interests of Cole OP II. Because the limited partnership interests of Cole OP II may, at the discretion of our board of directors, be exchanged for shares of our common stock, any merger, exchange or conversion between Cole OP II and another entity ultimately could result in the issuance of a substantial number of shares of our common stock, thereby diluting the percentage ownership interest of other stockholders. Because of these and other reasons described in this “Risk Factors” section, a stockholder should not expect to be able to own a significant percentage of our shares.

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Payment of fees to Cole Advisors and its affiliates will reduce cash available for investment and distribution.

      Cole Advisors and its affiliates will perform services for us in connection with the offer and sale of the shares in the Offering, the selection and acquisition of our investments, the management and leasing of our properties, the servicing of our mortgage loans, if any, and the administration of our other investments. They will be paid substantial fees for these services, which will reduce the amount of cash available for investment in properties or distribution to stockholders.

We may be unable to pay or maintain cash distributions or increase distributions over time.

      There are many factors that can affect the availability and timing of cash distributions to stockholders. Distributions are based principally on cash available from our operations. The amount of cash available for distributions is affected by many factors, such as our ability to buy properties as offering proceeds become available, the yields on securities of other real estate programs that we invest in and our operating expense levels, as well as many other variables. Actual cash available for distributions may vary substantially from estimates. With a limited operating history, we cannot assure stockholders that we will be able to pay or maintain distributions or that distributions will increase over time. Nor can we give any assurance that rents from the properties will increase, that the securities we buy will increase in value or provide constant or increased distributions over time, or that future acquisitions of real properties, mortgage loans or our investments in securities will increase our cash available for distributions to stockholders. Our actual results may differ significantly from the assumptions used by our board of directors in establishing the distribution rate to stockholders.

If we are unable to obtain funding for future capital needs, cash distributions to our stockholders and the value of our investments could decline.

      When tenants do not renew their leases or otherwise vacate their space, we will often need to expend substantial funds for tenant improvements to the vacated space in order to attract replacement tenants. In addition, although our current leases with tenants require tenants to pay routine property maintenance costs, we are responsible for any major structural repairs, such as repairs to the foundation, exterior walls and rooftops.

      We use substantially all of the Offering’s gross proceeds to buy real estate and pay various fees and expenses. We do not intend to reserve any proceeds from the Offering for future capital needs. Accordingly, if we need additional capital in the future to improve or maintain our properties or for any other reason, we must obtain financing from other sources, such as cash flow from operations, borrowings, property sales or future equity offerings. These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both.

General Risks Related to Investments in Real Estate

Our operating results would be affected by economic and regulatory changes that have an adverse impact on the real estate market in general, and we cannot assure stockholders that we will be profitable or that we will realize growth in the value of our real estate properties.

      Our operating results are subject to risks generally incident to the ownership of real estate, including:

•  changes in general economic or local conditions;

•  changes in supply of or demand for similar or competing properties in an area;

•  changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive;

•  changes in tax, real estate, environmental and zoning laws; and

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•  periods of high interest rates and tight money supply.

      These and other reasons may prevent us from being profitable or from realizing growth or maintaining the value of our real estate properties.

Most of our properties depend upon a single tenant for all of their rental income, and our financial condition and ability to make distributions may be adversely affected by the bankruptcy or insolvency, a downturn in the business or a lease termination of a single tenant.

      We expect that most of the properties that we acquire will be occupied by only one tenant and, therefore, the success of those properties are materially dependent on the financial stability of such tenants. Lease payment defaults by tenants could cause us to reduce the amount of distributions we pay. A default of a tenant on its lease payments to us would cause us to lose the revenue from the property and force us to find an alternative source of revenue to meet any mortgage payment and prevent a foreclosure if the property is subject to a mortgage. In the event of a default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-letting the property. If a lease is terminated, there is no assurance that we will be able to lease the property for the rent previously received or sell the property without incurring a loss. A default by a tenant, the failure of a guarantor to fulfill its obligations or other premature termination of a lease or a tenant’s election not to extend a lease upon its expiration could have an adverse effect on our financial condition and our ability to pay distributions.

If a tenant declares bankruptcy, we may be unable to collect balances due under relevant leases.

      Any or all of the tenants, or a guarantor of a tenant’s lease obligations, could be subject to a bankruptcy proceeding pursuant to Title 11 of the bankruptcy laws of the United States. Such a bankruptcy filing would bar all efforts by us to collect pre-bankruptcy debts from these entities or their properties, unless we receive an enabling order from the bankruptcy court. Post-bankruptcy debts would be paid currently. If a lease is assumed, all pre-bankruptcy balances owing under it must be paid in full. If a lease is rejected by a tenant in bankruptcy, we would have a general unsecured claim for damages. If a lease is rejected, it is unlikely we would receive any payments from the tenant because our claim is capped at the rent reserved under the lease, without acceleration, for the greater of one year or 15% of the remaining term of the lease, but not greater than three years, plus rent already due but unpaid. This claim could be paid only in the event funds were available, and then only in the same percentage as that realized on other unsecured claims.

      A tenant or lease guarantor bankruptcy could delay efforts to collect past due balances under the relevant leases, and could ultimately preclude full collection of these sums. Such an event could cause a decrease or cessation of rental payments that would mean a reduction in our cash flow and the amount available for distributions. In the event of a bankruptcy, we cannot assure you that the tenant or its trustee will assume our lease. If a given lease, or guaranty of a lease, is not assumed, our cash flow and the amounts available for distributions to stockholders may be adversely affected.

If a sale-leaseback transaction is re-characterized, our financial condition could be adversely affected.

      We have entered, and may in the future enter, into sale-leaseback transactions, whereby we purchase a property and then lease the same property back to the person from whom we purchased it. In the event of the bankruptcy of a tenant, a transaction structured as a sale-leaseback may be re-characterized as either a financing or a joint venture, either of which outcomes could adversely affect our business.

      If the sale-leaseback were re-characterized as a financing, we might not be considered the owner of the property, and as a result would have the status of a creditor in relation to the tenant. In that event, we would no longer have the right to sell or encumber our ownership interest in the property. Instead, we would have a claim against the tenant for the amounts owed under the lease, with the claim arguably secured by the property. The tenant/debtor might have the ability to propose a plan restructuring the term, interest rate and amortization schedule of its outstanding balance. If confirmed by the bankruptcy court,

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we could be bound by the new terms, and prevented from foreclosing our lien on the property. These outcomes could adversely affect our cash flow and the amount available for distributions.

      If the sale-leaseback were re-characterized as a joint venture, our lessee and we could be treated as co-venturers with regard to the property. As a result, we could be held liable, under some circumstances, for debts incurred by the lessee relating to the property. The imposition of liability on us could adversely affect our cash flow and the amount available for distributions to our stockholders.

Properties that have vacancies for a significant period of time could be difficult to sell, which could diminish a stockholder’s return on investment.

      A property may incur vacancies either by the continued default of tenants under their leases or the expiration of tenant leases. If vacancies continue for a long period of time, we may suffer reduced revenues resulting in less cash distributions to be distributed to stockholders. In addition, because properties’ market values depend principally upon the value of the properties’ leases, the resale value of properties with prolonged vacancies could suffer, which could further reduce returns.

We may obtain only limited warranties when we purchase a property.

      The seller of a property will often sell such property in its “as is” condition on a “where is” basis and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing. The purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property as well as the loss of rental income from that property.

We may be unable to secure funds for future tenant improvements, which could adversely impact our ability to pay cash distributions to our stockholders.

      When tenants do not renew their leases or otherwise vacate their space, it is usual that, in order to attract replacement tenants, we will be required to expend substantial funds for tenant improvements and tenant refurbishments to the vacated space. We will use substantially all of the gross proceeds of our Offering to buy real estate and pay various fees and expenses. We do not intend to reserve any proceeds from the Offering for future capital needs. Accordingly, if we need additional capital in the future to improve or maintain our properties or for any other reason, we will have to obtain financing from other sources, such as cash flow from operations, borrowings, property sales or future equity offerings. These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both.

Our inability to sell a property when we desire to do so could adversely impact our ability to pay cash distributions to stockholders.

      The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms set by us, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property.

      We may be required to expend funds to correct defects or to make improvements before a property can be sold. We cannot assure stockholders that we will have funds available to correct such defects or to make such improvements.

      In acquiring a property, we may agree to restrictions that prohibit the sale of that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These provisions would restrict our ability to sell a property.

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We may not be able to sell our properties at a price equal to, or greater than, the price for which we purchased such property, which may lead to a decrease in the value of our assets.

      Many of our leases will not contain rental increases over time. Therefore, the value of the property to a potential purchaser may not increase over time, which may restrict our ability to sell a property, or in the event we are able to sell such property, may lead to a sale price less than the price that we paid to purchase the property.

We have, and in the future may, acquire or finance properties with lock-out provisions, which may prohibit us from selling a property, or may require us to maintain specified debt levels for a period of years on some properties.

      Lock-out provisions could materially restrict us from selling or otherwise disposing of or refinancing properties. These provisions would affect our ability to turn our investments into cash and thus affect cash available for distributions to stockholders. Lock-out provisions may prohibit us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties.

      Lock-out provisions could impair our ability to take actions during the lock-out period that would otherwise be in the best interests of our stockholders and, therefore, may have an adverse impact on the value of the shares relative to the value that would result if the lock-out provisions did not exist. In particular, lock-out provisions could preclude us from participating in major transactions that could result in a disposition of our assets or a change in control even though that disposition or change in control might be in the best interests of our stockholders.

Rising expenses could reduce cash flow and funds available for future acquisitions.

      Any properties that we buy are subject to operating risks common to real estate in general, any or all of which may negatively affect us. If any property is not fully occupied or if rents are being paid in an amount that is insufficient to cover operating expenses, we could be required to expend funds with respect to that property for operating expenses. The properties will be subject to increases in tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses.

      While most of our properties are leased on a net-lease basis or require the tenants to pay a portion of such expenses, renewals of leases or future leases may not be negotiated on that basis, in which event we will have to pay those costs. If we are unable to lease properties on a triple-net-lease basis or on a basis requiring the tenants to pay all or some of such expenses, or if tenants fail to pay required tax, utility and other impositions, we could be required to pay those costs, which could adversely affect funds available for future acquisitions or cash available for distributions.

Adverse economic conditions will negatively affect our returns and profitability.

      Recent geopolitical events have exacerbated the general economic slowdown that has affected the nation as a whole and the local economies where our properties may be located. The following market and economic challenges may adversely affect our operating results:

•  poor economic times may result in tenant defaults under leases;

•  re-leasing may require concessions or reduced rental rates under the new leases; and

•  increased insurance premiums, resulting in part from the increased risk of terrorism, may reduce funds available for distribution or, to the extent such increases are passed through to tenants, may lead to tenant defaults. Increased insurance premiums may make it difficult to increase rents to tenants on turnover, which may adversely affect our ability to increase our returns.

      Our operations could be negatively affected to the extent that an economic downturn is prolonged or becomes more severe.

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If we suffer losses that are not covered by insurance or that are in excess of insurance coverage, we could lose invested capital and anticipated profits.

      Each tenant is responsible for insuring its goods and premises and, in some circumstances, may be required to reimburse us for a share of the cost of acquiring comprehensive insurance for the property, including casualty, liability, fire and extended coverage customarily obtained for similar properties in amounts that our advisor determines are sufficient to cover reasonably foreseeable losses. Tenants of single-user properties leased on a triple-net-lease basis typically are required to pay all insurance costs associated with those properties. Material losses may occur in excess of insurance proceeds with respect to any property, as insurance may not be sufficient to fund the losses. However, there are types of losses, generally of a catastrophic nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, which are either uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential terrorism acts could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases have begun to insist that commercial property owners purchase specific coverage against terrorism as a condition for providing mortgage loans. It is uncertain whether such insurance policies will be available, or available at reasonable cost, which could inhibit our ability to finance or refinance our potential properties. In these instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We cannot assure stockholders that they will have adequate coverage for such losses. The Terrorism Risk Insurance Act of 2002 is designed for a sharing of terrorism losses between insurance companies and the federal government. We cannot be certain how this act will impact us or what additional cost to us, if any, could result. If such an event damaged or destroyed one or more of our properties, we could lose both our invested capital and anticipated profits from such property.

Terrorist attacks, such as the attacks that occurred in New York and Washington, D.C. on September 11, 2001, and other acts of violence or war may affect the markets in which we operate, our operations and our profitability.

      Terrorist attacks may negatively affect our operations and a stockholders investment in our common shares. We cannot assure stockholders that there will not be further terrorist attacks against the United States or United States businesses. Properties we acquire may be located in areas that may be susceptible to attack, which may make these properties more likely to be viewed as terrorist targets than similar, less recognizable properties. These attacks or armed conflicts may directly impact the value of our properties through damage, destruction, loss or increased security costs. We may obtain terrorism insurance as required by our lenders. The terrorism insurance that we obtain may not be sufficient to cover loss for damages to our properties as a result of terrorist attacks. In addition, certain losses resulting from these types of events are uninsurable and others would not be covered by our current terrorism insurance. Additional terrorism insurance may not be available at a reasonable price or at all.

      The United States’ armed conflict in Iraq and other parts of the world could have a further impact on our tenants. The consequences of any armed conflict are unpredictable, and we may not be able to foresee events that could have an adverse effect on our business.

      More generally, any of these events could result in increased volatility in or damage to the United States and worldwide financial markets and economy. They also could result in a continuation of the current economic uncertainty in the United States or abroad. Our revenues will be dependent upon payment of rent by retailers, which may be particularly vulnerable to uncertainty in the local economy. Adverse economic conditions could affect the ability of our tenants to pay rent, which could have a material adverse effect on our operating results and financial condition, as well as our ability to pay distributions to stockholders.

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Real estate related taxes may increase, and if these increases are not passed on to tenants, our income will be reduced.

      Some local real property tax assessors may seek to reassess some of our properties as a result of our acquisition of the property. Generally, from time to time our property taxes increase as property values or assessment rates change or for other reasons deemed relevant by the assessors. An increase in the assessed valuation of a property for real estate tax purposes will result in an increase in the related real estate taxes on that property. Although some tenant leases may permit us to pass through such tax increases to the tenants for payment, there is no assurance that renewal leases or future leases will be negotiated on the same basis. Increases not passed through to tenants will adversely affect our income, cash available for distributions and the amount of distributions to stockholders.

Revenue from our properties depends on the amount of our tenants’ retail revenue, making us vulnerable to general economic downturns and other conditions affecting the retail industry.

      Some of our leases provide for base rent plus contractual base rent increases. Some of our leases may also include a percentage rent clause for additional rent above the base amount based upon a specified percentage of the sales our tenants generate.

      Under those leases that contain percentage rent clauses, our revenue from tenants may decrease as the sales of our tenants decrease. Generally, retailers face declining revenues during downturns in the economy. As a result, the portion of our revenue that we derive from percentage rent leases could decline upon a general economic downturn.

CC&Rs may restrict our ability to operate a property.

      Some of our properties are contiguous to other parcels of real property, comprising part of the same shopping center development. In connection therewith, there exist significant covenants, conditions and restrictions, known as “CC&Rs,” restricting the operation of such property and any improvements on that property, and related to granting easements on that property. Moreover, the operation and management of the contiguous properties may impact such property. Compliance with CC&Rs may adversely affect our operating costs and reduce the amount of funds that we have available to pay distributions.

Our operating results may be negatively affected by potential development and construction delays and resultant increased costs and risks.

      While we do not currently intend to do so, we may use proceeds from the Offering to acquire and develop properties upon which we will construct improvements. We will be subject to uncertainties associated with re-zoning for development, environmental concerns of governmental entities and/or community groups, and our builder’s ability to build in conformity with plans, specifications, budgeted costs and timetables. If a builder fails to perform, we may resort to legal action to rescind the purchase or the construction contract or to compel performance. A builder’s performance may also be affected or delayed by conditions beyond the builder’s control. Delays in completion of construction could also give tenants the right to terminate preconstruction leases. We may incur additional risks when we make periodic progress payments or other advances to builders before they complete construction. These and other such factors can result in increased costs of a project or loss of our investment. In addition, we will be subject to normal lease-up risks relating to newly constructed projects. We also must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time we acquire the property. If our projections are inaccurate, we may pay too much for a property, and our return on our investment could suffer.

      While we do not currently intend to do so, we may invest in unimproved real property. Returns from development of unimproved properties are also subject to risks associated with re-zoning the land for development and environmental concerns of governmental entities and/or community groups. Although we intend to limit any investment in unimproved property to property we intend to develop, a stockholders investment nevertheless is subject to the risks associated with investments in unimproved real property.

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If we contract with an affiliated development company for newly developed property, we cannot guarantee that our earnest money deposit made to the development company will be fully refunded.

      While we currently do not have an affiliated development company, our sponsor and/or its affiliates may form a development company. In such an event, we may enter into one or more contracts, either directly or indirectly through joint ventures with affiliates or others, to acquire real property from an affiliate of Cole Advisors that is engaged in construction and development of commercial real properties. Properties acquired from an affiliated development company may be either existing income-producing properties, properties to be developed or properties under development. We anticipate that we will be obligated to pay a substantial earnest money deposit at the time of contracting to acquire such properties. In the case of properties to be developed by an affiliated development company, we anticipate that we will be required to close the purchase of the property upon completion of the development of the property by our affiliate. At the time of contracting and the payment of the earnest money deposit by us, our development company affiliate typically will not have acquired title to any real property. Typically, our development company affiliate will only have a contract to acquire land, a development agreement to develop a building on the land and an agreement with one or more tenants to lease all or part of the property upon its completion. We may enter into such a contract with our development company affiliate even if at the time of contracting we have not yet raised sufficient proceeds in our offering to enable us to close the purchase of such property. However, we will not be required to close a purchase from our development company affiliate, and will be entitled to a refund of our earnest money, in the following circumstances:

•  our development company affiliate fails to develop the property;

•  all or a specified portion of the pre-leased tenants fail to take possession under their leases for any reason; or

•  we are unable to raise sufficient proceeds from our offering to pay the purchase price at closing.

      The obligation of our development company affiliate to refund our earnest money will be unsecured, and no assurance can be made that we would be able to obtain a refund of such earnest money deposit from it under these circumstances because our development company affiliate may be an entity without substantial assets or operations. However, our development company affiliate’s obligation to refund our earnest money deposit may be guaranteed by Cole Realty, which will enter into contracts to provide property management and leasing services to various Cole-sponsored programs, including us, for substantial monthly fees. As of the time Cole Realty may be required to perform under any guaranty, we cannot assure that Cole Realty will have sufficient assets to refund all of our earnest money deposit in a lump sum payment. If we were forced to collect our earnest money deposit by enforcing the guaranty of Cole Realty, we will likely be required to accept installment payments over time payable out of the revenues of Cole Realty operations. We cannot assure stockholders that we would be able to collect the entire amount of our earnest money deposit under such circumstances.

Competition with third parties in acquiring properties and other investments may reduce our profitability and the return on a stockholders investment.

      We compete with many other entities engaged in real estate investment activities, including individuals, corporations, bank and insurance company investment accounts, other REITs, real estate limited partnerships and other entities engaged in real estate investment activities, many of which have greater resources than we do. Larger REITs may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. In addition, the number of entities and the amount of funds competing for suitable investments may increase. Any such increase would result in increased demand for these assets and therefore increased prices paid for them. If we pay higher prices for properties and other investments, our profitability will be reduced and stockholders may experience a lower return on their investment.

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Our properties will face competition that may affect tenants’ ability to pay rent and the amount of rent paid to us may affect the cash available for distributions and the amount of distributions.

      We intend to locate our properties, and our current properties are located, in developed areas. Therefore, there are and will be numerous other retail properties within the market area of each of our properties that will compete with us for tenants. The number of competitive properties could have a material effect on our ability to rent space at our properties and the amount of rents charged. We could be adversely affected if additional competitive properties are built in locations competitive with our properties, causing increased competition for customer traffic and creditworthy tenants. This could result in decreased cash flow from tenants and may require us to make capital improvements to properties that we would not have otherwise made, thus affecting cash available for distributions and the amount available for distributions to stockholders.

Delays in acquisitions of properties may have an adverse effect on a stockholder’s investment.

      There may be a substantial period of time before all of the proceeds of the Offering are actually invested. Delays we encounter in the selection, acquisition and/or development of properties could adversely affect a stockholder’s returns. Where properties are acquired prior to the start of construction or during the early stages of construction, it will typically take several months to complete construction and rent available space. Therefore, stockholders could suffer delays in the payment of cash distributions attributable to those particular properties.

Costs of complying with governmental laws and regulations, including those relating to environmental matters, may adversely affect our income and the cash available for any distributions.

      All real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials and the remediation of contamination associated with disposals. Some of these laws and regulations may impose joint and several liability on tenants, owners or operators for the costs to investigate or remediate contaminated properties, regardless of fault or whether the acts causing the contamination were legal. This liability could be substantial. In addition, the presence of hazardous substances, or the failure to properly remediate these substances, may adversely affect our ability to sell, rent or pledge such property as collateral for future borrowings.

      Some of these laws and regulations have been amended so as to require compliance with new or more stringent standards as of future dates. Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require us to incur material expenditures. Future laws, ordinances or regulations may impose material environmental liability. Additionally, our tenants’ operations, the existing condition of land when we buy it, operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our properties. In addition, there are various local, state and federal fire, health, life-safety and similar regulations with which we may be required to comply, and that may subject us to liability in the form of fines or damages for noncompliance. Any material expenditures, fines or damages we must pay will reduce our ability to make distributions and may reduce the value of a stockholder’s investment.

      State and federal laws in this area are constantly evolving, and we intend to monitor these laws and take commercially reasonable steps to protect ourselves from the impact of these laws, including obtaining environmental assessments of most properties that we acquire; however, we will not obtain an independent third-party environmental assessment for every property we acquire. In addition, we cannot assure you that any such assessment that we do obtain will reveal all environmental liabilities or that a prior owner of a property did not create a material environmental condition not known to us. We cannot predict what other environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted, or what environmental conditions may be found to exist in

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the future. We cannot assure stockholders that our business, assets, results of operations, liquidity or financial condition will not be adversely affected by these laws, which may adversely affect cash available for distributions and the amount of distributions to stockholders.

If we sell properties by providing financing to purchasers, defaults by the purchasers would adversely affect our cash flows.

      If we decide to sell any of our properties, we intend to use our best efforts to sell them for cash. However, in some instances we may sell our properties by providing financing to purchasers. When we provide financing to purchasers, we will bear the risk that the purchaser may default, which could negatively impact our cash distributions to stockholders. Even in the absence of a purchaser default, the distribution of the proceeds of sales to our stockholders, or their reinvestment in other assets, will be delayed until the promissory notes or other property we may accept upon the sale are actually paid, sold, refinanced or otherwise disposed of. In some cases, we may receive initial down payments in cash and other property in the year of sale in an amount less than the selling price and subsequent payments will be spread over a number of years. If any purchaser defaults under a financing arrangement with us, it could negatively impact our ability to pay cash distributions to our stockholders.

Our recovery of an investment in a mortgage that has defaulted may be limited.

      There is no guarantee that the mortgage, loan or deed of trust securing an investment will, following a default, permit us to recover the original investment and interest that would have been received absent a default. The security provided by a mortgage, deed of trust or loan is directly related to the difference between the amount owed and the appraised market value of the property. Although we rely on a current real estate appraisal when we make the investment, the value of the property is affected by general fluctuations in the real estate market, rezoning, neighborhood changes, highway relocations and failure by the borrower to maintain the property.

Our costs associated with complying with the Americans with Disabilities Act may affect cash available for distributions.

      Our properties are subject to the Americans with Disabilities Act of 1990 (Disabilities Act). Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally requires that buildings and services, including restaurants and retail stores, be made accessible and available to people with disabilities. The Disabilities Act’s requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. We will attempt to acquire properties that comply with the Disabilities Act or place the burden on the seller or other third party, such as a tenant, to ensure compliance with the Disabilities Act. However, we cannot assure stockholders that we will be able to acquire properties or allocate responsibilities in this manner. If we cannot, our funds used for Disabilities Act compliance may affect cash available for distributions and the amount of distributions to stockholders.

Risks Associated with Debt Financing

We may incur mortgage indebtedness and other borrowings, which may increase our business risks.

      We have acquired, and expect that in most instances will continue to acquire, real properties by using either existing financing or borrowing new funds. In addition, we may incur mortgage debt and pledge all or some of our real properties as security for that debt to obtain funds to acquire additional real properties. We may borrow if we need funds to satisfy the REIT tax qualification requirement that we distribute at least 90.0% of our annual REIT taxable income to our stockholders. We may also borrow if we otherwise deem it necessary or advisable to assure that we maintain our qualification as a REIT for federal income tax purposes.

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      If there is a shortfall between the cash flow from a property and the cash flow needed to service mortgage debt on a property, then the amount available for distributions to stockholders may be reduced. In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In that case, we could lose the property securing the loan that is in default, thus reducing the value of your investment. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds. We may give full or partial guarantees to lenders of mortgage debt to the entities that own our properties. When we provide a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity. If any mortgages contain cross-collateralization or cross-default provisions, a default on a single property could affect multiple properties. If any of our properties are foreclosed upon due to a default, our ability to pay cash distributions to our stockholders will be adversely affected.

High mortgage rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire and the amount of cash distributions we can make.

      When we place mortgage debt on properties, we run the risk of being unable to refinance the properties when the loans come due, or of being unable to refinance on favorable terms. If interest rates are higher when the properties are refinanced, we may not be able to finance the properties and our income could be reduced. If any of these events occur, our cash flow would be reduced. This, in turn, would reduce cash available for distribution to you and may hinder our ability to raise more capital by issuing more stock or by borrowing more money.

Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.

      When providing financing, a lender could impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt. Loan documents we enter into may contain covenants that limit our ability to further mortgage the property, discontinue insurance coverage or replace Cole Advisors as our advisor. These or other limitations may adversely affect our flexibility and our ability to achieve our operating plans.

Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions to our stockholders.

      We expect that we will incur additional indebtedness in the future. Interest we pay reduces cash available for distributions. Additionally, if we incur variable rate debt, increases in interest rates would increase our interest costs, which could reduce our cash flows and our ability to pay distributions to stockholders. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments in properties at times that may not permit realization of the maximum return on such investments.

We have broad authority to incur debt, and high debt levels could hinder our ability to make distributions and could decrease the value of stockholder’s investment.

      Our charter generally limits us to incurring debt no greater than 60.0% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of all of our assets, unless any excess borrowing is approved by a majority of our independent directors and disclosed to our stockholders in our next quarterly report, along with a justification for such excess borrowing. High debt levels would cause us to incur higher interest charges, would result in higher debt service payments and could be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute and could result in a decline in the value of stockholder’s investment.

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Our independent directors approved, and we expect that during the term of the Offering we will again request that our independent directors approve our ability to incur debt greater than the debt limit discussed above.

      We have with the approval of a majority of our independent directors, incur debt that is in excess of 60% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of all of our assets. We anticipate that we will receive such authority, from time to time in the future for additional borrowings. This results in our having greater than normal debt servicing payments, which may restrict our ability to purchase additional properties or the availability of cash to make distributions to our stockholders.

Risks Associated with Section 1031 Exchange Transactions and Tenant-in-Common Investments

We may have increased exposure to liabilities from litigation as a result of our participation in a Tenant-in-Common Program.

      Cole Capital Partners, an affiliate of our advisor, has developed Tenant-in-Common Programs to facilitate the acquisition of real estate properties to be owned in co-tenancy arrangements with persons who are looking to invest proceeds from a sale of real estate to qualify for like-kind exchange treatment under Section 1031 of the Internal Revenue Code. We may participate in the Tenant-in-Common program by either co-investing in the property with the Cole Exchange Entity or purchasing a tenant-in-common interest from the Cole Exchange Entity, generally at the Cole Exchange Entity’s cost. Changes in tax laws may result in Tenant-in-Common Programs no longer being available, which may adversely affect such programs or cause them not to achieve their intended value. The Cole Exchange Entities are affiliates of our advisor, and, as such, even though we do not sponsor these Tenant-in-Common Programs, we may be named in or otherwise required to defend against any lawsuits brought by Tenant-in-Common Participants because of our affiliation with sponsors of such transactions. Furthermore, in the event that the Internal Revenue Service conducts an audit of the purchasers of co-tenancy interests and successfully challenges the qualification of the transaction as a like-kind exchange, purchasers of co-tenancy interests may file a lawsuit against the entity offering the co-tenancy interests, its sponsors, and/or us. In such event we may be involved in one or more such offerings and could therefore be named in or otherwise required to defend against lawsuits brought by other Tenant-in-Common Participants. Any amounts we are required to expend defending any such claims will reduce the amount of funds available for investment by us in properties or other investments and may reduce the amount of funds available for distribution to our stockholders. In addition, disclosure of any such litigation may adversely affect our ability to raise additional capital in the future through the sale of stock.

We may be subject to risks associated with Tenant-in-Common Programs inherent in ownership of co-tenancy interests with non-affiliated third parties.

      In connection with some of our property acquisitions, we may become tenant-in-common owners of properties in which Cole Exchange Entities sell tenant-in-common interests to Tenant-in-Common Participants. As an owner of tenant-in-common interests in properties, we will be subject to the risks inherent to the ownership of co-tenancy interests with unrelated third parties. In a substantial majority of these transactions, the underlying property serves as collateral for the mortgage loan used to finance the purchase of the property. To the extent the loan is not repaid in full as part of the Tenant-in-Common Program, the loan remains outstanding after the sale of the co-tenancy interests to the Tenant-in-Common Participants. Each co-tenant is a borrower under the loan agreements. However, these loans generally are non-recourse against the Tenant-in-Common Participants interests and are secured by real property. However, the Tenant-in-Common Participants are required to indemnify and become liable to the lender for customary carve-outs under the applicable financing documents, including but not limited to fraud or intentional misrepresentation by a co-tenant or a guarantor of the loan, physical waste of the property, misapplication or misappropriation of insurance proceeds and failure to pay taxes.

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We will be subject to risks associated with the co-tenants in our co-tenancy arrangements that otherwise may not be present in other real estate investments.

      We may enter in tenant-in-common or other co-tenancy arrangements with respect to a portion of the properties we acquire. Ownership of co-tenancy interests involves risks generally not otherwise present with an investment in real estate such as the following:

•  the risk that a co-tenant may at any time have economic or business interests or goals that are or become inconsistent with our business interests or goals;

•  the risk that a co-tenant may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives;

•  the possibility that an individual co-tenant might become insolvent or bankrupt, or otherwise default under the applicable mortgage loan financing documents, which may constitute an event of default under all of the applicable mortgage loan financing documents or allow the bankruptcy court to reject the tenants-in-common agreement or management agreement entered into by the co-tenants owning interests in the property;

•  the possibility that a co-tenant might not have adequate liquid assets to make cash advances that may be required in order to fund operations, maintenance and other expenses related to the property, which could result in the loss of a current or prospective tenants and may otherwise adversely affect the operation and maintenance of the property, could cause a default under the mortgage loan financing documents applicable to the property may result in late charges, penalties and interest and may lead to the exercise of foreclosure and other remedies by the lender;

•  the risk that a co-tenant could breach agreements related to the property, which may cause a default under, or result in personal liability for, the applicable mortgage loan financing documents, violate applicable securities law and otherwise adversely affect the property and the co-tenancy arrangement; or

•  the risk that a default by any co-tenant would constitute a default under the applicable mortgage loan financing documents that could result in a foreclosure and the loss of all or a substantial portion of the investment made by the co-tenants.

      Any of the above might subject a property to liabilities in excess of those contemplated and thus reduce the amount available for distribution to our stockholders.

      In the event that our interests become adverse to those of the other co-tenants, we will not have the contractual right to purchase the co-tenancy interests from the other co-tenants. Even if we are given the opportunity to purchase such co-tenancy interests in the future, we cannot guarantee that we will have sufficient funds available at the time to purchase co-tenancy interests from the Tenant-in-Common Participants.

      We might want to sell our co-tenancy interests in a given property at a time when the other co-tenants in such property do not desire to sell their interests. Therefore, we may not be able to sell our interest in a property at the time we would like to sell. In addition, we anticipate that it will be much more difficult to find a willing buyer for our co-tenancy interests in a property than it would be to find a buyer for a property we owned outright.

Federal Income Tax Risks

Failure to qualify as a REIT would adversely affect our operations and our ability to make distributions.

      Morris, Manning & Martin, LLP, our legal counsel, has rendered its opinion that we will qualify as a REIT when we file our tax return for the year ended December 31, 2005, based upon our representations as to the manner in which we are and will be owned, invest in assets and operate, among other things. However, our qualification as a REIT will depend upon our ability to meet, through investments, actual operating results, distributions and satisfaction of specific stockholder rules, the various tests imposed by

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the Internal Revenue Code. Morris, Manning & Martin, LLP will not review these operating results or compliance with the qualification standards on an ongoing basis. This means that we may fail to satisfy the REIT requirements in the future. Also, this opinion represents Morris, Manning & Martin, LLP’s legal judgment based on the law in effect as of the date of June 27, 2005. Morris, Manning & Martin, LLP’s opinion is not binding on the Internal Revenue Service or the courts, and we will not apply for a ruling from the Internal Revenue Service regarding our status as a REIT. Future legislative, judicial or administrative changes to the federal income tax laws could be applied retroactively, which could result in our disqualification as a REIT.

      If we fail to qualify as a REIT for any taxable year, we will be subject to federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT status. Losing our REIT status would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability. In addition, distributions to stockholders would no longer qualify for the distributions paid deduction, and we would no longer be required to make distributions. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax.

Certain fees paid to Cole OP II may affect our REIT status.

      In connection with any Tenant-in-Common Program, Cole OP II could enter into a number of contractual arrangements with Tenant-in-Common Participants, that will, in effect, guarantee the sale of the co-tenancy interests being offered by any Tenant-in-Common Participants. In consideration for entering into these agreements, Cole OP II would be paid fees that could be characterized by the Internal Revenue Service as non-qualifying income for purposes of satisfying the “income tests” required for REIT qualification. If this fee income were, in fact, treated as non-qualifying, and if the aggregate of such fee income and any other non-qualifying income in any taxable year ever exceeded 5.0% of our gross revenues for such year, we could lose our REIT status for that taxable year and the four following taxable years. As set forth above, we will use all reasonable efforts to structure our activities in a manner intended to satisfy the requirements for our continued qualification as a REIT. Our failure to qualify as a REIT would adversely affect a stockholder’s return on their investment.

Recharacterization of the Tenant-in-Common Programs may result in a 100% tax on income from a prohibited transaction, which would diminish our cash distributions to stockholders.

      The Internal Revenue Service could recharacterize transactions under a Tenant-in-Common Program such that Cole OP II, rather than the Tenant-in-Common Participant, is treated as the bona fide owner, for tax purposes, of properties acquired and resold by a Tenant-in-Common Participant in connection with the Tenant-in-Common Programs. Such characterization could result in the fees paid to Cole OP II by a Tenant-in-Common Participant as being deemed income from a prohibited transaction, in which event the fee income paid to us in connection with the Tenant-in-Common Programs would be subject to a 100% penalty tax. If this occurs, our ability to pay cash distributions to stockholders will be adversely affected. We anticipate that the Cole Exchange Entity will obtain a legal opinion in connection with each Tenant-in-Common Program to the effect that the program will qualify as a like-kind exchange under Section 1031 of the Internal Revenue Code. However, no assurance can be given that the Internal Revenue Service will not take a position contrary to such an opinion.

Recharacterization of sale-leaseback transactions may cause us to lose our REIT status.

      We have purchased, and in the future may purchase, properties and lease them back to the sellers of such properties. While we use our best efforts to structure any such sale-leaseback transaction so that the lease will be characterized as a “true lease,” thereby allowing us to be treated as the owner of the property for federal income tax purposes, we cannot assure stockholders that the IRS will not challenge such characterization. In the event that any sale-leaseback transaction is challenged and recharacterized as a financing transaction or loan for federal income tax purposes, deductions for depreciation and cost recovery relating to such property would be disallowed. If a sale-leaseback transaction were so recharacterized, we

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might fail to satisfy the REIT qualification “asset tests” or the “income tests” and, consequently, lose our REIT status effective with the year of recharacterization. Alternatively, the amount of our REIT taxable income could be recalculated, which might also cause us to fail to meet the distribution requirement for a taxable year.

Stockholders may have tax liability on distributions you elect to reinvest in our common stock.

      If stockholders participate in our distribution reinvestment plan, they will be deemed to have received, and for income tax purposes will be taxed on, the amount reinvested in common stock to the extent the amount reinvested was not a tax-free return of capital. As a result, unless stockholders are a tax-exempt entity, they may have to use funds from other sources to pay their tax liability on the value of the common stock received.

In certain circumstances, we may be subject to federal and state income taxes as a REIT, which would reduce our cash available for distribution to stockholders.

      Even if we qualify and maintain our status as a REIT, we may be subject to federal income taxes or state taxes. For example, net income from a “prohibited transaction” would be subject to a 100% tax. We may not be able to make sufficient distributions to avoid excise taxes applicable to REITs. We may also decide to retain income we earn from the sale or other disposition of our property and pay income tax directly on such income. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly. However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability. We may also be subject to state and local taxes on our income or property, either directly or at the level of Cole OP II or the other companies through which we indirectly own our assets. Any federal or state taxes we pay will reduce our cash available for distribution to stockholders.

Legislative or regulatory action could adversely affect investors.

      Under recently enacted tax legislation, the tax rate applicable to qualifying corporate distributions received by individuals prior to 2009 has been reduced to a maximum rate of 15.0%. This special tax rate is generally not applicable to distributions paid by a REIT, unless such distributions represent earnings on which the REIT itself has been taxed. As a result, distributions (other than capital gain distributions) we pay to individual investors generally will be subject to the tax rates that are otherwise applicable to ordinary income, which currently are as high as 35.0%. This change in law may make an investment in our shares comparatively less attractive to individual investors than an investment in the shares of non-REIT corporations, and could have an adverse effect on the value of our common stock. Stockholders are urged to consult with their own tax advisor with respect to the impact of recent legislation on their investment in our common stock and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our common stock. Stockholders should also note that our counsel’s tax opinion assumes that no legislation will be enacted after June 27, 2005 that will be applicable to an investment in our shares.

Foreign purchasers of our common stock may be subject to FIRPTA tax upon the sale of their shares.

      A foreign person disposing of a U.S. real property interest, including shares of a U.S. corporation whose assets consist principally of U.S. real property interests is generally subject to a tax, known as FIRPTA tax, on the gain recognized on the disposition. Such FIRPTA tax does not apply, however, to the disposition of stock in a REIT if the REIT is “domestically controlled.” A REIT is “domestically controlled” if less than 50.0% of the REIT’s stock, by value, has been owned directly or indirectly by persons who are not qualifying U.S. persons during a continuous five-year period ending on the date of disposition or, if shorter, during the entire period of the REIT’s existence.

      We cannot assure you that we will qualify as a “domestically controlled” REIT. If we were to fail to so qualify, gain realized by foreign investors on a sale of our shares would be subject to FIRPTA tax,

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unless our shares were traded on an established securities market and the foreign investor did not at any time during a specified testing period directly or indirectly own more than 5.0% of the value of our outstanding common stock.

There are special considerations that apply to pension or profit-sharing trusts or IRAs investing in our shares.

      If stockholders are investing the assets of a pension, profit-sharing, 401(k), Keogh or other qualified retirement plan or the assets of an IRA in our common stock, stockholders should satisfy themselves that, among other things:

•  their investment is consistent with fiduciary obligations under ERISA and the Internal Revenue Code;

•  their investment is made in accordance with the documents and instruments governing the stockholder’s plan or IRA, including the stockholder’s plan investment policy;

•  their investment satisfies the prudence and diversification requirements of ERISA;

•  their investment will not impair the liquidity of the plan or IRA;

•  their investment will not produce UBTI for the plan or IRA;

•  stockholders will be able to value the assets of the plan annually in accordance with ERISA requirements; and

•  Their investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

ITEM 1B.      UNRESOLVED STAFF COMMENTS

      Not applicable.

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ITEM 2. PROPERTIES

      As of December 31, 2005, through separate wholly-owned subsidiaries of our operating partnership, we owned the following properties, each of which is 100% leased to single tenants with an average remaining lease term of approximately 14 years:

											Percentage
									2005		of 2005
									Annualized		Annualized
					Square		Purchase		Gross Base		Gross
Property	Acquisition Date		Location		Feet		Price		Rent		Base Rent
Tractor Supply specialty retail		September 26, 2005		Parkersburg, WV		21,688	$	3,353,243	$	251,980		4	%
Walgreens drugstore		October 5, 2005		Brainerd, MN		15,120		4,434,440		303,000		4	%
Rite Aid drugstore		October 20, 2005		Alliance, OH		11,348		2,153,871		189,023		3	%
La-Z-Boy furnishings store		October 25, 2005		Glendale, AZ		23,000		5,823,871		459,522		7	%
Walgreens drugstore		November 2, 2005		Florissant, MO		15,120		5,280,483		344,000		5	%
Walgreens drugstore		November 2, 2005		Saint Louis, MO		15,120		5,150,225		335,500		5	%
Walgreens drugstore		November 2, 2005		Saint Louis, MO		15,120		6,261,239		408,000		6	%
Walgreens drugstore		November 22, 2005		Columbia, MO		13,973		6,419,530		439,000		6	%
Walgreens drugstore		November 22, 2005		Olivette, MO		15,030		7,997,138		528,000		8	%
CVS drugstore		December 1, 2005		Alpharetta, GA		10,125		3,188,803		222,244		3	%
Lowe’s home improvement		December 1, 2005		Enterprise, AL		95,173		7,632,658		500,000		7	%
CVS drugstore		December 8, 2005		Richland Hills, TX		10,908		3,773,637		272,593		4	%
FedEx Ground distribution center		December 9, 2005		Rockford, IL		67,925		6,279,083		445,632		7	%
Plastech automotive supply		December 15, 2005		Auburn Hills, MI		111,881		24,093,417		2,138.878		31	%
Total						441,531	$	91,841,638	$	6,837,372		100	%

Property Statistics

      The following table shows the geographic diversification of our portfolio as of December 31, 2005:

	Total				2005 Annualized		Percentage of 2005
	Number of		Rentable		Gross Base		Annualized Gross
Location	Properties		Square Feet		Rent		Base Rent
Missouri		5		74,363	$	2,054,500		30	%
Michigan		1		111,881		2,138,878		31	%
Alabama		1		95,173		500,000		7	%
Arizona		1		23,000		459,522		7	%
Minnesota		1		15,120		303,000		4	%
Ohio		1		11,348		189,023		3	%
Texas		1		10,908		272,593		4	%
West Virginia		1		21,688		251,980		4	%
Georgia		1		10,125		222,244		3	%
Illinois		1		67,925		445,632		7	%
		14		441,531	$	6,837,372		100	%

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      The following table shows the tenant industry diversification of our portfolio as of December 31, 2005:

					2005 Annualized		Percentage of 2005
	Total Number		Rentable		Gross Base		Annualized Gross
Industry	of Leases		Square Feet		Rent		Base Rent
Drugstore		9		121,864	$	3,041,360		45	%
Automotive Supply		1		111,881		2,138,878		31	%
Home Improvement		1		95,173		500,000		7	%
Furnishings		1		23,000		459,522		7	%
Specialty Retail		1		21,688		251,980		4	%
Distribution		1		67,925		445,632		7	%
		14		441,531	$	6,837,372		100	%

      The following table shows the tenant diversification of our portfolio as of December 31, 2005:

			2005 Annualized		Percentage of 2005
	Total Number		Gross Base		Annualized Gross
Tenant	of Leases		Rent		Base Rent
Walgreens		6	$	2,357,500		34	%
Plastech		1		2,138,878		31	%
Lowe’s		1		500,000		7	%
CVS		2		494,837		7	%
La-Z-Boy		1		459,522		7	%
Rite Aid		1		189,023		3	%
Tractor Supply		1		251,980		4	%
FedEx		1		445,632		7	%
		14	$	6,837,372		100	%

      The following table shows lease expirations of our portfolio as of December 31, 2005, during each of the next ten years and thereafter, assuming no exercise of renewal options or termination rights:

					2005 Annualized		Percentage of 2005
	Total Number		Rentable Square		Gross Base		Annualized Gross
Year of Lease Expiration	of Leases		Feet Expiring		Rent		Base Rent
Vacant		—		—	$	—		0	%
2006 - 2014		—		—		—		0	%
2015		3		186,098		1,405,154		21	%
Thereafter		11		255,433		5,432,218		79	%
		14		441,531	$	6,837,372		100	%

ITEM 3. LEGAL PROCEEDINGS

      In the ordinary course of business, we may become subject to litigation or claims. There are no material pending legal proceedings or proceedings known to be contemplated against us.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters were submitted to a vote of our stockholders during the fourth quarter of 2005.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

      As of March 22, 2006, we had approximately 5.6 million shares of common stock outstanding held by a total of 1,574 stockholders of record. The number of stockholders is based on the records of Phoenix American Financial Services, Inc., who serves as our registrar and transfer agent.

      There is no established trading market for our common stock. Therefore, there is a risk that a stockholder may not be able to sell our stock at a time or price acceptable to the stockholder, or at all. Pursuant to the Offering, we are selling shares of our common stock to the public at a price of $10.00 per share and at a price of $9.50 per share pursuant to our distribution reinvestment plan. Additionally, we provide discounts in our Offering for certain categories of purchasers, including based on volume discounts. Under our charter, certain restrictions are imposed on the ownership and transfer of shares.

      Unless and until our shares are listed on a national securities exchange or are included for quotation on The Nasdaq National Market, it is not expected that a public market for the shares will develop. To assist fiduciaries of tax-qualified pension, stock bonus or profit-sharing plans, employee benefit plans and annuities described in Section 403(a) or (b) of the Internal Revenue Code or an individual retirement account or annuity described in Section 408 of the Internal Revenue Code subject to the annual reporting requirements of ERISA and IRA trustees or custodians in preparation of reports relating to an investment in the shares, we intend to provide reports of the quarterly and annual determinations of the current value of the net assets per outstanding share to those fiduciaries who request such reports. Until three full fiscal years after the later of the completion of the Offering and any subsequent offering of shares, we intend to use the offering price of shares in the most recent offering as the per share net asset value. Beginning three full fiscal years after the completion of the last offering of shares, the value of the properties and other assets will be based on valuations of either our properties or us as a whole, whichever valuation method our board of directors determines to be appropriate. Persons independent of us and independent of our advisor will perform such valuations.

Share Redemption Program

      Our board of directors has adopted a share redemption program that enables our stockholders to sell their shares to us in limited circumstances. Our share redemption program permits stockholders to sell their shares back to us after they have held them for at least one year, subject to the significant conditions and limitations described below.

      Our common stock is currently not listed on a national securities exchange, or included for quotation on a national securities market, and we will not seek to list our stock until such time as our independent directors believe that the listing of our stock would be in the best interest of our stockholders. In order to provide stockholders with the benefit of interim liquidity, stockholders who have held their shares for at least one year may present all, or a portion consisting of at least 25%, of the holder’s shares to us for redemption at any time in accordance with the procedures outlined below. At that time, we may, subject to the conditions and limitations described below, redeem the shares presented for redemption for cash to the extent that we have sufficient funds available to us to fund such redemption. We will not pay to our board of directors, advisor or its affiliates any fees to complete any transactions under our share redemption program.

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      During the term of the Offering the redemption price per share will depend on the length of time a redeeming stockholder held such shares as follows: after one year from the purchase date — 92.5% of the amount paid for each share; after two years from the purchase date — 95.0% of the amount paid for each share, after three years from the purchase date — 97.5% of the amount paid for each share; and after four years from the purchase date — 100.0% of the amount paid for each share (in each case, as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock). At any time we are engaged in an offering of shares, the per share price for shares purchased under our redemption plan will always be equal to or lower than the applicable per share offering price. Thereafter the per share redemption price will be based on the then-current net asset value of the shares (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock). Our board of directors will announce any redemption price adjustment and the time period of its effectiveness as a part of its regular communications with our stockholders. At any time the redemption price is determined by any method other than the net asset value of the shares, if we have sold property and have made one or more special distributions to our stockholders of all or a portion of the net proceeds from such sales, the per share redemption price will be reduced by the net sale proceeds per share distributed to investors prior to the redemption date as a result of the sale of such property in the special distribution. Our board of directors will, in its sole discretion, determine which distributions, if any, constitute a special distribution. While our board of directors does not have specific criteria for determining a special distribution, we expect that a special distribution will only occur upon the sale of a property and the subsequent distribution of the net sale proceeds. Upon receipt of a request for redemption, we will conduct a Uniform Commercial Code search to ensure that no liens are held against the shares. We will charge an administrative fee to the stockholder for the search and other costs, which will be deducted from the proceeds of the redemption or, if a lien exists, will be charged to the stockholder. Subject to our waiver of the one-year holding period requirement, shares required to be redeemed in connection with the death of a stockholder may be repurchased without the one-year activity period requirement, at a purchase price equal to the price actually paid for the shares.

      During any calendar year, we will not redeem in excess of 3.0% of the weighted average number of shares outstanding during the prior calendar year. The cash available for redemption will be limited to the proceeds from the sale of shares pursuant to our distribution reinvestment plan.

      We will redeem our shares on the last business day of the month following the end of each quarter. Requests for redemption would have to be received on or prior to the end of the quarter in order for us to repurchase the shares as of the end of the next month. Stockholders may withdraw their request to have their shares redeemed at any time prior to the last day of the applicable quarter.

      If we could not purchase all shares presented for redemption in any quarter, based upon insufficient cash available and the limit on the number of shares we may redeem during any calendar year, we would attempt to honor redemption requests on a pro rata basis. We would treat the unsatisfied portion of the redemption request as a request for redemption the following quarter. At such time, stockholders may then (1) withdraw their request for redemption at any time prior to the last day of the new quarter or (2) ask that we honor their request at such time, if, any, when sufficient funds become available. Such pending requests will generally be honored on a pro rata basis. We will determine whether we have sufficient funds available as soon as practicable after the end of each quarter, but in any event prior to the applicable payment date.

      Our board of directors may choose to amend, suspend or terminate our share redemption program upon 30 days notice at any time. Additionally, we will be required to discontinue sales of shares under the distribution reinvestment plan on the earlier of June 27, 2007, which is two years from the effective date of the Offering, unless the offering is extended, or the date we sell 5,000,000 shares under the plan, unless we file a new registration statement with the SEC and applicable states. Because the redemption of shares will be funded with the net proceeds we receive from the sale of shares under the distribution reinvestment plan, the discontinuance or termination of the distribution reinvestment plan will adversely affect our ability to redeem shares under the share redemption program. We would notify stockholders of such developments (i) in the annual or quarterly reports mentioned above or (ii) by means of a separate

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mailing to stockholders, accompanied by disclosure in a current or periodic report under the Exchange Act. During the Offering, we would also include this information in a prospectus supplement or post-effective amendment to the registration statement, as then required under federal securities laws.

      Our share redemption program is only intended to provide interim liquidity for stockholders until a liquidity event occurs, such as the listing of the shares on a national securities exchange, inclusion of the shares for on a national market system, or our merger with a listed company. The share redemption program will be terminated if the shares become listed on a national securities exchange or included for quotation on a national market system. We cannot guarantee that a liquidity event will occur.

      The shares we redeem under our share redemption program will be cancelled and return to the status of authorized and unissued shares. We do not intend to resell such shares to the public unless they are first registered with the SEC under the Securities Act and under appropriate state securities laws or otherwise sold in compliance with such laws.

      During the year ended December 31, 2005, we did not redeem any shares under our share redemption program.

Distributions

      We intend to qualify as a REIT for federal income tax purposes commencing with our taxable year ended December 31, 2005. As a REIT, we intend to make distributions each taxable year (not including a return of capital for federal income tax purposes) equal to at least 90% of our taxable income. One of our primary goals is to pay regular (quarterly) distributions to our stockholders. We have declared and paid distributions quarterly based on specific record dates.

      On October 4, 2005, our board of directors authorized and 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 distributions were paid in January, 2006 and totaled approximately $195,000, of which approximately $79,000 was reinvested in shares of our common stock through our distribution reinvestment program.

      As we incurred a loss for income tax purposes during the year ended December 31, 2005, none of the distributions declared was taxable to the stockholders as ordinary income. We funded approximately $107,000 of the distributions from our funds from operations and until proceeds from our Offering are invested and generating operating cash flow sufficient to make distributions to stockholder, we intend to pay all or a substantial portion of our distributions from the proceeds of our Offering or from borrowing in anticipation of future cash flows. Additionally, as the distributions were paid during 2006, the character of such distributions will be determined based on future taxable earnings and distributions which may be declared. The amount of distributions paid and taxable portion in this period are not necessarily indicative or predictive of amounts anticipated in future periods.

Use of Initial Public Offering Proceeds

      We registered 50,000,000 shares of our common stock in our ongoing Offering (SEC File no. 333-121094, effective June 27, 2005), of which we registered 45,000,000 shares at $10.00 per share to be offered to the public, and 5,000,000 shares offered to our investors pursuant to our distribution reinvestment plan at $9.50 per share. As of December 31, 2005, we had issued 2,832,387 shares of common stock in our ongoing Offering, raising gross offering proceeds of approximately $28.3 million. From this amount, we paid approximately $1.7 million in acquisition fees to Cole Realty, approximately $2.4 million in selling commissions and dealer manager fees to Cole Capital, an affiliate of Cole Advisors, approximately $320,000 in finance coordination fees to Cole Advisors and approximately $419,000 in organization and offering costs to Cole Advisors. With the net offering proceeds and indebtedness, we acquired approximately $91.8 million in real estate and related assets and made the other payments reflected under “Cash Flows from Financing Activities” in our consolidated statement of cash flows. As of March 22, 2006, we had issued approximately 5.6 million shares at an aggregate gross offering price of approximately $56.2 million.

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Unregistered Sale of Securities and Issuance of Stock Options

      We issued 20,000 shares of our common stock to Cole Holdings in connection with our inception in 2004 at $10.00 per share. On May 2, 2005, we issued options to purchase 10,000 shares of our common stock to our independent directors under our Independent Director Stock Option Plan. As of December 31, 2005, the options were anti-dilutive with an exercise price of $9.15 per share. These shares and options were not registered under the Securities Act of 1933, as amended, and were issued in reliance on Rule 4(2) of the Securities Act.

      The following table provides information regarding our equity compensation plan as of December 31, 2005:

	Number of Securities		Weighted-Average		Number of Securities
	to be Issued Upon		Exercise Price of		Remaining Available for
	Exercise of		Outstanding		Future Issuance Under
	Outstanding Options,		Options, Warrants		Equity Compensation
Plan Category	Warrants and Rights		and Rights		Plans
Equity compensation plans approved by security holders		10,000		9.15		990,000
Equity compensation plans not approved by security holders		—		N/A		—
Total		10,000		9.15		990,000

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ITEM 6. SELECTED FINANCIAL DATA

      We were formed on September 29, 2004, and did not commence operations until September 23, 2005, when we accepted the minimum amount of subscriptions pursuant to the Offering. Accordingly, the following selected financial data for the year ended December 31, 2005 is not comparable to the period from inception (September 29, 2004) through December 31, 2004. The following data should be read in conjunction with our consolidated financial statements and the notes thereto and “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this Annual Report on Form 10-K. The selected financial data presented below has been derived from our consolidated financial statements.

				From Inception
				(September 29, 2004)
	Year Ended			Through
	December 31, 2005			December 31, 2004
Balance Sheet Data:
Total real estate assets	$	91,618,285		$	—
Cash and cash equivalents	$	4,575,144		$	200,000
Restricted cash	$	1,813,804		$	—
Total assets	$	98,809,838		$	—
Mortgage notes payable	$	66,804,041		$	—
Notes payable to affiliates	$	4,453,000		$	—
Escrowed investor proceeds	$	1,813,804		$	—
Stockholders’ equity	$	25,204,966		$	200,000
Operating Data:
Rental income	$	741,669		$	—
General and administrative	$	156,252		$	—
Property and asset management fees	$	38,768		$	—
Depreciation and amortization	$	221,411		$	—
Interest expense	$	467,386		$	—
Net loss	$	(114,591	)	$	—
Funds from operations(1)	$	106,820		$	—
Cash Flow Data:
Cash flows provided by operations	$	397,741		$	—
Cash flows used in investing activities	$	(93,640,753	)	$	—
Cash flows provided by financing activities	$	97,618,156		$	200,000
Dividends declared and unpaid	$	195,209		$	—
Per share data:
Net loss — basic and diluted	$	(0.28	)	$	—
Funds from operations(1)	$	0.26		$	—
Dividends declared	$	0.47		$	—
Weighted average shares outstanding		411,909			—

(1)  See “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Funds From Operations” for information regarding why we present funds from operations and a for reconciliation of this non-generally accepted accounting principles in the United States (“GAAP”) financial measure to net loss.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      The following discussion and analysis should be read in conjunction with the “Selected Financial Data” and our accompanying consolidated financial statements and notes thereto. See also “Cautionary Note Regarding Forward-Looking Statements” preceding Part I.

Overview

      We were formed on September 29, 2004 to acquire and operate commercial real estate primarily consisting of high quality, freestanding, single-tenant properties net leased to investment grade and other creditworthy tenants located throughout the United States. We have no paid employees and are externally advised and managed by Cole Advisors, an affiliate of ours. We intend to qualify as a real estate investment trust for federal income tax purposes when we file our tax return for the year ended December 31, 2005.

      We commenced our principal operations on September 23, 2005, when we issued the initial 486,000 shares of our common stock in the Offering. Prior to such date, we were considered a development stage company. We acquired our first real estate property on September 26, 2005, thus the results of our operations for the year ended December 31, 2005, and the period from inception to December 31, 2004, are indicative of an early-stage enterprise with growing revenues and expenses associated with the acquisition of properties, organization, and interest expense associated with debt financing on the real estate acquisitions, and general and administrative expenses at a high percentage of total revenues.

      During 2005, we acquired a 100% interest in 14 properties located in 10 states totaling approximately 455,000 rentable square feet for an aggregate purchase price of approximately $91.8 million. At December 31, 2005, these properties were 100% leased, in each case, to single tenants. To purchase these assets, we used proceeds from the Offering and indebtedness. As of December 31, 2005, our borrowings totaled approximately $71.3 million.

      With our goals of providing current income to our stockholders and preserving their capital, we view our most significant challenges as:

•  continuing to raise sufficient amounts of equity capital in order to acquire a large, diversified portfolio while maintaining a moderate leverage ratio; and

•  investing net offering proceeds in properties that are accretive to our stockholders distributions at a time when the demand for high-quality, income-producing properties is high and the market competitive.

Application of Critical Accounting Policies

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

      The critical accounting policies outlined below have been discussed with members of the audit committee of the board of directors.

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Investment in Real Estate Assets

      We are required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives. These assessments, which are based on estimates, have a direct impact on net income. The estimated useful lives of our assets by class are generally as follows:

Building	40 years
Tenant improvements	Lease term
Intangible lease assets	Lesser of useful life or 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 December 31, 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, it is our policy to 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, other value of in-place leases and value of tenant relationships, based in each case on their fair values.

      We utilize independent appraisals to determine the fair values of the tangible assets of an acquired property (which includes land and building). Factors considered by us 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. In estimating carrying costs, we include real estate taxes, insurance, and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand.

      The fair values of above-market and below-market in-place lease values are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease. The above-market and below-market lease values are capitalized as intangible lease assets or liabilities and amortized as an adjustment of rental income over the remaining terms of the respective 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 sheet 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 intangibles are included in intangible lease assets in the accompanying consolidated balance sheet and are amortized to expense over the remaining term of the respective leases.

      The determination of the fair values of the assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, discount rates and other variables. The use of inappropriate estimates would result in an incorrect assessment of our purchase price allocations, which could impact the amount of our reported net income.

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Valuation of Real Estate Assets

      We continually monitor events and changes in circumstances that could indicate that the carrying amounts of our real estate and related intangible assets may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of real estate and related intangible assets may not be recoverable, we assess the recoverability of the assets by determining whether the carrying value of the assets will be recovered through the undiscounted future operating cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, we will adjust the real estate and related intangible assets to the fair value and recognize an impairment loss.

      Projections of expected future cash flows require us to estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, discount rates, the number of months it takes to re-lease the property and the number of years the property is held for investment. The use of inappropriate assumptions in the future cash flow analysis would result in an incorrect assessment of the property’s future cash flow and fair value and could result in the overstatement of the carrying value of our real estate and related intangible assets and net income.

Revenue Recognition

      Upon the acquisition of real estate, certain properties have leases where minimum rent payments increase during the term of the lease. We record rental revenue for the full term of each lease on a straight-line basis. Accordingly, we record a receivable from tenants that we expect to collect over the remaining lease term rather than currently, which we record as rents receivable. When we acquire a property, the term of existing leases is considered to commence as of the acquisition date for the purposes of this calculation. In accordance with Staff Accounting Bulletin 101, Revenue Recognition in Financial Statements, we defer the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Cost recoveries from tenants are included in rental income in the period the related costs are incurred.

Income Taxes

      We intend to elect to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with our taxable year ended 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. We believe we are organized and operating in such a manner as to qualify to be taxed as a REIT for the taxable year ended December 31, 2005.

Results of Operations

      Our results of operations are not indicative of those expected in future periods as we expect that rental income, depreciation expense, amortization expense, operating expenses, asset management fees and net income will each increase in future periods as a result of owning the assets acquired during the year ended December 31, 2005 for an entire period and as a result of anticipated future acquisitions of real estate assets.

Year ended December 31, 2005 Compared to the Period from September 29, 2004 (Date of Inception) to December 31, 2004:

      We commenced our principal operations on September 23, 2005, when we issued the initial 486,000 shares in the Offering and we made our initial real estate acquisition on September 26, 2005. As a

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result, our consolidated financial results for the year ended December 31, 2005 are not comparable to the results for the period from September 29, 2004 (date of inception) to December 31, 2004.

      Results of operations for the year ended December 31, 2005 primarily consisted of the following:

      Real Estate Operations. Rental income was approximately $742,000, depreciation and amortization expense was approximately $221,000, property and asset management fees were approximately $39,000, and interest expense was approximately $467,000 for the year ended December 31, 2005. All of such costs were directly related to the timing of our real estate acquisitions during 2005. We acquired our initial property on September 26, 2005, and 13 additional properties during the fourth quarter of 2005. We expect all of such amounts to increase in future periods as the properties acquired in 2005 are owned for a full year and as we acquire new properties.

      Our property acquisitions during the year ended December 31, 2005 were financed in part with short-term and long-term notes payable as discussed in Note 5 to our consolidated financial statements. Our interest expense in future periods will vary based on our level of future borrowings, which will depend on the level of proceeds raised in the Offering, the cost of borrowings, and the opportunity to acquire real estate assets which meet our investment objectives.

      General and Administrative Expenses. General and administrative expenses for the year ended December 31, 2005 totaled approximately $156,000, constituting 21.0% of total revenues. The primary components of general and administrative expenses were board of directors fees, legal fees, accounting fees, and organizational costs of approximately $49,000, $36,000, $27,000, and $17,000, respectively. Such expenses represented approximately six months of expense as we incurred no general and administrative expenses prior to the June 27, 2005, the effective date of the Offering. With the acquisition of new properties in future periods and incurring such costs for a full year, we anticipate that general and administrative expenses will increase in amount, but decrease as a percentage of total revenue.

      We sustained a net loss for the year ended December 31, 2005 of approximately $115,000, primarily as a result of incurring overhead-related general and administrative expenses, depreciation and amortization expenses and interest expense without sufficient rental income from properties to cover the costs. Loss per share for the year ended December 31, 2005 was $0.28. With the acquisition of new properties in future periods, we anticipate that rental income and earnings per share will both increase.

Portfolio Information

      As of December 31, 2005, we owned 14 properties located in ten states, all of which were 100% leased to single tenants with an average lease term remaining of approximately 14 years.

      As of December 31, 2005, our five highest geographic concentrations were as follows:

	Total						Percentage of Total
	Number of		Rentable		2005 Annualized		2005 Annualized
Location	Properties		Square Feet		Gross Base Rent		Gross Base Rent
Michigan		1		111,881		2,138,878		31	%
Missouri		5		74,363	$	2,054,500		30	%
Alabama		1		95,173		500,000		7	%
Arizona		1		23,000		459,521		7	%
Illinois		1		67,925		445,632		7	%
		9		372,342	$	5,598,532		82	%

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      As of December 31, 2005, our five highest tenant industry concentrations were as follows:

	Total						Percentage of Total
	Number of		Rentable		2005 Annualized		2005 Annualized
Industry	Leases		Square Feet		Gross Base Rent		Gross Base Rent
Drugstore		9		121,864	$	3,041,360		44	%
Automotive Supply		1		111,881		2,138,878		31	%
Home Improvement		1		95,173		500,000		7	%
Furnishings		1		23,000		459,522		7	%
Distribution		1		67,925		445,632		7	%
		13		419,843	$	6,585,392		96	%

      As of December 31, 2005, our five highest tenant concentrations were as follows:

	Total				Percentage of total
	Number of		2005 Annualized		2005 Annualized
Tenant	Leases		Gross Base Rent		Gross Base Rent
Walgreens		6	$	2,357,500		34	%
Plastech		1		2,138,878		31	%
Lowe’s		1		500,000		7	%
CVS		2		494,837		7	%
La-Z-Boy		1		459,521		7	%
		11	$	5,950,736		86	%

      For more information on our portfolio diversification and statistics, see “Item 2 — Properties” above.

Funds From Operations

      We believe that funds from operations (“FFO”) is a beneficial indicator of the performance of a REIT. Because FFO calculations exclude such factors as depreciation and amortization of real estate assets and gains or losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), they facilitate comparisons of operating performance between periods and between other REITs. Our management believes that accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictability over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. As a result, we believe that the use of FFO, together with the required GAAP presentations, provide a more complete understanding of our performance relative to our competitors and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. Other REITs may not define FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition (as we do) or may interpret the current NAREIT definition differently than we do.

      FFO is a non-GAAP financial measure and does not represent net income as defined by GAAP. Net income as defined by GAAP is the most relevant measure in determining our operating performance because FFO includes adjustments that investors may deem subjective, such as adding back expenses such as depreciation and amortization. Accordingly, FFO should not be considered as an alternative to net income as an indicator of our operating performance.

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      Our calculation of FFO is presented in the following table for the year ended December 31, 2005:

	December 31,
	2005
Net loss	$	(114,591	)
Add:
Depreciation of real estate assets		151,472
Amortization of lease related costs		69,939
FFO	$	106,820

      Set forth below is additional information (often considered in conjunction with FFO) that may be helpful in assessing our operating results:

•  In order to recognize revenues on a straight-line basis over the terms of the respective leases, we recognized additional revenue by straight-lining rental revenue of approximately $34,000 during the year ended December 31, 2005.

•  During the year ended December 31, 2004, amortization of deferred financing costs totaled approximately $18,000.

Liquidity and Capital Resources

      We expect to continue to raise capital through our ongoing Offering of common stock and to utilize the net proceeds of the Offering and proceeds from secured or unsecured financings to complete future property acquisitions. As of December 31, 2005, we had received and accepted subscriptions for 2,832,387 shares of common stock in our Offering for gross proceeds of approximately $28.3 million.

Short-term Liquidity and Capital Resources

      We expect to meet our short-term liquidity requirements through net cash provided by property operations and proceeds from the Offering. We expect our operating cash flows to increase as additional properties are added to our portfolio. We expect that approximately 88.6% of the gross proceeds from our Offering will be invested in real estate, approximately 9.2% will be used to pay sales commissions, dealer manager fees and offering and organizational costs, with the remaining 2.2% used to pay acquisition and advisory fees and acquisition expenses. The offering and organizational costs associated with the Offering are initially paid by our advisor, which we reimburse for such costs up to 1.5% of the capital raised by us in the Offering. As of December 31, 2005, Cole Advisors had paid approximately $1.4 million of offering and organization costs and we had reimbursed our advisor for approximately $421,000 of such costs, of which approximately $2,000 was expensed as organizational costs.

      During the period from January 1, 2006 to March 22, 2006, we completed the acquisition of nine single-tenant properties and two multi-tenant properties in separate transactions for an aggregate purchase price of approximately $62.6 million, exclusive of closing costs. The acquisitions were funded with proceeds from the Offering and approximately $47.4 million in aggregate proceeds from eleven 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 distributions were paid in January, 2006 and totaled approximately $195,000, of which approximately $79,000 was reinvested in shares through our distribution reinvestment program.

Long-term Liquidity and Capital Resources

      We expect to meet our long-term liquidity requirements through proceeds from the sale of our common stock, including through the Offering, proceeds from secured or unsecured financings from banks and other lenders, the selective and strategic sale of properties and net cash flows from operations. We expect that our primary uses of capital will be for property acquisitions, for the payment of tenant

49

improvements, for the payment of offering-related costs, for the payment of operating expenses, including interest expense on any outstanding indebtedness, and for the payment of distributions to our stockholders.

      We expect that substantially all net cash generated from operations will be used to pay distributions to our stockholders after certain capital expenditures, including tenant improvements and leasing commissions, are paid at the properties; however, we may use other sources to fund distributions as necessary. To the extent that cash flows from operations are lower due to fewer properties being acquired or lower returns on the properties, distributions paid to our stockholders may be lower. We expect that substantially all net cash resulting from equity or debt financing will be used to fund acquisitions, certain capital expenditures identified at acquisition, repayments of outstanding debt, or distributions to our stockholders. Over the long term, we intend to reduce our aggregate borrowings as a percentage of our real estate assets.

      As of December 31, 2005, we had cash and cash equivalents of approximately $4.6 million, which we expect to be used primarily to invest in additional real estate, pay operating expenses and pay stockholder distributions.

      As of December 31, 2005, we had approximately $71.3 million of debt outstanding consisting of approximately $41.8 million in fixed rate, term mortgage loans and approximately $29.5 million in variable rate term mortgage loans. The weighted average interest rate at December 31, 2005 under the fixed rate term mortgage loans was 5.47% and the variable rate term mortgage interest rate is stated at LIBOR plus 2.0%. Additionally the ratio of debt to total assets was approximately 72% and the weighted average years to maturity was 4.70 years.

      Our contractual obligations as of December 31, 2005 are as follows:

	Payments Due by Period(2)
			Less Than		1-3		4-5		More Than
Contractual Obligations	Total		1 Year		Years		Years		5 Years
Outstanding fixed debt obligations	$	55,447,416	$	2,438,082	$	15,808,421	$	19,038,974	$	18,161,939
Outstanding variable debt obligations(1)		30,517,102		30,517,102		—		—		—
Total	$	85,964,518	$	32,955,184	$	15,808,421	$	19,038,974	$	18,161,939

(1)	A rate of 6.375% was used to calculate the variable debt payment obligations in future periods. This is the rate effective as of December 31, 2005.
(2)	Principle paydown amounts are included in payments due by period amounts.

     Our charter prohibits us from incurring debt that would cause our borrowings to exceed the greater of 60% of our assets, valued at the greater of the aggregate cost (before depreciation and other non-cash reserves) or fair market value of all assets owned by us, unless approved by a majority of our independent directors and disclosed to our stockholders in our next quarterly report. During the fourth quarter of 2005, the independent directors approved borrowings that caused our leverage ratio at certain times to exceed the 60% limitation. The independent directors believed such borrowing levels were justified for the following reasons:

•  the borrowings enabled us to purchase the properties and earn rental income more quickly;

•  the property acquisitions were likely to increase the net offering proceeds from our initial public offering by allowing us to show potential investors actual acquisitions, thereby improving our ability to meet our goal of acquiring a diversified portfolio of properties to generate current income for investors and preserve investor capital; and

•  based on expected equity sales at the time and scheduled maturities of our short-term variable rate debt, leverage was likely to exceed the charter’s guidelines only for a limited period of time.

50

      We expect the ratio of debt to total assets to exceed 60% during 2006, but to decline during the year as additional capital is raised and certain of the short-term variable rate debt is paid according to its scheduled maturities.

Cash Flow Analysis

Operating Activities

      Net cash provided by operating activities was approximately $398,000 for the year ended December 31, 2005, primarily due to a net loss for the period of approximately $115,000 offset by depreciation and amortization expenses totaling approximately $242,000 and an increase in accounts payable and accrued expenses of approximately $283,000. Our initial property acquisition was made on September 26, 2005. See “Results of Operations” for a more complete discussion of the factors impacting our operating performance.

Investing Activities

      Net cash used in investing activities was approximately $93.6 million for the year ended December 31, 2005, primarily due to approximately $91.8 million used on the acquisition of 14 real estate properties and their associated intangible lease assets and acquisition costs and approximately $1.8 million in restricted cash, which is held in escrow pending issuance of shares to investors.

Financing Activities

      Net cash provided by financing activities was approximately $97.6 million for the year ended December 31, 2005, primarily due to net proceeds from the issuance of common stock in the Offering of approximately $25.3 million, net proceeds of $70.5 million from the issuance of notes in connection with the acquisition of 14 properties and an approximately $1.8 million liability related to investor proceeds, which are held in escrow pending our acceptance of subscriptions and the issuance of shares to the investors.

Election as a REIT

      We intend to elect to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, when we file our tax return for the year ended December 31, 2005. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our ordinary taxable income to stockholders. As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income for four years following the year during which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT for federal income tax purposes. No provision for federal income taxes has been made in our accompanying consolidated financial statements, as we incurred a loss for federal income tax purposes. We are subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in our accompanying financial statements.

Inflation

      We are exposed to inflation risk as income from long-term leases is the primary source of our cash flows from operations. There are provisions in certain of our tenant leases that would protect us from the impact of inflation such as step rental increases and percentage rent provisions. However, due to the long-term nature of the leases, the leases may not re-set frequently enough to cover inflation.

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Related-Party Transactions and Agreements

      We have entered into agreements with Cole Advisors and its affiliates, whereby we pay certain fees to, or reimburse certain expenses of, Cole Advisors or its affiliates for acquisition and advisory fees and expenses, organization and offering costs, sales commissions, dealer manager fees, asset and property management fees and reimbursement of operating costs. See Note 8 to our consolidated financial statements included in this report for a discussion of the various related-party transactions, agreements and fees.

Conflicts of Interest

      Affiliates of Cole Advisors act as sponsor, general partner or advisor to various private real estate limited partnerships and a REIT that offered its shares pursuant to an exemption from registration. As such, there are conflicts of interest where Cole Advisors or its affiliates, while serving in the capacity as sponsor, general partner or advisor for another Cole-sponsored program, may be in competition with us in connection with property acquisitions, property dispositions, and property management. The compensation arrangements between affiliates of Cole Advisors and these other Cole real estate funds could influence its advice to us. See “Item 1. Business — Conflicts of Interest” in this Form 10-K.

Subsequent Events

      Certain events subsequent to December 31, 2005 through March 22, 2006, including the sale of shares of common stock, the declaration of dividends, the acquisition of 11 properties, and the attainment of additional mortgage financing, are discussed in Note 15 to the consolidated financial statements.

Impact of Recent Accounting Pronouncements

      In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment”. SFAS No. 123 (revised 2004) is a revision of FASB Statement No. 123, “Accounting for Stock-Based Compensation”. This statement supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and its related implementation guidance. SFAS No. 123 (revised 2004) requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost will be recognized over the period during which an employee is required to provide services in exchange for the award. We expect to adopt the provisions of SFAS 123 (revised 2004) using a modified prospective application. The modified prospective method requires companies to recognize compensation cost for unvested awards that are outstanding on the effective date based on the fair value that we had originally estimated for purposes of preparing its SFAS 123 pro forma disclosures. For all new awards that are granted or modified after the effective date, a company would use SFAS 123R’s measurement model. This statement is effective for us on January 1, 2006. As of December 31, 2005, the amount of unrecognized compensation expense to be recognized in future periods, in accordance with SFAS 123R, is approximately $30,000. Had SFAS No. 123R been implemented in 2005, we would have experienced an approximately $30,000 reduction in our net income and a $0.07 per share decrease in both basic earnings per share and diluted earnings per share.

      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

52

other partnerships, this guidance is effective no later than January 1, 2006. We believe the FSP does not have a material impact to the consolidated financial statements.

      In March 2005, the FASB issued Interpretation No. 47 “Accounting for Conditional Asset Retirement Obligations” to clarify that the term conditional asset retirement obligation as used in FASB Statement No. 143 is a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that the enterprise may or may not have control over. This Interpretation requires recognition of a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably determined. This Interpretation is effective no later than the end of fiscal years ending after December 15, 2005 (December 31, 2005, for calendar-year enterprises). The implementation of FASB No. 143 and Interpretation No. 47 did not have a material impact to the consolidated financial statements.

Off Balance Sheet Arrangements

      As of December 31, 2005, we had no off balance sheet arrangements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

      As a result of our use of debt, primarily to acquire properties, we are exposed to interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flow primarily through a moderate level of overall borrowings. However, we currently have a substantial amount of debt outstanding relative to our total assets. We manage our ratio of fixed to floating rate debt with the objective of achieving a mix that we believe is appropriate. Our floating rate debt is based on variable interest rates in order to provide the necessary financing flexibility; however, we are closely monitoring interest rates and will continue to consider the sources and terms of our borrowing facilities to determine whether we have appropriately guarded ourselves against the risk of increasing interest rates in future periods.

      We may enter into interest rate swaps, caps or other arrangements in order to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes. As of December 31, 2005, we had not entered into any such arrangement. All of our debt was entered into for other than trading purposes.

      Our financial instruments consist of both fixed and variable rate debt. As of December 31, 2005, our consolidated debt consisted of the following, with scheduled maturities:

	2006			2007		2008			2009		2010			Thereafter
Maturing debt
Variable rate debt	$	29,457,000			—		—			—		—			—
Fixed rate debt	$	157,755		$	166,193	$	9,543,093			—	$	16,666,000		$	15,267,000
Average interest rate on debt
Variable rate debt		Libor + 2.00	%		—		—			—		—			—
Fixed rate debt		—			—		5.15	%		—		5.59	%		5.50	%

      Approximately $41.8 million of our total debt outstanding as of December 31, 2005 is subject to fixed rates, with a weighted average interest rate of 5.47% and expirations ranging from 2008 to 2015. A change in the market interest rate impacts the net financial instrument position of our fixed rate debt portfolio but has no impact on interest incurred or cash flows.

      As of December 31, 2005, a 1% change in interest rates would result in a change in interest expense of approximately $295,000 per year.

      We do not have any foreign operations or assets. As a result, we are not exposed to fluctuations in foreign currently rates.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The financial statements and supplementary data filed as part of this report are set forth beginning on page F-1 of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

      There were no changes in or disagreements with our independent registered public accountants during the year ended December 31, 2005 or the period from inception (September 29, 2004) to December 31, 2004.

ITEM 9A. CONTROLS AND PROCEDURES

      In accordance with Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2005, to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

      No change occurred in our internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the three months ended December 31, 2005 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

ITEM 9B.      OTHER INFORMATION

      As of the quarter ended December 31, 2005, all items required to be disclosed under Form 8-K were reported under Form 8-K.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 2006 annual meeting of stockholders.

ITEM 11. EXECUTIVE COMPENSATION

      The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with respect to our 2006 annual meeting of stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

      The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with respect to our 2006 annual meeting of stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with respect to our 2006 annual meeting of stockholders.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

      The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with respect to our 2006 annual meeting of stockholders.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

      (a) List of Documents Filed.

      1. The list of the financial statements contained herein is set forth on page F-1 hereof.

      2. Schedule III — Real Estate Assets and Accumulated Depreciation is set forth beginning on page S-1 hereof. All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are not applicable and therefore have been omitted.

      3. The Exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.

      (b) See (a) 3 above.

      (c) See (a) 2 above.

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SIGNATURES

      Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 23rd day of March 2006.

Cole Credit Property Trust II, Inc.

(Registrant)

By:  /s/ CHRISTOPHER H. COLE

Christopher H. Cole

Chief Executive Officer and President

      Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacity as and on the date indicated.

Signature	Title	Date
/s/ CHRISTOPHER H. COLE Christopher H. Cole	Chief Executive Officer, President and Director (Principal Executive Officer)	March 23, 2006
/s/ BLAIR D. KOBLENZ Blair D. Koblenz	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	March 23, 2006
/s/ MARCUS E. BROMLEY Marcus E. Bromley	Director	March 23, 2006
/s/ ELIZABETH L. WATSON Elizabeth L. Watson	Director	March 23, 2006

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      Supplemental Information to be Furnished with Reports Filed Pursuant to Section 15(d) of the Act by Registrants which have not Registered Securities Pursuant to Section 12 of the Act

      After the filing of this Form 10-K, we will furnish to our security holders an annual report covering our last fiscal year and a proxy statement for our upcoming annual meeting.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Financial Statements	Page
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements		F-2
Consolidated Balance Sheets as of December 31, 2005 and 2004		F-3
Consolidated Statements of Operations for the Year Ended December 31, 2005 and the Period From Inception (September 29, 2004) to December 31, 2004		F-4
Consolidated Statements of Stockholders’ Equity for the Year Ended December 31, 2005 and the Period From Inception (September 29, 2004) to December 31, 2004		F-5
Consolidated Statements of Cash Flows for the Year Ended December 31, 2005 and the Period From Inception (September 29, 2004) to December 31, 2004		F-6
Notes to Consolidated Financial Statements		F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Cole Credit Property Trust II, Inc.

Phoenix, Arizona

      We have audited the accompanying consolidated balance sheets of Cole Credit Property Trust II, Inc. and subsidiaries (“the Company”) as of December 31, 2005 and 2004 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2005 and for the period from September 29, 2004 (date of inception) to December 31, 2004. Our audits also included the financial statement schedule listed in the index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

      We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, such consolidated financial statements presents fairly, in all material respects, the financial position of the Company as of December 31, 2005 and 2004 and the results of its operations and its cash flows for the year ended December 31, 2005 and for the period from September 29, 2004 (date of inception) to December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

      The Company was in the development stage at December 31, 2004; during the year ended December 31, 2005, the Company completed its development activities and commenced its planned principal operations.

/s/ DELOITTE & TOUCHE, LLP

Phoenix, Arizona

March 23, 2006

F-2

COLE CREDIT PROPERTY TRUST II, INC.

CONSOLIDATED BALANCE SHEETS

		December 31,
		2005			2004
ASSETS:
Real estate assets, at cost:
Land		$	23,854,308		$	—
Buildings and improvements, less accumulated depreciation of $151,472			57,338,359			—
Acquired intangible lease assets, less accumulated amortization of $71,881			10,425,618			—
	Total real estate assets		91,618,285			—
Cash and cash equivalents			4,575,144			200,000
Restricted cash			1,813,804			—
Rents and tenant receivables			36,001			—
Prepaid expenses and other assets			11,928			—
Deferred financing costs, less accumulated amortization of $17,964			754,676			—
Total assets		$	98,809,838		$	200,000
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Mortgage notes payable		$	66,804,041		$	—
Notes payable to affiliates			4,453,000			—
Accounts payable and accrued expenses			282,797			—
Escrowed investor proceeds			1,813,804			—
Due to affiliates			41,384			—
Acquired below market lease intangibles, less accumulated amortization of $52			14,637			—
Distributions payable			195,209			—
Total liabilities			73,604,872			—
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding			—			—
Common stock, $.01 par value; 90,000,000 shares authorized, 2,832,387 and 20,000 shares issued and outstanding at December 31, 2005 and 2004, respectively			28,324			200
Capital in excess of par value			25,486,442			199,800
Accumulated distributions in excess of earnings			(309,800	)		—
Total stockholders’ equity			25,204,966			200,000
Total liabilities and stockholders’ equity		$	98,809,838		$	200,000

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

F-3

COLE CREDIT PROPERTY TRUST II, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

					Period from Inception
		Year Ended			(September 29, 2004) to
		December 31, 2005			December 31, 2004
Revenues:
Rental income		$	741,669		$	—
Expenses:
General and administrative			156,252			—
Property and asset management fees			38,768			—
Depreciation			151,472			—
Amortization			69,939			—
	Total operating expenses		416,431			—
Real estate operating income			325,238			—
Other income (expense):
Interest income			27,557			—
Interest expense			(467,386	)		—
	Total other expense		(439,829	)		—
Net loss		$	(114,591	)	$	—
Weighted average number of common shares outstanding
Basic and diluted			411,909			—
Net loss per common share
Basic and diluted		$	(0.28	)	$	—

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

F-4

COLE CREDIT PROPERTY TRUST II, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Period From Inception (September 29, 2004) to December 31, 2004

and for the Year Ended December 31, 2005

	Common Stock							Accumulated
					Capital in			Distributions			Total
	Number of		Par		Excess of Par			in Excess of			Stockholders’
	Shares		Value		Value			Earnings			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		2,812,387		28,124		28,080,997			—			28,109,121
Distributions		—		—		—			(195,209	)		(195,209	)
Commissions on stock sales and related dealer manager fees		—		—		(2,375,780	)		—			(2,375,780	)
Other offering costs		—		—		(418,575	)		—			(418,575	)
Net loss		—		—		—			(114,591	)		(114,591	)
Balance, December 31, 2005		2,832,387	$	28,324	$	25,486,442		$	(309,800	)	$	25,204,966

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

F-5

COLE CREDIT PROPERTY TRUST II, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Period September 29, 2004 (Date of Inception) to December 31, 2004

and for the Period Ended December 31, 2005

					Period from Inception
		Year Ended			(September 29, 2004) to
		December 31, 2005			December 31, 2004
Cash Flows from Operating Activities:
Net loss		$	(114,591	)	$	—
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation			151,472			—
Amortization			89,793			—
Changes in assets and liabilities:						—
	Rents and tenant receivables		(36,001	)		—
	Prepaid expenses and other assets		(11,928	)		—
	Accounts payable and accrued expenses		282,797			—
	Due to affiliates		36,199			—
Total adjustments			512,332			—
Net cash provided by operating activities			397,741			—
Cash Flows from Investment Activities:
Investment in real estate and related assets			(81,344,139	)		—
Acquired intangible lease assets			(10,497,499	)		—
Acquired below market lease intangibles			14,689
Restricted cash			(1,813,804	)		—
Net cash used in investing activities			(93,640,753	)		—
Cash Flows from Financing Activities:
Proceeds from issuance of common stock			28,109,121			200,000
Proceeds from mortgage notes payable			67,631,404			—
Repayment of mortgage note payable			(827,363	)		—
Proceeds from notes payable to affiliate			4,453,000
Escrowed investor proceeds liability			1,813,804			—
Offering costs on issuance of common stock			(2,789,170	)		—
Deferred financing costs paid			(772,640	)		—
Net cash provided by financing activities			97,618,156			200,000
Net increase in cash and cash equivalents			4,375,144			200,000
Cash and cash equivalents, beginning of period			200,000			—
Cash and cash equivalents, end of period		$	4,575,144		$	200,000
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Distributions declared and unpaid		$	195,209		$	—
Commissions and dealer manager fees due to affiliate		$	5,185		$	—
Interest paid		$	223,183		$	—

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

F-6

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2005

NOTE 1 — ORGANIZATION AND BUSINESS

      Cole Credit Property Trust II, Inc. (the “Company”) was formed on September 29, 2004 and is a Maryland corporation that is organized and operating in order to qualify as a real estate investment trust (“REIT”) by electing to be taxed as a REIT beginning with the taxable year ended 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 (“Cole Advisors”) the affiliate advisor to the Company, is the sole limited partner and owner of 0.1% (minority interest) of the partnership interests of Cole OP II.

      At December 31, 2005, the Company owned 14 properties comprising approximately 455,000 square feet of single-tenant commercial space located in ten states. At December 31, 2005, these properties were 100% leased.

      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 $10.00 per share, subject to certain volume and other discounts (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 $9.50 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 December 31, 2005, the Company had issued approximately 2.83 million shares of its common stock in the Offering for aggregate gross proceeds of approximately $28.3 million before offering costs, selling commissions and dealer manager fees of approximately $2.8 million. 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.

      The Company’s stock is not currently listed on a national exchange. The Company may seek to list its stock for trading on a national securities exchange or for quotation on The Nasdaq National Market only if a majority of its independent directors believe listing would be in the best interest of its stockholders. The Company does not intend to list its shares at this time. The Company does not anticipate that there would be any market for its common stock until its shares are listed or quoted. In the event it does not obtain listing prior to the tenth anniversary of the completion or termination of the Offering, its charter requires that it either: (1) seek stockholder approval of an extension or amendment of this listing deadline; or (2) seek stockholder approval to adopt a plan of liquidation of the corporation.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such financial statements and accompanying notes are the representations of its management, who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the United States (“GAAP”), in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements.

F-7

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Principles of Consolidation and Basis of Presentation

      The consolidated financial statements include the accounts of the Company and its wholly-owned 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Investment in 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.

      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
Tenant improvements	Lease term
Intangible lease assets	Lesser of useful life or 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 December 31, 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 difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of fair market lease rates for the corresponding in-place leases, which is generally obtained from independent appraisals, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market and below-market lease values are capitalized as intangible lease assets or

F-8

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

liabilities and amortized as an adjustment to rental income over the remaining terms of the respective 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.

Cash and Cash Equivalents

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

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 $1.8 million of offering proceeds for which shares of common stock had not been issued as of December 31, 2005.

Rents and Tenant Receivables

      Rents and tenant receivables primarily includes amounts to be collected in future periods related to the recognition of rental income on a straight-line basis over the lease term and cost recoveries from tenants. See Revenue Recognition.

Prepaid Expenses and Other Assets

      Prepaid expenses and other assets includes expenses incurred as of the balance sheet date that relate to future periods and will be expensed or reclassified to another account during the period to which the costs relate. Any amounts with no future economic benefit are charged to earnings when identified.

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 year ended December 31, 2005 was approximately $18,000 and was recorded in interest expense in the consolidated statements of operations.

Revenue Recognition

      Upon the acquisition of real estate, certain properties have leases where minimum rent payments increase during the term of the lease. The Company records rental revenue for the full term of each lease on a straight-line basis. Accordingly, the Company records a receivable from tenants that the Company expects to collect over the remaining lease term rather than currently, which is recorded as rents receivable. When the Company acquires a property, the term of existing leases is considered to commence

F-9

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

as of the acquisition date for the purposes of this calculation. In accordance with Staff Accounting Bulletin 101, Revenue Recognition in Financial Statements, the Company defers the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Cost recoveries from tenants are included in rental income in the period the related costs are incurred.

Income Taxes

      The Company intends to elect to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its taxable year ended 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. The Company believes it is organized and operating in such a manner as to qualify to be taxed as a REIT for the taxable year ended December 31, 2005.

Concentration of Credit Risk

      At December 31, 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.

      The Company’s tenants are generally of “investment grade” quality. One tenant in the drugstore industry and one tenant in the automotive supply industry account for approximately 34% and 31% of the Company’s gross annualized base rental revenues, respectively. Tenants in the drugstore, and automotive supply industries comprise approximately 44% and 31%, respectively, of the Company’s gross annualized base rental revenues.

Offering and Related Costs

      Cole Advisors 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 December 31, 2005 and 2004, Cole Advisors had incurred organization and offering costs of approximately $1,425,000 and $463,000, respectively, on behalf of the Company. Of these amounts, the Company was responsible for approximately $421,000 and $0 at December 31, 2005 and 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, of which approximately $2,000 was expensed during the year ended December 31, 2005.

Due to affiliates

      Due to affiliates consists of approximately $36,000 due to Cole Advisors for reimbursement of legal fees and approximately $5,000 due to Cole Capital Corporation (“Cole Capital”), the Company’s affiliated dealer manager, for commissions and dealer manager fees payable on stock issuances.

F-10

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Stockholders’ Equity

      At December 31, 2005 and 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 outside of permanent equity for future redemption of shares. No proceeds were received from the distribution reinvestment plan during the year ended December 31, 2005.

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 all the outstanding stock options was anti-dilutive to earnings per share for the year ended December 31, 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 2004 Independent Directors Stock Option Plan (“IDSOP”) (see Note 10). 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 December 31, 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 $30,000 of general and administrative expenses for the year ended December 31, 2005 or an additional loss of $0.07 per dilutive share.

Reportable Segments

      The Financial Accounting Standards Board (“FASB”) issued SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” which establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. We have determined that we have one reportable segment, with activities related to investing in real estate. Our investments in real estate generate rental revenue and other income through the leasing of single-tenant properties, which comprised 100% of our total consolidated revenues for the year ended December 31, 2005. Although our investments in real estate are geographically diversified throughout the United States, management evaluates operating performance on an individual property level. However, as each of our single-tenant properties has similar economic characteristics, tenants, and products and services, our single-tenant properties have been aggregated into one reportable segment.

F-11

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Interest

      Interest is charged to interest expense as it accrues. No interest costs were capitalized during the year ended December 31, 2005.

Distributions Payable and Distribution Policy

      In order to maintain its status as a REIT, the Company is required to make distributions each taxable year equal to at least 90% of its REIT taxable income excluding capital gains. To the extent funds are available, the Company intends to pay regular quarterly distributions to stockholders. Distributions are paid to those stockholders who are stockholders of record as of applicable record dates.

      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 monthly distributions were calculated to be equivalent to an annualized distribution of six percent (6%) per share, assuming a purchase price of $10.00 per share. As of December 31, 2005, the Company had distributions payable of approximately $195,000. The distributions were paid in January 2006, of which approximately $79,000 was reinvested in shares through our distribution reinvestment program.

Recent Accounting Pronouncements

      In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment”. SFAS No. 123 (revised 2004) is a revision of FASB Statement No. 123, “Accounting for Stock-Based Compensation”. This statement supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and its related implementation guidance.

      SFAS No. 123 (revised 2004) requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost will be recognized over the period during which an employee is required to provide services in exchange for the award. We expect to adopt the provisions of SFAS 123 (revised 2004) using a modified prospective application. The modified prospective method requires companies to recognize compensation cost for unvested awards that are outstanding on the effective date based on the fair value that we had originally estimated for purposes of preparing its SFAS 123 pro forma disclosures. For all new awards that are granted or modified after the effective date, a company would use SFAS 123R’s measurement model. This statement is effective for us on January 1, 2006. As of December 31, 2005, the amount of unrecognized compensation expense to be recognized in future periods, in accordance with SFAS 123R, is approximately $30,000. Had SFAS No. 123R been implemented in 2005, the Company would have experienced an approximately $30,000 reduction in net income and a $0.07 per share decrease in both basic earnings per share and diluted earnings per share.

      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

F-12

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

other partnerships, this guidance is effective no later than January 1, 2006. The Company believes the FSP does not have a material impact to the consolidated financial statements.

      In March 2005, the FASB issued Interpretation No. 47 “Accounting for Conditional Asset Retirement Obligations” to clarify that the term conditional asset retirement obligation as used in FASB Statement No. 143 is a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that the enterprise may or may not have control over. This Interpretation requires recognition of a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably determined. This Interpretation is effective no later than the end of fiscal years ending after December 15, 2005 (December 31, 2005, for calendar-year enterprises). The Interpretation No. 47 did not have a material impact to the consolidated financial statements.

NOTE 3 — REAL ESTATE ACQUISITIONS

      During the year ended December 31, 2005, the Company acquired the following properties:

									2005		Percentage of
					Square		Purchase		Annualized		2005 Annualized
Property	Acquisition Date		Location		Feet		Price		Gross Base Rent		Gross Base Rent
Tractor Supply specialty retail		September 26, 2005		Parkersburg, WV		21,688	$	3,353,243	$	251,980		4	%
Walgreens drugstore		October 5, 2005		Brainerd, MN		15,120		4,434,440		303,000		4	%
Rite Aid drugstore		October 20, 2005		Alliance, OH		11,348		2,153,871		189,023		3	%
La-Z-Boy furnishings store		October 25, 2005		Glendale, AZ		23,000		5,823,871		459,522		7	%
Walgreens drugstore		November 2, 2005		Florissant, MO		15,120		5,280,483		344,000		5	%
Walgreens drugstore		November 2, 2005		Saint Louis, MO		15,120		5,150,225		335,500		5	%
Walgreens drugstore		November 2, 2005		Saint Louis, MO		15,120		6,261,239		408,000		6	%
Walgreens drugstore		November 22, 2005		Columbia, MO		13,973		6,419,530		439,000		6	%
Walgreens drugstore		November 22, 2005		Olivette, MO		15,030		7,997,138		528,000		8	%
CVS drugstore		December 1, 2005		Alpharetta, GA		10,125		3,188,803		222,244		3	%
Lowe’s home improvement		December 1, 2005		Enterprise, AL		95,173		7,632,658		500,000		7	%
CVS drugstore		December 8, 2005		Richland Hills, TX		10,908		3,773,637		272,593		4	%
FedEx Ground distribution center		December 9, 2005		Rockford, IL		67,925		6,279,083		445,632		7	%
Plastech automotive supply		December 15, 2005		Auburn Hills, MI		111,881		24,093,417		2,138,878		31	%
Total						441,531	$	91,841,638	$	6,837,372		100	%

      In accordance with SFAS, No. 141, the Company allocated the purchase price of these properties to the fair value of the assets acquired and the liabilities assumed, including the allocation of the intangibles associated with the in-place leases considering the following factors: lease origination costs, tenant relationships, and above or below market leases. See Notes 4 and 6.

F-13

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 4 — INTANGIBLE LEASE ASSETS

      Identified intangible assets relating to the real estate acquisitions discussed in Note 3 consisted of the following:

	December 31,
	2005		2004
Acquired in place leases and tenant relationships, net of accumulated amortization of $69,939 and $0 at December 31, 2005 and 2004, respectively (with a weighted average life of 172 and 0 months for in-place leases and tenant relationships, respectively)	$	9,970,272	$	—
Acquired above market leases, net of accumulated amortization of $1,942 and $0 at December 31, 2005 and 2004, respectively (with a weighted average life of 118 months)	$	455,346	$	—
	$	10,425,618	$	—

      Amortization expense recorded on the identified intangible assets, for each of fiscal years ended December 31, 2005 and 2004 was approximately $72,000 and $0, respectively.

      Estimated amortization expense of the respective intangible lease assets as of December 31, 2005 for each of the five succeeding fiscal years is as follows:

	Amount
	Leases		Above
Year	In-Place		Market Leases
2006	$	716,504	$	46,610
2007	$	716,504	$	46,610
2008	$	716,504	$	46,610
2009	$	716,504	$	46,610
2010	$	716,504	$	46,610

NOTE 5 — MORTGAGE NOTES PAYABLE

      As of December 31, 2005, the Company had the following indebtedness outstanding:

				Fixed
		Fixed Rate		Interest				Variable Rate			Total Loan
Property	Location	Loan Amount		Rate			Maturity Date	Loan Amount		Maturity Date	Outstanding
Plastech - mortgage note	Auburn Hills, MI	$	—		N/A		N/A	$	17,700,000	December 14, 2006	$	17,700,000
Lowe’s - mortgage note	Enterprise, AL		4,859,000		5.52	%	December 11, 2010		1,121,000	March 1, 2006		5,980,000
Walgreens - mortgage note	Olivette, MO		5,379,146		5.15	%	July 11, 2008		—	N/A		5,379,146
Walgreens (Gravois Rd) - mortgage note	Saint Louis, MO		3,999,000		5.48	%	November 11, 2015		923,000	February 2, 2006		4,922,000
FedEx Ground
Distribution Center - mortgage note	Rockford, IL		3,998,000		5.61	%	December 11, 2010		922,000	March 10, 2006		4,920,000
La-Z-Boy - mortgage note	Glendale, AZ		3,415,000		5.76	%	November 11, 2010		1,138,000	January 25, 2006		4,553,000
Walgreens - mortgage note	Columbia, MO		4,487,895		5.15	%	July 11, 2008		—	N/A		4,487,895
Related Party Note	N/A		—		N/A		N/A		4,453,000	June 30, 2006		4,453,000
Walgreens - mortgage note	Florissant, MO		3,372,000		5.48	%	November 11, 2015		778,000	February 2, 2006		4,150,000

F-14

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

				Fixed
		Fixed Rate		Interest				Variable Rate			Total Loan
Property	Location	Loan Amount		Rate			Maturity Date	Loan Amount		Maturity Date	Outstanding
Walgreens (Telegraph Rd) - mortgage note	Saint Louis, MO		3,289,000		5.48	%	November 11, 2015		759,000	February 2, 2006		4,048,000
Walgreens - mortgage note	Brainerd, MN	2,814,000 2,379,000			5.44	% 5.52%	October 11, 2015 December 11,		649,000 549,000	January 4, 2006 March 8, 2006	3,463,000 2,928,000
CVS - mortgage note	Richland Hills, TX		2,015,000		5.52	%	2010 December 11,		465,000	March 1, 2006		2,480,000
CVS - mortgage note	Alpharetta, GA						2010
Tractor Supply - mortgage note	Parkersburg, WV		1,793,000		5.57	%	October 11, 2015		—	N/A		1,793,000
Total indebtedness		$	41,800,041					$	29,457,000		$	71,257,041

      The fixed rate debt mortgage notes require monthly interest-only payments with the principal balance due July 2008 through December 2015. The variable rate debt mortgage notes bear interest at the one-month LIBOR rate plus 200 basis points and require monthly interest-only payments. Each of the mortgage notes are secured by the respective property. The mortgage notes are generally non-recourse to the Company and Cole Op II, but both are liable for customary non-recourse carveouts.

      The mortgage notes may not be prepaid, in whole or in part, except under the following circumstances: (i) full prepayment may be made on any of the three (3) monthly payment dates occurring immediately prior to the maturity date, and (ii) partial prepayments resulting from the application of insurance or condemnation proceeds to reduce the outstanding principal balance of the mortgage notes. Notwithstanding the prepayment limitations, the Company may sell the properties to a buyer that assumes the respective mortgage loan. The transfer would be subject to the conditions set forth in the individual property’s mortgage note document, including without limitation, the lender’s approval of the proposed buyer and the payment of the lender’s fees, costs and expenses associated with the sale of the property and the assumption of the loan.

      In the event that a mortgage note is not paid off on the respective maturity date, each mortgage note includes hyperamortization provisions. The interest rate during the hyperamortization period shall be the fixed interest rate as stated on the respective mortgage note agreement plus two percent (2.0%). The individual mortgage note maturity date, under the hyperamortization provisions, will be extended by twenty (20) years. During such period, the lender will apply 100% of the rents collected to (i) all payments for escrow or reserve accounts, (ii) payment of interest at the original fixed interest rate, (iii) payments for the replacement reserve account, (iv) any other amounts due in accordance with the mortgage note agreement other than any additional interest expense, (v) any operating expenses of the property pursuant to an approved annual budget, (vi) any extraordinary expenses, (vii) payments to be applied to the reduction of the principal balance of the mortgage note, and (viii) any additional interest expense, which is not paid will be added to the principal balance of the mortgage note.

      The Company’s weighted average interest rate relating to the fixed rate debt mortgage at December 31, 2005 was approximately 5.47%.

Related party notes

      On December 15, 2005, Cole OP II borrowed $2,458,000 and $1,995,000 from Series C, LLC, which is an affiliate of the Company and the Company’s advisor, by executing two promissory notes which are secured by the membership interests held by Cole OP II in Cole WG St. Louis MO, LLC and Cole RA Alliance OH, LLC, respectively. Each of the loans 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 accrued and unpaid interest payable in full on June 30, 2006. Each of the loans is generally non recourse to Cole OP II and may be prepaid at any time without penalty or premium. The Company’s board of

F-15

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

directors, including a majority of its independent directors, approved the loans and determined that the terms of the loans are no less favorable to the Company than loans between unaffiliated third parties under the same circumstances.

      The following table summarizes the scheduled aggregate principal repayments for the five years subsequent to December 31, 2005:

	Principal
For the Year Ending December 31:	Repayments
2006	$	29,614,755
2007		166,193
2008		9,543,093
2009		—
2010		16,666,000
Thereafter		15,267,000
Total	$	71,257,041

      The variable rate mortgages approximate fair market value. The fair value of our fixed rate mortgage notes payable at December 31, 2005 approximates $41,400,000.

NOTE 6 — INTANGIBLE LEASE LIABILITY

      Identified intangible liability relating to the real estate acquisitions discussed in Note 3 consisted of the following:

	December 31,
	2005		2004
Acquired below–market leases, net of accumulated amortization of $52 and $0 at December 31, 2005 and 2004, respectively (with a weighted average life of 141 months)	$	14,637	$	—

      Amortization income recorded on the identified intangible liability, for each of fiscal years ended December 31, 2005 and 2004 was $52 and $0, respectively.

      Estimated amortization income of the respective intangible lease liability as of December 31, 2005 for each of the five succeeding fiscal years is as follows:

	Amount
	Below
Year	Market Lease
2006	$	1,253
2007	$	1,253
2008	$	1,253
2009	$	1,253
2010	$	1,253

NOTE 7 — COMMITMENTS AND CONTINGENCIES

Litigation

      In the ordinary course of business, the Company may become subject to litigation or claims. There are no material pending legal proceedings known to be contemplated against us.

F-16

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Environmental Matters

      In connection with the ownership and operation of real estate, the Company may be potentially liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and the Company is not aware of any other environmental condition that it believes will have a material adverse effect on the consolidated results of operations.

NOTE 8 — 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 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 year ended December 31, 2005, the Company paid approximately $2,376,000 to Cole Capital for commissions and dealer manager fees, of which approximately $1,954,000 was reallowed to participating broker-dealers.

      All organization and offering expenses (excluding selling commissions and the dealer-manager fee) are being paid for by Cole Advisors or its affiliates and will be reimbursed by the Company up to 1.5% of gross offering proceeds. During the year ended December 31, 2005, the Company reimbursed the Advisor approximately $421,000 for organizational and offering expenses, of which approximately $2,000 was expensed as organization costs.

      If Cole Advisors 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 Cole Advisors a financing coordination fee equal to 1% of the amount available under such financing; provided however, that Cole Advisors 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 Cole Advisors received such a fee. Financing coordination fees payable from loan proceeds from permanent financing will be paid to Cole Advisors 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. All organization and offering expenses (excluding selling commissions and the dealer-manager fee) are being paid for by Cole Advisors or its affiliates and will be reimbursed by the Company up to 1.5% of gross offering proceeds. During the year ended December 31, 2005, the Company paid Cole Advisors approximately $320,000 for finance coordination fees.

      The Company pays Cole Realty, its affiliated property manager, fees for the management and leasing of the Company’s properties. Such fees are equal to 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. Cole Realty may subcontract its duties for a fee that may be less than the fee provided for in the property management agreement. Cole Realty or its affiliates also 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

F-17

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

not to exceed 2% 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 year ended December 31, 2005, the Company paid property management fees and acquisition fees to Cole Realty of approximately $14,000 and approximately $1.7 million, respectively.

      The Company pays Cole Advisors 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 year ended December 31, 2005, the Company paid asset management fees to Cole Advisors of approximately $25,000.

      If Cole Advisors 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 Cole Advisors 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 Cole Advisors, 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 Cole Advisors is entitled to receive 10% of the remaining net sale proceeds. During the year ended December 31, 2005, the Company did not pay any fees or amounts to Cole Advisors 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 Cole Advisors (the “Subordinated Incentive Listing Fee”).

      Upon termination of the advisory agreement with Cole Advisors, other than termination by the Company because of a material breach of the advisory agreement by Cole Advisors, 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 Cole Advisors a Subordinated Incentive Listing Fee.

      The Company will reimburse Cole Advisors 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 Cole Advisors receives acquisition fees or real estate commissions. During the year ended December 31, 2005, the Company did not reimburse Cole Advisors for any such costs.

      On December 15, 2005, Cole OP II borrowed $2,458,000 and $1,995,000 from Series C, LLC, which is an affiliate of the Company and the Company’s advisor, by executing two promissory notes which are secured by the membership interests held by Cole OP II in Cole WG St. Louis MO, LLC and Cole RA Alliance OH, LLC, respectively. Each of the loans 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

F-18

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

accrued and unpaid interest payable in full on June 30, 2006. Each of the loans is generally non recourse to Cole OP II and may be prepaid at any time without penalty or premium. The Company’s board of directors, including a majority of its independent directors, approved the loans and determined that the terms of the loans are no less favorable to the Company than loans between unaffiliated third parties under the same circumstances.

NOTE 9 — ECONOMIC DEPENDENCY

      Under various agreements, the Company has engaged or will engage Cole Advisors and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for 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 Cole Advisors 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 10 — INDEPENDENT DIRECTOR’S STOCK OPTION PLAN

      The Company has a stock option plan, 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% of the fair market value of the Company’s common stock as of the date that the option is granted. A total of 1,000,000 shares have been authorized and reserved for issuance under the IDSOP.

      No grants were made under the Independent Director Plan in 2004. A summary of the Company’s stock option activity under its Independent Director Plan during the year ended December 31, 2005 is as follows:

			Exercise
	Number		Price		Exercisable
Outstanding at December 31, 2004		—		—		—
Granted in 2005		10,000	$	9.15		—
Outstanding at December 31, 2005		10,000	$	9.15		10,000

      In accordance with Statement 123, the fair value of each stock option granted in 2005 has been estimated as of the date of the grant using the Black-Scholes minimum value method. The weighted average risk-free interest rate assumed for 2005 was 4.19%, and the projected future dividend yield was estimated to be 6.0% for the options granted in 2005. The expected life of an option was assumed to be 10 years for the year ended December 31, 2005. Based on these assumptions, the fair value of the options granted during the year ended December 31, 2005 is approximately $60,000. The weighted average contractual remaining life for options that were exercisable at December 31, 2005 was approximately nine years.

F-19

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 11 — STOCKHOLDERS EQUITY

Distribution Reinvestment Plan

      The Company maintains a distribution reinvestment plan that allows common stockholders (the “Stockholders”) to elect to have the distributions the Stockholders receive reinvested in additional shares of the Company’s common stock. The purchase price per share under the distribution reinvestment plan will be the higher of 95% of the fair market value per share as determined by the Company’s board of directors and $9.50 per share. No sales commissions or dealer manager fees will be paid on shares sold under the distribution reinvestment plan. The Company may terminate the distribution reinvestment plan at the Company’s discretion at any time upon ten days prior written notice to the Stockholders. Additionally, the Company will be required to discontinue sales of shares under the distribution reinvestment plan on the earlier of June 27, 2007, which is two years from the effective date of the Offering, unless the Offering is extended, or the date the Company sells 5,000,000 shares under the Offering, unless the Company files a new registration statement with the Securities and Exchange Commission and applicable states. No shares were purchased under the distribution reinvestment plan during the year ended December 31, 2005.

Share Redemption Program

      The Company’s share redemption program permits the Stockholders to sell their shares back to the Company after they have held them for at least one year, subject to the significant conditions and limitations described below.

      There are several restrictions on the Stockholder’s ability to sell their shares to the Company under the program. The Stockholders generally have to hold their shares for one year before selling the shares to the Company under the plan; however, the Company may waive the one-year holding period in the event of the death or bankruptcy of a Stockholder. In addition, the Company will limit the number of shares redeemed pursuant to the Company’s share redemption program as follows: (1) during any calendar year, the Company will not redeem in excess of 3.0% of the weighted average number of shares outstanding during the prior calendar year; and (2) funding for the redemption of shares will be limited to the amount of net proceeds the Company receives from the sale of shares under the Company’s distribution reinvestment plan. These limits may prevent the Company from accommodating all requests made in any year. During the term of the Offering, and subject to certain provisions the redemption price per share will depend on the length of time the Stockholder has held such shares as follows: after one year from the purchase date — 92.5% of the amount the Stockholder paid for each share; after two years from the purchase date — 95.0% of the amount the Stockholder paid for each share; after three years from the purchase date — 97.5% of the amount the Stockholder paid for each share; and after four years from the purchase date — 100.0% of the amount the Stockholder paid for each share.

      Upon receipt of a request for redemption, the Company will conduct a Uniform Commercial Code search to ensure that no liens are held against the shares. The Company will charge an administrative fee to the Stockholder for the search and other costs, which will be deducted from the proceeds of the redemption or, if a lien exists, will be charged to the Stockholder. Repurchases will be made quarterly. If funds are not available to redeem all requested redemptions at the end of each quarter, the shares will be purchased on a pro rata basis and the unfulfilled requests will be held until the next quarter, unless withdrawn. The Company’s board of directors may amend, suspend or terminate the share redemption program at any time upon 30 days prior written notice to the Stockholders. No shares were redeemed under the share redemption program during the year ended December 31, 2005.

F-20

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 12 — INCOME TAXES

      For income tax purposes, dividends to common stockholders are characterized as ordinary income, capital gains, or as a return of a stockholder’s invested capital. As the Company incurred a loss for income tax purposes during the year ended December 31, 2005, none of the distributions declared was taxable to the stockholders as ordinary income. Additionally, as the distributions were paid during 2006, the character of such distributions will be determined based on future taxable earnings and distributions which may be declared. During the period ended December 31, 2004, the Company was a development stage company and had no operations and made no distributions.

      At December 31, 2005, the tax basis carrying value of the Company’s total assets were approximately $98.8 million.

NOTE 13 — OPERATING LEASES

      All of the Company’s real estate assets are leased to tenants under operating leases for which the terms and expirations vary. The leases frequently have provisions to extend the lease agreement and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants.

      The future minimum rental income from the Company’s investment in real estate assets under non-cancelable operating leases, at December 31, 2005 is as follows:

	Amount
Year ending December 31:
2006	$	6,918,514
2007		6,937,978
2008		6,937,978
2009		6,937,978
2010		6,937,978
Thereafter		66,182,219
Total	$	100,852,645

NOTE 14 — QUARTERLY RESULTS (unaudited)

      Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2005. The Company believes that all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly, and in accordance with GAAP, the selected quarterly information.

	2005(1)
	Third			Fourth
Revenues(2)	$	2,761		$	738,908
Net loss		(29,543	)		(85,048	)
Basic and diluted net loss per share(2)		(0.46	)		(0.05	)
Dividends per share		—			—

(1)  No quarterly financial information is presented for 2004 and the first two quarters of 2005 as the Company was a development stage company during those quarters and had no operations.

F-21

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2)  The total of the two quarterly amounts for the year ended December 31, 2005, does not equal the total for the year then ended. This difference results from the increase in shares outstanding over the year.

NOTE 15 — SUBSEQUENT EVENTS

Sale of Shares of Common Stock

      As of March 22, 2006, the Company had raised approximately $56.2 million in offering proceeds through the issuance of approximately 5.6 million shares of the Company’s common stock. As of March 22, 2006 approximately $393.8 million (representing approximately 39.4 million shares) remained available for sale to the public under the Offering, exclusive of shares available under the Company’s distribution reinvestment plan.

Property Acquisition and Borrowings

      During the period from January 1, 2006 through March 22, 2006, the Company has acquired 11 commercial real estate buildings in separate transactions for an aggregate acquisition cost of approximately $62.6 million and issued mortgage notes payable totaling approximately $45.1 million to finance the transactions (see details on borrowings below). These acquisitions are as follows:

Property	Location		Acquisition Date		Square Feet		Purchase Price(1)
Academy Sports		Macon, GA		January 6, 2006		74,532	$	5,600,000
David’s Bridal		Lenexa, KS		January 11, 2006		12,083		3,270,000
Rite Aid		Enterprise, AL		January 26, 2006		14,564		3,714,000
Rite Aid		Wauseon, OH		January 26, 2006		14,564		3,893,679
Staples		Crossville, TN		January 26, 2006		23,942		2,900,000
Rite Aid		Saco, ME		January 27, 2006		11,180		2,500,000
Wadsworth Blvd		Denver, CO		February 6, 2006		198,477		18,500,000
Mountainside Fitness		Chandler, AZ		February 9, 2006		31,063		5,863,000
Drexel Heritage		Hickory, NC		February 24, 2006		261,057		4,250,000
Rayford Square		Spring, TX		March 2, 2006		79,968		9,900,000
CVS		Portsmouth, OH		March 8, 2006		10,170		2,166,000
Total						731,855	$	62,556,679

(1)  Purchase price excludes related closing and acquisition costs.

F-22

COLE CREDIT PROPERTY TRUST II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following mortgage notes require monthly interest-only payments and relate to the aforementioned acquisitions:

			Fixed Rate		Fixed					Variable
			Loan		Interest					Rate Loan				Total Loan
Property	Location		Amount		Rate			Maturity Date		Amount(1)		Maturity Date		Outstanding
Academy Sports		Macon, GA	$	3,478,000		5.69	%		January 11, 2016	$	802,000		April 6, 2006	$	4,280,000
David’s Bridal		Lenexa, KS		1,799,000		5.86	%		January 11, 2011		817,000		April 11, 2006		2,616,000
Rite Aid		Enterprise, AL		2,043,000		5.80	%		February 11, 2016		928,000		April 26, 2006		2,971,000
Rite Aid		Wauseon, OH		2,142,000		5.80	%		February 11, 2016		973,000		April 26, 2006		3,115,000
Staples		Crossville, TN		1,885,000		5.71	%		February 11, 2011		435,000		April 26, 2006		2,320,000
Rite Aid		Saco, ME		1,375,000		5.82	%		February 11, 2011		625,000		April 27, 2006		2,000,000
Wadsworth Blvd		Denver, CO		12,025,000		5.57	%		March 1, 2011		2,275,000		December 31, 2006		12,025,000
Mountainside Fitness		Chandler, AZ		—		—			N/A		4,690,400		December 31, 2006		4,690,400
Drexel Heritage		Hickory, NC		2,763,000		5.80	%		March 11, 2011		637,000		May 24, 2006		3,400,000
Rayford Square		Spring, TX		5,940,000		5.64	%		April 1, 2006		—		N/A		5,940,000
CVS		Portsmouth, OH		1,424,000		5.67	%		March 11, 2011		329,000		June 8, 2006		1,753,000
Total			$	34,874,000						$	12,511,400			$	47,385,400

(1)  The variable rate debt mortgage notes bear interest at the one-month LIBOR rate plus 200 basis points with interest paid monthly.

Declaration of Distributions

      On January 3, 2006, the Company’s board of directors authorized a distribution of $0.05 per share for stockholders of record on each of January 7, 2006 and February 7, 2006 and a distribution of $0.0521 per share for stockholders of record on March 7, 2006. The payment date for each of the distributions will be in April 2006, but not later than April 6, 2006. The January and February 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. The March distribution is calculated to be equivalent to an annualized distribution of six and one-quarter percent (6.25%) per share, assuming a purchase price of $10.00 per share.

F-23

COLE CREDIT PROPERTY TRUST II, INC.

SCHEDULE III — REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION

December 31, 2005

	Initial Costs to Company						Gross Amount at Which Carried at December 31, 2005
					Buildings and				Buildings and				Accumulated
Description	Encumbrances		Land		Improvements		Land		Improvements		Total		Depreciation
Tractor Supply - Parkersburg, WV	$	1,793,000	$	934,094	$	2,049,813	$	934,094	$	2,049,813	$	2,983,907	$	(17,303	)
Walgreens - Brainerd, MN		3,463,000		981,431		2,879,090		981,431		2,879,090		3,860,521		(17,164	)
Rite Aid - Alliance, OH		—		431,879		1,445,749		431,879		1,445,749		1,877,628		(8,986	)
La-Z-Boy - Glendale, AZ		4,553,000		2,515,230		2,968,168		2,515,230		2,968,168		5,483,398		(17,343	)
Walgreens - Florissant, MO		4,150,000		1,481,823		3,204,729		1,481,823		3,204,729		4,686,552		(10,369	)
Walgreens (Telegraph Rd) - St. Louis, MO		4,048,000		1,744,792		2,874,581		1,744,792		2,874,581		4,619,373		(9,315	)
Walgreens (Gravois Rd) - St. Louis, MO		4,922,000		2,220,036		3,304,989		2,220,036		3,304,989		5,525,025		(10,705	)
Walgreens - Columbia, MO		4,487,894		2,349,209		3,345,990		2,349,209		3,345,990		5,695,199		(11,537	)
Walgreens - Olivette, MO		5,379,146		3,076,687		3,797,713		3,076,687		3,797,713		6,874,400		(12,732	)
CVS - Alpharetta, GA		2,480,000		1,214,170		1,693,229		1,214,170		1,693,229		2,907,399		(2,016	)
Lowe’s - Enterprise, AL		5,980,000		1,011,873		5,803,040		1,011,873		5,803,040		6,814,913		(6,878	)
CVS - Richland Hills, TX		2,928,000		1,141,450		2,302,484		1,141,450		2,302,484		3,443,934		(2,552	)
FedEx Package Distribution Center -Rockford, IL		4,920,000		1,468,781		3,668,567		1,468,781		3,668,567		5,137,348		(4,408	)
Plastech - Auburn Hills, MI		17,700,000		3,282,853		18,151,689		3,282,853		18,151,689		21,434,542		(20,164	)
Total	$	66,804,040	$	23,854,308	$	57,489,831	$	23,854,308	$	57,489,831	$	81,344,139	$	(151,472	)

S-1

COLE CREDIT PROPERTY TRUST II, INC.

SCHEDULE III — REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION — (Continued)

December 31, 2005

			Date		Depreciation is
Description	Date Acquired		Constructed		Computed(a)
Tractor Supply - Parkersburg, WV		9/26/2005		2005		0 to 40 years
Walgreens - Brainerd, MN		10/5/2005		2000		0 to 40 years
Rite Aid - Alliance, OH		10/20/2005		1996		0 to 40 years
La-Z-Boy - Glendale, AZ		10/25/2005		2001		0 to 40 years
Walgreens - Florissant, MO		11/2/2005		2001		0 to 40 years
Walgreens (Telegraph Rd) - St. Louis, MO		11/2/2005		2001		0 to 40 years
Walgreens (Gravois Rd) - St. Louis, MO		11/2/2005		2001		0 to 40 years
Walgreens - Columbia, MO		11/22/2005		2002		0 to 40 years
Walgreens - Olivette, MO		11/22/2005		2001		0 to 40 years
CVS - Alpharetta, GA		12/1/2005		1998		0 to 40 years
Lowe’s - Enterprise, AL		12/1/2005		1995		0 to 40 years
CVS - Richland Hills, TX		12/8/2005		1997		0 to 40 years
FedEx Package Distribution Center - Rockford, IL		12/9/2005		1994		0 to 40 years
Plastech - Auburn Hills, MI		12/15/2005		1995		0 to 40 years

(a)  The Company’s assets are depreciated or amortized using the straight-lined method over the useful lives of the assets by class. Generally, tenant improvements and lease intangibles are amortized over the respective lease term and buildings are depreciated over 40 years.

S-2

COLE CREDIT PROPERTY TRUST II, INC.

SCHEDULE III — REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION — (Continued)

December 31, 2005

			Accumulated
	Cost		Depreciation
Balance at December 31, 2004	$	—	$	—
2005 Additions		81,344,139		151,472
2005 Dispositions		—		—
Balance at December 31, 2005		81,344,139	$	151,472

S-3

EXHIBIT INDEX

      The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the year ended December 31, 2005 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.			Description
	3	.1*	Corrected Fifth Articles of Amendment and Restatement.
	3	.2	Amended and Restated Bylaws. (Incorporated by reference to Exhibit 99.1 to the Company’s Form 8-K (File No. 333-121094), filed on September 6, 2005)
	4	.1	Form of Subscription Agreement and Subscription Agreement Signature Page (included as Appendix B to prospectus). (Incorporated by reference to Exhibit 4.1 to the Company’s Form S-11/A (File No. 333-121094), filed on June 16, 2005)
	10	.1	2004 Independent Directors’ Stock Option Plan. (Incorporated by reference to Exhibit 10.5 to the Company’s Form S-11 (File No. 333-121094), filed on December 9, 2004)
	10	.2	Form of Stock Option Agreement under 2004 Independent Directors’ Stock Option Plan. (Incorporated by reference to Exhibit 10.6 to the Company’s Form S-11/A (File No. 333-121094), filed on April 11, 2005)
	10	.3	Form of Escrow Agreement between Cole Credit Property Trust II, Inc. and Wells Fargo Bank, N.A. (Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q (File No. 333-121094), filed on August 12, 2005)
	10	.4	Amended and Restated Property Management and Leasing Agreement, dated September 16, 2005, by and among Cole Credit Property Trust II, Inc., Cole Operating Partnership II, LP and Fund Realty Advisors, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 333-121094), filed on September 23, 2005)
	10	.5	Amended and Restated Advisory Agreement, dated September 16, 2005, by and between Cole Credit Property Trust II, Inc. and Cole REIT Advisors II, LLC. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No. 333-121094), filed on September 23, 2005)
	10	.6	Amended and Restated Agreement of Limited Partnership of Cole Operating Partnership II, LP, dated September 16, 2005, by and between Cole Credit Property Trust II, Inc. and the limited partners thereto. (Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (File No. 333-121094), filed on September 23, 2005)
	10	.7	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. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q (File No. 333-121094), filed on November 14, 2005)
	10	.8	Promissory Note between Cole TS Parkersburg WV, LLC, and Wachovia Bank National Association dated September 26, 2005. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q (File No. 333-121094), filed on November 14, 2005)
	10	.9	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. (Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q (File No. 333-121094), filed on November 14, 2005)
	10	.10	Promissory Note between Cole WG Brainerd MN, LLC, and Wachovia Bank National Association dated October 5, 2005. (Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q (File No. 333-121094), filed on November 14, 2005)
	10	.11	Purchase Agreement between Cole RA Alliance OH, LLC, and Monogram Development XV, LTD pursuant to an Assignment of Purchase Agreement dated October 19, 2005. (Incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q (File No. 333-121094), filed on November 14, 2005)
	10	.12	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. (Incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q (File No. 333-121094), filed on November 14, 2005)

Exhibit No.			Description
	10	.13	Promissory Note between Cole LZ Glendale AZ, LLC, and Wachovia Bank National Association dated October 25, 2005. (Incorporated by reference to Exhibit 10.7 to the Company’s Form 10-Q (File No. 333-121094), filed on November 14, 2005)
	10	.14	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. (Incorporated by reference to Exhibit 10.8 to the Company’s Form 10-Q (File No. 333-121094), filed on November 14, 2005)
	10	.15	Promissory Note between Cole WG St. Louis MO Portfolio, LLC, and Wachovia Bank National Association dated November 2, 2005. (Incorporated by reference to Exhibit 10.9 to the Company’s Form 10-Q (File No. 333-121094), filed on November 14, 2005)
	10	.16	Amended and Restated Distribution Reinvestment Plan (included as Appendix C to prospectus). (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 333-121094), filed on December 22, 2005)
	10	.17	Purchase Agreement among Cole WG Columbia MO, LLC, and ECM Hutchinson, LLC, ECM Clearwest, LLC, Newton, LLC, ECM St. Joseph, LLC, ECM Broadway, LLC, and ECM Olive, LLC pursuant to an Assignment of Agreement of Purchase and Sale dated July 21, 2005, as further assigned by an Instrument of Assignment and Assumption dated November 15, 2005. (Incorporated by reference to Exhibit 10.17 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.18	Note and Deed of Trust Assumption Agreement among Cole WG Columbia MO, LLC, ECM Broadway, LLC, and Wells Fargo Bank, N.A., a national banking association, Successor by Merger to Wells Fargo Bank Minnesota, N.A., as Trustee for the Registered Holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2003-C6, dated November 22, 2005. (Incorporated by reference to Exhibit 10.18 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.19	Purchase Agreement among Cole WG Olivette MO, LLC, and ECM Hutchinson, LLC, ECM Clearwest, LLC, Newton, LLC, ECM St. Joseph, LLC, ECM Broadway, LLC, and ECM Olive, LLC pursuant to an Assignment of Agreement of Purchase and Sale dated November 15, 2005. (Incorporated by reference to Exhibit 10.19 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.20	Note and Deed of Trust Assumption Agreement among Cole WG Olivette MO, LLC, ECM Olive, LLC, and Wells Fargo Bank, N.A., a national banking association, Successor by Merger to Wells Fargo Bank Minnesota, N.A., as Trustee for the Registered Holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2003-C6, dated November 22, 2005. (Incorporated by reference to Exhibit 10.20 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.21	Purchase Agreement between Cole LO Enterprise AL, LLC, and Daniel Elstein pursuant to an Assignment of Purchase Agreement and Escrow Instructions dated November 30, 2005. (Incorporated by reference to Exhibit 10.21 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.22	Promissory Note between Cole LO Enterprise AL, LLC, and Wachovia Bank, National Association, dated December 1, 2005. (Incorporated by reference to Exhibit 10.22 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.23	Purchase Agreement between Cole CV Alpharetta GA, LLC, and Thompson-Alpharetta, Ltd. pursuant to an Assignment of Purchase Agreement and Escrow Instructions dated November 30, 2005. (Incorporated by reference to Exhibit 10.23 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.24	Promissory Note between Cole CV Alpharetta GA, LLC, and Wachovia Bank, National Association, dated December 1, 2005. (Incorporated by reference to Exhibit 10.24 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.25	Purchase Agreement between Cole CV Richland Hills TX, LP, and Tradewind Associates L.P. pursuant to an Assignment of Purchase Agreement and Escrow Instructions dated December 7, 2005. (Incorporated by reference to Exhibit 10.25 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)

Exhibit No.			Description
	10	.26	Promissory Note between Cole CV Richland Hills TX, LP, and Wachovia Bank, National Association, dated December 8, 2005. (Incorporated by reference to Exhibit 10.26 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.27	Purchase Agreement between Cole FE Rockford IL, LLC, and The Westmoreland Company, Inc. pursuant to an Assignment of Agreement of Purchase and Sale and Joint Escrow Instructions dated December 8, 2005. (Incorporated by reference to Exhibit 10.27 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.28	Promissory Note between Cole FE Rockford IL, LLC, and Wachovia Bank, National Association, dated December 9, 2005. (Incorporated by reference to Exhibit 10.28 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.29	Purchase Agreement between Cole PT Auburn Hills MI, LLC, and Metro Acquisitions, LLC pursuant to an Assignment of Agreement of Purchase and Sale and Joint Escrow Instructions dated December 14, 2005. (Incorporated by reference to Exhibit 10.29 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.30	Promissory Note between Cole PT Auburn Hills MI, LLC, and Wachovia Financial Services, Inc., dated December 15, 2005. (Incorporated by reference to Exhibit 10.30 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.31	Promissory Note between Cole Operating Partnership II, LP and Series C, LLC with respect to Cole RA Alliance OH, LLC dated December 15, 2005. (Incorporated by reference to Exhibit 10.31 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.32	Security Agreement between Cole Operating Partnership II, LP and Series C, LLC with respect to Cole RA Alliance OH, LLC dated December 15, 2005. (Incorporated by reference to Exhibit 10.32 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.33	Promissory Note between Cole Operating Partnership II, LP and Series C, LLC with respect to Cole WG St. Louis MO Portfolio, LLC dated December 15, 2005. (Incorporated by reference to Exhibit 10.33 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.34	Security Agreement between Cole Operating Partnership II, LP and Series C, LLC with respect to Cole WG St. Louis MO Portfolio, LLC dated December 15, 2005. (Incorporated by reference to Exhibit 10.34 to the Company’s Form POS AM (File No. 333-121094), filed on December 23, 2005)
	10	.35*	Purchase and Sale Agreement between Cole AS Macon GA, LLC, and Academy, Ltd., pursuant to an Assignment of Purchase and Sale Agreement dated January 5, 2006.
	10	.36*	Promissory Note between Cole AS Macon GA, LLC, and Wachovia Bank, National Association, dated January 6, 2006.
	10	.37*	Real Estate Contract between Cole DB Lenexa KS, LLC, and DB-KS, LLC pursuant to an Assignment of Real Estate Contract, dated January 10, 2006.
	10	.38*	Promissory Note between Cole DB Lenexa KS, LLC, and Wachovia Bank, National Association, dated January 11, 2006.
	10	.39*	Purchase Agreement between Cole RA Enterprise AL, LLC, and NOM Enterprise, LLC, pursuant to an Assignment of Purchase Agreement dated January 26, 2006.
	10	.40*	Promissory Note between Cole RA Enterprise AL, LLC, and Wachovia Bank, National Association, dated January 26, 2006.
	10	.41*	Master Purchase Agreement and Escrow Instructions among Cole RA Wauseon OH, LLC, and NOM Wauseon, LLC, NOM Defiance, LLC, and NOM Lima Bath, Ltd., pursuant to an Assignment of Master Purchase Agreement and Escrow Instructions dated January 26, 2006.
	10	.42*	Promissory Note between Cole RA Wauseon OH, LLC, and Wachovia Bank, National Association, dated January 26, 2006.
	10	.43*	Purchase Agreement and Escrow Instructions between Cole ST Crossville TN, LLC, and William F. Graham, PTRS, pursuant to an Assignment of Purchase Agreement and Escrow Instructions dated January 25, 2006.
	10	.44*	Promissory Note between Cole ST Crossville TN, LLC, and Wachovia Bank, National Association, dated January 26, 2006.

Exhibit No.			Description
	10	.45*	Purchase Agreement and Escrow Instructions between Cole RA Saco ME, LLC, and Princeton-Saco, LLC, pursuant to an Assignment of Purchase Agreement and Escrow Instructions dated January 26, 2006.
	10	.46*	Promissory Note between Cole RA Saco ME, LLC, and Wachovia Bank, National Association, dated January 27, 2006.
	10	.47*	Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions between Cole MT Denver CO, LLC, and Shadrall Associates, pursuant to an Assignment of Purchase and Sale of Real Property and Joint Escrow Instructions dated February 6, 2006.
	10	.48*	Promissory Note between Cole MT Denver CO, LLC, and Bear Stearns Commercial Mortgage, Inc., dated February 6, 2006.
	10	.49*	Loan Agreement between Cole MT Denver CO, LLC, and Bear Stearns Commercial Mortgage, Inc., dated February 6, 2006.
	10	.50*	Promissory Note between Cole Operating Partnership II, LP, and Series C, LLC, with respect to Cole MT Denver CO, LLC, dated February 6, 2006.
	10	.51*	Security Agreement between Cole Operating Partnership II, LP and Series C, LLC with respect to Cole MT Denver CO, LLC, dated February 6, 2006.
	10	.52*	Purchase Agreement and Escrow Instructions between Cole MF Chandler AZ, LLC, and Alma School Town Center LLC, pursuant to an Assignment of Purchase Agreement and Escrow Instructions dated February 8, 2006.
	10	.53*	Purchase and Sale Agreement between Cole DH Hickory NC, LLC, and Hickory Business Park, LLC, pursuant to an Assignment of Purchase and Sale Agreement dated February 23, 2006.
	10	.54*	Promissory Note between Cole DH Hickory NC, LLC, and Wachovia Bank, National Association, dated February 24, 2006.
	10	.55*	Contract of Sale between Cole MT Spring TX, LP, and RPI Interests II, Ltd., pursuant to an Assignment of Contract of Sale dated March 1, 2006.
	10	.56*	Promissory Note between Cole MT Spring TX, LP, and Bear Stearns Commercial Mortgage, Inc., dated March 2, 2006.
	10	.57*	Loan Agreement between Cole MT Spring TX, LP, and Bear Stearns Commercial Mortgage, Inc., dated March 2, 2006.
	10	.58*	Purchase Agreement and Escrow Instructions between Cole CV Scioto Trail OH, LLC, and Scioto Trail Company, pursuant to an Assignment of Purchase Agreement and Escrow Instructions dated March 6, 2006.
	10	.59*	Promissory Note between Cole CV Scioto Trail OH, LLC, and Wachovia Bank, National Association, dated March 8, 2006.
	10	.60	Form of Dealer Manager Agreement. (Incorporated by reference to Exhibit 1.1 to the Company’s Form 10-Q (File No. 333-121094), filed on August 12, 2005)
	14	.1*	Cole Credit Property Trust II, Inc. Code of Business Conduct and Ethics.
	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.

*  Filed herewith.

EX-3.1

                                                                     EXHIBIT 3.1

                  FIFTH ARTICLES OF AMENDMENT AND RESTATEMENT

                       COLE CREDIT PROPERTY TRUST II, INC.

FIRST: Cole Credit Property Trust II, Inc., a Maryland corporation, desires to
amend and restate its Charter as currently in effect and as hereinafter amended.

SECOND: The following provisions are all the provisions of the Charter currently
in effect and as hereinafter amended:

                                    ARTICLE I

                                  INCORPORATOR

            The undersigned, Christopher H. Cole, whose address is 2555 E.
Camelback Road, Suite 400, Phoenix, Arizona 86016, being at least 18 years of
age, does hereby form a corporation under the general laws of the State of
Maryland.

                                   ARTICLE II

                                      NAME

            The name of the corporation (which is hereinafter called the
"Corporation") is:

                       Cole Credit Property Trust II, Inc.

                                   ARTICLE III

                               PURPOSES AND POWERS

            The purposes for which the Corporation is formed are to engage in
any lawful act or activity (including, without limitation or obligation,
engaging in business as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, or any successor statute (the "Code")) for
which corporations may be organized under the general laws of the State of
Maryland as now or hereafter in force. For purposes of these Articles, "REIT"
means a real estate investment trust under Sections 856 through 860 of the Code.

                                   ARTICLE IV

                  PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT

            The address of the principal office of the Corporation in the State
of Maryland is c/o The National Registered Agents of MD, Inc., 11 E. Chase
Street, Baltimore, Maryland 21202. The name and address of the resident agent of
the Corporation are The National Registered Agents of MD, Inc., 11 E. Chase
Street, Baltimore, Maryland 21202. The resident agent is a Maryland corporation.
The Corporation may have such other offices and place of business within or
outside the State of Maryland as the Board may from time to time determine.

                                    ARTICLE V

                                   DEFINITIONS

            As used in the Charter, the following terms shall have the following
meanings unless the context otherwise requires:



            Acquisition Expenses. Any and all expenses incurred by the
Corporation, the Advisor, or any Affiliate of either in connection with the
selection, acquisition or development of any Asset, whether or not acquired,
including, without limitation, legal fees and expenses, travel and
communications expenses, costs of appraisals, nonrefundable option payments on
property not acquired, accounting fees and expenses, and title insurance
premiums.

            Acquisition Fees. Any and all fees and commissions, exclusive of
Acquisition Expenses, paid by any Person to any other Person (including any fees
or commissions paid by or to any Affiliate of the Corporation or the Advisor) in
connection with making or investing in Mortgages or the purchase, development or
construction of a Property, including, without limitation, real estate
commissions, selection fees, Development Fees, Construction Fees, non-recurring
management fees, loan fees, points or any other fees of a similar nature.
Excluded shall be Development Fees and Construction Fees paid to any Person not
affiliated with the Sponsor in connection with the actual development and
construction of a project.

            Advisor or Advisors. The Person or Persons, if any, appointed,
employed or contracted with by the Corporation pursuant to Section 9.1 hereof
and responsible for directing or performing the day-to-day business affairs of
the Corporation, including any Person to whom the Advisor subcontracts all or
substantially all of such functions.

            Advisory Agreement. The agreement between the Corporation and the
Advisor pursuant to which the Advisor will direct or perform the day-to-day
business affairs of the Corporation.

            Affiliate or Affiliated. As to any Person, (i) any Person directly
or indirectly owning, controlling or holding, with the power to vote, ten
percent or more of the outstanding voting securities of such other Person; (ii)
any Person ten percent or more of whose outstanding voting securities are
directly or indirectly owned, controlled or held, with the power to vote, by
such other Person; (iii) any Person directly or indirectly controlling,
controlled by or under common control with such other Person; (iv) any executive
officer, director, trustee or general partner of such other Person; and (v) any
legal entity for which such Person acts as an executive officer, director,
trustee or general partner.

            Aggregate Share Ownership Limit. Not more than 9.8% in value of the
aggregate of the outstanding Shares.

            Assets. Any Property, Mortgage or other direct or indirect
investments in equity interests in, or loans secured by, Real Property (other
than investments in bank accounts, money market funds or other current assets)
owned by the Corporation, directly or indirectly through one or more of its
Affiliates, by the Corporation and any other investment made, directly or
indirectly through one or more of its Affiliates.

            Average Invested Assets. For a specified period, the average of the
aggregate book value of the assets of the Corporation invested, directly or
indirectly, in equity interests in and loans secured by real estate, before
deducting depreciation, bad debts or other non-cash reserves, computed by taking
the average of such values at the end of each month during such period;
provided, however, that during such periods in which the Board is determining on
a regular basis the current value of the Corporation's net assets for purposes
of enabling fiduciaries of employee benefit plan stockholders to comply with
applicable Department of Labor reporting requirements, "Average Invested Assets"
will equal the greater of (i) the amount determined pursuant to the foregoing
and (ii) the assets aggregate valuation established by the most recent such
valuation determination without reduction for depreciation, bad debts or other
non-cash reserves.

            Beneficial Ownership. Ownership of Shares by a Person, whether the
interest in Shares is held directly or indirectly (including by a nominee), and
shall include interests that would be treated as owned through the application
of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The
terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall
have the correlative meanings.

            Board or Board of Directors. The Board of Directors of the
Corporation.

                                       -2-


            Business Day. Any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in New York City
are authorized or required by law, regulation or executive order to close.

            Bylaws. The Bylaws of the Corporation, as amended from time to time.

            Charitable Beneficiary. One or more beneficiaries of the Charitable
Trust as determined pursuant to Section 7.2.6, provided that each such
organization must be described in Section 501(c)(3) of the Code and
contributions to each such organization must be eligible for deduction under
each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.

            Charitable Trust. Any trust provided for in Section 7.2.1.

            Charitable Trustee. The Person unaffiliated with the Corporation and
a Prohibited Owner that is appointed by the Corporation to serve as Trustee of
the Charitable Trust.

            Charter. These Fourth Articles of Amendment and Restatement and any
Articles of Amendment, Articles of Amendment and Restatement, Articles of
Supplementary or other modification or amendment thereto.

            Code. As provided in Article III herein.

            Commencement of the Initial Public Offering. The date that the
Securities and Exchange Commission declares effective the Corporation's
registration statement filed under the Securities Act for the Initial Public
Offering.

            Common Share Ownership Limit. Not more than 9.8% (in value or in
number of shares, whichever is more restrictive) of the aggregate of the
outstanding Common Shares.

            Common Shares. As provided in Section 6.1 herein.

            Competitive Real Estate Commission. A real estate or brokerage
commission paid for the purchase or sale of a Property that is reasonable,
customary and competitive in light of the size, type and location of the
Property.

            Construction Fee. A fee or other remuneration for acting as general
contractor and/or construction manager to construct improvements, supervise and
coordinate projects or to provide major repairs or rehabilitations on a
Property.

            Constructive Ownership. Ownership of Shares by a Person, whether the
interest in Shares is held directly or indirectly (including by a nominee), and
shall include interests that would be treated as owned through the application
of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The
terms "Constructive Owner," "Constructively Owns" and "Constructively Owned"
shall have the correlative meanings.

            Contract Purchase Price. The amount actually paid or allocated in
respect of the purchase, development, construction or improvement of a Property
or the amount of funds advanced with respect to a Mortgage, or the amount
actually paid or allocated in respect of the purchase of other Assets, in each
case exclusive of Acquisition Fees and Acquisition Expenses.

            Corporation. As provided in Article II herein.

            Dealer Manager. Cole Capital Corporation, an Arizona corporation and
an Affiliate of the Corporation, or such other Person selected by the Board to
act as the dealer manager for an Offering.

            Development Fee. A fee for the packaging of a Property or Mortgage,
including the negotiation and approval of plans, and any assistance in obtaining
zoning and necessary variances and financing for a specific Property, either
initially or at a later date.

                                      -3-


            Director. As provided in Section 8.1 herein.

            Distributions. Any distributions of money or other property,
pursuant to Section 6.2.5 hereof, by the Corporation to owners of Shares,
including distributions that may constitute a return of capital for federal
income tax purposes.

            Excepted Holder. A stockholder of the Corporation for whom an
Excepted Holder Limit is created by Article VII or by the Board of Directors
pursuant to Section 7.1.7.

            Excepted Holder Limit. Provided that the affected Excepted Holder
agrees to comply with the requirements established by the Board of Directors
pursuant to Section 7.1.7 and subject to adjustment pursuant to Section 7.1.8,
the percentage limit established by the Board of Directors pursuant to Section
7.1.7.

            Gross Proceeds. The aggregate purchase price of all Shares sold for
the account of the Corporation through an Offering, without deduction for
Selling Commissions, volume discounts, dealer manager fees or Organization and
Offering Expenses. For the purpose of computing Gross Proceeds, the purchase
price of any Share for which reduced Selling Commissions or Dealer-Manager Fees
are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the
Corporation are not reduced) shall be deemed to be the full amount of the
Offering price per Share pursuant to the Prospectus for such Offering without
giving effect to such reduction.

            Independent Appraiser. A Person with no material current or prior
business or personal relationship with the Advisor or the Directors and who is a
qualified appraiser of Real Property of the type held by the Corporation or of
other Assets as determined by the Board of Directors. Membership in a nationally
recognized appraisal society such as the American Institute of Real Estate
Appraisers or the Society of Real Estate Appraisers shall be conclusive evidence
of such qualification as to Real Property.

            Independent Director. A Director who is not on the date of
determination, and within the last two years from the date of determination has
not been, directly or indirectly associated with the Sponsor, the Corporation,
the Advisor or any of their Affiliates by virtue of (i) ownership of an interest
in the Sponsor, the Advisor or any of their Affiliates, other than the
Corporation, (ii) employment by the Corporation, the Sponsor, the Advisor or any
of their Affiliates, (iii) service as an officer or director of the Sponsor, the
Advisor or any of their Affiliates, other than as a Director of the Corporation
or of any other real estate investment trust organized by the Sponsor or advised
by the Advisor, (iv) performance of services, other than as a Director of the
Corporation, (v) service as a director or Director of more than three real
estate investment trusts organized by the Sponsor or advised by the Advisor, or
of any other real estate investment trust organized by the Sponsor or advised by
the Advisor, or (vi) maintenance of a material business or professional
relationship with the Sponsor, the Advisor or any of their Affiliates. A
business or professional relationship is considered "material" if the aggregate
gross revenue derived by the Director from the Sponsor, the Advisor and their
Affiliates exceeds five percent of either the Director's annual gross income
during either of the last two years or the Director's net worth on a fair market
value basis. An indirect association with the Sponsor or the Advisor shall
include circumstances in which a Director's spouse, parent, child, sibling,
mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-law
is or has been associated with the Sponsor, the Advisor, any of their Affiliates
or the Corporation.

            Initial Date. The date upon which this Charter is accepted for
record by the SDAT.

            Initial Investment. That portion of the initial capitalization of
the Corporation contributed by the Sponsor or its Affiliates pursuant to Section
II.A. of the NASAA REIT Guidelines.

            Initial Public Offering. The first Offering.

            Invested Capital. The amount calculated by multiplying the total
number of Shares purchased by Stockholders by the issue price per Share, reduced
by the portion of any Distribution that is attributable to Net Sales Proceeds
and by any amounts paid by the Corporation to repurchase Shares pursuant to the
Corporation's plan for the repurchase of Shares.

                                      -4-


            Joint Ventures. Those joint venture or partnership arrangements in
which the Corporation or the Operating Partnership is a co-venturer or general
partner established to acquire or hold Assets.

            Leverage. The aggregate amount of indebtedness of the Corporation
for money borrowed (including purchase money mortgage loans) outstanding at any
time, both secured and unsecured.

            Listing. The listing of the Shares on a national securities exchange
or the quotation of the Shares on The Nasdaq National Market ("Nasdaq"). Upon
such Listing, the Shares shall be deemed Listed.

            Market Price. On any date, with respect to any class or series of
outstanding Shares, the Closing Price for such Shares on such date. The "Closing
Price" on any date shall mean the last sale price for such Shares, regular way,
or, in case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, for such Shares, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if such Shares are not
listed or admitted to trading on the NYSE, as reported on the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such Shares are listed or
admitted to trading or, if such Shares are not listed or admitted to trading on
any national securities exchange, the last quoted price, or, if not so quoted,
the average of the high bid and low asked prices on The Nasdaq National
Market or, if such system is no longer in use, the principal other automated
quotation system that may then be in use or, if such Shares are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such Shares
selected by the Board of Directors or, in the event that no trading price is
available for such Shares, the fair market value of Shares, as determined in
good faith by the Board of Directors.

            MGCL. The Maryland General Corporation Law.

            Mortgages. In connection with mortgage financing provided, invested
in, participated in or purchased by the Corporation, all of the notes, deeds of
trust, security interests or other evidences of indebtedness or obligations,
which are secured or collateralized by Real Property owed by the borrowers under
such notes, deeds of trust, security interests or other evidences of
indebtedness or obligations.

            NASAA REIT Guidelines. The Statement of Policy Regarding Real Estate
Investment Trusts published by the North American Securities Administrators
Association.

            Net Assets. The total assets of the Corporation (other than
intangibles) at cost, before deducting depreciation, reserves for bad debts or
other non-cash reserves, less total liabilities calculated at least quarterly by
the Corporation on a basis consistently applied; provided, however, that during
such periods in which the Board is determining on a regular basis the current
value of the Corporation's net assets for purposes of enabling fiduciaries of
employee benefit plan stockholders to comply with applicable Department of Labor
reporting requirements, "Net Assets" shall mean the greater of (i) the amount
determined pursuant to the foregoing and (ii) the assets' aggregate valuation
established by the most recent such valuation without reduction for
depreciation, bad debts or other non-cash reserves.

            Net Income. For any period, the Corporation's total revenues
applicable to such period, less the total expenses applicable to such period
other than additions to reserves for depreciation, bad debts or other similar
non-cash reserves and excluding any gain from the sale of the Assets.

            Net Sales Proceeds. In the case of a transaction described in clause
(i)(A) of the definition of Sale, Net Sales Proceeds means the proceeds of any
such transaction less the amount of selling expenses incurred by or on behalf of
the Corporation, including all real estate commissions, closing costs and legal
fees and expenses. In the case of a transaction described in clause (i)(B) of
such definition, Net Sales Proceeds means the proceeds of any such transaction
less the amount of selling expenses incurred by or on behalf of the Corporation,
including any legal fees and expenses and other selling expenses incurred in
connection with such transaction. In the case of a transaction described in
clause (i)(C) of such definition, Net Sales Proceeds means the proceeds of any
such transaction actually distributed to the Corporation from the Joint Venture
less the amount of any selling expenses, including legal fees and expenses,
incurred by or on behalf of the Corporation (other than those paid by the Joint
Venture). In the case of a transaction or series of transactions described in
clause (i)(D) of the definition of Sale,

                                      -5-


Net Sales Proceeds means the proceeds of any such transaction (including the
aggregate of all payments under a Mortgage on or in satisfaction thereof other
than regularly scheduled interest payments) less the amount of selling expenses
incurred by or on behalf of the Corporation, including all commissions, closing
costs and legal fees and expenses. In the case of a transaction described in
clause (i)(E) of such definition, Net Sales Proceeds means the proceeds of any
such transaction less the amount of selling expenses incurred by or on behalf of
the Corporation, including any legal fees and expenses and other selling
expenses incurred in connection with such transaction. In the case of a
transaction described in clause (ii) of the definition of Sale, Net Sales
Proceeds means the proceeds of such transaction or series of transactions less
all amounts generated thereby which are reinvested in one or more Assets within
180 days thereafter and less the amount of any real estate commissions, closing
costs, and legal fees and expenses and other selling expenses incurred by or
allocated to the Corporation in connection with such transaction or series of
transactions. Net Sales Proceeds shall also include any consideration (including
non-cash consideration such as stock, notes or other property or securities)
that the Corporation determines, in its discretion, to be economically
equivalent to proceeds of a Sale, valued in the reasonable determination of the
Company. Net Sales Proceeds shall not include any reserves established by the
Corporation in its sole discretion.

            NYSE. The New York Stock Exchange.

            Offering. Any public offering and sale of Shares pursuant to an
effective registration statement filed under the Securities Act, excluding
Shares offered under any employee benefit plan.

            Operating Partnership. Cole Operating Partnership II, LP, a Delaware
limited partnership, through which the Corporation may own Assets.

            Organization and Offering Expenses. Any and all costs and expenses
incurred by and to be paid from the assets of the Corporation in connection with
the formation, qualification and registration of the Corporation, and the
marketing and distribution of Shares, including, without limitation, total
underwriting and brokerage discounts and commissions (including fees of the
underwriters' attorneys), expenses for printing, engraving, amending,
supplementing, mailing and distributing costs, salaries of employees while
engaged in sales activity, telephone and other telecommunications costs, all
advertising and marketing expenses (including the costs of the Corporation
related to investor and broker-dealer sales meetings), charges of transfer
agents, registrars, trustees, escrow holders, depositories, experts, fees,
expenses and taxes related to the filing, registration and qualification of the
sale of the Shares under federal and state laws, including taxes and fees, and
accountants' and attorneys' fees.

            Person. An individual, corporation, business trust, partnership,
estate, trust (including a trust qualified under Sections 401(a) or 501(c)(17)
of the Code), limited liability company, a portion of a trust permanently set
aside for or to be used exclusively for the purposes described in Section 642(c)
of the Code, association, private foundation within the meaning of Section
509(a) of the Code, joint stock company or other entity and also includes a
group as that term is used for purposes of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, and a group to which an Excepted Holder Limit
applies.

            Preferred Shares. As provided in Section 6.1 herein.

            Prohibited Owner. With respect to any purported Transfer, any Person
who, but for the provisions of Section 7.1.1, would Beneficially Own or
Constructively Own Shares, and if appropriate in the context, shall also mean
any Person who would have been the record owner of Shares that the Prohibited
Owner would have so owned.

            Property or Properties. As the context requires, any, or all, of the
Real Property acquired by the Corporation, either directly or indirectly through
joint venture arrangements or other partnership or investment interests.

            Prospectus. The same as that term is defined in Section 2(10) of the
Securities Act, including a preliminary prospectus, an offering circular as
described in Rule 256 of the General Rules and Regulations under the Securities
Act, or, in the case of an intrastate offering, any document by whatever name
known, utilized for the purpose of offering and selling Securities to the
public.

                                      -6-


            Real Property or Real Estate. Land, rights in land (including
leasehold interests), and any buildings, structures, improvements, furnishings,
fixtures and equipment located on or used in connection with land and rights or
interests in land.

            Reinvestment Plan. As provided in Section 6.10.

            REIT. A corporation, trust, association or other legal entity (other
than a real estate syndication) that is engaged primarily in investing in equity
interests in real estate (including fee ownership and leasehold interests) or in
loans secured by real estate or both as defined pursuant to the REIT Provisions
of the Code.

            REIT Provisions of the Code. Sections 856 through 860 of the Code
and any successor or other provisions of the Code relating to real estate
investment trusts (including provisions as to the attribution of ownership of
beneficial interests therein) and the regulations promulgated thereunder.

            Restriction Termination Date. The first day after the Initial Date
on which the Board of Directors determines that it is no longer in the best
interests of the Corporation to attempt to, or continue to, qualify as a REIT or
that compliance with the restrictions and limitations on Beneficial Ownership,
Constructive Ownership and Transfers of Shares set forth herein is no longer
required in order for the Corporation to qualify as a REIT.

            Roll-Up Entity. A partnership, real estate investment trust,
corporation, trust or similar entity that would be created or would survive
after the successful completion of a proposed Roll-Up Transaction.

            Roll-Up Transaction. A transaction involving the acquisition,
merger, conversion or consolidation either directly or indirectly of the
Corporation and the issuance of securities of a Roll-Up Entity to the
Stockholders. Such term does not include:

                  (a) a transaction involving securities of the Corporation that
have been for at least twelve months listed on a national securities exchange or
traded through Nasdaq's National Market System; or

                  (b) a transaction involving the conversion to corporate, trust
            or association form of only the Corporation, if, as a consequence of
the transaction, there will be no significant adverse change in any of the
following:

                        (i)   Stockholders' voting rights;

                        (ii)  the term of existence of the Corporation;

                        (iii) Sponsor or Advisor compensation; or

                        (iv)  the Corporation's investment objectives.

            Sale or Sales. (i) any transaction or series of transactions
whereby: (A) the Corporation or the Operating Partnership directly or indirectly
(except as described in other subsections of this definition) sells, grants,
transfers, conveys or relinquishes its ownership of any Property or portion
thereof, including the lease of any Property consisting of a building only, and
including any event with respect to any Property which gives rise to a
significant amount of insurance proceeds or condemnation awards; (B) the
Corporation or the Operating Partnership directly or indirectly (except as
described in other subsections of this definition) sells, grants, transfers,
conveys, or relinquishes its ownership of all or substantially all of the
interest of the Corporation or the Operating Partnership in any Joint Venture in
which it is a co-venturer or partner; (C) any Joint Venture directly or
indirectly (except as described in other subsections of this definition) in
which the Corporation or the Operating Partnership as a co-venturer or partner
sells, grants, transfers, conveys or relinquishes its ownership of any Property
or portion thereof, including any event with respect to any Property which gives
rise to insurance claims or condemnation awards; or (D) the Corporation or the
Operating Partnership directly or indirectly (except as described in other
subsections of this definition) sells, grants, conveys or relinquishes its
interest in any Mortgage or portion thereof (including with respect to any
Mortgage, all repayments thereunder or in satisfaction thereof other than
regularly scheduled interest payments) and any event which gives rise to a
significant amount of insurance proceeds or similar awards; or (E) the

                                      -7-


Corporation or the Operating Partnership directly or indirectly (except as
described in other subsections of this definition) sells, grants, transfers,
conveys, or relinquishes its ownership of any other Asset not previously
described in this definition or any portion thereof, but (ii) not including any
transaction or series of transactions specified in clause (i) (A) through (E)
above in which the proceeds of such transaction or series of transactions are
reinvested in one or more Assets within 180 days thereafter.

            SDAT. As provided in Section 6.4 herein.

            Securities. Any of the following issued by the Corporation, as the
text requires: Shares, any other stock, shares or other evidences of equity or
beneficial or other interests, voting trust certificates, bonds, debentures,
notes or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in,
temporary or interim certificates for, receipts for, guarantees of, or warrants,
options or rights to subscribe to, purchase or acquire, any of the foregoing.

            Securities Act. The Securities Act of 1933, as amended from time to
time, or any successor statute thereto. Reference to any provision of the
Securities Act shall mean such provision as in effect from time to time, as the
same may be amended, and any successor provision thereto, as interpreted by any
applicable regulations as in effect from time to time.

            Selling Commissions. Any and all commissions payable to
underwriters, dealer managers or other broker-dealers in connection with the
sale of Shares, including, without limitation, commissions and fees payable to
the Dealer Manager.

            Shares. Shares of stock of the Corporation of any class or series,
including Common Shares or Preferred Shares.

            Soliciting Dealers. Those broker-dealers that are members of the
National Association of Securities Dealers, Inc., or that are exempt from
broker-dealer registration, and, in either case, have executed participating
broker or other agreements with the Dealer Manager to sell Shares.

            Sponsor. Any Person which (i) is directly or indirectly instrumental
in organizing, wholly or in part, the Corporation, (ii) will manage or
participate in the management of the Corporation, and any Affiliate of any such
Person, other than a Person whose only relationship with the Corporation is that
of an independent property manager and whose only compensation is as such, (iii)
takes the initiative, directly or indirectly, in founding or organizing the
Corporation, either alone or in conjunction with one or more other Persons, (iv)
receives a material participation in the Corporation in connection with the
founding or organizing of the business of the Corporation, in consideration of
services or property, or both services and property, (v) has a substantial
number of relationships and contacts with the Corporation, (vi) possesses
significant rights to control Properties, (vii) receives fees for providing
services to the Corporation which are paid on a basis that is not customary in
the industry, or (viii) provides goods or services to the Corporation on a basis
which was not negotiated at arm's-length with the Corporation.

            Stockholders. The holders of record of the Shares as maintained in
the books and records of the Corporation or its transfer agent.

            Termination Date. The date of termination of the Advisory Agreement.

            Termination of the Initial Public Offering. The earlier of (i) the
date on which the Initial Public Offering expires or is terminated by the
Corporation or (ii) the date on which all shares offered in the Initial Public
Offering are sold, excluding warrants offered thereunder and shares that may be
acquired upon exercise of such warrants and shares offered thereunder that may
be acquired pursuant to the Reinvestment Plan (as hereafter defined).

            Transfer. Any issuance, sale, transfer, gift, assignment, devise or
other disposition, as well as any other event that causes any
Person to acquire Beneficial Ownership or Constructive Ownership, or any
agreement to take any such actions or cause any such events, of Shares or the
right to vote or receive dividends on Shares,

                                      -8-


including (a) the granting or exercise of any option (or any disposition of any
option), (b) any disposition of any securities or rights convertible into or
exchangeable for Shares or any interest in Shares or any exercise of any such
conversion or exchange right and (c) Transfers of interests in other entities
that result in changes in Beneficial or Constructive Ownership of Shares; in
each case, whether voluntary or involuntary, whether owned of record,
Constructively Owned or Beneficially Owned and whether by operation of law or
otherwise. The terms "Transferring" and "Transferred" shall have the correlative
meanings.

            Total Operating Expenses. All costs and expenses paid or incurred by
the Corporation, as determined under generally accepted accounting principles,
that are in any way related to the operation of the Corporation or to corporate
business, including advisory fees, but excluding (i) the expenses of raising
capital such as Organization and Offering Expenses, legal, audit, accounting,
underwriting, brokerage, listing, registration, and other fees, printing and
other such expenses and tax incurred in connection with the issuance,
distribution, transfer, registration and Listing of the Shares, (ii) interest
payments, (iii) taxes, (iv) non-cash expenditures such as depreciation,
amortization and bad debt reserves, (v) incentive fees paid in compliance with
the NASAA REIT Guidelines, (vi) Acquisition Fees and Acquisition Expenses, (vii)
real estate commissions on the Sale of Property, and (viii) other fees and
expenses connected with the acquisition, disposition, management and ownership
of real estate interests, mortgage loans or other property (including the costs
of foreclosure, insurance premiums, legal services, maintenance, repair, and
improvement of property).

            Unimproved Real Property. Property in which the Corporation has an
equity interest that was not acquired for the purpose of producing rental or
other operating income, that has no development or construction in process and
for which no development or construction is planned, in good faith, to commence
within one year.

                                   ARTICLE VI

                                      STOCK

            Section 6.1 Authorized Shares. The Corporation has authority to
issue 100,000,000 Shares, consisting of 90,000,000 shares of Common Stock, $0.01
par value per share ("Common Shares"), and 10,000,000 shares of Preferred Stock,
$0.01 par value per share ("Preferred Shares"). The aggregate par value of all
authorized shares of stock having par value is $1,000,000. If shares of one
class of stock are classified or reclassified into shares of another class of
stock pursuant to this Article VI, the number of authorized shares of the former
class shall be automatically decreased and the number of shares of the latter
class shall be automatically increased, in each case by the number of shares so
classified or reclassified, so that the aggregate number of shares of stock of
all classes that the Corporation has authority to issue shall not be more than
the total number of Shares set forth in the first sentence of this paragraph.
The Board of Directors, with the approval of a majority of the entire Board and
without any action by the stockholders of the Corporation, may amend the Charter
from time to time to increase or decrease the aggregate number of Shares or the
number of shares of any class or series of stock that the Corporation has
authority to issue.

            Section 6.2 Common Shares.

                  Section 6.2.1 Common Shares Subject to Terms of Preferred
Shares. The Common Shares shall be subject to the express terms of any series of
Preferred Shares.

                  Section 6.2.2 Description. Subject to the provisions of
Article VII and except as may otherwise be specified in the terms of any class
or series of Common Shares, each Common Share shall entitle the holder thereof
to one vote per share on all matters upon which Stockholders are entitled to
vote pursuant to Section 12.2 hereof. Shares of a particular class of Common
Shares shall have equal dividend, distribution, liquidation and other rights,
and shall have no preference, cumulative, preemptive, conversion or exchange
rights. The Board may classify or reclassify any unissued Common Shares from
time to time in one or more classes or series of Shares.

                  Section 6.2.3 Rights Upon Liquidation. In the event of any
voluntary or involuntary liquidation, dissolution or winding up, or any
distribution of the assets of the Corporation, the aggregate assets available
for distribution to holders of the Common Shares shall be determined in
accordance with applicable law. Each holder of Common Shares shall be entitled
to receive, ratably with each other holder of Common Shares, that

                                      -9-


portion of such aggregate assets available for distribution as the number of
outstanding Common Shares held by such holder bears to the total number of
outstanding Common Shares then outstanding.

                  Section 6.2.4 Voting Rights. Except as may be provided
otherwise in the Charter, and subject to the express terms of any series of
Preferred Shares, the holders of the Common Shares shall have the exclusive
right to vote on all matters (as to which a common stockholder shall be entitled
to vote pursuant to applicable law) at all meetings of the Stockholders.

                  Section 6.2.5. Distribution Rights. The Board from time to
time may authorize and the Company may pay to Stockholders such dividends or
other Distributions in cash or other property as the Board in its discretion
shall determine. The Board shall endeavor to authorize, and the Company may pay,
such dividends and Distributions as shall be necessary for the Company to
qualify as a REIT under the REIT Provisions of the Code unless the Board has
determined, in its sole discretion, that qualification as a REIT is not in the
best interests of the Company; provided, however, Stockholders shall have no
right to any dividend or Distribution unless and until authorized by the Board
and declared by the Company. The exercise of the powers and rights of the Board
pursuant to this section shall be subject to the provisions of any class or
series of Shares at the time outstanding. The receipt by any Person in whose
name any Shares are registered on the records of the Company or by his or her
duly authorized agent shall be a sufficient discharge for all dividends or
Distributions payable or deliverable in respect of such Shares and from all
liability to see to the application thereof. Distributions in kind shall not be
permitted, except for distributions of readily marketable securities,
distributions of beneficial interests in a liquidating trust established for the
dissolution of the Company and the liquidation of its assets in accordance with
the terms of the Charter or distributions in which (a) the Board advises each
Stockholder of the risks associated with direct ownership of the property, (b)
the Board offers each Stockholder the election of receiving such in-kind
distributions, and (c) in-kind distributions are made only to those Stockholders
that accept such offer.

            Section 6.3 Preferred Shares. The Board, including at least a
majority of the Independent Directors who do not have an interest in the
transaction, may classify any unissued Preferred Shares and reclassify any
previously classified but unissued Preferred Shares of any series from time to
time, in one or more classes or series of Shares. The voting rights of the
holders of shares of any series of Preferred Shares shall not exceed voting
rights that bear the same relationship to the voting rights of the holders of
Common Shares as the consideration paid to the Corporation for each Preferred
Share bears to the book value of each outstanding Common Share.

            Section 6.4 Classified or Reclassified Shares. Prior to issuance of
classified or reclassified Shares of any class or series, the Board by
resolution shall: (a) designate that class or series to distinguish it from all
other classes and series of Shares; (b) specify the number of Shares to be
included in the class or series; (c) set or change, subject to the provisions of
Section 6.9 and subject to the express terms of any class or series of Shares
outstanding at the time, the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms and conditions of redemption for each class or series;
and (d) cause the Corporation to file articles supplementary with the State
Department of Assessments and Taxation of Maryland ("SDAT"). Any of the terms of
any class or series of Shares set or changed pursuant to clause (c) of this
Section 6.4 may be made dependent upon facts or events ascertainable outside the
Charter (including determinations by the Board or other facts or events within
the control of the Corporation) and may vary among holders thereof, provided
that the manner in which such facts, events or variations shall operate upon the
terms of such class or series of Shares is clearly and expressly set forth in
the articles supplementary filed with the SDAT.

            Section 6.5 Dividends and Distributions. The receipt by any Person
in whose name any Shares are registered on the records of the Corporation or by
his or her duly authorized agent shall be a sufficient discharge for all
dividends or Distributions payable or deliverable in respect of such Shares and
from all liability to see to the application thereof. Distributions in kind
shall not be permitted, except for distributions of readily marketable
securities, distributions of beneficial interests in a liquidating trust
established for the dissolution of the Corporation and the liquidation of its
assets in accordance with the terms of the Charter or distributions in which (i)
the Board advises each Stockholder of the risks associated with direct ownership
of the property, (ii) the Board offers each Stockholder the election of
receiving such in-kind distributions, and (iii) in-kind distributions are made
only to those Stockholders that accept such offer.

                                      -10-


            Section 6.6 Charter and Bylaws. The rights of all Stockholders and
the terms of all Shares are subject to the provisions of the Charter and the
Bylaws.

            Section 6.7 No Issuance of Share Certificates. Until Listing, the
Corporation shall not issue stock certificates except to Stockholders who make a
written request to the Corporation. A Stockholder's investment shall be recorded
on the books of the Corporation. To transfer his or her Shares, a Stockholder
shall submit an executed form to the Corporation, which form shall be provided
by the Corporation upon request. Such transfer will also be recorded on the
books of the Corporation. Upon issuance or transfer of Shares, the Corporation
will provide the Stockholder with information concerning his or her rights with
regard to such Shares, as required by the Bylaws and the MGCL or other
applicable law.

            Section 6.8 Suitability of Stockholders. Until Listing, the
following provisions shall apply:

                  Section 6.8.1 Investor Suitability Standards. Subject to
suitability standards established by individual states, to become a Stockholder
in the Corporation, if such prospective Stockholder is an individual (including
an individual beneficiary of a purchasing Individual Retirement Account), or if
the prospective Stockholder is a fiduciary (such as a trustee of a trust or
corporate pension or profit sharing plan, or other tax-exempt organization, or a
custodian under a Uniform Gifts to Minors Act), such individual or fiduciary, as
the case may be, must represent to the Corporation, among other requirements as
the Corporation may require from time to time:

                        (a) that such individual (or, in the case of a
fiduciary, that the fiduciary account or the donor who directly or indirectly
supplies the funds to purchase the Shares) has a minimum annual gross income of
$45,000 and a net worth (excluding home, furnishings and automobiles) of not
less than $45,000; or

                        (b) that such individual (or, in the case of a
fiduciary, that the fiduciary account or the donor who directly or indirectly
supplies the funds to purchase the Shares) has a net worth (excluding home,
furnishings and automobiles) of not less than $150,000.

                  Section 6.8.2 Determination of Suitability of Sale. Until the
Shares are Listed, the Sponsor and each Person selling Shares on behalf of the
Sponsor or the Corporation shall make every reasonable effort to determine that
the purchase of Shares is a suitable and appropriate investment for each
Stockholder. In making this determination, the Sponsor or each Person selling
Shares on behalf of the Sponsor or the Corporation shall ascertain that the
prospective Stockholder: (a) meets the minimum income and net worth standards
established for the Corporation; (b) can reasonably benefit from the Corporation
based on the prospective Stockholder's overall investment objectives and
portfolio structure; (c) is able to bear the economic risk of the investment
based on the prospective Stockholder's overall financial situation; and (d) has
apparent understanding of (1) the fundamental risks of the investment; (2) the
risk that the Stockholder may lose the entire investment; (3) the lack of
liquidity of the Shares; (4) the restrictions on transferability of the Shares;
(5) the background and qualifications of the Sponsor or the Advisor; and (6) the
tax consequences of the investment.

            The Sponsor or each Person selling shares on behalf of the Sponsor
or the Corporation shall make this determination on the basis of information it
has obtained from a prospective Stockholder. Relevant information for this
purpose will include at least the age, investment objectives, investment
experiences, income, net worth, financial situation, and other investments of
the prospective Stockholder, as well as any other pertinent factors.

            The Sponsor or each Person selling Shares on behalf of the Sponsor
or the Corporation shall maintain records of the information used to determine
that an investment in Shares is suitable and appropriate for a Stockholder. The
Sponsor or each Person selling Shares on behalf of the Sponsor or the
Corporation shall maintain these records for at least six years.

                  Section 6.8.3 Minimum Investment and Transfer. Subject to
certain individual state requirements, no sale or transfer of Shares will be
permitted of less than 100 Shares, other than the initial investment in the
Corporation by a Stockholder, which will not be permitted if less than 250
Shares, and a Stockholder shall not transfer, fractionalize or subdivide such
Shares so as to retain less than such minimum number thereof.

                                      -11-


            Section 6.9 Repurchase of Shares. The Board may establish, from time
to time, a program or programs by which the Corporation voluntarily repurchases
Shares from its Stockholders; provided, however, that such repurchase does not
impair the capital or operations of the Corporation.

            Section 6.10 Distribution Reinvestment Plans. The Board may
establish, from time to time, a Distribution reinvestment plan or plans (each, a
"Reinvestment Plan"). Under any such Reinvestment Plan, (i) all material
information regarding Distributions to the Stockholders and the effect of
reinvesting such Distributions, including the tax consequences thereof, shall be
provided to the Stockholders not less often than annually, and (ii) each
Stockholder participating in such Reinvestment Plan shall have a reasonable
opportunity to withdraw from the Reinvestment Plan not less often than annually
after receipt of the information required in clause (i) above.

                                   ARTICLE VII

                 RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES

            Section 7.1 Shares.

                  Section 7.1.1 Ownership Limitations. During the period
commencing on the Initial Date and prior to the Restriction Termination Date:

                        (a) Basic Restrictions.

                              (i) (1) No Person, other than an Excepted Holder,
shall Beneficially Own or Constructively Own Shares in excess of the Aggregate
Share Ownership Limit, (2) no Person, other than an Excepted Holder, shall
Beneficially Own or Constructively Own Common Shares in excess of the Common
Share Ownership Limit and (3) no Excepted Holder shall Beneficially Own or
Constructively Own Shares in excess of the Excepted Holder Limit for such
Excepted Holder.

                              (ii) No Person shall Beneficially or
Constructively Own Shares to the extent that such Beneficial or Constructive
Ownership of Shares would result in the Corporation being "closely held" within
the meaning of Section 856(h) of the Code (without regard to whether the
ownership interest is held during the last half of a taxable year), or otherwise
failing to qualify as a REIT (including, but not limited to, Beneficial or
Constructive Ownership that would result in the Corporation owning (actually or
Constructively) an interest in a tenant that is described in Section
856(d)(2)(B) of the Code if the income derived by the Corporation from such
tenant would cause the Corporation to fail to satisfy any of the gross income
requirements of Section 856(c) of the Code).

                              (iii) Notwithstanding any other provisions
contained herein, any Transfer of Shares that, if effective, would result in
Shares being beneficially owned by less than 100 Persons (determined under the
principles of Section 856(a)(5) of the Code) shall be void ab initio, and the
intended transferee shall acquire no rights in such Shares.

                        (b) Transfer in Trust. If any Transfer of Shares occurs
which, if effective, would result in any Person Beneficially Owning or
Constructively Owning Shares in violation of Section 7.1.1(a)(i) or (ii),

                              (i) then that number of Shares the Beneficial or
Constructive Ownership of which otherwise would cause such Person to violate
Section 7.1.1(a)(i) or (ii) (rounded to the nearest whole share) shall be
automatically transferred to a Charitable Trust for the benefit of a Charitable
Beneficiary, as described in Section 7.2, effective as of the close of business
on the Business Day prior to the date of such Transfer, and such Person shall
acquire no rights in such Shares; or

                              (ii) if the transfer to the Charitable Trust
described in clause (i) of this sentence would not be effective for any reason
to prevent the violation of Section 7.1.1(a)(i) or (ii), then the

                                      -12-


Transfer of that number of Shares that otherwise would cause any Person to
violate Section 7.1.1(a)(i) or (ii) shall be void ab initio, and the intended
transferee shall acquire no rights in such Shares.

                  Section 7.1.2 Remedies for Breach. If the Board of Directors
or any duly authorized committee thereof shall at any time determine in good
faith that a Transfer or other event has taken place that results in a violation
of Section 7.1.1 or that a Person intends to acquire or has attempted to acquire
Beneficial or Constructive Ownership of any Shares in violation of Section 7.1.1
(whether or not such violation is intended), the Board of Directors or a
committee thereof shall take such action as it deems advisable to refuse to give
effect to or to prevent such Transfer or other event, including, without
limitation, causing the Corporation to redeem Shares, refusing to give effect to
such Transfer on the books of the Corporation or instituting proceedings to
enjoin such Transfer or other event; provided, however, that any Transfers or
attempted Transfers or other events in violation of Section 7.1.1 shall
automatically result in the transfer to the Charitable Trust described above,
and, where applicable, such Transfer (or other event) shall be void ab initio as
provided above irrespective of any action (or non-action) by the Board of
Directors or a committee thereof.

                  Section 7.1.3 Notice of Restricted Transfer. Any Person who
acquires or attempts or intends to acquire Beneficial Ownership or Constructive
Ownership of Shares that will or may violate Section 7.1.1(a), or any Person who
would have owned Shares that resulted in a transfer to the Charitable Trust
pursuant to the provisions of Section 7.1.1(b), shall immediately give written
notice to the Corporation of such event, or in the case of such a proposed or
attempted transaction, give at least 15 days prior written notice, and shall
provide to the Corporation such other information as the Corporation may request
in order to determine the effect, if any, of such Transfer on the Corporation's
status as a REIT.

                  Section 7.1.4 Owners Required To Provide Information. From the
Initial Date and prior to the Restriction Termination Date:

                        (a) every owner of more than five percent (or such lower
percentage as required by the Code or the Treasury Regulations promulgated
thereunder) of the outstanding Shares, within 30 days after the end of each
taxable year, shall give written notice to the Corporation stating the name and
address of such owner, the number of Shares and other Shares Beneficially Owned
and a description of the manner in which such shares are held. Each such owner
shall provide to the Corporation such additional information as the Corporation
may request in order to determine the effect, if any, of such Beneficial
Ownership on the Corporation's status as a REIT and to ensure compliance with
the Aggregate Share Ownership Limit.

                        (b) each Person who is a Beneficial or Constructive
Owner of Shares and each Person (including the stockholder of record) who is
holding Shares for a Beneficial or Constructive Owner shall provide to the
Corporation such information as the Corporation may request, in good faith, in
order to determine the Corporation's status as a REIT and to comply with the
requirements of any taxing authority or governmental authority or to determine
such compliance.

                  Section 7.1.5 Remedies Not Limited. Subject to Section 8.1 of
the Charter, nothing contained in this Section 7.1 shall limit the authority of
the Board of Directors to take such other action as it deems necessary or
advisable to protect the Corporation and the interests of its stockholders in
preserving the Corporation's status as a REIT.

                  Section 7.1.6 Ambiguity. In the case of an ambiguity in the
application of any of the provisions of this Section 7.1, Section 7.2 or any
definition contained in Article V, the Board of Directors shall have the power
to determine the application of the provisions of this Section 7.1 or Section
7.2 with respect to any situation based on the facts known to it. In the event
Section 7.1 or 7.2 requires an action by the Board of Directors and the Charter
fails to provide specific guidance with respect to such action, the Board of
Directors shall have the power to determine the action to be taken so long as
such action is not contrary to the provisions of Article V or Sections 7.1 or
7.2. Absent a decision to the contrary by the Board of Directors (which the
Board may make in its sole and absolute discretion), if a Person would have (but
for the remedies set forth in Section 7.1.2) acquired Beneficial or Constructive
Ownership of Shares in violation of Section 7.1.1, such remedies (as applicable)
shall apply first to the Shares which, but for such remedies, would have been
Beneficially Owned or Constructively

                                      -13-


Owned (but not actually owned) by such Person, pro rata among the Persons who
actually own such Shares based upon the relative number of the Shares held by
each such Person.

                  Section 7.1.7 Exceptions.

                        (a) Subject to Section 7.1.1(a)(ii), the Board of
Directors, in its sole discretion, may exempt (prospectively or retroactively) a
Person from the Aggregate Share Ownership Limit and the Common Share Ownership
Limit, as the case may be, and may establish or increase an Excepted Holder
Limit for such Person if:

                              (i) the Board of Directors obtains such
representations and undertakings from such Person as are reasonably necessary to
ascertain that no individual's Beneficial or Constructive Ownership of such
Shares will violate Section 7.1.1(a)(ii);

                              (ii) such Person does not and represents that it
will not own, actually or Constructively, an interest in a tenant of the
Corporation (or a tenant of any entity owned or controlled by the Corporation)
that would cause the Corporation to own, actually or Constructively, more than a
9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant
and the Board of Directors obtains such representations and undertakings from
such Person as are reasonably necessary to ascertain this fact (for this
purpose, a tenant from whom the Corporation (or an entity owned or controlled by
the Corporation) derives (and is expected to continue to derive) a sufficiently
small amount of revenue such that, in the opinion of the Board of Directors,
rent from such tenant would not adversely affect the Corporation's ability to
qualify as a REIT, shall not be treated as a tenant of the Corporation); and

                              (iii) such Person agrees that any violation or
attempted violation of such representations or undertakings (or other action
which is contrary to the restrictions contained in Sections 7.1.1 through 7.1.6)
will result in such Shares being automatically transferred to a Charitable Trust
in accordance with Sections 7.1.1(b) and 7.2.

                        (b) Prior to granting any exception pursuant to Section
7.1.7(a), the Board of Directors may require a ruling from the Internal Revenue
Service, or an opinion of counsel, in either case in form and substance
satisfactory to the Board of Directors in its sole discretion, as it may deem
necessary or advisable in order to determine or ensure the Corporation's status
as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board of
Directors may impose such conditions or restrictions as it deems appropriate in
connection with granting such exception.

                        (c) Subject to Section 7.1.1(a)(ii), an underwriter
which participates in a public offering or a private placement of Shares (or
securities convertible into or exchangeable for Shares) may Beneficially Own or
Constructively Own Shares (or securities convertible into or exchangeable for
Shares) in excess of the Aggregate Share Ownership Limit, the Common Share
Ownership Limit or both such limits, but only to the extent necessary to
facilitate such public offering or private placement.

                        (d) The Board of Directors may only reduce the Excepted
Holder Limit for an Excepted Holder: (1) with the written consent of such
Excepted Holder at any time, or (2) pursuant to the terms and conditions of the
agreements and undertakings entered into with such Excepted Holder in connection
with the establishment of the Excepted Holder Limit for that Excepted Holder. No
Excepted Holder Limit shall be reduced to a percentage that is less than the
Common Share Ownership Limit.

                  Section 7.1.8 Increase in Aggregate Share Ownership and Common
Share Ownership Limits. Subject to Section 7.1.2(a)(ii), the Board of Directors
may from time to time increase the Common Share Ownership Limit and the
Aggregate Share Ownership Limit for one or more Persons and decrease the Common
Share Ownership Limit and the Aggregate Share Ownership Limit for all other
Persons; provided, however, that the decreased Common Share Ownership Limit
and/or Aggregate Share Ownership Limit will not be effective for any Person
whose percentage ownership in Shares is in excess of such decreased Common Share
Ownership Limit and/or Aggregate Share Ownership Limit until such time as such
Person's percentage of Share equals or falls below

                                      -14-


the decreased Common Share Ownership Limit and/or Aggregate Share Ownership
Limit, but any further acquisition of Shares in excess of such percentage
ownership of Shares will be in violation of the Common Share Ownership Limit
and/or Aggregate Share Ownership Limit and, provided further, that the new
Common Share Ownership Limit and/or Aggregate Share Ownership Limit would not
allow five or fewer Persons to Beneficially Own more than 49.9% in value of the
outstanding Shares.

                  Section 7.1.9 Legend. Each certificate for Shares shall bear
substantially the following legend:

      The shares represented by this certificate are subject to restrictions on
      Beneficial and Constructive Ownership and Transfer for the purpose, among
      others, of the Corporation's maintenance of its status as a Real Estate
      Investment Trust (a "REIT") under the Internal Revenue Code of 1986, as
      amended (the "Code"). Subject to certain further restrictions and except
      as expressly provided in the Corporation's Charter, (i) no Person may
      Beneficially or Constructively Own Common Shares of the Corporation in
      excess of 9.8% (in value or number of shares) of the outstanding Common
      Shares of the Corporation unless such Person is an Excepted Holder (in
      which case the Excepted Holder Limit shall be applicable); (ii) no Person
      may Beneficially or Constructively Own Shares of the Corporation in excess
      of 9.8% of the value of the total outstanding Shares of the Corporation,
      unless such Person is an Excepted Holder (in which case the Excepted
      Holder Limit shall be applicable); (iii) no Person may Beneficially or
      Constructively Own Shares that would result in the Corporation being
      "closely held" under Section 856(h) of the Code or otherwise cause the
      Corporation to fail to qualify as a REIT; and (iv) no Person may Transfer
      Shares if such Transfer would result in Shares of the Corporation being
      owned by fewer than 100 Persons. Any Person who Beneficially or
      Constructively Owns or attempts to Beneficially or Constructively Own
      Shares which cause or will cause a Person to Beneficially or
      Constructively Own Shares in excess or in violation of the above
      limitations must immediately notify the Corporation. If any of the
      restrictions on transfer or ownership are violated, the Shares represented
      hereby will be automatically transferred to a Trustee of a Charitable
      Trust for the benefit of one or more Charitable Beneficiaries. In
      addition, the Corporation may redeem shares upon the terms and conditions
      specified by the Board of Directors in its sole discretion if the Board of
      Directors determines that ownership or a Transfer or other event may
      violate the restrictions described above. Furthermore, upon the occurrence
      of certain events, attempted Transfers in violation of the restrictions
      described above may be void ab initio. All capitalized terms in this
      legend have the meanings defined in the Corporation's Charter, as the same
      may be amended from time to time, a copy of which, including the
      restrictions on transfer and ownership, will be furnished to each holder
      of Shares of the Corporation on request and without charge. Requests for
      such a copy may be directed to the Secretary of the Corporation at its
      principal office.

                  Instead of the foregoing legend, the certificate may state
that the Corporation will furnish a full statement about certain restrictions on
transferability to a stockholder on request and without charge. In the case of
uncertificated Shares, the Corporation will send the holder of such Shares a
written statement of the information otherwise required on certificates.

            Section 7.2 Transfer of Shares in Trust.

                  Section 7.2.1 Ownership in Trust. Upon any purported Transfer
or other event described in Section 7.1.1(b) that would result in a transfer of
Shares to a Charitable Trust, such Shares shall be deemed to have been
transferred to the Charitable Trustee as Trustee of a Charitable Trust for the
exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the
Charitable Trustee shall be deemed to be effective as of the close of business
on the Business Day prior to the purported Transfer or other event that results
in the transfer to the Charitable Trust pursuant to Section 7.1.1(b). The
Charitable Trustee shall be appointed by the Corporation and shall be a Person
unaffiliated with the Corporation and any Prohibited Owner. Each Charitable
Beneficiary shall be designated by the Corporation as provided in Section 7.2.6.

                  Section 7.2.2 Status of Shares Held by the Charitable Trustee.
Shares held by the Charitable Trustee shall continue to be issued and
outstanding Shares of the Corporation. The Prohibited Owner

                                      -15-


shall have no rights in the shares held by the Charitable Trustee. The
Prohibited Owner shall not benefit economically from ownership of any shares
held in trust by the Charitable Trustee, shall have no rights to dividends or
other distributions and shall not possess any rights to vote or other rights
attributable to the shares held in the Charitable Trust.

                  Section 7.2.3 Dividend and Voting Rights. The Charitable
Trustee shall have all voting rights and rights to dividends or other
distributions with respect to Shares held in the Charitable Trust, which rights
shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any
dividend or other distribution paid prior to the discovery by the Corporation
that Shares have been transferred to the Charitable Trustee shall be paid with
respect to such Shares to the Charitable Trustee upon demand and any dividend or
other distribution authorized but unpaid shall be paid when due to the
Charitable Trustee. Any dividends or distributions so paid over to the
Charitable Trustee shall be held in trust for the Charitable Beneficiary. The
Prohibited Owner shall have no voting rights with respect to shares held in the
Charitable Trust and, subject to Maryland law, effective as of the date that
Shares have been transferred to the Charitable Trustee, the Charitable Trustee
shall have the authority (at the Charitable Trustee's sole discretion) (i) to
rescind as void any vote cast by a Prohibited Owner prior to the discovery by
the Corporation that Shares have been transferred to the Charitable Trustee and
(ii) to recast such vote in accordance with the desires of the Charitable
Trustee acting for the benefit of the Charitable Beneficiary; provided, however,
that if the Corporation has already taken irreversible corporate action, then
the Charitable Trustee shall not have the authority to rescind and recast such
vote. Notwithstanding the provisions of this Article VII, until the Corporation
has received notification that Shares have been transferred into a Charitable
Trust, the Corporation shall be entitled to rely on its share transfer and other
stockholder records for purposes of preparing lists of stockholders entitled to
vote at meetings, determining the validity and authority of proxies and
otherwise conducting votes of stockholders.

                  Section 7.2.4 Sale of Shares by Charitable Trustee. Within 20
days of receiving notice from the Corporation that Shares have been transferred
to the Charitable Trust, the Charitable Trustee shall sell the shares held in
the Charitable Trust to a person, designated by the Charitable Trustee, whose
ownership of the shares will not violate the ownership limitations set forth in
Section 7.1.1(a). Upon such sale, the interest of the Charitable Beneficiary in
the shares sold shall terminate and the Charitable Trustee shall distribute the
net proceeds of the sale to the Prohibited Owner and to the Charitable
Beneficiary as provided in this Section 7.2.4. The Prohibited Owner shall
receive the lesser of (1) the price paid by the Prohibited Owner for the shares
or, if the Prohibited Owner did not give value for the shares in connection with
the event causing the shares to be held in the Charitable Trust (e.g., in the
case of a gift, devise or other such transaction), the Market Price of the
shares on the day of the event causing the shares to be held in the Charitable
Trust and (2) the price per share received by the Charitable Trustee (net of any
commissions and other expenses of sale) from the sale or other disposition of
the shares held in the Charitable Trust. The Charitable Trustee may reduce the
amount payable to the Prohibited Owner by the amount of dividends and
distributions which have been paid to the Prohibited Owner and are owed by the
Prohibited Owner to the Charitable Trustee pursuant to Section 7.2.3 of this
Article VII. Any net sales proceeds in excess of the amount payable to the
Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If,
prior to the discovery by the Corporation that Shares have been transferred to
the Charitable Trustee, such shares are sold by a Prohibited Owner, then (i)
such shares shall be deemed to have been sold on behalf of the Charitable Trust
and (ii) to the extent that the Prohibited Owner received an amount for such
shares that exceeds the amount that such Prohibited Owner was entitled to
receive pursuant to this Section 7.2.4, such excess shall be paid to the
Charitable Trustee upon demand.

                  Section 7.2.5 Purchase Right in Shares Transferred to the
Charitable Trustee. Shares transferred to the Charitable Trustee shall be deemed
to have been offered for sale to the Corporation, or its designee, at a price
per share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the Charitable Trust (or, in the case of a devise
or gift, the Market Price at the time of such devise or gift) and (ii) the
Market Price on the date the Corporation, or its designee, accepts such offer.
The Corporation may reduce the amount payable to the Prohibited Owner by the
amount of dividends and distributions which has been paid to the Prohibited
Owner and are owed by the Prohibited Owner to the Charitable Trustee pursuant to
Section 7.2.3 of this Article VII. The Corporation may pay the amount of such
reduction to the Charitable Trustee for the benefit of the Charitable
Beneficiary. The Corporation shall have the right to accept such offer until the
Charitable Trustee has sold the shares held in the Charitable Trust pursuant to
Section 7.2.4. Upon such a sale to the Corporation, the interest of the
Charitable Beneficiary in the shares sold shall terminate and the Charitable
Trustee shall distribute the net proceeds of the sale to the Prohibited Owner.

                                      -16-


                  Section 7.2.6 Designation of Charitable Beneficiaries. By
written notice to the Charitable Trustee, the Corporation shall designate one or
more nonprofit organizations to be the Charitable Beneficiary of the interest in
the Charitable Trust such that (i) Shares held in the Charitable Trust would not
violate the restrictions set forth in Section 7.1.1(a) in the hands of such
Charitable Beneficiary and (ii) each such organization must be described in
Section 501(c)(3) of the Code and contributions to each such organization must
be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of
the Code.

            Section 7.3 NYSE Transactions. Nothing in this Article VII shall
preclude the settlement of any transaction entered into through the facilities
of the NYSE or any other national securities exchange or automated inter-dealer
quotation system. The fact that the settlement of any transaction occurs shall
not negate the effect of any other provision of this Article VII and any
transferee in such a transaction shall be subject to all of the provisions and
limitations set forth in this Article VII.

            Section 7.4 Enforcement. The Corporation is authorized specifically
to seek equitable relief, including injunctive relief, to enforce the provisions
of this Article VII.

            Section 7.5 Non-Waiver. No delay or failure on the part of the
Corporation or the Board of Directors in exercising any right hereunder shall
operate as a waiver of any right of the Corporation or the Board of Directors,
as the case may be, except to the extent specifically waived in writing.

                                  ARTICLE VIII

                        PROVISIONS FOR DEFINING, LIMITING
                      AND REGULATING CERTAIN POWERS OF THE
                CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS

            Section 8.1 Number of Directors. The business and affairs of the
Corporation shall be managed under the direction of the Board of Directors. The
number of Directors of the Corporation (the "Directors") initially shall be
five, which number may be increased or decreased from time to time pursuant to
the Bylaws; provided, however, that the total number of Directors shall not be
fewer than three; provided further that there may be fewer than three directors
at any time the Corporation has only one holder of record of Common Shares. From
and after the commencement of the Corporation's initial public offering, a
majority of the Board will be Independent Directors except for a period of up to
60 days after the death, removal or resignation of an Independent Director. The
Directors may increase the number of Directors and fill any vacancy, whether
resulting from an increase in the number of Directors or otherwise, on the
Board, in the manner provided in the Bylaws. The names of the Directors who
shall serve until the first annual meeting of stockholders and until their
successors are duly elected and qualify are:

                              Christopher H. Cole
                               Marcus E. Bromley
                              Elizabeth L. Watson


            The Corporation elects, at such time as it becomes eligible to make
the election provided for under Section 3-802(b) of the MGCL, that, except as
may be provided by the Board of Directors in setting the terms of any class or
series of Shares, any and all vacancies on the Board of Directors may be filled
only by the affirmative vote of a majority of the remaining Directors in office,
even if the remaining Directors do not constitute a quorum, and any Director
elected to fill a vacancy shall serve for the remainder of the full term of the
directorship in which such vacancy occurred. Notwithstanding the foregoing
sentence, Independent Directors shall nominate replacements for vacancies among
the Independent Directors' positions.

            Section 8.2 Experience. Each Director shall have at least three
years of relevant experience demonstrating the knowledge and experience required
to successfully acquire and manage the type of assets being acquired by the
Corporation. From and after the commencement of the Corporation's initial public
offering, at least one of the Independent Directors shall have three years of
relevant real estate experience.

            Section 8.3 Committees. The Board may establish such committees as
it deems appropriate, in its discretion, provided that from and after the
commencement of the Corporation's initial public offering, the majority of the
members of each committee will be Independent Directors.

            Section 8.4 Term. Each Director shall hold office for one year,
until the next annual meeting of

                                      -17-


Stockholders and until his or her successor is duly elected and qualifies.
Directors may be elected to an unlimited number of successive terms.

            Section 8.5 Fiduciary Obligations. The Directors and the Advisor
serve in a fiduciary capacity to the Corporation and have a fiduciary duty to
the Stockholders of the Corporation, including, with respect to the Directors, a
specific fiduciary duty to supervise the relationship of the Corporation with
the Advisor.

            Section 8.6 Extraordinary Actions. Notwithstanding any provision of
law permitting or requiring any action to be taken or approved by the
affirmative vote of the holders of Shares entitled to cast a greater number of
votes, any such action shall be effective and valid if declared advisable by the
Board of Directors and taken or approved by the affirmative vote of holders of
Shares entitled to cast a majority of all the votes entitled to be cast on the
matter.

            Section 8.7 Authorization by Board of Stock Issuance. The Board of
Directors may authorize the issuance from time to time of Shares of any class or
series, whether now or hereafter authorized, or securities or rights convertible
into Shares of any class or series, whether now or hereafter authorized, for
such consideration as the Board of Directors may deem advisable (or without
consideration in the case of a stock split or stock dividend), subject to such
restrictions or limitations, if any, as may be set forth in the Charter or the
Bylaws.

            Section 8.8 Preemptive Rights and Appraisal Rights. Except as may be
provided by the Board of Directors in setting the terms of classified or
reclassified Shares pursuant to Section 6.4 or as may otherwise be provided by
contract, no holder of Shares shall, as such holder, have any preemptive right
to purchase or subscribe for any additional Shares or any other security of the
Corporation which it may issue or sell. Holders of Shares shall not be entitled
to exercise any rights of an objecting stockholder provided for under Title 3,
Subtitle 2 of the MGCL or any successor statute unless the Board of Directors,
upon the affirmative vote of a majority of the Board of Directors, shall
determine that such rights apply, with respect to all or any classes or series
of stock, to one or more transactions occurring after the date of such
determination in connection with which holders of such Shares would otherwise be
entitled to exercise such rights.

            Section 8.9 Determinations by Board. The determination as to any of
the following matters, made in good faith by or pursuant to the direction of the
Board of Directors consistent with the Charter shall be final and conclusive and
shall be binding upon the Corporation and every holder of Shares: the amount of
the net income of the Corporation for any period and the amount of assets at any
time legally available for the payment of dividends, redemption of its stock or
the payment of other distributions on its stock; the amount of paid-in surplus,
net assets, other surplus, annual or other cash flow, funds from operations, net
profit, net assets in excess of capital, undivided profits or excess of profits
over losses on sales of assets; the amount, purpose, time of creation, increase
or decrease, alteration or cancellation of any reserves or charges and the
propriety thereof (whether or not any obligation or liability for which such
reserves or charges shall have been created shall have been paid or discharged);
any interpretation of the terms, preferences, conversion or other rights, voting
powers or rights, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption of any class
or series of stock of the Corporation; the fair value, or any sale, bid or asked
price to be applied in determining the fair value, of any asset owned or held by
the Corporation or any Shares; the number of Shares of any class of the
Corporation; any matter relating to the acquisition, holding and disposition of
any assets by the Corporation; or any other matter relating to the business and
affairs of the Corporation or required or permitted by applicable law, the
Charter or Bylaws, or otherwise to be determined by the Board of Directors.

            Section 8.10 REIT Qualification. If the Corporation elects to
qualify for federal income tax treatment as a REIT, the Board of Directors shall
use its reasonable best efforts to take such actions as are necessary or
appropriate to preserve the status of the Corporation as a REIT; however, if the
Board of Directors determines that it is no longer in the best interests of the
Corporation to continue to be qualified as a REIT, the Board of Directors may
revoke or otherwise terminate the Corporation's REIT election pursuant to
Section 856(g) of the Code. The Board of Directors also may determine that
compliance with any restriction or limitation on stock ownership and transfers
set forth in Article VII is no longer required for REIT qualification.

            Section 8.11 Removal of Directors. Subject to the rights of holders
of one or more classes or series of Preferred Shares to elect or remove one or
more Directors, any Director, or the entire Board of Directors,

                                      -18-


may be removed from office at any time, but only by the affirmative vote of at
least a majority of the votes entitled to be cast generally in the election of
Directors. At a meeting in which there is a quorum, the holders of a majority
of shares can elect to remove any Director, or the entire Board of Directors.

                                   ARTICLE IX

                                     ADVISOR

            Section 9.1 Appointment and Initial Investment of Advisor. The Board
is responsible for setting the general policies of the Corporation and for the
general supervision of its business conducted by officers, agents, employees,
advisors or independent contractors of the Corporation. However, the Board is
not required personally to conduct the business of the Corporation, and it may
(but need not) appoint, employ or contract with any Person (including a Person
Affiliated with any Director) as an Advisor and may grant or delegate such
authority to the Advisor as the Board may, in its sole discretion, deem
necessary or desirable. The term of retention of any Advisor shall not exceed
one year, although there is no limit to the number of times that a particular
Advisor may be retained. The Advisor or its Affiliates have made an initial
investment of $200,000 in the Corporation. The Advisor or any such Affiliate may
not sell this initial investment while the Advisor remains an Advisor, but may
transfer the initial investment to other Affiliates.

            Section 9.2 Supervision of Advisor. The Board shall evaluate the
performance of the Advisor before entering into or renewing an Advisory
Agreement, and the criteria used in such evaluation shall be reflected in the
minutes of the meetings of the Board. The Board may exercise broad discretion in
allowing the Advisor to administer and regulate the operations of the
Corporation, to act as agent for the Corporation, to execute documents on behalf
of the Corporation and to make executive decisions that conform to general
policies and principles established by the Board. The Board shall monitor the
Advisor to assure that the administrative procedures, operations and programs of
the Corporation are in the best interests of the Stockholders and are fulfilled.
The Independent Directors are responsible for reviewing the fees and expenses of
the Corporation at least annually or with sufficient frequency to determine that
the expenses incurred are reasonable in light of the investment performance of
the Corporation, its Net Assets, its Net Income and the fees and expenses of
other comparable unaffiliated REITs. Each such determination shall be reflected
in the minutes of the meetings of the Board. In addition, from time to time, but
not less often than annually, a majority of the Independent Directors and a
majority of Directors not otherwise interested in the transaction must approve
each transaction with the Advisor or its Affiliates. The Independent Directors
also will be responsible for reviewing, from time to time and at least annually,
the performance of the Advisor and determining that compensation to be paid to
the Advisor is reasonable in relation to the nature and quality of services
performed and the investment performance of the Corporation and that the
provisions of the Advisory Agreement are being carried out. Specifically, the
Independent Directors will consider factors such as (i) the amount of the fee
paid to the Advisor in relation to the size, composition and performance of the
Assets, (ii) the success of the Advisor in generating opportunities that meet
the investment objectives of the Corporation, (iii) rates charged to other REITs
and to investors other than REITs by advisors performing the same or similar
services, (iv) additional revenues realized by the Advisor and its Affiliates
through their relationship with the Corporation, including loan administration,
underwriting or broker commissions, servicing, engineering, inspection and other
fees, whether paid by the Corporation or by others with whom the Corporation
does business, (v) the quality and extent of service and advice furnished by the
Advisor, (vi) the performance of the Assets, including income, conservation or
appreciation of capital, frequency of problem investments and competence in
dealing with distress situations, and (vii) the quality of the Assets relative
to the investments generated by the Advisor for its own account. The Independent
Directors may also consider all other factors that they deem relevant, and the
findings of the Independent Directors on each of the factors considered shall be
recorded in the minutes of the Board. The Board shall determine whether any
successor Advisor possesses sufficient qualifications to perform the advisory
function for the Corporation and whether the compensation provided for in its
contract with the Corporation is justified.

            Section 9.3 Fiduciary Obligations. The Advisor shall have a
fiduciary responsibility and duty to the Corporation and to the Stockholders.

            Section 9.4 Affiliation and Functions. The Board, by resolution or
in the Bylaws, may provide guidelines, provisions or requirements concerning the
affiliation and functions of the Advisor.

                                      -19-


            Section 9.5 Termination. Either a majority of the Independent
Directors or the Advisor may terminate the Advisory Agreement on 60 days'
written notice without cause or penalty, and, in such event, the Advisor will
cooperate with the Corporation and the Board in making an orderly transition of
the advisory function.

            Section 9.6 Disposition Fee on Sale of Property. The Corporation may
pay the Advisor, or its Affiliate, a real estate disposition fee upon Sale of
one or more Properties, in an amount up to one-half of the brokerage commission
paid, but in no event greater than three percent of the sales price of such
Property or Properties. Payment of such fee may be made only if the Advisor
provides a substantial amount of services in connection with the Sale of a
Property or Properties, as determined by a majority of the Independent
Directors. In addition, the amount paid when added all other real estate
commissions paid to the Advisor, its Affiliates or unaffiliated parties in
connection with such Sale shall not exceed an amount equal to the lesser of the
Competitive Real Estate Commission or an amount equal to six percent of the
contract sales price of such Property or Properties.

            Section 9.7 Incentive Fees. The Corporation may pay the Advisor an
interest in the gain from the Sale of Assets, for which full consideration is
not paid in cash or property of equivalent value, provided the amount or
percentage of such interest is reasonable. Such an interest in gain from the
Sale of Assets shall be considered presumptively reasonable if it does not
exceed 10% of the balance of such net proceeds remaining after payment to
Stockholders, in the aggregate, of an amount equal to 100% of the Invested
Capital, plus an amount equal to eight percent of the Invested Capital per annum
cumulative, non-compounded. In the case of multiple Advisors, such Advisor and
any of their Affiliates shall be allowed such fees provided such fees are
distributed by a proportional method reasonably designed to reflect the value
added to the Corporation assets by each respective Advisor or any Affiliate.

            Section 9.8 Organization and Offering Expenses Limitation. The
Corporation shall reimburse the Advisor and its Affiliates for Organization and
Offering Expenses incurred by the Advisor or its Affiliates; provided, however,
that the total amount of all Organization and Offering Expenses shall be
reasonable and shall in no event exceed 15% of the Gross Proceeds of each
Offering, unless otherwise approved by a majority of the Independent Directors.

            Section 9.9 Acquisition Fees. The Corporation may pay the Advisor
and its Affiliates fees for the review and evaluation of potential investments
in Assets; provided, however, that the total of all Acquisition Fees and
Acquisition Expenses shall be reasonable, and shall not exceed an amount equal
to six percent of the Contract Purchase Price, or, in the case of a Mortgage,
six percent of the funds advanced; provided, however, that a majority of the
Directors (including a majority of the Independent Directors) not otherwise
interested in the transaction may approve fees and expenses in excess of this
limit if they determine the transaction to be commercially competitive, fair and
reasonable to the Corporation.

            Section 9.10 Reimbursement for Total Operating Expenses. The
Corporation may reimburse the Advisor, at the end of each fiscal quarter, for
Total Operating Expenses incurred by the Advisor; provided, however that the
Corporation shall not reimburse the Advisor at the end of any fiscal quarter for
Total Operating Expenses that, in the four consecutive fiscal quarters then
ended, exceed the greater of two percent of Average Invested Assets or 25% of
Net Income (the "2%/25% Guidelines") for such year. The Independent Directors
shall have the responsibility of limiting Total Operating Expenses to amounts
that do not exceed the 2%/25% Guidelines unless they have made a finding that,
based on such unusual and non-recurring factors that they deem sufficient, a
higher level of expenses (an "Excess Amount") is justified. Within 60 days after
the end of any fiscal quarter of the Corporation for which there is an Excess
Amount which the Independent Directors conclude was justified and reimbursable
to the Advisor, there shall be sent to the Stockholders a written disclosure of
such fact, together with an explanation of the factors the Independent Directors
considered in determining that such Excess Amount was justified. Any such
finding and the reasons in support thereof shall be reflected in the minutes of
the meetings of the Board. In the event that the Independent Directors do not
determine that excess expenses are justified, the Advisor shall reimburse the
Corporation the amount by which the expenses exceeded the 2%/25% Guidelines.

            Section 9.11 Reimbursement Limitation. The Corporation shall not
reimburse the Advisor or its Affiliates for services for which the Advisor or
its Affiliates are entitled to compensation in the form of a separate fee.

                                      -20-


                                    ARTICLE X

                      INVESTMENT OBJECTIVES AND LIMITATIONS

            Section 10.1 Investment Objectives. The Board of Directors shall
establish written policies on investments and borrowing and shall monitor the
administrative procedures, investment operations and performance of the
Corporation and the Advisor to assure that such policies are carried out.

            Section 10.2 Review of Objectives. The Independent Directors shall
review the investment policies of the Corporation with sufficient frequency (not
less often than annually) to determine that the policies being followed by the
Corporation are in the best interests of its Stockholders. Each such
determination and the basis therefor shall be set forth in the minutes of the
meetings of the Board.

            Section 10.3 Certain Permitted Investments.

                  (a) The Corporation may invest in Assets, as defined in
Article IV hereof.

                  (b) The Corporation may invest in Joint Ventures with the
Sponsor, Advisor, one or more Directors or any Affiliate, only if a majority of
Directors (including a majority of Independent Directors) not otherwise
interested in the transaction, approve such investment as being fair and
reasonable to the Corporation and on substantially the same terms and conditions
as those received by the other joint venturers.

                  (c) Subject to any limitations in Section 10.4, the
Corporation may invest in equity securities only if a majority of Directors
(including a majority of Independent Directors) not otherwise interested in the
transaction approve such investment as being fair, competitive and commercially
reasonable.

            Section 10.4 Investment Limitations. In addition to other investment
restrictions imposed by the Board from time to time, consistent with the
Corporation's objective of qualifying as a REIT, the following shall apply to
the Corporation's investments:

                  (a) Not more than ten percent of the Corporation's total
assets shall be invested in Unimproved Real Property or mortgage loans on
Unimproved Real Property.

                  (b) The Corporation shall not invest in commodities or
commodity future contracts. This limitation is not intended to apply to futures
contracts, when used solely for hedging purposes in connection with the
Corporation's ordinary business of investing in real estate assets and
mortgages.

                  (c) The Corporation shall not invest in or make any Mortgage
unless an appraisal is obtained concerning the underlying property except for
those loans insured or guaranteed by a government or government agency. In cases
in which a majority of Independent Directors so determine, and in all cases in
which the transaction is with the Advisor, Sponsor, Directors, or any Affiliates
thereof, such appraisal of the underlying property must be obtained from an
Independent Appraiser. Such appraisal shall be maintained in the Corporation's
records for at least five years and shall be available for inspection and
duplication by any Stockholder. In addition to the appraisal, a mortgagee's or
owner's title insurance policy or commitment as to the priority of the mortgage
or condition of the title must be obtained.

                  (d) The Corporation shall not make or invest in any Mortgage,
including a construction loan, on any one property if the aggregate amount of
all mortgage loans outstanding on the property, including the loans of the
Corporation, would exceed an amount equal to 85% of the appraised value of the
property as determined by an appraisal unless substantial justification exists
because of the presence of other underwriting criteria. For purposes of this
subsection, the "aggregate amount of all mortgage loans outstanding on the
property, including the loans of the Corporation" shall include all interest
(excluding contingent participation in income and/or appreciation in value of
the mortgaged property), the current payment of which may be deferred pursuant
to the terms of such loans, to the extent that deferred interest on each loan
exceeds five percent per annum of the principal balance of the loan.

                                      -21-


                  (e) The Corporation shall not invest in indebtedness secured
by a mortgage on real property that is subordinate to the lien or other
indebtedness of the Advisor, any Director, the Sponsor or any Affiliate of the
Corporation.

                  (f) The Corporation shall not issue (i) equity Securities
redeemable solely at the option of the holder (except that Stockholders may
offer their Common Shares to the Corporation pursuant to any repurchase plan
adopted by the Board on terms outlined in the Prospectus relating to any
Offering, as such plan is thereafter amended in accordance with its terms); (ii)
debt Securities unless the historical debt service coverage (in the most
recently completed fiscal year) as adjusted for known changes is sufficient to
properly service that higher level of debt; (iii) equity Securities on a
deferred payment basis or under similar arrangements; or (iv) options or
warrants to the Advisor, Directors, Sponsor or any Affiliate thereof except on
the same terms as such options or warrants are sold to the general public.
Options or warrants may be issued to persons other than the Advisor, Directors,
Sponsor or any Affiliate thereof, but not at exercise prices less than the fair
market value of the underlying Securities on the date of grant and not for
consideration (which may include services) that in the judgment of the
Independent Directors has a market value less than the value of such option or
warrant on the date of grant. Options or warrants issuable to the Advisor,
Directors, Sponsor or any Affiliate thereof shall not exceed ten percent of the
outstanding Shares on the date of grant. The voting rights per share of Shares
of the Corporation (other than the publicly held Shares of the Corporation) sold
in a private offering shall not exceed the voting rights which bear the same
relationship to the voting rights of the publicly held Shares as the
consideration paid to the Corporation for each privately offered Share of the
Corporation bears to the book value of each outstanding publicly held Share.

                  (g) A majority of the Directors shall authorize the
consideration to be paid for each Asset, ordinarily based on the fair market
value of the Asset. If a majority of the Independent Directors determine, or if
the Asset is acquired from the Advisor, a Director, the Sponsor or their
Affiliates, such fair market value shall be determined by a qualified
Independent Appraiser selected by the Independent Directors.

                  (h) The aggregate Leverage shall be reasonable in relation to
the Net Assets and shall be reviewed by the Board at least quarterly. The
maximum amount of such Leverage shall not exceed 60% of the cost (before
deducting depreciation or other non-cash reserves) of all of the Assets.
Notwithstanding the foregoing, Leverage may exceed such limit if any excess in
borrowing over such level is approved by a majority of the Independent
Directors. Any such excess borrowing shall be disclosed to Stockholders in the
next quarterly report of the Corporation following such borrowing, along with
justification for such excess.

                  (i) The Corporation will continually review its investment
activity to attempt to ensure that it is not classified as an "investment
company" under the Investment Company Act of 1940, as amended.

                  (j) The Corporation will not make any investment that the
Corporation believes will be inconsistent with its objectives of qualifying and
remaining qualified as a REIT unless and until the Board determines, in its sole
discretion, that REIT qualification is not in the best interests of the
Corporation.

                  (k) The Corporation shall not invest in real estate contracts
of sale unless such contracts of sale are in recordable form and appropriately
recorded in the chain of title.

                                   ARTICLE XI

                              CONFLICTS OF INTEREST

            Section 11.1 Sales and Leases to the Corporation. The Corporation
may purchase or lease an Asset or Assets from the Sponsor, the Advisor, a
Director, or any Affiliate thereof upon a finding by a majority of Directors
(including a majority of Independent Directors) not otherwise interested in the
transaction that such transaction is fair and reasonable to the Corporation and
at a price to the Corporation no greater than the cost of the Asset to such
Sponsor, Advisor, Director or Affiliate, or, if the price to the Corporation is
in excess of such cost, that substantial justification for such excess exists
and such excess is reasonable. In no event shall the purchase price of any
Property to the Corporation exceed its current appraised value.

                                      -22-


            Section 11.2 Sales and Leases to the Sponsor, Advisor, Directors or
Affiliates. An Advisor, Sponsor, Director or Affiliate thereof may purchase or
lease Assets from the Corporation if a majority of Directors (including a
majority of Independent Directors) not otherwise interested in the transaction
determine that the transaction is fair and reasonable to the Corporation.

            Section 11.3 Other Transactions.

                  (a) No goods or services will be provided by the Advisor or
its Affiliates to the Corporation unless a majority of the Directors (including
a majority of the Independent Directors) not otherwise interested in such
transaction approve such transaction as fair and reasonable to the Corporation
and on terms and conditions not less favorable to the Corporation than those
available from unaffiliated third parties.

                  (b) The Corporation shall not make loans to the Sponsor,
Advisor, Directors or any Affiliates thereof except Mortgages pursuant to
Section 10.4(c) hereof or loans to wholly owned subsidiaries of the Corporation.
The Sponsor, Advisor, Directors and any Affiliates thereof shall not make loans
to the Corporation, or to joint ventures in which the Corporation is a
co-venturer, unless approved by a majority of the Directors (including a
majority of the Independent Directors) not otherwise interested in such
transaction as fair, competitive, and commercially reasonable, and no less
favorable to the Corporation than comparable loans between unaffiliated parties.

            Section 11.4 Conflict Resolution Procedures. In the event that an
investment opportunity becomes available that is suitable for both the
Corporation and a public or private entity with which the Advisor or its
Affiliates are affiliated, for which both entities have sufficient uninvested
funds, then the entity that has had the longest period of time elapse since it
was offered an investment opportunity will first be offered the investment
opportunity. An investment opportunity will not be considered suitable for an
entity if the 2%/25% Guidelines could not be satisfied if the entity were to
make the investment. In determining whether or not an investment opportunity is
suitable for more than one entity, the Board and the Advisor will examine such
factors, among others, as the cash requirements of each entity, the effect of
the acquisition both on diversification of each entity's investments by type of
property and geographic area and on diversification of the tenants of its
properties, the policy of each entity relating to leverage of properties, the
anticipated cash flow of each entity, the income tax effects of the purchase to
each entity, the size of the investment and the amount of funds available to
each program and the length of time such funds have been available for
investment. If a subsequent development, such as a delay in the closing of the
acquisition of such investment or a delay in the construction of a property,
causes any such investment, in the opinion of the Board and the Advisor, to be
more appropriate for an entity other than the entity that committed to make the
investment, the Advisor may determine that the other entity affiliated with the
Advisor or its Affiliates will make the investment. It shall be the duty of the
Board, including the Independent Directors, to ensure that the method used by
the Advisor for the allocation of the acquisition of investments by two or more
affiliated programs seeking to acquire similar types of Assets is applied fairly
to the Corporation.

                                   ARTICLE XII

                                  STOCKHOLDERS

            Section 12.1 Meetings. There shall be an annual meeting of the
Stockholders, to be held at such time and place as shall be determined by or in
the manner prescribed in the Bylaws, at which the Directors shall be elected and
any other proper business may be conducted. The annual meeting will be held on a
date that is a reasonable period of time following the distribution of the
Corporation's annual report to Stockholders but not less than thirty days after
delivery of such report. A majority of Stockholders present in person or by
proxy at an annual meeting at which a quorum is present, may, without the
necessity for concurrence by the Board, vote to elect the Directors. A quorum
shall be 50% of the then outstanding Shares. Special meetings of Stockholders
may be called in the manner provided in the Bylaws, including by the president
or by a majority of the Directors or a majority of the Independent Directors,
and shall be called by an officer of the Corporation upon the written request of
Stockholders holding in the aggregate not less than ten percent of the
outstanding Shares entitled to be voted on any issue proposed to be considered
at any such special meeting. Notice of any special meeting of Stockholders shall
be given as provided in the Bylaws, and the special meeting shall be held not
less than 15 days nor more than 60 days after the delivery of such notice. If
the meeting is called by written request of Stockholders as described in this

                                      -23-

Section 12.1, the special meeting shall be held at the time and place specified
in the Stockholder request; provided, however, that if none is so specified, at
such time and place convenient to the Stockholders. If there are no Directors,
the officers of the Corporation shall promptly call a special meeting of the
Stockholders entitled to vote for the election of successor Directors. Any
meeting may be adjourned and reconvened as the Board may determine or as
otherwise provided in the Bylaws. The Directors, including the Independent
Directors, shall take reasonable steps to insure that all requirements within
this Section 12.1 are met.

            Section 12.2 Voting Rights of Stockholders. Subject to the
provisions of any class or series of Shares then outstanding and the mandatory
provisions of any applicable laws or regulations, the Stockholders shall be
entitled to vote only on the following matters: (a) election or removal of
Directors, without the necessity for concurrence by the Board, as provided in
Sections 12.1, 8.4 and 8.11 hereof; (b) amendment of the Charter, without the
necessity for concurrence by the Board, as provided in Article XIV hereof; (c)
dissolution of the Corporation, without the necessity for concurrence by the
Board; (d) merger or consolidation of the Corporation, or the sale or other
disposition of all or substantially all of the Corporation's assets; and (e)
such other matters with respect to which the Board of Directors has adopted a
resolution declaring that a proposed action is advisable and directing that the
matter be submitted to the Stockholders for approval or ratification. Except
with respect to the foregoing matters, no action taken by the Stockholders at
any meeting shall in any way bind the Board. Without the approval of a majority
of the Shares entitled to vote on the matter, the Board of Directors may not (i)
amend the Charter to adversely affect the rights, preferences and privileges of
the holders of Common Shares; (ii) amend the Charter provisions relating to
director qualifications, fiduciary duties, liability and indemnification,
conflicts of interest, investment policies or investment restrictions;
(iii) liquidate or dissolve the Corporation other than before the initial
investment in property; (iv) sell all or substantially all of the Corporation's
assets other than in the ordinary course of the Corporation's business or as
otherwise permitted by law; or (v) cause the merger or reorganization of the
Corporation, except as permitted by law.

            Section 12.3 Voting Limitations on Shares Held by the Advisor,
Directors and Affiliates. With respect to Shares owned by the Advisor, any
Director, or any of their Affiliates, neither the Advisor, nor such Director(s),
nor any of their Affiliates may vote or consent on matters submitted to the
Stockholders regarding the removal of the Advisor, such Director(s) or any of
their Affiliates or any transaction between the Corporation and any of them. In
determining the requisite percentage in interest of Shares necessary to approve
a matter on which the Advisor, such Director(s) and any of their Affiliates may
not vote or consent, any Shares owned by any of them shall not be included.

            Section 12.4 Right of Inspection. Any Stockholder and any designated
representative thereof shall be permitted access to the records of the
Corporation to which it is entitled under applicable law at all reasonable
times, and may inspect and copy any of them for a reasonable charge. Inspection
of the Corporation's books and records by the office or agency administering the
securities laws of a jurisdiction shall be provided upon reasonable notice and
during normal business hours.

            Section 12.5 Access to Stockholder List. An alphabetical list of the
names, addresses and telephone numbers of the Stockholders, along with the
number of Shares held by each of them (the "Stockholder List"), shall be
maintained as part of the books and records of the Corporation and shall be
available for inspection by any Stockholder or the Stockholder's designated
agent at the home office of the Corporation upon the request of the Stockholder.
The Stockholder List shall be updated at least quarterly to reflect changes in
the information contained therein. A copy of such list shall be mailed to any
Stockholder so requesting within ten days of receipt by the Corporation of the
request. The copy of the Stockholder List shall be printed in alphabetical
order, on white paper, and in a readily readable type size (in no event smaller
than ten-point type). The Corporation may impose a reasonable charge for
expenses incurred in reproduction pursuant to the Stockholder request. A
Stockholder may request a copy of the Stockholder List in connection with
matters relating to Stockholders' voting rights, and the exercise of Stockholder
rights under federal proxy laws.

            If the Advisor or the Board neglects or refuses to exhibit, produce
or mail a copy of the Stockholder List as requested, the Advisor and/or the
Board, as the case may be, shall be liable to any Stockholder requesting the
list for the costs, including reasonable attorneys' fees, incurred by that
Stockholder for compelling the production of the Stockholder List, and for
actual damages suffered by any Stockholder by reason of such refusal or neglect.
It shall be a defense that the actual purpose and reason for the requests for
inspection or for a copy of the Stockholder List is to secure such list of
Stockholders or other information for the purpose of selling such list or copies
thereof, or of using the same for a commercial purpose other than in the
interest of the applicant as a

                                      -24-


Stockholder relative to the affairs of the Corporation. The Corporation may
require the Stockholder requesting the Stockholder List to represent that the
list is not requested for a commercial purpose unrelated to the Stockholder's
interest in the Corporation. The remedies provided hereunder to Stockholders
requesting copies of the Stockholder List are in addition, to and shall not in
any way limit, other remedies available to Stockholders under federal law, or
the laws of any state.

            Section 12.6 Reports. The Directors, including the Independent
Directors, shall take reasonable steps to insure that the Corporation shall
cause to be prepared and mailed or delivered to each Stockholder as of a record
date after the end of the fiscal year and each holder of other publicly held
Securities within 120 days after the end of the fiscal year to which it relates
an annual report for each fiscal year ending after the Commencement of the
Initial Public Offering that shall include: (i) financial statements prepared in
accordance with generally accepted accounting principles which are audited and
reported on by independent certified public accountants; (ii) the ratio of the
costs of raising capital during the period to the capital raised; (iii) the
aggregate amount of advisory fees and the aggregate amount of other fees paid to
the Advisor and any Affiliate of the Advisor by the Corporation and including
fees or charges paid to the Advisor and any Affiliate of the Advisor by third
parties doing business with the Corporation; (iv) the Total Operating Expenses
of the Corporation, stated as a percentage of Average Invested Assets and as a
percentage of its Net Income; (v) a report from the Independent Directors that
the policies being followed by the Corporation are in the best interests of its
Stockholders and the basis for such determination; and (vi) separately stated,
full disclosure of all material terms, factors and circumstances surrounding any
and all transactions involving the Corporation, Directors, Advisors, Sponsors
and any Affiliate thereof occurring in the year for which the annual report is
made, and the Independent Directors shall be specifically charged with a duty to
examine and comment in the report on the fairness of such transactions.

                                  ARTICLE XIII

                      LIABILITY LIMITATION, INDEMNIFICATION
                      AND TRANSACTIONS WITH THE CORPORATION

            Section 13.1 Limitation of Stockholder Liability. The shares, when
issued and fully paid, shall be non-assessable by the Company. No Stockholder
shall be liable for any debt, claim, demand, judgment or obligation of any kind
of, against or with respect to the Corporation by reason of his being a
Stockholder, nor shall any Stockholder be subject to any personal liability
whatsoever, in tort, contract or otherwise, to any Person in connection with the
Corporation's assets or the affairs of the Corporation by reason of his being a
Stockholder.

            Section 13.2 Limitation of Director and Officer Liability. Subject
to the provisions of Section 13.3 hereof and the limitations of any applicable
provisions under Maryland law, no Director or officer of the Corporation shall
be liable to the Corporation or its Stockholders for money damages. Without
limiting the generality of the foregoing, and pursuant to Section 13.3 hereof,
the Company shall not hold harmless a Director, Advisor or Affiliate in
connection with or by reason of any act or omission performed or omitted to be
performed on behalf of the Company in such capacity unless the Director, Advisor
or Affiliate has determined, in good faith, that the course of conduct that
caused the loss or liability was in the best interests of the Company. Further,
the Company shall not hold harmless a Director, Advisor or Affiliate if: (a) in
the case of a Director (who was not an Independent Director), Advisor or
Affiliate, the loss or liability was the result of negligence or misconduct by
the Director, Advisor or Affiliate, or (b) in the case of a Director who is an
Independent Director, the loss or liability was the result of gross negligence
or willful misconduct by the Director. Neither the amendment nor repeal of this
Section 13.2, nor the adoption or amendment of any other provision of the
Charter or Bylaws inconsistent with this Section 13.2, shall apply to or affect
in any respect the applicability of the preceding sentence with respect to any
act or failure to act which occurred prior to such amendment, repeal or
adoption.

            Section 13.3 Indemnification.

                  (a) The Corporation shall indemnify and hold harmless a
Director, officer, employee, agent, Advisor or Affiliate (the "Indemnitee")
against any or all losses or liabilities reasonably incurred by the Indemnitee
in connection with or by reason of any act or omission performed or omitted to
be performed on behalf of the Corporation in such capacity, provided, that the
Indemnitee has determined, in good faith, that the course of conduct that caused
the loss or liability was in the best interests of the Corporation. The
Corporation shall not indemnify or hold harmless the Indemnitee if: (a) in the
case that the Indemnitee is a Director (other than an Independent Director), an
Advisor or an Affiliate, the loss or liability was the result of negligence or
misconduct by the Indemnitee; or (b) in the case that the Indemnitee is an
Independent Director, the loss or liability was the result of gross negligence
or willful misconduct by the Indemnitee. Any indemnification of expenses or
agreement to hold harmless may be paid only out of the net assets of the
Corporation, and no portion may be recoverable from the Stockholders.

                                      -25-


                  (b) The Corporation shall not provide indemnification for any
loss, liability or expense arising from or out of an alleged violation of
federal or state securities laws by such party unless one or more of the
following conditions are met: (a) there has been a successful adjudication on
the merits of each count involving alleged material securities law violations as
to the Indemnitee, (b) such claims have been dismissed with prejudice on the
merits by a court of competent jurisdiction as to the Indemnitee; or (c) a court
of competent jurisdiction approves a settlement of the claims against the
Indemnitee and finds that indemnification of the settlement and the related
costs should be made, and the court considering the request for indemnification
has been advised of the position of the Securities and Exchange Commission and
of the published position of any state securities regulatory authority in which
Securities were offered or sold as to indemnification for violations of
securities laws.

                  (c) Notwithstanding anything to the contrary contained in the
provisions of subsection (a) and (b) above of this Section, the Corporation
shall not indemnify or hold harmless an Indemnitee if it is established that:
(a) the act or omission was material to the loss or liability and was committed
in bad faith or was the result of active and deliberate dishonesty, (b) the
Indemnitee actually received an improper personal benefit in money, property or
services, (c) in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful, or (d) in a
proceeding by or in the right of the Corporation, the Indemnitee shall have been
adjudged to be liable to the Corporation.

                  (d) The Board may take such action as is necessary to carry
out this Section 13.3 and is expressly empowered to adopt, approve and amend
from time to time Bylaws, resolutions or contracts implementing such provisions.
No amendment of the Charter or repeal of any of its provisions shall limit or
eliminate the right of indemnification provided hereunder with respect to acts
or omissions occurring prior to such amendment or repeal.

            Section 13.4 Payment of Expenses. The Corporation shall pay or
reimburse reasonable legal expenses and other costs incurred by an Indemnitee in
advance of final disposition of a proceeding if all of the following are
satisfied: (i) the proceeding relates to acts or omissions with respect to the
performance of duties or services on behalf of the Corporation, (ii) the
Indemnitee provides the Corporation with written affirmation of the Indemnitee's
good faith belief that the Indemnitee has met the standard of conduct necessary
for indemnification by the Corporation as authorized by Section 13.3 hereof,
(iii) the legal proceeding was initiated by a third party who is not a
Stockholder or, if by a Stockholder of the Corporation acting in his or her
capacity as such, a court of competent jurisdiction approves such advancement,
and (iv) the Indemnitee provides the Corporation with a written agreement to
repay the amount paid or reimbursed by the Corporation, together with the
applicable legal rate of interest thereon, if it is ultimately determined that
the Indemnitee did not comply with the requisite standard of conduct and is not
entitled to indemnification. Any indemnification payment or reimbursement of
expenses will be furnished in accordance with the procedures in Section 2-418(e)
of the MGCL or any successor statute.

            Section 13.5 Express Exculpatory Clauses in Instruments. Neither the
Stockholders nor the Directors, officers, employees or agents of the Corporation
shall be liable under any written instrument creating an obligation of the
Corporation by reason of their being Stockholders, Directors, officers,
employees or agents of the Corporation, and all Persons shall look solely to the
Corporation's assets for the payment of any claim under or for the performance
of that instrument. The omission of the foregoing exculpatory language from any
instrument shall not affect the validity or enforceability of such instrument
and shall not render any Stockholder, Director, officer, employee or agent
liable thereunder to any third party, nor shall the Directors or any officer,
employee or agent of the Corporation be liable to anyone as a result of such
omission.

            Section 13.6 Transactions with Affiliates. The Corporation shall not
engage in transactions with the Advisor, the Sponsor, a Director or any of the
Corporation's Affiliates, except to the extent that each such transaction has,
after disclosure of such affiliation, been approved or ratified by the
affirmative vote of a majority of the Directors (including a majority of the
Independent Directors) not Affiliated with the Person who is party to the
transaction and:

                  (a) The transaction is fair and reasonable to the Corporation.

                                      -26-


                  (b) The terms and conditions of such transaction are not less
favorable to the Corporation than those available from unaffiliated third
parties.

                  (c) If an acquisition is involved, the total consideration is
not in excess of the appraised value of the Property being acquired, as
determined by an Independent Appraiser.

                                   ARTICLE XIV

                                   AMENDMENTS

            Section 14.1 General. Subject to Section 12.2, the Corporation
reserves the right from time to time to make any amendment to the Charter, now
or hereafter authorized by law, including any amendment altering the terms or
contract rights, as expressly set forth in the Charter, of any Shares. All
rights and powers conferred by the Charter on Stockholders, Directors and
officers are granted subject to this reservation.

                                   ARTICLE XV

                              ROLL-UP TRANSACTIONS

            In connection with any proposed Roll-Up Transaction, an appraisal of
all of the Corporation's assets shall be obtained from a competent Independent
Appraiser. The Corporation's assets shall be appraised on a consistent basis,
and the appraisal shall be based on the evaluation of all relevant information
and shall indicate the value of the assets as of a date immediately prior to the
announcement of the proposed Roll-Up Transaction. The appraisal shall assume an
orderly liquidation of the assets over a twelve-month period. The terms of the
engagement of the Independent Appraiser shall clearly state that the engagement
is for the benefit of the Corporation and the Stockholders. A summary of the
appraisal, indicating all material assumptions underlying the appraisal, shall
be included in a report to Stockholders in connection with a proposed Roll-Up
Transaction. In connection with a proposed Roll-Up Transaction, the person
sponsoring the Roll-Up Transaction shall offer to Stockholders who vote against
the proposed Roll-Up Transaction the choice of:

                  (a) accepting the securities of a Roll-Up Entity offered in
the proposed Roll-Up Transaction; or

                  (b) one of the following:

                        (i) remaining as Stockholders and preserving their
interests therein on the same terms and conditions as existed previously; or

                        (ii) receiving cash in an amount equal to the
Stockholder's pro rata share of the appraised value of the net assets of the
Corporation.

            The Corporation is prohibited from participating in any proposed
Roll-Up Transaction:

                  (a) that would result in the Stockholders having voting rights
in a Roll-Up Entity that are less than the rights provided for in Sections 12.1
and 12.2 hereof;

                  (b) that includes provisions that would operate as a material
impediment to, or frustration of, the accumulation of Shares by any purchaser of
the securities of the Roll-Up Entity (except to the minimum extent necessary to
preserve the tax status of the Roll-Up Entity), or which would limit the ability
of an investor to exercise the voting rights of its securities of the Roll-Up
Entity on the basis of the number of Shares held by that investor;

                  (c) in which an investor's rights to access of records of the
Roll-Up Entity will be less than those described in Sections 12.4 and 12.5
hereof; or

                                      -27-


                  (d) in which any of the costs of the Roll-Up Transaction would
be borne by the Corporation if the Roll-Up Transaction is not approved by the
Stockholders.

                                   ARTICLE XVI

                                    DURATION

            In the event that Listing does not occur on or before the tenth
anniversary of the Termination of the Initial Public Offering, then the Board of
Directors must either (a) adopt a resolution that sets forth a proposed
amendment to the Charter extending or eliminating this deadline (the "Extension
Amendment"), declare that the Extension Amendment is advisable and direct that
the proposed Extension Amendment be submitted for consideration at either an
annual or special meeting of the Stockholders, or (b) adopt a resolution that
declares that a proposed liquidation and dissolution is advisable on
substantially the terms and conditions set forth in, or referred to, in the
resolution (the "Plan of Liquidation"), and direct that the proposed Plan of
Liquidation be submitted for consideration at either an annual or special
meeting of the Stockholders. If the Board of Directors seeks the Extension
Amendment as described above and the Stockholders do not approve such amendment,
then the Board of Directors shall seek the Plan of Liquidation as described
above. If the Stockholders do not then approve the Plan of Liquidation, the
Corporation shall continue its business. If the Board of Directors seeks the
Plan of Liquidation as described above and the Stockholders do not approve such
resolution, then the Board of Directors shall seek the Extension Amendment as
described above. If the Stockholders do not then approve the Extension
Amendment, the Corporation shall continue its business. In the event that
Listing occurs on or before the tenth anniversary of the Termination of the
Initial Public Offering, the Corporation shall continue perpetually unless
dissolved pursuant to any applicable provision of the MGCL.

      THIRD: The amendment to and restatement of the Charter as hereinabove set
forth have been duly advised by the Board of Directors and approved by the
Stockholders of the Corporation as required by law.

      FOURTH: The current address of the principal office of the Corporation is
as set forth in Article IV of the foregoing amendment and restatement of the
Charter.

      FIFTH: The name and address of the Corporation's current resident agent is
as set forth in Article IV of the foregoing amendment and restatement of the
Charter.

      SIXTH: The number of directors of the Corporation and the names of those
currently in office are as set forth in Article VIII of the foregoing amendment
and restatement of the Charter.

      SEVENTH: The total number of shares of stock that the Corporation had
authority to issue immediately prior to this amendment and restatement was
100,000,000 consisting of 90,000,000 shares of Common Stock, $0.01 par value per
share and 10,000,000 shares of Preferred Stock, $0.01 par value per share. The
aggregate par value of all shares of stock having par value was $1,000,000.

      EIGHTH: The total number of shares of stock which the Corporation has
authority to issue pursuant to the foregoing amendment and restatement of the
charter is 100,000,000, consisting of 90,000,000 shares of Common Stock, $0.01
par value per share, and 10,000,000 shares of Preferred Stock, $0.01 par value
per share. The aggregate par value of all authorized shares of stock having par
value is $1,000,000.

         NINTH: The undersigned Chief Executive Officer acknowledges these
Fourth Articles of Amendment and Restatement to be the corporate act of the
Corporation and as to all matters or facts required to be verified under oath,
the undersigned Executive Vice President acknowledges that, to the best of his
knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties of
perjury.

                                      -28-


      IN WITNESS WHEREOF, the Corporation has caused these Fourth Articles of
Amendment and Restatement to be signed in its name and on its behalf by its
Chief Executive Officer and attested to by its Secretary on this 8th day of
September, 2005.

      ATTEST:                              COLE CREDIT PROPERTY TRUST II, INC.

      /s/ John M. Pons                     By: /s/ Christopher H. Cole (SEAL)
      ---------------------------------        ---------------------------------
      Name:  John M. Pons                      Name:  Christopher H. Cole
      Title: Secretary                         Title: Chief Executive Officer

                                      -29-

EX-10.35

                                                                   Exhibit 10.35

                           PURCHASE AND SALE AGREEMENT

                                 ACADEMY, LTD.,

                                   AS "SELLER"

                                       AND

                                  SERIES C, LLC

                                 AS "PURCHASER"

                                    PROPERTY:

                     1689 EISENHOWER PARKWAY MACON GA 31206



                                TABLE OF CONTENTS



SECTION                                 TITLE                               PAGE
- -------                                 -----                               ----
                                                                         
SECTION 1.  SALE OF PROPERTY.............................................     1
SECTION 2.  PURCHASE PRICE...............................................     1
SECTION 3.  NET LEASE....................................................     1
SECTION 4.  EARNEST MONEY................................................     1
SECTION 5.  DELIVERY OF INFORMATION......................................     2
SECTION 6.  INSPECTION PERIOD............................................     2
SECTION 7.  REPRESENTATIONS AND WARRANTIES OF SELLER.....................     4
SECTION 8.  REPRESENTATIONS AND WARRANTIES OF PURCHASER..................     6
SECTION 9.  CONDITIONS TO CLOSING........................................     7
SECTION 10. THE CLOSING..................................................     9
SECTION 11. POST-CLOSING OBLIGATIONS.....................................    11
SECTION 12. DESTRUCTION, DAMAGE OR CONDEMNATION..........................    11
SECTION 13. DEFAULT AND REMEDIES.........................................    12
SECTION 14. BROKER.......................................................    12
SECTION 15. NOTICES......................................................    12
SECTION 16. MISCELLANEOUS................................................    13


EXHIBITS

A - Legal Description of Land
B - Form of Lease
C - Subordination Non-Disturbance and Attornment Agreement
D - Surveyor's Certification
E - General Contract Reliance Letter
F   SEC Filing Letter



                           PURCHASE AND SALE AGREEMENT

     This Purchase and Sale Agreement ("Agreement") is dated effective November
1, 2005, by and between ACADEMY, LTD., a Texas limited partnership ("Seller"),
and SERIES C, LLC ("Purchaser"). In consideration of the mutual covenants set
forth herein, Seller and Purchaser hereby covenant and agree as follows:

     SECTION 1. SALE OF PROPERTY

     Seller shall sell and Purchaser shall purchase and upon the terms and
conditions set forth in this Agreement: (i) the tract of real property listed
and described on Exhibit A attached hereto and made a part hereof (collectively,
the "Land"); (ii) the building and all improvements situated on the Land
(collectively, the "Building"); (iii) all right, title and interest of Seller,
if any, in and to the land lying in the bed of any street or highway in front of
or adjoining the Land to the center line thereof and to any unpaid award for any
taking thereof by condemnation, or any damage to the Land by reason of a change
of grade of any street or highway; (iv) all the estate and rights of Seller in
and to the Land, the Building, and all appurtenances thereto; (v) all of
Seller's interest, to the extent transferable, in all permits and licenses (the
"Permits"), warranties (specifically including, without limitation, the general
contractor's one-year construction warranty with respect to construction of the
Building and other Improvements on the Real Property and any warranty related to
the roof of the Building), 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
(the "Contracts"); and (vi) all right, title and interest of Seller, if any, in
and to the fixtures and equipment attached to the Land and/or the Building (the
"Personal Property"), excluding, however, trade fixtures, inventory, equipment
and other personal property of Seller used in the operation of the business
conducted at the property. The Land, Building, Permits, Contracts, Personal
Property and other interests being sold and purchased are referred to as the
"Property." The Property shall be conveyed, assigned and transferred to
Purchaser at Closing (hereinafter defined) free and clear of all liens, claims,
easements, and encumbrances whatsoever except for the Permitted Exceptions
(hereinafter defined).

     SECTION 2. PURCHASE PRICE

     As consideration for the purchase and sale of the Property, Purchaser
agrees to pay Seller $5,600,000.00 ("Purchase Price") payable in good,
immediately available funds at Closing.

     SECTION 3. NET LEASE

     At Closing, Purchaser and Seller shall (i) execute and, as applicable,
acknowledge (a) four duplicate originals of a lease between Purchaser, as
landlord, and Seller, as tenant, for the Property, such lease to be
substantially the same in form and substance as the lease annexed hereto as
Exhibit B (the "Lease"), and (b) a lease memorandum for the Property in
recordable form and otherwise in form and substance reasonably acceptable to
Purchaser and Seller (the "Lease Memorandum"), and (ii) deliver the same into
escrow with Title Company so that the Lease Memorandum may be recorded upon
closing and so that Title Company can deliver two fully executed counterpart
originals to Purchaser and to Seller upon closing. The initial annual rental for
the Lease of the Property shall be $408,800.00.

     SECTION 4. EARNEST MONEY

     Purchaser shall deposit $100,000.00 (the "Earnest Money") and escrow this
Agreement with Fidelity National Title Insurance Company, 40 North Central
Avenue, Suite 2850, Phoenix, Arizona 85004, Attn: Mary Garcia, working with and
through as its local agent, Veritas Title Company whose address is 2415 West
Alabama, Suite 203, Houston, Texas 77098, Attn: Robert Sheldon ("Title
Company"). The Title Company shall, promptly upon receipt, place the Earnest
Money in an interest bearing account at an institution approved by Purchaser.
All interest shall become part of the Earnest Money and shall be paid to the
party entitled to the Earnest Money in accordance with the terms hereof. At
Closing, the Earnest Money shall be applied to the Purchase Price. In the



event of default, the Earnest Money shall be distributed by the Title Company as
provided herein. If this Agreement is terminated by Purchaser in accordance with
Purchaser's termination rights, the Earnest Money shall be returned to
Purchaser.

     SECTION 5 DELIVERY OF INFORMATION

     Within 5 DAYS of the Effective Date, to the extent not previously provided
to Purchaser, Seller shall promptly provide or cause to be provided to
Purchaser:

     (1)  copies of any and all documents and instruments affecting the Property
          in Seller's possession, including, but not limited to, site plans,
          surveys, soil and substrata studies, environmental site assessments,
          architectural renderings, plans and specifications, engineering plans
          and studies, landscape plans, and other plans, diagrams, or studies of
          any kind, if any, plus all other related items, if any, relating to
          the Property (collectively, "Seller's Diligence Materials");

     (2)  a current commitment for title insurance ("Title Commitment") from the
          Title Company setting forth the status of title of the Property and
          showing all liens, claims, encumbrances, reservations, restrictions,
          outstanding mineral interests, and all other maters, if any, relating
          to the Property;

     (3)  A true, complete, and legible copy of all recorded documents and any
          other documents referred to in the Title Commitment, including without
          limitation plats, deeds, zoning ordinances, restrictions, and
          easements;

     (4)  a copy of Seller's existing survey of the Land and Building; and

     (5)  copies of all Permits and Contracts, including the forms of all roof
          warranties and construction warranties that will be obtained by Seller
          upon the completion of the construction of the Building and other
          improvements on the Land.

     (6)  drafts of the special warranty deed, bill of sale and any other
          instruments to be executed by Seller to convey the Property to
          Purchaser (such conveyance documents being herein collectively
          referred to as the "Closing Drafts".

     SECTION 6 INSPECTION PERIOD

     A. Inspection Period. Purchaser shall have until 5:00 pm, 30 DAYS FROM THE
LATER OF (I) PURCHASER'S RECEIPT OF THE TITLE COMMITMENT, OR (II) PURCHASER'S
RECEIPT OF SELLER'S DILIGENCE MATERIALS (the "Inspection Period") to conduct a
due diligence review of the Property and to secure approval of any financing
Purchaser may require or desire in connection with its acquisition of the
Property. Seller shall allow Purchaser and/or Purchaser's representatives access
to the Property and to Seller's books and records for the purposes of inspection
of, including, but not limited to, sales reports and environmental reports in
the possession of Seller during the Inspection Period ("Purchaser's
Inspection").

     B. Update of Reports. During the Inspection Period, Seller will reasonably
cooperate with Purchaser to have any existing environmental reports and studies
updated and certified to Purchaser and its lender, if any, at Purchaser's sole
cost and expense.

     C. Termination Option. Purchaser may terminate this Agreement any time
prior to the expiration of the Inspection Period, in Purchaser's sole
discretion, by sending written notice to Seller. If Purchaser terminates this
Agreement during the Inspection Period, neither party under this Agreement shall
have any further obligations to the other (except as provided in Sections 6H and
6I hereof) and the Earnest Money, together with accrued interest, less $100.00
(the "Independent Consideration"), shall be promptly returned to Purchaser by
the Title Company. Time is of the essence with respect to Purchaser's
termination option. Except as otherwise set forth in this Agreement, Purchaser
shall not have the right to terminate this transaction, or to alter or modify
this Agreement or the form of



the Lease, after the expiration of the Inspection Period, and any such notice
given after the expiration of the Inspection Period shall have no force and
effect. The Independent Consideration shall be retained by Seller from the
Earnest Money in any event hereunder as consideration for Seller's grant of the
option to terminate during the Inspection Period to Purchaser.

     D. Inspection. Purchaser shall have until the expiration of the Inspection
Period to conduct Purchaser's Inspection and to examine the Title Commitment,
Seller's existing survey, Closing Drafts, Seller's Diligence Materials and other
documents and information provided by Seller, pursuant to Section 5 above
(collectively the "Seller's Information") and to object in writing to any
matters reflected thereby, to object in writing to the form and language of the
Closing Drafts, and to object in writing to any other matters pursuant to
Purchaser's Inspection (other than liens which will be released at Closing,
which liens shall not be exceptions to title to the Property). If Purchaser
makes any such objection, then Seller, within a reasonable period of time not to
exceed 30 days from the date of receipt of such objections, may (but Seller
shall in no way be obligated to do so) cure such objections, whereupon it will
be deemed that title and all other matters with respect to the Property are
satisfactory to Purchaser. If Purchaser makes any objection to Seller's
Information or Purchaser's Inspection and Seller elects not to cure same, or is
unable to do so, Seller shall so notify Purchaser, and Purchaser's remedies
shall be limited solely to those set forth in Section 6E hereof. If Purchaser
fails to timely notify Seller of any objections to Seller's Information or
Purchaser's Inspection, then Purchaser shall be deemed to have disapproved of
Seller's Information and Purchaser's Inspection and shall have elected to
terminate this Agreement.

     E. Objections. If Seller fails or elects not to cure an objection to
Seller's Information or Purchaser's Inspection as set out in Section 6D hereof,
then Purchaser, as its sole and exclusive remedy, shall have the right to
either:

          (1) waive such objection and purchase the Property subject thereto
without reduction in the Purchase Price; or

          (2) terminate this Agreement by notifying Seller thereof within 10
days after Seller notifies Purchaser of Seller's inability or election not to
cure such objection. If Purchaser does not so timely elect to terminate this
Agreement, Purchaser shall be deemed to have waived such objection.

     F. Permitted Exceptions. All exceptions to title to the Property not timely
objected to by Purchaser, and such objections of Purchaser as may subsequently
be waived by Purchaser are herein called the "Permitted Exceptions."

     G. Inspection Studies. All of Purchaser's inspections, tests, studies and
investigations with respect to the Property (collectively, "Inspection
Studies"), pursuant to Purchaser's Inspection or otherwise, shall be at
Purchaser's sole cost and expense. Purchaser agrees that Purchaser will (i) use
its best efforts to not interfere with or disturb Seller, nor interfere with or
disturb the work of any persons performing work on the Building, (ii) repair any
damage to the Property caused by Purchaser's inspections, tests, studies and
investigations, and (iii) indemnify, defend and hold Seller harmless from any
and all claims, costs, expenses and liabilities, including attorney's fees, if
any, directly resulting from such inspections, tests, studies and investigations
of Purchaser. Copies of all Inspection Studies are to be delivered to Seller by
the party preparing, compiling or conducting such Inspection Studies, coincident
with their delivery to Purchaser, to the extent such delivery is permitted by
the party preparing, and if such party requires a fee, such as a reliance
letter, Seller agrees to pay such fee, as long as Seller is given the
opportunity to review and approve the fee, prior to the fee being incurred.
Further, Purchaser shall not under any circumstances divulge any of the
Inspection Studies results or data to third parties (other than Purchaser's
principals, advisors, investors and lenders) without Seller's prior written
consent. The provisions of this Section shall survive the Closing or any
termination or cancellation of this Agreement notwithstanding any contrary
provisions hereof and Seller's remedies in enforcement thereof shall not be
limited by the provisions of Section 13 hereof.

     H. Return of Information. If this Agreement is terminated for any reason,
any and all Seller's Information and other information and copies of work sheets
and other documents and materials obtained by Purchaser from or on behalf of
Seller shall be returned to Seller and Purchaser shall not retain any copy or



reproduction of any such written document or information, and all of such
information shall continue to be held in confidence by Purchaser as set forth in
Section 6I below.

     I. Confidentiality. Purchaser and Purchaser's agents and representatives
shall hold the terms of this Agreement and all information obtained with respect
to the Property and Seller in confidence and shall not disclose its content to
others, except to Purchaser's consultants and lender, if any, and those parties
approved by Seller. Notwithstanding any provision of this Agreement, the
provisions of this Section 6I shall survive any termination of this Agreement
and the limitations on Seller's remedies under Section 13B shall not in any way
limit Seller's enforcement of the provisions of this Section 6I.

     SECTION 7. REPRESENTATIONS AND WARRANTIES OF SELLER

     A. Representations and Warranties of Seller. Seller warrants and represents
to Purchaser as follows:

          (1) The Property is not subject to any agreements of sale, or any
     options, or other rights of third parties to acquire any interest therein
     (except as contained in this Agreement) of which Seller has knowledge or is
     a party (and Seller will not enter into any such agreement without
     Purchaser's prior written consent), and Seller does not have knowledge of
     any condemnation proceedings, eminent domain proceedings or similar actions
     or proceedings currently pending or threatened against the Property.

          (2) Seller is duly organized and validly existing as a limited
     partnership under the laws of the State of Texas and is qualified to
     transaction business in the state in which the Property is located. The
     foregoing representation and warranty shall be effective as of the date
     hereof and as of the Closing Date, and shall survive indefinitely, subject
     to any applicable statutes of limitations.

          (3) Seller has all requisite power and authority, has taken all
     actions required by its organizational documents and applicable law, and
     has obtained all consents which are necessary to authorize or enable it to
     execute and deliver this Agreement. Seller has such power and authority and
     has obtained such consents and approvals that are necessary to consummate
     the transactions contemplated in this Agreement, including, without
     limitation, the execution of the Lease. The individuals executing this
     Agreement on Seller's behalf have been duly authorized and are empowered to
     bind Seller to this Agreement and the Lease. The foregoing representation
     and warranty shall be effective as of the date hereof and as of the Closing
     Date, and shall survive indefinitely, subject to any applicable statutes of
     limitations.

          (4) Seller is not a party to any litigation, arbitration or proceeding
     (i) in which such Seller is adverse to any past tenant or present tenant of
     the Property with respect to such tenancy, (ii) in which Seller is adverse
     to any person or entity having or claiming any interest in the Property
     with respect to such interest or claim, or (iii) which affects or questions
     Seller's title to the Property or Seller's ability to perform its
     obligations under this Agreement. Seller knows of no presently pending
     litigation, arbitration, governmental investigation or proceeding, and, to
     Seller's actual knowledge, no litigation, arbitration or proceeding has
     been threatened against Seller, affecting or questioning Seller's title to,
     or use of, the Property or any part thereof.

          (5) Neither the execution of this Agreement, nor the consummation by
     Seller of the transactions contemplated by this Agreement, will (i) result
     in a breach of the terms, conditions or provisions of, or constitute a
     default under, or result in a termination of, any agreement or instrument
     to which Seller is a party, (ii) violate any restriction to which Seller is
     subject, (iii) constitute a violation of any applicable code, resolution,
     law, statute, regulation, ordinance, judgment, rule, decree or order of
     which Seller is aware, or (iv) except as expressly contemplated hereby,
     result in the creation of any lien, charge or encumbrance upon the Property
     or any part thereof. To the actual knowledge of Seller, Seller is not in
     default under any agreement or instrument where the liability thereunder
     might adversely affect Seller's ability to perform its obligations under
     this Agreement.



          (6) To the actual knowledge of Seller, the Building is not, and on the
     Closing Date will not be, in violation of any applicable building and
     zoning laws, rules, codes or regulations, except to a de minimis extent not
     affecting the use or operation of the Property.

          (7) To the actual knowledge of Seller, the Property and the use
     thereof does not, and on the Closing Date will not, violate, in any
     material respects, any (i) applicable federal, state, county, municipal and
     other governmental statutes, laws, rules, orders, regulations, ordinances,
     judgments, decrees and injunctions of any court, board, agency, commission,
     office or authority of any nature whatsoever for any governmental unit, or
     (ii) covenants, agreements, restrictions and encumbrances contained in any
     instrument, either of record or known to Seller, affecting the Property or
     any part thereof which may (I) require repairs, modifications or
     alterations in or to the Property or any part thereof, or (II) in any way
     limit the use and enjoyment thereof.

          (8) Seller has not received notice or has knowledge of any pending
     improvements, liens or special assessments to be made against the Property
     by any governmental authority.

          (9) There are no unrecorded leases (other than the Lease), liens or
     encumbrances which may affect title to the Property.

          (10) Seller has not and will not, without the prior written consent of
     Purchaser, 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 knowledge, there are no
     pending proceedings, the object of which would be to change the present
     zoning or other land-use limitations.

          (11) No consent of any third party is required in order for Seller to
     enter into this Agreement and perform Seller's obligations hereunder.

          (12) 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 the Closing Date shall be paid in full by Seller.

          (13) 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 Seller prior to the Closing Date.

          (14) Seller has provided Purchaser with a copy of an Environmental
     Site Assessment prepared by Terracon dated July 9, 2004 (the "Environmental
     Site Assessment"). Other than the information contained in the
     Environmental Site Assessment, 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.

          (15) Other than the information contained in the Environmental Site
     Assessment, to Seller's actual knowledge, there is not now, nor has there
     ever been, on or in the Property 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 Purchaser, effective as of the Closing Date, 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 the Closing Date and continuing
     in existence on the Property at the Closing Date).

          (16) ALL OF SELLER'S REPRESENTATIONS AND COVENANTS IN THIS AGREEMENT
     AND ALL EXHIBITS ATTACHED TO THIS AGREEMENT ARE LIMITED AS SET FORTH IN
     THIS SUBPARAGRAPH. Seller's covenants to provide information and
     documentation and all of Seller's representations are limited to Seller's
     period of ownership of the Property and the actual knowledge gained by
     Seller with respect to the Property during such period of ownership,
     without any duty of investigation nor the implication of any such duty as
     to same during such period of ownership or otherwise. Purchaser
     acknowledges that Seller's "actual knowledge" is limited to that of David
     Huff, an individual who does not reside in Georgia, and who has not
     undertaken any investigation with respect to such representations.
     Accordingly, Purchaser must rely solely on Purchaser's Inspection to verify
     the accuracy thereof. As to the period prior to Seller's ownership, Seller
     can make no representation, however, Seller shall provide such information
     and documentation as described in this Agreement as is in Seller's
     possession. Seller shall not be a warrantor or guarantor of any studies or
     tests conducted by any person other than Seller and its employees and
     provided to Purchaser pursuant to this Agreement, if any.

     B. Change in Facts. If, at or before the Closing, either Seller becomes
aware of any fact or circumstance which would change a representation or
warranty, then Seller will immediately give notice of such changed fact or
circumstance to Purchaser. In the event Purchaser has current actual knowledge
as of the Closing Date of any breach of the foregoing representations and
warranties and Purchaser proceeds with the Closing, then Purchaser shall be
deemed to have waived and forever released Seller from any and all claims
arising out of such breach, but subject to Seller's performance of the
obligations to be performed by Seller under the terms of the Lease.

     C. Survival. Subject to Section 7B, the representations and warranties in
Section 7A shall survive the Closing for a period of one year (except to the
extent expressly provided to the contrary hereinabove). Seller shall and does
hereby indemnify against and hold Purchaser harmless from any loss, damage,
liability and expense, together with all court costs and attorneys' fees which
Purchaser may incur, by reason of any material misrepresentation by Seller or
any material breach of any of Seller's warranties. To the extent Purchaser shall
fail to assert a claim under the foregoing indemnification within 90 days after
the expiration of said one year period following the Closing with respect to
those representations and warranties that survive only for a period of one year,
then such claim shall be deemed to be waived and forever released by Purchaser.

     SECTION 8. REPRESENTATIONS AND WARRANTIES OF PURCHASER.

     A. Representations and Warranties of Purchaser. Purchaser warrants and
represents to Seller that as of the date hereof:

          (1) Neither the execution of this Agreement nor the consummation by
     Purchaser of the transactions contemplated by this Agreement will (i)
     conflict with, or result in a breach of, the terms, conditions or
     provisions of, or constitute a default, or result in a termination of, any
     agreement or instrument to which Purchaser is a party, (ii) violate any
     restriction to which Purchaser is subject or (iii) constitute a violation
     of any applicable code, resolution, law, statute, regulation, ordinance,
     judgment, rule, decree or order, of which Purchaser is aware.

          (2) Purchaser is a limited liability company duly organized, validly
     existing and in good standing under the laws of the State of Arizona.

          (3) Purchaser has all requisite power and authority, has taken all
     actions required by its organizational documents and applicable laws and
     has obtained all consents which are necessary to authorize or enable it to
     execute and deliver this Agreement and to consummate the transactions



     contemplated in this Agreement. The individuals executing this Agreement on
     Purchaser's behalf have been duly authorized and are empowered to bind
     Purchaser to this Agreement.

          (4) Purchaser acknowledges that in entering into this Agreement,
     Purchaser has not been induced by and has not relied upon any
     representations, warranties or statements, whether express or implied, made
     by Seller or any agent, employee or other representative of Seller or by
     any broker or any other person representing or purporting to represent
     Seller, which are not expressly set forth in this Agreement, whether or not
     any such representations, warranties or statements were made in writing or
     orally.

     B. AS IS. PURCHASER ACKNOWLEDGES AND AGREES THAT PURCHASER IS EXPERIENCED
IN THE OWNERSHIP AND OPERATION OF PROPERTIES SIMILAR TO THE PROPERTY AND THAT
PURCHASER PRIOR TO THE CLOSING DATE WILL HAVE INSPECTED THE PROPERTY TO ITS
SATISFACTION AND IS QUALIFIED TO MAKE SUCH INSPECTION. PURCHASER ACKNOWLEDGES
THAT PURCHASER, PRIOR TO THE CLOSING DATE WILL HAVE, THOROUGHLY INSPECTED AND
EXAMINED THE PROPERTY TO THE EXTENT DEEMED NECESSARY BY PURCHASER IN ORDER TO
ENABLE PURCHASER TO EVALUATE THE CONDITION OF THE PROPERTY AND ALL OTHER ASPECTS
OF THE PROPERTY (INCLUDING, BUT NOT LIMITED TO, THE ENVIRONMENTAL CONDITION OF
THE PROPERTY), AND PURCHASER ACKNOWLEDGES THAT PURCHASER IS RELYING SOLELY UPON
ITS OWN (OR ITS REPRESENTATIVES) INSPECTION, EXAMINATION AND EVALUATION OF THE
PROPERTY AND NOT UPON ANY STATEMENTS (ORAL OR WRITTEN) WHICH MAY HAVE BEEN MADE
OR MAY BE MADE (OR PURPORTEDLY MADE) BY SELLER OR ANY OF ITS REPRESENTATIVES
OTHER THAN THE REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS
AGREEMENT, THE LEASE AND THE CLOSING DRAFTS. AS A MATERIAL PART OF THE
CONSIDERATION FOR THIS AGREEMENT AND THE PURCHASE PRICE, PURCHASER HEREBY AGREES
TO ACCEPT THE PROPERTY ON THE CLOSING DATE IN ITS "AS-IS, WHERE IS" CONDITION
AND WITH ALL FAULTS, AND WITHOUT REPRESENTATIONS AND WARRANTIES OF ANY KIND,
EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, EXCEPT ONLY THE TITLE
WARRANTIES EXPRESSLY SET FORTH IN THE DEED DATED ON THE CLOSING DATE AND THE
REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT AND IN THE
LEASE. THE PURCHASER HEREBY EXPRESSLY ASSUMES ALL RISKS, LIABILITIES, CLAIMS,
DAMAGES, AND COSTS (AND AGREES THAT SELLER SHALL NOT BE LIABLE FOR ANY SPECIAL,
DIRECT, INDIRECT, CONSEQUENTIAL, OR OTHER DAMAGES) RESULTING OR ARISING FROM OR
RELATED TO THE OWNERSHIP, USE, CONDITION, LOCATION, MAINTENANCE, REPAIR OR
OPERATION OF THE PROPERTY. THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE THE
CLOSING.

     SECTION 9. CONDITIONS TO CLOSING.

     A. Purchaser's Preconditions. Purchaser's obligation to consummate the
acquisition of the Property pursuant to the terms of this Agreement is subject
to and conditioned upon the following:

          (1) Each of the representations and warranties made by Seller in this
     Agreement being true and complete on the Closing Date in all material
     respects.

          (2) Seller shall have performed all obligations which it is required
     to perform pursuant to the provisions of this Agreement.

          (3) Seller's execution and delivery of the Deed, the Bill of Sale
     (each as hereinafter defined), the Lease and the Lease Memorandum for the
     Property.

          (4) No material adverse change shall have occurred between the date
     hereof and the Closing Date in the financial condition of Seller or any
     guarantor of Seller's obligations under the Lease.



          (5) Seller has provided to Purchaser (a) a copy of the final and
     unconditional certificate of occupancy or its legal equivalent for the
     Building (unless the municipality where the Property is located does not
     issue such certificate or its legal equivalent) that permits Seller to
     occupy the Building and operate its business therein, (b) a written
     certification by Seller's independent project architect that the Building
     has been substantially completed in accordance with the plans and
     specifications therefore, and (c) Seller's written certification that it
     has accepted the Building in its substantially completed condition
     (together, the "Completion Documents"), subject only to the completion of
     minor details of construction that do not prevent Seller's occupancy of the
     Building (herein, "Punch List Items").

          (6) Seller has provided to Purchaser a copy of the then current
     listing of Punch List Items that Seller has provided to the contractor for
     the construction of the Building.

          (7) Seller has provided to Purchaser originals, to the extent
     available, or copies, to the extent originals are not available, of all
     Permits and Contracts; and

          (8) Seller has delivered to Purchaser not later than 10 business days
     prior to the Closing Date a current ALTA, As-Built survey of the Land,
     Building and the appurtenances thereto, prepared by a surveyor licensed in
     the State of Georgia, to be approved by and certified to Seller, Purchaser,
     Purchaser's lender and the Title Company and which has been prepared in
     accordance with the "Minimum Standard Detail Requirements for Land Title
     Surveys" jointly established by ALTA and ACSM and which complies with the
     requirements of the Title Company and which contains items 1, 2, 3, 4, 6,
     7(a), 7(b), 7(c), 8-11 and 13-16 of the Table A Options and
     Responsibilities (the "As-Built Survey"). The As-Built Survey shall show
     the location on the Property of the Building and all other improvements,
     and set-back lines, fences, evidence of abandoned fences, ponds, creeks,
     streams, rivers, flood plains and flood prone areas, canals, watercourses,
     easements, roads, rights-of-way, encroachments and such other exceptions,
     located on the Property or described in the commitment for the Property,
     and shall contain a surveyor's certification in the form of Exhibit "D"
     attached hereto. Notwithstanding anything contained in this Agreement to
     the contrary, Purchaser shall be deemed to have accepted all matters shown
     thereon, except to the extent that the As-Built Survey reflects any matter
     affecting the Property or title thereto not reflected by the survey or
     surveys delivered by Seller to Purchaser pursuant to Section 5 above.

          (9) The issuance of the Title Policy (as hereinafter defined), or a
     written commitment therefore, subject only to those matters approved or
     deemed approved by Purchaser pursuant to this Agreement.

          (10) The deposit by Seller with Purchaser not later than 10 business
     days prior to the Closing Date of (i) an original estoppel certificate
     naming Purchaser (or its designee) and Wachovia Bank, National Association
     as addressees, which certificate must be reasonably acceptable to
     Purchaser, and (ii) the SNDA (as hereinafter defined) executed by Tenant
     under the Lease.

          (11) The deposit with Title Company 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 Title Company to allow for
     the deletion of the mechanics' lien exception from the Title Policy.

     B. Review Period. Purchaser shall have a period of 5BUSINESS DAYS from the
date of its receipt of each of the Permits and Contracts and As-Built Survey in
which to approve the same, which approval shall not be unreasonably withheld,
provided that Purchaser shall not be permitted to object to (a) the Permits and
Contracts if they are substantially consistent, in all material respects, to the
form of such Permits and Contracts previously provided by Seller pursuant to
Section 5(5) above, and (b) the As-Built Survey except to the extent it reveals
any matter affecting the Property or title thereto not previously disclosed by
the survey or surveys provided by Seller pursuant to Section 5 above. If
Purchaser shall reasonably object, in writing, within such 5 business day period
to either the Permits, Contracts or the As-Built Survey, Seller shall have a
period of up to 30 days in which to use its reasonable efforts to cure such
objections and the Closing shall be extended until such time as such objections
have been resolved to Purchaser's reasonable satisfaction or otherwise waived by
Purchaser. If, however, Purchaser shall



fail to provide any written objection within the aforementioned 5 business day
period, Purchaser shall be deemed to have accepted the Permits, Contracts and
the As-Built Survey. If Purchaser provides any timely objections pursuant hereto
and Seller is unable to cure such objections within such 30-day period,
Purchaser shall be permitted to terminate this Agreement by giving written
notice thereof to Seller within 5 days after the expiration of such 30-day
period, in which event neither party under this Agreement shall have any further
obligation to the other and the Earnest Money, together with accrued interest,
less the Independent Consideration, shall be promptly returned to Purchaser by
the Title Company.

     C. Seller's Preconditions. Seller's obligation to consummate the sale of
the Property pursuant to the terms of this Agreement is subject to and
conditioned upon the following:

          (1) Each of the representations and warranties made by Purchaser in
     this Agreement being true and complete on the Closing Date.

          (2) Purchaser shall have performed all obligations that it is required
     to perform pursuant to the provisions of this Agreement, including, without
     limitation, the delivery of the documents required under Section 10.

          (3) Purchaser's execution and delivery of the Lease and Lease
     Memorandum for the Property.

          (4) Seller's receipt of the As-Built Survey and those Completion
     Documents that are to be provided by third parties or by governmental or
     quasi-governmental entities.

     SECTION 10. THE CLOSING

     A. Closing. The closing of the sale of the Property by Seller to Purchaser
(the "Closing") shall take place on or before 30 DAYS AFTER THE EXPIRATION OF
THE INSPECTION PERIOD (the "Closing Date"); provided, however, that the Closing
Date shall occur not later than DECEMBER 22, 2005. The Closing shall occur in
the office of the Title Company. Buyer may extend the Closing for up to an
ADDITIONAL 30 DAYS upon delivery of written notice to extend the Closing to
Title Company and to Seller prior to the original Closing Date and by depositing
an additional $50,000.00 of non-refundable earnest money with the Title Company.
For purposes of this Agreement, any additional earnest money deposited with
Title Company pursuant to this Section 10 shall be added to and become a part of
the Earnest Money.

     B. Seller's Closing Obligations. At Closing, Seller shall deliver to
Purchaser the following:

          (1) A Special Warranty Deed from Seller in recordable form, conveying
     to Purchaser indefeasible fee simple title to the Property, subject only to
     the Lease, the Permitted Exceptions and such other title exceptions which
     Purchaser may agree (or be deemed to have agreed) to take title subject to
     (the "Deed").

          (2) An Owner's Policy of Title Insurance (the "Title Policy") on the
     current applicable state form with a so-called "extended coverage"
     endorsement issued through the Title Company and insuring, for an amount
     equal to the Purchase Price, that indefeasible fee simple title to the
     Property is vested in Purchaser and that title to the Property is subject
     to no exceptions other than the Lease, Permitted Exceptions and such other
     title exceptions which Purchaser may agree (or be deemed to have agreed) to
     take title subject to.

          (3) To the extent not previously provided, 6 copies of the current
     As-Built Survey (last revised not more than 30 days prior to Closing).

          (4) A report of searches made of the local and centralized Uniform
     Commercial Code records where the Property is located to a date which is
     not more than 10 days prior to the Closing Date, showing no



     filings against, or with respect to, the Property or any portion thereof,
     other than those to be released or provided for at Closing.

          (5) Unless required to be posted at the Property, to the extent in
     Seller's possession, the original, or a complete and accurate copy, of the
     current certificate of occupancy or its legal equivalent for the Property
     with all amendments thereto (unless the municipality where the Property is
     located does not issue such certificate or its legal equivalent).

          (6) Copies of any final "as built" record drawings for the Property in
     the control or possession of Seller.

          (7) The Lease duly executed by Seller, as tenant.

          (8) The Lease Memorandum duly executed and acknowledged by Seller, as
     tenant.

          (9) A Non-foreign affidavit with respect to Seller as required by IRC
     Section 1445(b)(2) and the regulations issued thereunder.

          (10) Resolutions of Seller's general partners, or such other
     reasonable documentation, evidencing that those officers acting for Seller
     have full authority to consummate the transactions in accordance with the
     terms of this Agreement as modified through the Closing.

          (11) Such other documents and affidavits as may be reasonably required
     by this Agreement or by the Title Company in order to consummate this
     transaction and issue the Title Policy to Purchaser.

          (12) Such other instruments, affidavits and documents as are
     customarily executed by the seller of an interest in real property in
     connection with the recording of a deed.

          (13) A certificate executed by Seller stating that the representations
     and warranties contained in Section 7 are true and correct as of the
     Closing Date.

          (14) A Bill of Sale from Seller conveying to Purchaser the Personal
     Property, without warranty of title with respect thereto, and assigning to
     Purchaser, without recourse or warranty, all warranties, guaranties,
     indemnities and other rights which Seller may have against any
     manufacturer, seller, engineer, contractor or builder with respect to the
     construction of the Building and any other improvements situated on the
     Property, which warranties, guaranties, indemnities and other rights shall
     be expressly listed on an exhibit to such Bill of Sale (the "Bill of
     Sale").

          (15) If Purchaser intends to encumber the Property with a mortgage or
     other security interest in connection with its acquisition of the Property,
     a Subordination Non-Disturbance and Attornment Agreement executed and
     acknowledged by Seller, as tenant, in the form attached hereto as Exhibit C
     with respect to the Lease (the "SNDA").

          (16) A reliance letter in substantially the form attached hereto as
     Exhibit E executed by the general contractor with whom Seller entered into
     the construction contract for the construction of the Building.

     C. Purchaser's Closing Obligations. At Closing, Purchaser shall deliver the
following to Seller with respect to the Property:

          (1) The Purchase Price, as specified in Section 2, as adjusted per
     Section 2.

          (2) The Lease, duly executed by Purchaser, as landlord.



          (3) The Lease Memorandum, duly executed and acknowledged by Purchaser.

          (4) A certificate executed by Purchaser stating that the
     representations and warranties contained in Section 8 are true and correct
     as of the Closing Date.

          (5) If Purchaser intends to encumber the Property with a mortgage or
     other security interest in connection with its acquisition of the Property,
     the SNDA executed and acknowledged by Purchaser's lender.

          (6) A copy of all of Purchaser's Inspection Studies.

          (7) Such other documents as may be reasonably required by this
     Agreement or by the Title Company.

     D. Prorations. Except for acknowledgment of the payment of the Earnest
Money, there shall be no prorations or apportionments hereunder insofar as
Seller, pursuant to the Lease, shall be required to pay all items usually
prorated in transactions of the type described herein, including all real
property taxes applicable to any period prior to the Closing Date. Rent for the
remainder of the month of Closing shall be paid at the Closing pursuant to the
Lease. Seller hereby acknowledges that, from and after Closing, it shall
continue to be liable for all taxes, construction costs and all other expenses
and charges accruing prior to Closing, and, as the tenant under the Lease, will
assume all such payment obligations commencing at Closing and for items accruing
on and after the Closing.

     E. Fees. Seller shall pay the cost of (i) all documents to be delivered to
Purchaser pursuant to this Agreement and (ii) all Closing costs, including,
without limitation, the title insurance premium and the services provided by the
Title Company (excluding endorsements required by Purchaser, but including any
endorsements obtained by Seller to cure a title objection), survey charges,
stamp taxes, transfer taxes, and all other fees relating to the granting,
executing and recording of the deed. Purchaser shall pay the expenses incident
to obtaining financing for the acquisition of the Property, including the
premium for the mortgagee title policies and the cost of endorsements to the
Title Policy required by Purchaser (but excluding any endorsements obtained by
Seller to cure a title objection). Each party shall pay its own legal fees
incidental to the execution of this Agreement and the consummation of the
transactions contemplated hereby.

     SECTION 11. POST-CLOSING OBLIGATIONS

     A. Punch List Items. Seller agrees and covenants to complete, or to cause
to be completed, within 90 DAYS AFTER THE CLOSING DATE, all remaining Punch List
Items in connection with the construction of the Building.

     B. Survival. The obligations set forth in this Section 11 shall survive the
Closing and delivery of the Deed.

     SECTION 12. DESTRUCTION, DAMAGE OR CONDEMNATION

     Risk of loss due to damage or destruction or condemnation of the Property
or any part thereof, shall remain with Seller until legal title passes to
Purchaser. In the event of any damage or destruction of the Property, Purchaser
shall have the option of (i) terminating this Agreement, or (ii) accepting title
in its damaged or destroyed condition whereupon such damage or destruction shall
be deemed to have occurred for purposes of the Lease during the term of such
Lease (in which event it shall be the obligation of Seller to restore after the
closing of title). Notwithstanding the foregoing, in the event of an immaterial
damage to the Property prior to the Closing, Purchaser shall be required to
accept title in accordance with the provisions of clause (ii) of this Section
12. For purposes hereof, damage to the Property shall be deemed to be
"immaterial" if the cost to repair or restore such damage does not exceed
$100,000.00 in the aggregate, the estimated time to repair or restore such
damage does not exceed 90 days, and the tenant under the Lease cannot abate or
offset any payments thereunder or terminate the Lease.



     SECTION 13. DEFAULT AND REMEDIES

     A. Default by Seller. In the event that any of Seller's representations or
warranties contained herein are untrue, or if Seller shall have failed to have
performed any of the covenants or agreements contained herein which are to be
performed by Seller, or if any of the conditions precedent to Purchaser's
obligation to consummate the transactions contemplated hereby shall have failed
to occur, Purchaser may, as its sole and exclusive remedies, (i) terminate this
Agreement in its entirety by giving written notice of termination to Seller, in
which event the Earnest Money, together with accrued interest (less the
Independent Consideration), shall be promptly returned to Purchaser by the Title
Company neither party shall have any further rights or liabilities under this
Agreement except that Seller shall continue to remain liable under the
provisions of Section 6 or (ii) seek to enforce specific performance of this
Agreement. Notwithstanding the foregoing, if specific performance is unavailable
as a remedy to Purchaser because of Seller's affirmative acts, Purchaser shall
be entitled to pursue all rights and remedies available at law or in equity.

     B. Default by Purchaser. In the event Purchaser shall default in the
performance of its obligations to purchase the Property and to make all payments
to Seller required hereunder, Seller, as Seller's sole and exclusive remedy,
shall have the right to terminate this Agreement and receive and retain the
Earnest Money and all interest and other sums earned thereon as liquidated
damages for all loss, damage and expense suffered by Seller, including, without
limitation, the loss of its bargain, and neither party shall have any further
rights or liabilities under this Agreement except that Purchaser shall continue
to remain liable under the indemnification provisions of Section 6.

     SECTION 14. BROKER.

     Seller and Purchaser represent and warrant to each other that they know of
no broker who has claimed or may have the right to claim a commission in
connection with this transaction, except Stan Johnson Company ( the "Broker") to
which Purchaser agrees to pay a commission of $40,000.00 pursuant to a separate
agreement between Purchaser and the Broker. Each party hereby indemnifies and
agrees to save the other harmless of and from all loss, cost, liability and
expense, including reasonable attorney's fees, arising out of the breach by the
other of the representations and warranties contained in this Section 14. The
provisions of this Section 14 shall survive the Closing or, if the Closing does
not occur for any reason, shall survive the termination of this Agreement.

     SECTION 15. NOTICES

     All notices required or desired to be given under this Agreement shall be
in writing and shall be sent by (i) facsimile transmission, to the facsimile
number set forth hereinafter for the party to whom notice is given, or (ii)
either certified United States mail, return receipt requested, or Federal
Express (or other national or regional overnight courier which provides evidence
of delivery), addressed to the other party at its address set forth below, or at
such other addresses or facsimile numbers as shall be designated by Seller or
Purchaser by notice given in the manner herein provided.

Notice to Seller shall be sent to:    Academy, Ltd.
                                      1800 North Mason Road
                                      Katy, Texas 77449
                                      Attn: David Huff
                                      Phone: 281-646-5253
                                      Fax: 281-387-9838

With copy to:                         John S. Moody, Jr.
                                      Thompson & Knight LLP
                                      333 Clay Street, Suite 3300
                                      Houston, Texas 77002
                                      Phone: 713-951-5869
                                      Fax: 832-397-8031



Notice to Purchaser shall be sent to: Series C, LLC
                                      2555 E. Camelback Road, Suite 400
                                      Phoenix, Arizona 85016
                                      Attn: Legal Department
                                      Phone: 602-778-8700
                                      Fax: 602-778-8780

With copy to:                         Bennett Wheeler Lytle & Cartwright, PLC
                                      3838 North Central Avenue, Suite 1120
                                      Phoenix, Arizona 85012
                                      Attn: Kevin T. Lytle, Esq.
                                      Phone: 602-445-3434
                                      Fax: 602-266-9119

If to Escrow Agent:                   Fidelity National Title Insurance Company
                                      40 North Central Avenue, Suite 2850
                                      Phoenix, Arizona 85004
                                      Attn: Ms. Mary Garcia
                                      Phone: 602-343-7550
                                      Fax: 602-343-7564

With a copy to:                       Veritas Title Company
                                      2415 W. Alabama
                                      Houston, Texas 77098
                                      Attn: Robert Sheldon
                                      Phone: 713-482-2807
                                      Fax: 713-482-2840

     SECTION 16. MISCELLANEOUS

     A. Counterparts. This Agreement may be executed in any number of
counterparts which together shall constitute the agreement of the parties. The
section headings herein contained are for purposes of identification only and
shall not be considered in construing this Agreement.

     B. Entire Agreement. This Agreement embodies and constitutes the entire
understanding between the parties with respect to the transaction contemplated
herein, and all prior agreements, understandings, representations and
statements, oral or written, are merged into this Agreement. Neither this
Agreement nor any provisions hereof may be waived, modified, amended, discharged
or terminated except by an instrument signed by the party against whom the
enforcement of such waiver, modification, amendment, discharge or termination is
sought, and then only to the extent set forth in such instrument.

     C. Governing Law. This Agreement shall be governed by the law of the state
in which the Property is situated.

     D. Successors and Assigns. This Agreement and the terms and provisions
hereof shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, executors, personal representatives, successors and
permitted assigns. Purchaser cannot assign this Agreement to any other person or
entity (other than to an affiliate of Purchaser or a real state investment trust
sponsored by an affiliate of Purchaser) without the prior written consent of
Seller, and in the event of such permitted assignment by Purchaser, Purchaser
shall remain liable for all of Purchaser's obligations under this Agreement. The
representations and warranties of Seller in this Agreement shall inure to the
benefit of and be binding upon the parties hereto, the Purchaser, any subsequent
owners of the Property and Purchaser's lender.


     E. Liability Limitation. This Agreement is executed by the authorized
representatives of the parties, not individually, but solely on behalf of such
parties. All persons dealing with any party must look solely to the assets of
such party for the enforcement of any claim against it. The obligations
hereunder are not binding upon, nor shall resort be had to the private property
of any of the directors, officers, partners, shareholders, advisors, employees
or agents of Purchaser or Seller. Any Trustee executing this Agreement in a
trust capacity shall be liable hereunder solely in such capacity.

     F. Severability. In the event any portion of this Agreement shall be
declared by any court of competent jurisdiction to be invalid, illegal or
unenforceable, such portion shall be deemed severed from this Agreement and the
remaining parts hereof shall remain in full force and effect, as fully as though
such invalid, illegal or unenforceable portion had never been part of this
Agreement.

     G. Attorney's Fees. If it shall be necessary for either Purchaser or Seller
to employ an attorney to enforce its rights pursuant to this Agreement (or
defend any such enforcement), the non-prevailing party shall reimburse the
prevailing party for reasonable attorneys fees.

     H. Exhibits. All exhibits attached hereto are incorporated herein by this
reference for all purposes.

     I. Counterparts; Facsimile Signatures. This Agreement may be executed in
multiple counterparts, all of which together shall constitute one agreement.
Further, a photographic, photostatic, facsimile or other reproduction of a
signature to this Agreement, when delivered to evidence the actual execution of
this Agreement by a party hereto, shall be deemed to be the execution of this
Agreement by such party.

     J. Time of Essence. Time is important to both Seller and Purchaser in the
performance of this Agreement, and they have agreed that strict compliance is
required as to any date set out herein. If the final date of any period which is
set out in any paragraph of this Agreement falls upon a Saturday, Sunday or
legal holiday under the laws of the United States or the State of Texas, then,
and in such event, the time of such period shall be extended to the next day
which is not a Saturday, Sunday or legal holiday.

     K. Effective Date. Whenever the term or phrase "effective date hereof" or
"date hereof" or other similar phrases describing the date this Agreement
becomes binding on Seller and Purchaser are used in this Agreement, such terms
or phrases shall mean and refer to the date on which a counterpart or
counterparts of this agreement executed by Seller and Purchaser, together with
the Earnest Money, are deposited with the Title Company.

     L. Time for Acceptance. When executed by Purchaser or Seller and delivered
to the other party hereto, this Agreement shall constitute an offer to buy or
sell the Property, as the case may be, on the terms herein set forth, acceptable
by the party receiving such executed Agreement within 14 days after such
receipt, by executing this Agreement and delivering the original hereof to the
Title Company and a copy hereof to the other party hereto. Failure to accept in
the manner and within the time specified shall constitute a rejection and
termination of such offer.

     M. Construction. The captions contained in this Agreement are solely for
convenience and shall not effect or be considered in the construction of the
terms of this Agreement.

     N. SEC S-X 3-14 Audit. Seller acknowledges that Purchaser may elect to
assign all of its right, title and interest in and to this Agreement to a
company that is subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended ("Registered Company"), promoted by the Purchaser or to
an affiliate of a Registered Company (a "Registered Company Affiliate"). In the
event Purchaser's assignee under this Agreement is a Registered Company or a
Registered Company Affiliate, the Registered Company will be required to make
certain filings with the U.S. Securities and Exchange Commission required under
SEC Rule 3-14 of Regulation S-X (the "SEC Filings") that relate to the most
recent pre-acquisition fiscal year (the "Audited Year") for the Property. In
such event, to assist the Registered Company with the preparation of the SEC
Filings, Seller agrees to provide Purchaser and the Registered Company with
financial information is Seller's possession or control regarding the



Property for the Audited Year requested by Purchaser, the Registered Company,
and/or Purchaser's or the Registered Company's auditors. Such information may
include, but is not limited to, bank statements in Seller's possession or
control, operating statements, general ledgers, cash receipts schedules,
invoices for expenses and capital improvements, insurance documentation, and
accounts receivable aging related to the Property ("SEC Filing Information").
Upon receipt of written notice from Purchaser prior to the expiration of the
Inspection Period, Seller shall promptly deliver the SEC Filing Information
requested by Purchaser, the Registered Company and/or Purchaser's or the
Registered Company's auditors, and Seller agrees to cooperate with Purchaser,
the Registered Company and Purchaser's or the Registered Company's auditors
regarding any reasonable inquiries by Purchaser, the Registered Company and
Purchaser's or the Registered Company'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 Purchaser's or the Registered
Company's auditors ("SEC Filings Letter"). A sample SEC Filings Letter is
attached to the Purchase Agreement as Exhibit G; however, Purchaser's and/or the
Registered Company's auditors may require additions and/or revisions to such
letter following review of the SEC Filing Information provided by Seller. The
SEC Filing Information provided by Seller shall be subject to a confidentiality
agreement; however, Seller consents to the disclosure of such SEC Filing
Information that is required to be disclosed in any SEC Filings by the
Registered Company. Purchaser shall reimburse Seller for Seller's reasonable
costs associated with providing the SEC Filing Information. The provisions of
this Section 16N shall survive the Closing for a period of one (1) year.

                     [Signatures to Follow on the Next Page]



                     [[SIGNATURE PAGE TO AGREEMENT OF SALE]]

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

                                        PURCHASER:

                                        SERIES C, LLC


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

                                        Date: November 1, 2005


                                        SELLER:

                                        ACADEMY, LTD.,
                                        a Texas limited partnership

                                        By: Academy Managing Co., L.L.C.,
                                            a Texas limited liability company,
                                            its General Partner


                                        By: /s/ David F. Huff
                                            ------------------------------------
                                        Name: David F. Huff
                                        Title: CFO

                                        Date: November 8, 2005



                    AMENDMENT TO PURCHASE AND SALE AGREEMENT

     THIS AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Amendment") dated as of
December 13, 2005, is entered into between ACADEMY, LTD., a Texas limited
partnership ("Seller") and SERIES C, LLC ("Purchaser").

                                    RECITALS:

     A. Purchaser and Seller have entered into a Purchase and Sale Agreement
(the "Agreement"), dated effective November 10, 2005, with respect to the
purchase and sale of certain real property located at 1689 Eisenhower Parkway,
Macon, Georgia, as more fully described in the Agreement.

     B. Purchaser has requested and Seller has agreed to extend the Closing Date
and the parties have agreed to certain other matters, as set forth below.

                                   AGREEMENTS:

     Now, therefore, in consideration of the mutual agreements set forth below,
and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned agree as follows:

     1. Section 6A of the Agreement is hereby deleted in its entirety and
replaced with the following:

               "A. Inspection Period. Purchaser shall have until 5:00 pm on
          December 27, 2005 (the "Inspection Period") to conduct a due diligence
          review of the Property and to secure approval of any financing
          Purchaser may require or desire in connection with its acquisition of
          the Property. Seller shall allow Purchaser and/or Purchaser's
          representatives access to the Property and to Seller's books and
          records for the purposes of inspection of, including, but not limited
          to, sales reports and environmental reports in the possession of
          Seller during the Inspection Period ("Purchaser's Inspection")."

     2. Section 9A(10) of the Agreement is hereby deleted in its entirety and
replaced with the following:

               "(10) The deposit by Seller with Purchaser at Closing of (i) an
          original estoppel certificate naming Purchaser (or its designee) and
          Wachovia Bank, National Association as addressees, which certificate
          must be reasonably acceptable to Purchaser, and (ii) the SNDA (as
          hereinafter defined) executed by Tenant under the Lease."

     3. Section 10A of the Agreement is hereby deleted in its entirety and
replaced with the following:

               "A. The closing of the sale of the Property by Seller to
          Purchaser (the "Closing") shall take place on or before the later of
          December 28, 2005 or 10 days after receipt of the As-Built Survey by
          Purchaser (the "Closing Date"). The Closing shall occur in the office
          of the Title Company. Purchaser may extend the Closing Date to on or
          before January 22, 2006 upon delivery of written notice to extend the
          Closing to Title Company and to Seller prior to the original Closing
          Date and by depositing an additional $50,000.00 of non-refundable
          earnest money with the Title Company. For purposes of this Agreement,
          any additional earnest money deposited with Title Company pursuant to
          this Section 10 shall be added to and become a part of the Earnest
          Money."



     4. Except as expressly amended hereby, the Agreement and all rights and
powers created thereby or thereunder are in all respects ratified and confirmed
and remain in full force and effect. Where any section, subsection or clause of
the Agreement is modified or deleted by this Amendment, any unaltered provision
of such section, subsection or clause of the Agreement shall remain in full
force and effect. However, where any provision of this Amendment conflicts or is
inconsistent with the Agreement, the provision of this Amendment shall control.

     5. Terms used herein, which are not otherwise defined or modified herein,
but which are defined in the Agreement, shall have the meanings therein ascribed
to them.

     6. This Amendment (a) shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; (b) may be modified
or amended only in writing signed by each party hereto; (c) may be executed by
facsimile signatures and in several counterparts, and by the parties hereto on
separate counterparts, and each counterpart, when so executed and delivered,
shall constitute an original agreement, and all such separate counterparts shall
constitute one and the same agreement; and (d) embodies the entire Amendment and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements relating to such subject matter.

     The undersigned have caused this Amendment to be executed effective as of
the date first set forth above.

                                        PURCHASER:

                                        SERIES C, LLC


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


                                        SELLER:

                                        ACADEMY, LTD.,
                                        a Texas limited partnership

                                        By: Academy Managing Co., L.L.C.,
                                            a Texas limited liability company,
                                            its General Partner


                                        By: /s/ David F. Huff
                                            ------------------------------------
                                        Name: David F. Huff
                                        Title: CFO



                 SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT

     THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Amendment") dated as
of December 27, 2005, is entered into between ACADEMY, LTD., a Texas limited
partnership ("Seller") and SERIES C, LLC ("Purchaser").

                                    RECITALS:

     A. Purchaser and Seller have entered into a Purchase and Sale Agreement
dated effective November 10, 2005 and an Amendment to Purchase and Sale
Agreement dated effective December 13, 2005 (as amended, the "Agreement") with
respect to the purchase and sale of certain real property located at 1689
Eisenhower Parkway, Macon, Georgia, as more fully described in the Agreement.

     B. Purchaser has requested and Seller has agreed to extend the Closing Date
and the parties have agreed to certain other matters, as set forth below.

                                   AGREEMENTS:

     Now, therefore, in consideration of the mutual agreements set forth below,
and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned agree as follows:

     1. Section 6A of the Agreement is hereby deleted in its entirety and
replaced with the following:

               "A. Inspection Period. Purchaser shall have until 5:00 pm on
          January 5, 2005 (the "Inspection Period") to conduct a due diligence
          review of the Property and to secure approval of any financing
          Purchaser may require or desire in connection with its acquisition of
          the Property. Seller shall allow Purchaser and/or Purchaser's
          representatives access to the Property and to Seller's books and
          records for the purposes of inspection of, including, but not limited
          to, sales reports and environmental reports in the possession of
          Seller during the Inspection Period ("Purchaser's Inspection")."

     2. Section 10A of the Agreement is hereby deleted in its entirety and
replaced with the following:

               "A. The closing of the sale of the Property by Seller to
          Purchaser (the "Closing") shall take place on or before January 6,
          2006 (the "Closing Date"). The Closing shall occur in the office of
          the Title Company. Purchaser may extend the Closing Date to on or
          before January 22, 2006 upon delivery of written notice to extend the
          Closing to Title Company and to Seller prior to the original Closing
          Date and by depositing an additional $50,000.00 of non-refundable
          earnest money with the Title Company. For purposes of this Agreement,
          any additional earnest money deposited with Title Company pursuant to
          this Section 10 shall be added to and become a part of the Earnest
          Money."

     3. Except as expressly amended hereby, the Agreement and all rights and
powers created thereby or thereunder are in all respects ratified and confirmed
and remain in full force and effect. Where any section, subsection or clause of
the Agreement is modified or deleted by this Amendment, any unaltered provision
of such section, subsection or clause of the Agreement shall remain in full
force and effect. However, where any provision of this Amendment conflicts or is
inconsistent with the Agreement, the provision of this Amendment shall control.

     4. Terms used herein, which are not otherwise defined or modified herein,
but which are defined in the Agreement, shall have the meanings therein ascribed
to them.



     5. This Amendment (a) shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; (b) may be modified
or amended only in writing signed by each party hereto; (c) may be executed by
facsimile signatures and in several counterparts, and by the parties hereto on
separate counterparts, and each counterpart, when so executed and delivered,
shall constitute an original agreement, and all such separate counterparts shall
constitute one and the same agreement; and (d) embodies the entire Amendment and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements relating to such subject matter.

     The undersigned have caused this Amendment to be executed effective as of
the date first set forth above.

                                        PURCHASER:

                                        SERIES C, LLC


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


                                        SELLER:

                                        ACADEMY, LTD.,
                                        a Texas limited partnership

                                        By: Academy Managing Co., L.L.C.,
                                            a Texas limited liability company,
                                            its General Partner


                                        By: /s/ Arthur Bochman
                                            ------------------------------------
                                        Name:Arthur Bochman
                                        Title:President



                    ASSIGNMENT OF PURCHASE AND SALE AGREEMENT

                             ACADEMY LTD., 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 Purchase and Sale Agreement (the "Purchase Agreement")
described herein, to ASSIGNEE and its successors and assigns. The Purchase
Agreement is described as follows:

DATE OF AGREEMENT:   November 10, 2005

ORIGINAL BUYER:      Series C, LLC

ASSIGNED TO:         Cole AS Macon GA, LLC

PROPERTY ADDRESS:    1689 Eisenhower Parkway, Macon, GA 31206

     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 5th day of January, 2006.

ASSIGNOR:                               ASSIGNEE:

SERIES C, LLC,                          COLE AS MACON GA, 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                    By: /s/ John M. Pons
    ---------------------------------       ------------------------------------
    John M. Pons                            John M. Pons, Senior Vice President
    Authorized Officer

EX-10.36

                                                                   Exhibit 10.36

                                                          ACADEMY SPORTS - MACON
                                                             LOAN NO. 50-2854483

                                 PROMISSORY NOTE

$4,280,000.00                                                    January 6, 2006

     FOR VALUE RECEIVED, the undersigned, COLE AS MACON GA, 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 TWO HUNDRED EIGHTY THOUSAND AND NO/100 DOLLARS ($4,280,000.00),
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 January 11, 2036.

          (d) "Fixed Rate Tranche A" shall mean Three Million Four Hundred
Seventy-Eight Thousand and No/100 Dollars ($3,478,000.00) 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 Two Thousand
and No/100 Dollars ($802,000.00) 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 two-fifths percent (6.40%) 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 January 11, 2016.

          (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 January 11, 2016.

          (o) "Optional Prepayment Determination Date" shall mean November 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 Bibb County,
Georgia.

     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 April 6, 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 sixty-nine one hundredths percent (5.69%) (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 February 11, 2006 (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 actually
incurred.

     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 AS MACON GA, 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                            $3,478,000.00
Note Rate % (Per Annum)                              5.690%
Original Amortization Term (Months)                  999
Monthly Payment Amount (Excluding IO Period)         $16,491.52
Note Date                                            1/6/2006
First Pay Date                                       2/11/2006
Original Loan Term (Months)                          120
Scheduled Maturity Date                              1/11/2016
Interest Accrual Basis During Amortization Periods   ACTUAL/360
Interest Only (IO) Periods (Months)                  120
Interest Accrual Basis During IO Period              ACTUAL/360



COLE AS MACON, GA 502854483



                                                       INTEREST       PRINCIPAL
                          ACCRUAL                    COMPONENT OF    COMPONENT OF   ENDING UNPAID
                          DAYS IN     SCHEDULED       SCHEDULED       SCHEDULED       PRINCIPAL
PAY PERIOD    PAY DATE     PERIOD      PAYMENT         PAYMENT         PAYMENT         BALANCE
- ----------   ----------   -------   -------------   -------------   -------------   -------------
                                                                  
      0       1/11/2006        5    $        0.00   $    2,748.60   $        0.00   $3,478,000.00
      1       2/11/2006       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
      2       3/11/2006       28    $   15,392.08   $   15,392.08   $        0.00   $3,478,000.00
      3       4/11/2006       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
      4       5/11/2006       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
      5       6/11/2006       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
      6       7/11/2006       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
      7       8/11/2006       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
      8       9/11/2006       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
      9      10/11/2006       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     10      11/11/2006       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     11      12/11/2006       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     12       1/11/2007       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     13       2/11/2007       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     14       3/11/2007       28    $   15,392.08   $   15,392.08   $        0.00   $3,478,000.00
     15       4/11/2007       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     16       5/11/2007       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     17       6/11/2007       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     18       7/11/2007       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     19       8/11/2007       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     20       9/11/2007       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     21      10/11/2007       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     22      11/11/2007       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00




                                                                  
     23      12/11/2007       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     24       1/11/2008       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     25       2/11/2008       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     26       3/11/2008       29    $   15,941.80   $   15,941.80   $        0.00   $3,478,000.00
     27       4/11/2008       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     28       5/11/2008       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     29       6/11/2008       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     30       7/11/2008       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     31       8/11/2008       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     32       9/11/2008       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     33      10/11/2008       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     34      11/11/2008       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     35      12/11/2008       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     36       1/11/2009       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     37       2/11/2009       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     38       3/11/2009       28    $   15,392.08   $   15,392.08   $        0.00   $3,478,000.00
     39       4/11/2009       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     40       5/11/2009       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     41       6/11/2009       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     42       7/11/2009       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     43       8/11/2009       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     44       9/11/2009       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     45      10/11/2009       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     46      11/11/2009       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     47      12/11/2009       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     48       1/11/2010       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     49       2/11/2010       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     50       3/11/2010       28    $   15,392.08   $   15,392.08   $        0.00   $3,478,000.00
     51       4/11/2010       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     52       5/11/2010       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     53       6/11/2010       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     54       7/11/2010       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     55       8/11/2010       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     56       9/11/2010       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     57      10/11/2010       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     58      11/11/2010       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     59      12/11/2010       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     60       1/11/2011       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     61       2/11/2011       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     62       3/11/2011       28    $   15,392.08   $   15,392.08   $        0.00   $3,478,000.00
     63       4/11/2011       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     64       5/11/2011       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     65       6/11/2011       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     66       7/11/2011       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     67       8/11/2011       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     68       9/11/2011       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     69      10/11/2011       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     70      11/11/2011       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00





                                                                  
     71      12/11/2011       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     72       1/11/2012       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     73       2/11/2012       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     74       3/11/2012       29    $   15,941.80   $   15,941.80   $        0.00   $3,478,000.00
     75       4/11/2012       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     76       5/11/2012       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     77       6/11/2012       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     78       7/11/2012       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     79       8/11/2012       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     80       9/11/2012       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     81      10/11/2012       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     82      11/11/2012       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     83      12/11/2012       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     84       1/11/2013       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     85       2/11/2013       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     86       3/11/2013       28    $   15,392.08   $   15,392.08   $        0.00   $3,478,000.00
     87       4/11/2013       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     88       5/11/2013       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     89       6/11/2013       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     90       7/11/2013       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     91       8/11/2013       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     92       9/11/2013       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     93      10/11/2013       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     94      11/11/2013       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     95      12/11/2013       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
     96       1/11/2014       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     97       2/11/2014       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
     98       3/11/2014       28    $   15,392.08   $   15,392.08   $        0.00   $3,478,000.00
     99       4/11/2014       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    100       5/11/2014       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
    101       6/11/2014       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    102       7/11/2014       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
    103       8/11/2014       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    104       9/11/2014       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    105      10/11/2014       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
    106      11/11/2014       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    107      12/11/2014       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
    108       1/11/2015       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    109       2/11/2015       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    110       3/11/2015       28    $   15,392.08   $   15,392.08   $        0.00   $3,478,000.00
    111       4/11/2015       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    112       5/11/2015       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
    113       6/11/2015       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    114       7/11/2015       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
    115       8/11/2015       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    116       9/11/2015       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00
    117      10/11/2015       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
    118      11/11/2015       31    $   17,041.23   $   17,041.23   $        0.00   $3,478,000.00





                                                                  
    119      12/11/2015       30    $   16,491.52   $   16,491.52   $        0.00   $3,478,000.00
    120       1/11/2016       31    $3,495,041.23   $   17,041.23   $3,478,000.00   $        0.00
    120                    3,652    $5,485,567.14   $2,007,567.14   $3,478,000.00





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 LOGO)

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

J.L. Smith                                                       Date __________
1000

          S.R. Smith
          1234 Sample Street
          Any Where, USA 12345

PAY TO THE
ORDER OF _________________________________________________ $ ___________________

__________________________________________________________ DOLLARS

Memo ___________________________________________________________________________

: 000000000 :   10000001234567   1000

ROUTING #       ACCOUNT #

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-10.37

                                                                   Exhibit 10.37

                              REAL ESTATE CONTRACT

     This Contract is entered into by and between DB-KS, LLC., a Kansas limited
liability company ("Seller") and SERIES C, LLC, an Arizona limited liability
company, or its nominee or assigns ("Buyer"). The "Effective Date" of this
Contract is the last date upon which both Buyer and Seller have executed this
Contract.

     1. Purchase and Sale. Seller hereby agrees to sell and convey and Buyer
agrees to purchase the real property and all improvements to be constructed
thereon consisting of a DAVID'S BRIDAL STORE building situated at 9310-9320
MARSHALL DRIVE, LENEXA, JOHNSON COUNTY, KANSAS, together with all and singular
the rights and appurtenances pertaining to the property, and all right, title
and interest of Seller in and to any equipment related to and attached to the
building owned by Seller, and any parking, adjacent streets, easements, and
rights of way (collectively the "Property"), and Seller's interest in that
certain Lease Agreement ("Lease") with DAVID'S BRIDAL, INC. ("Tenant"), upon the
terms and conditions set forth herein. The Property shall also include all of
Seller's interest, to the extent transferable, in all permits and licenses,
warranties (specifically including, without limitation, the general contractor's
construction warranty with respect to construction of improvements at the
Property and any warranty related to the roof of the building located at the
Property), contractual rights and intangibles (including
architectural/engineering plans) with respect to the operation, maintenance,
repair or improvement of the Property. The Property is legally described as
follows:

     LOT 2, CROSSROADS OF LENEXA, A SUBDIVISION IN THE CITY OF LENEXA, JOHNSON
     COUNTY, KANSAS

     2. Purchase Price. The Purchase Price for the Property shall be
$3,280,000.00, and shall be paid as follows:

          (a) Buyer agrees to deliver to and deposit with Chicago Title
Insurance Company, 106 West 11th Street, Suite 1800, Kansas City, Missouri
64105, Attention: Bonnie Vestal (the "Escrow Holder") the amount of $50,000.00
as an earnest money deposit ("Deposit") within five (5) business days of the
Effective Date. The Deposit shall be applied to the Purchase Price at Closing or
delivered to the party entitled to receive it pursuant to the terms of this
Contract. Buyer may instruct the Escrow Holder to deposit the Deposit in an
interest bearing account and shall be entitled to all accumulated interest. The
parties agree that Fidelity National Title Insurance Company, 40 N. Central
Avenue, Suite 2850, Phoenix, Arizona 85004, Attention: Ms. Mary Garcia (the
"Title Company") shall act as title company with respect to this transaction and
that the Closing shall occur through Title Company.

          (b) The balance of the Purchase Price shall be paid in cash and
delivered at Closing.

     3. Seller's Representations and Warranties. Seller makes the following
representations and warranties to Buyer which shall survive the Closing:

          (a) Seller is a limited liability company in good standing under the
laws of the State of Kansas, and the person executing this Contract on behalf of
Seller is authorized to do so under the agreements governing the operation of
Seller's business.

          (b) Seller is not a foreign person selling property as described in
the Foreign Investment in Real Property Tax Act ("FIRPTA") and agrees to deliver
an affidavit at Closing reflecting that Seller is not such a foreign person and
provide Seller's tax identification number ("Tax Affidavit").

          (c) The improvements on the Property shall be completed in a good and
workmanlike manner, lien free, in accordance with the requirements of the Lease
and the requirements of governmental authorities.



          (d) To Seller's actual knowledge, no notice of violation has been
issued to and received by 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.

          (e) To Seller's actual knowledge there are no suits or claims pending
or 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) This transaction will not in any way violate any other agreements
to which Seller is a party, and no consent of any third party is required in
order for Seller to enter into this Contract and perform Seller's obligations
hereunder.

          (g) Without conducting any independent inquiry or investigations,
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.

          (h) To Seller's actual knowledge, there is not now, nor has there ever
been, on or in the Property 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 Property
(including Hazardous Materials released on the Property prior to Closing and
continuing in existence on the Property at Closing.

          (i) Should Seller receive notice or knowledge of any information
regarding any of the matters set forth in this Section 3 after the Effective
Date and prior to Closing, Seller will immediately notify Buyer of the same in
writing.

          All representations made in this Contract by Seller shall survive the
execution and delivery of this Contract and Closing for a period of six (6)
months.

          Except as set forth above in this Section 3 and as otherwise
specifically represented in this Contract, the Property shall be conveyed
"AS-IS" and "WHERE-IS" AND SELLER EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OR
GUARANTIES, OF ANY KIND, ORAL OR WRITTEN, EXPRESS OR IMPLIED, CONCERNING THE
VALUE, CONDITION, MERCHANTABILITY, MARKETABILITY, PROFITABILITY, ENFORCEABILITY,
OR FITNESS OF THE PROPERTY OR THE LEASE.

     4. Seller's Documents. (a) Seller shall, as soon as possible and not later
than FIFTEEN (15) days from the date this Contract is executed by Buyer, at
Seller's expense, deliver to Buyer legible, accurate and complete copies of the
following which are in Seller's possession (the "Delivery Items"): The Lease; a
standard form ALTA Owner's Title Commitment ("Title Commitment") covering the
Property and issued by the Title Company along with copies of all documents
referred to as exceptions therein; any existing surveys and site plans of the
Property; any environmental report; any existing soil reports in Seller's
possession or control. After completion of construction, Seller agrees to
deliver to Buyer the following: any engineering reports, architectural reports
and reviews, construction drawings, final



plans and specifications, and a certificate of occupancy.

     (b) Upon substantial completion of the improvements on the Property, Seller
shall deliver to Buyer an ALTA as-built survey ("Survey") of the Property and
improvements. The Survey shall by certified to Seller, Buyer and the Title
Company, incorporate the Title Commitment and Buyer's survey requirements and
form of certification attached hereto as EXHIBIT F and made a part hereof, and
(i) plat and identify all easements, boundaries, restrictions, set-backs,
utilities, parking (but not the number of parking spaces), improvements,
driveways, streets, rights of way, and curb cuts, (ii) show thereon a legal
description of the Property, (iii) disclose whether the Property is in a flood
plain, (iv) show the total square feet of the Property, and (v) provide
recording information for all recorded documents, and (v) otherwise be in
sufficient detail to allow Buyer to remove the standard exceptions for surveys
in the title policy.

     5. The Lease. (a) Seller shall perform (i) all obligations of the Landlord
under the Lease to be performed on or before the Closing, and (ii) all of
Seller's Construction Obligations (hereinafter defined) to be performed before
or after the Closing Date; and Seller shall indemnify and hold Buyer harmless
from and against all costs, expenses, claims, demands and liabilities which (1)
accrue or arise prior to the Closing Date under the Lease, and (2) accrue or
arise at any time, before or after the Closing Date, from any failure to perform
Seller's Construction Obligations. Buyer shall perform all obligations of the
Landlord under the Lease to be performed after the Closing Date except Seller's
Construction Obligations, and Buyer shall indemnify and hold Seller harmless
from and against all costs, expenses, claims, demands and liabilities which
accrue or arise after the Closing Date under the Lease except those which accrue
or arise from any failure to perform Seller's Construction Obligations.

          (b) All obligations of the Landlord under the Lease relating to
construction, completion and delivery to the Tenant of the building and all
other improvements to be constructed by the Landlord under the Lease
(collectively, the "Improvements") and delivery to Tenant of
construction-related items are herein collectively called "Seller's Construction
Obligations." Seller shall be solely responsible, at Seller's sole cost and
expense, for performance and completion of Seller's Construction Obligations,
whether performed or to be performed before or after the Closing Date. Seller
covenants and agrees with Buyer that Seller will diligently and timely perform
all of Seller's Construction Obligations and will pay all costs and expenses
thereof.

          (c) As soon as possible after completion of the Improvements, Seller
shall deliver to Buyer and the Title Company, final, unconditional lien waivers
for all work and materials incorporated into the Improvements and such other
documentation as may be reasonably required by Escrow Agent to allow for the
deletion of the mechanics' lien exception from the Title Policy (defined below).

          (d) Seller agrees to assign all construction warranties to Buyer.

     6. Title Insurance. Buyer shall deliver to Seller its written objections to
any matters shown or indicated in the Title Commitment or the existing survey
prior to expiration of the Due Diligence Period. Items identified in the Title
Commitment or the Survey but not objected to in a timely manner shall be deemed
"Permitted Exceptions" (defined hereafter). Seller shall have until Closing to
remove all such defects or objections to Buyer's reasonable satisfaction. If the
Title Commitment is amended to include new exceptions that are not set forth in
a prior 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 deliver to Seller its
written objections to any such new exceptions. Seller shall notify Buyer in
writing within FIVE (5) DAYS after receiving Buyer's written objections if
Seller does not intend to remove (or endorse over) any such objection. Seller's
lack of response shall be deemed as Seller's refusal to remove the objectionable
exceptions (or obtain title insurance endorsements over said objections, if
acceptable to Buyer) prior to Closing. In the event Seller is unable or
unwilling to cure or remove such objections to Buyer's reasonable satisfaction
prior to or at Closing, Buyer may, at its option, terminate this Contract and
receive a full refund of the Deposit or waive its objections and proceed to
Closing. Effective as of the date and time of recording of the Deed, there shall
be issued to Buyer by the Title Company an extended coverage ALTA Owner's Title
Insurance Policy



(the "Title Policy") in the amount of the Purchase Price. The Title Policy shall
insure good and marketable fee simple title to the Property. The Title Policy
shall contain as exceptions to title only those matters approved or waived by
Buyer ("Permitted Exceptions"). The costs and expenses of the standard coverage
Title Policy shall be paid by Seller and Buyer shall be responsible for the
additional cost of an extended coverage policy and for all endorsements.

     7. Due Diligence Period. In addition to Seller's performance of its
obligations, including the delivery of all documents at Closing, Buyer's
obligation to purchase the Property is subject to Buyer's satisfaction in its
sole discretion with all inspections, the condition of the Property, the Lease,
and any other matters pertaining to the Property (other than Seller's
Construction Obligations), by no later than THIRTY (30) DAYS after the later of
(i) Buyer's receipt of the Delivery Items, and (ii) the Effective Date (the "Due
Diligence Period"). In the event Buyer fails to deliver its written notice of
acceptance of the Property at any time at or before 5:00 p.m. Phoenix, Arizona
time on the last day of the Due Diligence Period, this Contract shall be deemed
to be terminated and Buyer shall receive a return of its Deposit. In the event
Buyer does notify Seller in writing of its acceptance of the Property prior to
expiration of the Due Diligence Period, the Deposit shall be non-refundable,
subject to Seller's performance of its obligations herein and except as
otherwise specifically set forth in this Contract. In the event either party
terminates this Contract pursuant to the rights under this Contract, Buyer shall
return all Delivery Items to Seller.

     8. Additional Conditions Precedent. Buyer's obligation to purchase the
Property and pay the Purchase Price is expressly conditioned upon (a) the
Improvements being completed in accordance with all requirements of the Lease,
(b) Tenant accepting the Leased Premises, (c) Tenant paying its first month of
base rent under the Lease, (d) no later than THIRTY (30) DAYS prior to Closing,
Tenant executing and delivering to Seller and Buyer an estoppel certificate in
form and substance reasonably acceptable to Buyer, naming Buyer (or its
designee) and Wachovia Bank, National Association as addressees, and without
identifying any remaining unfinished punch list items unless Seller agrees to
escrow 125% of the estimated completion costs of such items and diligently
completes same after Closing (the "Tenant Estoppel Certificate"); and (e) no
later than FIVE (5) BUSINESS DAYS prior to Closing, Tenant executing and
delivering to Seller and Buyer a subordination, non-disturbance and attornment
agreement, in form and substance reasonably acceptable to Tenant, for the
benefit of Wachovia Bank, National Association.

     9. Closing. This Contract shall close on or before (a) THIRTY (30) DAYS
after expiration of the Due Diligence Period, and (b) satisfaction of the
conditions described in Section 8 above, or such earlier date as may be agreed
upon by the parties ("Closing Date"). Buyer may extend the Closing Date an
additional ten (10) days upon delivery of written notice to Seller and Title
Company prior to the original Closing Date and by depositing an additional
non-refundable $50,000.00 Deposit (which shall make the entire $100,000.00
non-refundable, subject to Seller's performance of its obligations). Seller
agrees to provide Buyer with at least ten (10) days written notice of
satisfaction of all conditions to Closing. The Closing shall occur in escrow at
the Title Company. Seller and Buyer shall equally share all escrow fees and
closing costs but Buyer shall be fully responsible for all fees and expenses in
connection with its lender and recording the deed, and Seller shall be fully
responsible for the costs of releasing all monetary liens, judgments, and other
encumbrances that are to be released and of recording such releases. Each party
shall be responsible for and shall pay for its own legal fees. At Closing:

          (a) Seller shall deliver to Buyer the following, and Buyer's
obligations to perform under this Contract and to close escrow are expressly
subject to delivery of same:

               (i) A Special Warranty Deed in the form attached hereto as
Exhibit A (the "Deed"), duly executed and acknowledged by Seller, conveying fee
simple title to Buyer free and clear of any lien, encumbrance or exception other
than the matters of record, the Lease, unpaid taxes and assessments not yet due
and payable, all matters visible upon physical inspection, and matters disclosed
by an accurate survey. Seller shall not attach the Permitted Exceptions to the
Deed nor warrant that the exceptions disclosed in the title commitment are the
only matters of record.

               (ii) A Bill of Sale and Assignment in the form attached hereto as
Exhibit B (the "Bill of Sale") acceptable to Buyer and Seller (but without
recourse or warranty) duly executed and acknowledged by Seller,



conveying to Buyer all personalty, permits and construction warranties, if any.

               (iii) An assignment of Seller's interest as landlord in and to
the Lease in the form attached hereto as Exhibit C (the "Lease Assignment") duly
executed and acknowledged by Seller.

               (iv) The Title Policy.

               (vi) Possession of the Property subject to the Tenant's rights
under the Lease.

               (vi) The original Lease.

               (vii) Mechanic's lien and extended coverage affidavit of Seller.

               (viii) The FIRPTA Tax Affidavit.

               (ix) Notice letter to Tenant advising of the sale and authorizing
rent to be paid to Buyer after Closing.

               (x) Copies of all completed construction drawings, building
plans, architectural drawings, warranties, and relevant information pertaining
to the Property in Seller's possession.

               (xi) The Tenant Estoppel Certificate.

               (xii) The delivery by Seller to Buyer at Closing 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 Purchase Price.

               (xiii) The delivery by Seller to Buyer of the Certificate of
Occupancy for the improvements located at the Property.

               (xiv) The delivery by Seller to Buyer of an architect's affidavit
in the form attached hereto as Exhibit D.

               (xv) The delivery of the SEC Filing Information (as hereinafter
defined) and the SEC Filings Letter (as hereinafter defined) by Seller to Buyer
not less than FIVE (5) DAYS prior to Closing.

               If the foregoing conditions have not been satisfied by the
specified date or Closing and such failure continues for five (5) days after
written notice to Seller, then Buyer shall have the right, at Buyer's sole
option, by giving written notice to Seller and Title Company, to cancel this
Contract, whereupon the Deposit shall be paid immediately by Title Company to
Buyer and, except as otherwise provided in this Contract, neither of the parties
shall have any further liability or obligation under this Contract.

          (b) Buyer shall deliver to Seller the following:

               (i) The consideration required pursuant to Section 2 above, in
cash or by Buyer's certified or cashier's check in U.S. funds available
immediately to Seller.

               (ii) The Lease Assignment, duly executed and acknowledged by
Buyer.

     10. Entry on Property. Subject to the rights of Tenant, Buyer, its agents,
employees, and representatives, are hereby granted the right to immediately
enter on all or any portion of the Property for the purpose of making any
structural, mechanical, engineering, geological, ecological, environmental,
soil, surveying, or other inspections, tests, or work as Buyer, in its
discretion, may deem necessary or appropriate. Buyer agrees to indemnify and
hold Seller harmless



for all liabilities, damages and claims arising out of injury to persons or
property as a result of Buyer's inspection. Buyer's obligations hereunder shall
survive termination and Closing of this Contract.

     11. Prorations and Taxes. Rental income, real property taxes, installments
of current year special assessments, utility charges and other operating income
or expenses shall be prorated to the Closing, based upon actual days involved.
Seller shall be responsible for all taxes, installments of special assessments,
and any other charges and shall receive all income accruing from the Property
for any period prior to the date of Closing. Buyer shall be responsible for all
taxes, installments of special assessments, and any other charges and shall
receive all income accruing from the Property as of the date of Closing and for
any period after the date of Closing. The parties agree to make a good faith and
equitable allocation of all income and expenses and other charges addressed in
the Lease at least ten (10) days prior to Closing, and such allocation shall be
reflected on the closing statement to be agreed upon and signed by the parties
at Closing. If after Closing, 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 11 shall
survive Closing except that no adjustment shall be made later than TWO (2)
MONTHS after Closing 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. If escrow fails to close because of Seller's default, Seller
shall be liable for any cancellation charges of Title Company. If escrow fails
to close because of Buyer's default, Buyer shall be liable for any cancellation
charges of Title Company. If escrow fails to close for any other reason, Seller
and Buyer shall each be liable for one-half of any cancellation charges of Title
Company.

     12. Notices. All notices, deliveries or other communications required or
permitted to be given hereunder shall be in writing and shall be faxed, hand
delivered, mailed by registered or certified mail, postage prepaid, or sent by
overnight delivery service, to the following addresses:

Seller: DB-KS, LLC              Buyer:   Series C, LLC
        128 S. Dellrose                  2555 E. Camelback Road, Suite 400
        Wichita, Kansas 67218            Phoenix, Arizona 85016
        Attn: Thomas W. Boyd             Attn: Legal Department
        Fax #: (316) 685-9898            Fax #: 602-778-8780

                                Copy to: Bennett Wheeler Lytle & Cartwright, PLC
                                         3838 N. Central Ave., Suite 1120
                                         Phoenix, Arizona 85012
                                         Attn: J. Craig Cartwright
                                         Fax #: 602-266-9119

     13. Brokers. The parties each represent and warrant to the other that no
real estate broker, salesman or finder has been involved in this transaction
except for JEFF BERG OF CB RICHARD ELLIS (Seller's broker). Seller shall be
responsible for payment of the real estate commission at Closing pursuant to a
separate agreement with the Seller's broker. If any other claim for brokerage
fees in connection with this transaction is made by any broker, salesman or
finder claiming to have dealt through or on behalf of one of the parties hereto,
such party shall indemnify, defend and hold harmless the other party hereunder
from and against all liabilities, damages, claims, costs, fees and expenses
whatsoever with respect to said claim for brokerage fees. THE PRINCIPALS OF
SELLER ARE REAL ESTATE BROKERS LICENSED IN THE STATE OF KANSAS.

     14. Risk of Loss. As between Buyer (and its assigns) and Seller, all risk
of loss shall be borne by Seller until the date of Closing. Seller agrees to
give Buyer prompt written notice of any fire or other casualty affecting the
Property between the date hereof and Closing or of any actual or threatened
taking or condemnation of all or any portion of the Property. If prior to the
Closing there shall occur any such damage, or actual or threatened taking or
condemnation, then in any such event Buyer may at its option terminate this
Contract by notice to Seller within TWENTY



(20) DAYS after Buyer has received the notice referred to above or at the
Closing, whichever is earlier. If Buyer does not so elect to terminate this
Contract, then the Closing shall take place as provided herein without abatement
of the Purchase Price, and there shall be assigned to Buyer at the Closing all
of Seller's interest in and to all insurance proceeds or condemnation award.

     15. Default and Remedies. If Seller defaults hereunder, Buyer may (a)
terminate this Contract by written notice delivered to Seller at or prior to the
Closing, whereupon the Deposit shall immediately be returned to Buyer, or (b)
pursue an action for specific performance against Seller. Notwithstanding the
foregoing, if specific performance is unavailable as a remedy to Buyer because
of Seller's affirmative acts which constitute a default herein, Buyer shall be
entitled to pursue damages against Seller in an amount not to exceed $50,000. If
Buyer defaults hereunder, Seller, as Seller's sole and exclusive remedy for such
default, shall be entitled to terminate this Contract by notice to Buyer and
retain Buyer's Deposit, it being agreed between Buyer and Seller that such sum
shall be liquidated damages for a default of Buyer hereunder because of the
difficulty, inconvenience, and the uncertainty of ascertaining actual damages
for such default. If either Buyer or Seller obtains a judgment against the other
party, reasonable attorney's fees incurred by the prevailing party, as fixed by
the court, shall be included in such judgment and paid by the non-prevailing
party.

     16. Exchange. Each party hereby consents to the other party including this
transaction as part of a tax deferred exchange under Section 1031 of the
Internal Revenue Code and agrees to reasonably cooperate with the other party,
at no cost to the cooperating party, including the execution of any standard
notices and consent forms required by law, provided such forms shall not, in the
reasonable estimation of the non-exchanging party, expand or increase any
obligations or liabilities of such non-exchanging party hereunder. The parties
acknowledge and agree that assigning its rights to a third party intermediary
for purposes of effecting the exchange shall not release such party of its
obligations hereunder.

     17. Assignment. Buyer may assign its rights under this Contract 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 Contract, including specifically, without limitation, all obligations
concerning the Deposit. Buyer may also designate someone other than Buyer, as
grantee and/or assignee, under the conveyance documents by providing written
notice of such designation at least FIVE (5) DAYS prior to Closing. No
assignment shall release or otherwise relieve Buyer from any obligations
hereunder.

     18. Miscellaneous. This Contract shall be construed and governed in
accordance with the laws of the State of Kansas. All the parties to this
Contract have participated fully in the negotiation and preparation hereof; and
accordingly, this Contract shall not be more strictly construed against any one
of the parties hereto. In the event any term or provision of this Contract is
determined by an appropriate judicial authority to be illegal or otherwise
invalid, such provision shall be construed as such authority determines, and the
remainder of this Contract shall be construed to be in full force and effect. In
construing this Contract, the singular shall be held to include the plural, the
plural shall be held to include the singular, the use of any gender shall be
held to include every other and all genders, and captions and paragraph headings
shall be disregarded. All exhibits attached hereto are incorporated in, and made
a part of, this Contract. This Contract constitutes the entire understanding and
agreement between the parties, and there are no understandings, agreements,
representations or warranties except as specifically set forth herein. This
Contract may not be changed, altered or modified except by an instrument in
writing signed by the party against whom enforcement such change would be
sought. This Contract shall be binding upon the parties hereto and their
respective successors and assigns. Time is of the essence of this Contract. All
obligations hereunder which by their nature or by any provision of this Contract
involve performance after the Closing Date, shall survive the Closing and
delivery of the Deed. In the event Buyer assigns this Contract to another party,
Buyer shall remain obligated to perform its obligations hereunder.

     19. 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 Contract to a publicly
registered company ("Registered Company") promoted by Buyer. In the event
Buyer's assignee under this Contract 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 ("SEC Filing Information").
Seller shall deliver the SEC Filing Information requested by Buyer prior to the
expiration of the Due Diligence 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 Closing in form and substance requested
by Buyer's auditors ("SEC Filings Letter"). A sample SEC Filings Letter is
attached to the Purchase Contract as Exhibit E; 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 19 shall survive the Closing
for a period of one (1) year. Buyer shall be solely responsible for all
reasonable costs incurred by Seller in preparing such documentation and shall
provide Seller with adequate notice and opportunity to review and prepare such
information and documentation, and shall provide Seller with reasonable
assistance and counsel in preparing such documentation.

IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS CONTRACT ON THE DATE SHOWN
BELOW. THIS CONTRACT MAY BE SIGNED IN MULTIPLE COUNTERPART ORIGINALS.

                                        DB-KS, LLC


                                        By /s/ Thomas W. Boyd
                                           -------------------------------------
                                           Thomas W. Boyd, Member

                                        Date: 10-11-05


                                        SERIES C, LLC


                                        By /s/ John M. Pons
                                           -------------------------------------
                                           John M. Pons, Authorized Officer

                                        Date: October 11, 2005



                     FIRST AMENDMENT TO REAL ESTATE CONTRACT

     This First Amendment to Real Estate Contract (this "Amendment") is
effective as of the 25th day of October, 2005, by and between SERIES C, LLC, as
Buyer, and DB-KS, LLC, as Seller, and provides as follows:

     WHEREAS, Buyer and Seller entered into that certain Real Estate Contract,
effective as of October 11, 2005 (the "Agreement"), with respect to the improved
property located at 9310-9320 MARSHALL DRIVE, LENEXA, JOHNSON COUNTY, KANSAS;
and

     WHEREAS, Seller and Buyer desire to amend the Agreement to revise the
Purchase Price of the Property and the definition of Closing. All capitalized
terms used herein shall have the meaning given to them in the Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1. The Purchase Price set forth in Section 2 of the Agreement is hereby
revised from "$3,280,000.00" to "$3,270,000.00".

     2. The first sentence of Section 9 of the Agreement is hereby amended and
restated as follows:

          "This Contract shall close on or before the later to occur of the
     following: (a) JANUARY 5, 2006, and (b) satisfaction of the conditions
     described in Section 8 above ("Closing Date")."

     3. Except as provided herein, all terms and conditions of the Agreement
shall remain in full force and effect.

     4. This Amendment shall inure to the benefit of and shall be binding upon
the parties hereto and their respective successors and assigns.

     5. The parties agree that this Amendment may be executed by the parties in
one or more counterparts and each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date set forth above.

BUYER:                                  SERIES C, LLC


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                            John M. Pons
                                        Its: Authorized Officer


SELLER:                                 DB-KS, LLC


                                        By: /s/ Thomas W. Boyd
                                            ------------------------------------
                                            Thomas W. Boyd, Member



                    SECOND AMENDMENT TO REAL ESTATE CONTRACT

     This Second Amendment to Real Estate Contract (this "Amendment") is
effective as of the 16th day of November, 2005, by and between SERIES C, LLC, as
Buyer, and DB-KS, LLC, as Seller, and provides as follows:

     WHEREAS, Buyer and Seller entered into that certain Real Estate Contract,
effective as of October 11, 2005, as amended by that certain First Amendment to
Real Estate Contract dated as of October 25, 2005 (the "Agreement"), with
respect to the improved property located at 9310-9320 MARSHALL DRIVE, LENEXA,
JOHNSON COUNTY, KANSAS; and

     WHEREAS, Seller and Buyer desire to amend the Agreement to revise the
expiration date of the Due Diligence Period. All capitalized terms used herein
shall have the meaning given to them in the Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1. The first sentence of Section 7 of the Agreement is hereby amended and
restated as follows:

          "In addition to Seller's performance of its obligations, including the
     delivery of all documents at Closing, Buyer's obligation to purchase the
     Property is subject to Buyer's satisfaction in its sole discretion with all
     inspections, the condition of the Property, the Lease, and any other
     matters pertaining to the Property (other than Seller's Construction
     Obligations), by no later than NOVEMBER 23, 2005 (the "Due Diligence
     Period")."

     2. Except as provided herein, all terms and conditions of the Agreement
shall remain in full force and effect.

     3. This Amendment shall inure to the benefit of and shall be binding upon
the parties hereto and their respective successors and assigns.

     4. The parties agree that this Amendment may be executed by the parties in
one or more counterparts and each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date set forth above.

BUYER:                                  SERIES C, LLC


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                            John M. Pons
                                        Its: Authorized Officer


SELLER:                                 DB-KS, LLC


                                        By: /s/ Thomas W. Boyd
                                            ------------------------------------
                                            Thomas W. Boyd, Member



                       ASSIGNMENT OF REAL ESTATE CONTRACT

                              DB-KS, 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 Real Estate Contract ("Purchase Agreement") described
herein, to ASSIGNEE and its successors and assigns. The Purchase Agreement is
described as follows:

     DATE OF AGREEMENT: October 11, 2005

     ORIGINAL BUYER:    Series C, LLC

     ASSIGNED TO:       Cole DB Lenexa KS, LLC

     PROPERTY ADDRESS:  9310-9320 Marshall Drive, Lenexa, Kansas

     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 10th day of January, 2006.

ASSIGNOR:                               ASSIGNEE:

SERIES C, LLC,                          COLE DB LENEXA KS, LLC,

                                        By: COLE REIT ADVISORS II, LLC,
                                            its Manager


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

EX-10.38

                                                                   Exhibit 10.38

                                                         DAVID'S BRIDAL - LENEXA
                                                             LOAN NO. 50-2854192

                                 PROMISSORY NOTE

$2,616,000.00                                                   January 11, 2006

     FOR VALUE RECEIVED, the undersigned, COLE DB LENEXA KS, 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 SIXTEEN THOUSAND AND NO/100 DOLLARS ($2,616,000.00),
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 January 11, 2031.

          (d) "Fixed Rate Tranche A" shall mean One Million Seven Hundred
Ninety-Nine Thousand and No/100 Dollars ($1,799,000.00) 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 Seventeen
Thousand and No/100 Dollars ($817,000.00) 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 forty-two one-hundredths percent
(6.42%) 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 January 11, 2011.

          (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 January 11, 2011.

          (o) "Optional Prepayment Determination Date" shall mean November 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 Johnson
County, Kansas.

     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 April 11, 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 eighty-six one-hundredths percent (5.86%) (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 February 11, 2006 (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; and

                    (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.

                    (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
and/or any of its affiliates 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, any untrue statement of a material fact or omission to
state a material fact in the written materials and/or information provided to
Payee or any of its affiliates by or on behalf of Maker or any of its
affiliates, 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 affiliate, 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 and/or any of its affiliates 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 DB LENEXA KS, 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                            $1,799,000.00
Note Rate % (Per Annum)                              5.860%
Original Amortization Term (Months)                  999
Monthly Payment Amount (Excluding IO Period)         $8,785.12
Note Date                                            1/11/2006
First Pay Date                                       2/11/2006
Original Loan Term (Months)                          60
Scheduled Maturity Date                              1/11/2011
Interest Accrual Basis During Amortization Periods   ACTUAL/360
Interest Only (IO) Periods (Months)                  60
Interest Accrual Basis During IO Period              ACTUAL/360



COLE DAVID'S BRIDAL LENEXA KS 502854192



                                                  INTEREST       PRINCIPAL         ENDING
                      ACCRUAL                   COMPONENT OF     COMPONENT         UNPAID
  PAY                 DAYS IN     SCHEDULED       SCHEDULED     SCHEDULED OF     PRINCIPAL
PERIOD    PAY DATE    PERIOD       PAYMENT         PAYMENT        PAYMENT         BALANCE
- ------   ----------   -------   -------------   ------------   -------------   -------------
                                                             
   0      1/11/2006        0    $        0.00    $      0.00   $        0.00   $1,799,000.00
   1      2/11/2006       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
   2      3/11/2006       28    $    8,199.44    $  8,199.44   $        0.00   $1,799,000.00
   3      4/11/2006       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
   4      5/11/2006       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
   5      6/11/2006       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
   6      7/11/2006       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
   7      8/11/2006       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
   8      9/11/2006       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
   9     10/11/2006       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  10     11/11/2006       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  11     12/11/2006       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  12      1/11/2007       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  13      2/11/2007       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  14      3/11/2007       28    $    8,199.44    $  8,199.44   $        0.00   $1,799,000.00
  15      4/11/2007       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  16      5/11/2007       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  17      6/11/2007       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  18      7/11/2007       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  19      8/11/2007       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  20      9/11/2007       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  21     10/11/2007       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  22     11/11/2007       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00




                                                             
  23     12/11/2007       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  24      1/11/2008       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  25      2/11/2008       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  26      3/11/2008       29    $    8,492.28    $  8,492.28   $        0.00   $1,799,000.00
  27      4/11/2008       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  28      5/11/2008       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  29      6/11/2008       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  30      7/11/2008       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  31      8/11/2008       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  32      9/11/2008       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  33     10/11/2008       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  34     11/11/2008       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  35     12/11/2008       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  36      1/11/2009       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  37      2/11/2009       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  38      3/11/2009       28    $    8,199.44    $  8,199.44   $        0.00   $1,799,000.00
  39      4/11/2009       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  40      5/11/2009       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  41      6/11/2009       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  42      7/11/2009       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  43      8/11/2009       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  44      9/11/2009       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  45     10/11/2009       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  46     11/11/2009       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  47     12/11/2009       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  48      1/11/2010       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  49      2/11/2010       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  50      3/11/2010       28    $    8,199.44    $  8,199.44   $        0.00   $1,799,000.00
  51      4/11/2010       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  52      5/11/2010       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  53      6/11/2010       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  54      7/11/2010       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  55      8/11/2010       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  56      9/11/2010       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  57     10/11/2010       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  58     11/11/2010       31    $    9,077.95    $  9,077.95   $        0.00   $1,799,000.00
  59     12/11/2010       30    $    8,785.12    $  8,785.12   $        0.00   $1,799,000.00
  60      1/11/2011       31    $1,808,077.95    $  9,077.95   $1,799,000.00   $        0.00
  60                   1,826    $2,333,720.69    $534,720.69   $1,799,000.00





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 LOGO)

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

J. L. Smith                                                      Date __________
1000

          S.R. Smith
          1234 Sample Street
          Any Where, USA 12345

PAY TO THE
ORDER OF _________________________________________________ $ ___________________

__________________________________________________________ DOLLARS

Memo ___________________________________________________________________________

: 000000000 :   10000001234567    1000

ROUTING #       ACCOUNT #

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-10.39

                                                                   Exhibit 10.39

                               PURCHASE AGREEMENT

                                     BETWEEN

                               NOM ENTERPRISE, LLC

                                    AS SELLER

                                       AND

                                  SERIES C, LLC
                               AND/OR ITS NOMINEE

                                    AS BUYER

                                OCTOBER 25, 2005



                   PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

DATED: Dated to be effective as of October 25, 2005 (the "Effective Date").

PARTIES: This Purchase Agreement is between NOM ENTERPRISE, LLC, as "Seller",
         and SERIES C, LLC, and/or its Nominee, as "Buyer".

                                    RECITALS:

     A. As of the Effective Date, Seller is the fee title owner of that certain
improved property located at the intersection of U.S. Highway 84 and Alabama
Highway 248 (a/k/a Glover Avenue), in Enterprise, Alabama, as legally described
on Exhibit A attached hereto (the "Real Property").

     B. As of the Effective Date, the Real Property is improved with a building
containing approximately 14,564 square feet, or will be so improved prior to COE
(the "Building"), which Building is leased to Rite Aid Corporation ("Tenant") in
accordance with a written lease (the "Lease"), or will be so leased prior to
COE. 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."

     C. 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 (the "Agreement").

                                   AGREEMENTS:

     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 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 the
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.

          3.1 The Property. The term "Property" shall also include the
following:

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

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

               (iii) all interest, if any, of Seller in any road adjoining the
Real Property, to the center line thereof;



               (iv) 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;

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

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

               (vii) the Lease and security deposit, if any, now or hereafter
due thereunder; and

               (viii) all of Seller's interest, to the extent transferable, in
all permits and licenses (the "Permits"), warranties (specifically including,
without limitation, the general contractor's one-year construction warranty with
respect to construction of the Building and other Improvements on the Real
Property and any warranty related to the roof of the Building), contractual
rights and intangibles (including rights to the name of the improvements,
subject to any required approvals, as well as architectural/engineering plans)
with respect to the operation, maintenance, repair or improvement of the
Property (the "Contracts").

          3.2 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 of lease, a specimen of which is
attached hereto as Exhibit C (the "Assignment of Lease"), and 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 THREE MILLION SEVEN HUNDRED FOURTEEN THOUSAND and NO/100 DOLLARS
($3,714,000.00) (the "Purchase Price"), payable as follows:

          (i) 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 North Central Avenue, Suite 2850, Phoenix,
Arizona 85004, Attention: Ms. Mary Garcia ("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

          (ii) the balance 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:

          (i) 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;

          (ii) 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

          (iii) 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 two (2) days after the
Opening of Escrow, Seller shall order from Escrow Agent 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 standard coverage under the Owner's
Policy shall be paid by the Seller. Any additional costs for endorsements
required by Buyer (specifically excluding all endorsements obtained by Seller to
cure one or more title matters objectionable to Buyer) and any additional costs
for extended coverage under the Owner's Policy shall be paid by Buyer. In
addition 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 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 refusal to remove any of
the objectionable exceptions (or obtain title insurance endorsements over said
exceptions and objections) 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
Article 6, then Buyer shall be deemed to have approved of the condition of the
title of the Property as shown by the Report.

     7. BUYER'S STUDY PERIOD.

          7.1 The Study Period. Buyer shall have until the later of 5:00 p.m.
MST on (i) the thirtieth (30th) day after the Opening of Escrow, (ii) thirty
(30) days from Buyer's receipt of all deliveries of Seller's Diligence Materials
(as hereinafter defined), (iii) that day which is ten (10) days from Buyer's
receipt of the Report and legible copies of all documents identified in Part Two
of Schedule B of the Report, or (iv) that day which is ten (10) days from
Buyer's receipt of the Survey (as hereinafter defined) (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) subject to advance notice to Seller and Tenant, meet and confer with
Tenant; and, (iii) obtain, review and approve an environmental study of the Real
Property and Building (collectively, "Buyer's Diligence").

          7.2 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/or
contractors the right to enter upon the Property, at any time or times 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 Diligence. Buyer's indemnity and hold harmless
obligation shall survive cancellation of this Agreement or COE.

          7.3 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 Article
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.

          8.1 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, repair,
zoning (including any zoning verification letters), platting, engineering, soil
tests, water tests, environmental tests, construction (including the Certificate
of Occupancy for the Property), master planning, architectural drawings and like
matters regarding the Property (collectively, "Seller's Diligence Materials"),
all at no cost to Buyer. The foregoing deliveries shall include those items
listed on the attached Exhibit F.

          8.2 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
investigations, studies and/or tests which Buyer may have elected to obtain.

     9. THE SURVEY. Buyer, at Buyer's cost, shall 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 Alabama and delivered to Escrow Agent and
Seller, 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.

     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 Buyer's Diligence.

     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:

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

          (ii) 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;

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

          (iv) 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, in Tenant's standard form, without any punch
list items



remaining, 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;

          (v) 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;

          (vi) 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;

          (vii) the delivery by Seller to Buyer of the final Certificate of
Occupancy for the Improvements;

          (viii) the delivery by Seller to Buyer of an architect's affidavit in
the form attached hereto as Exhibit G;

          (ix) the delivery by Seller to Buyer of the leasehold title insurance
policy provided to Tenant pursuant to the Lease, if any;

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

          (xi) delivery of the SEC Filing Information (as hereinafter defined)
and the SEC Filings Letter (as hereinafter defined) by Seller to Buyer not less
than five (5) days prior to COE; and

          (xii) 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 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.

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

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

          (ii) to the best of 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; and, if any
such notice of violation is issued subsequent to the Effective Date of this
Agreement and prior to COE Seller may, at Seller's sole option, immediately
correct any claimed violations and bear all expenses, fees or related
expenditures in connection therewith arising from or being related to a time
prior to COE either directly or by credit to the Additional Funds due at COE;

          (iii) to the best of 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;



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

          (v) there are no suits or claims pending or, to the best of Seller's
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;

          (vi) 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;

          (vii) 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 the best of Seller's knowledge, there are no pending
proceedings, the object of which would be to change the present zoning or other
land-use limitations;

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

          (ix) 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;

          (x) 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 the Real Property 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 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;

          (xi) no default of Seller exists under any of the Contracts and, to
Seller's knowledge after due 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;

          (xii) if, at any time after the end of the Study Period and prior to
COE, Buyer delivers at least 5 days' prior written demand to Seller requesting
that Seller send a written notice terminating a Contract, Seller shall promptly
do so, provided, however, that such notice shall provide that: [a] the
termination effected thereby is subject to COE taking place; [b] as to the
Contract, the effective date of the termination shall be in accordance with the
Contract being terminated thereby; and, [c] Seller shall fully and timely pay to
the other party to the Contract being terminated all termination costs or
penalties which may be required in accordance with the Contract being
terminated;

          (xiii) no consent of any third party 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 after due
inquiry, no consent of any third party is required in order for Seller to assign
to Buyer the approved Contracts or the Lease;

          (xiv) 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;

          (xv) 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;



          (xvi) between the Effective Date and COE or any earlier termination of
this Agreement, Seller shall not execute or enter into any lease, 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;

          (xvii) Seller agrees that, between the Effective Date and COE or any
earlier termination of this Agreement, Seller shall, at its sole cost:

               [a] continue to operate the Property as heretofore operated by
     Seller subject to Buyer's rights under this Agreement to direct specific
     activities of Seller;

               [b] maintain or cause the Tenant to maintain the Property in its
     current condition and perform required and routine maintenance and make
     replacements of the Property that are tangible property (whether real or
     personal) and perform repairs or make replacements to any broken, defective
     or dysfunctional portions of the Property that are tangible property
     (whether real or personal) as the relevant conditions require;

               [c] pay or cause the 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;

               [d] comply or cause the Tenant to comply with all governmental
     requirements applicable to the Property;

               [e] except as required by a governmental agency, not place or
     permit to be placed on any portion of the Real Property any new
     improvements of any kind or remove or permit any improvements to be removed
     from the Real Property without the prior written consent of Buyer.

               [f] 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 Real
     Property without Buyer's prior written consent; and,

               [g] 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;

          (xviii) 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;

          (xix) to Seller's actual knowledge, there is not now, nor has there
ever been, on or in the Property 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 Hazardous Materials released on the Property prior to COE and
continuing in existence on the Property at COE);



          (xx) to the best of Seller's knowledge there are no proceedings
pending for the increase of the assessed valuation of the Real Property;

          (xxi) should Seller receive notice or knowledge of any information
regarding any of the matters set forth in this Article 13 after the Effective
Date and prior to COE, Seller shall immediately notify Buyer of the same in
writing; and

          (xxii) 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. 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
during said one (1) year period. Seller's indemnity and hold harmless
obligations shall survive COE for a period of one (1) year.

     14. BUYER'S WARRANTIES. Buyer hereby represents to Seller as of the
Effective Date and again as of COE that:

          (i) 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;

          (ii) 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;

          (iii) 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;

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

          (v) 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. 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 during said one (1) year period. Buyer's indemnity and hold
harmless obligations shall survive COE for a period of one (1) year.

     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:

          (i) the Parties warrant to one another that they have not dealt with
any finder, broker or realtor in connection with this Agreement except The
Lennox/Massell Companies ("Seller's Broker");

          (ii) 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 Subparagraph 16(ii) shall
survive cancellation of this Agreement or COE; and



          (iii) Seller shall be responsible for payment of a commission to
Seller's Broker pursuant to a separate written agreement between Seller and
Seller's Broker, which commission shall be paid at COE.

     17. CLOSE OF ESCROW. COE shall be on or before 5:00 p.m. MST on the
fifteenth (15th) day after the commencement of rent under the Lease, or such
earlier date as Buyer may choose by giving not less than five (5) days prior
written notice to Seller and Escrow Agent.

          17.1 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, non-refundable
Twenty-Five Thousand and no/100 Dollars ($25,000.00) of earnest money with
Escrow Agent. For purposes of this Agreement, any additional earnest money
deposited with Escrow Agent pursuant to this Paragraph 17.1 shall be added to
and become a part of the Earnest Money Deposit.

     18. ASSIGNMENT. This Agreement may not be assigned by Seller or Buyer
without the prior written consent of the other Party, which consent shall not be
unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing,
Buyer may assign its rights under this Agreement to an affiliate without seeking
or obtaining Seller's consent.

     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.

     20. REMEDIES.

          20.1 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.

          20.2 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 Subparagraph 5(ii) 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 Paragraph 20.1, 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.

          22.1 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:         NOM ENTERPRISE, LLC
                      3841 Green Hills Village Drive, Suite 400
                      Nashville, TN 37215
                      Attn: Mr. Mark Banks
                      Tel.: (615) 269-5444
                      Fax: (615) 383-6866

if to Buyer:          Series C, 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:   Fidelity National Title Insurance Company
                      40 North Central Avenue, Suite 2850
                      Phoenix, AZ 85004
                      Attn: Ms. Mary Garcia
                      Tel.: (602) 343-7571-0511
                      Fax: (602) 343-7564

          22.2 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 delivery or refusal
of delivery, if mailed or delivered by 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. 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. Seller and Buyer agree to pay closing costs as indicated
in this Agreement and in the escrow instructions attached hereto as Exhibit H,
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 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 Article 23,
Seller and Buyer shall each bear their own costs in regard to this Agreement.

          23.1 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
provisions of this Paragraph 23.1 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. Notwithstanding anything to the
contrary herein, real estate taxes may be adjusted, if necessary, upon receipt
by either party of the final tax bill for the year in which COE occurs.

          23.2 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 Article 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/JURISDICTION/VENUE. This Agreement shall be governed by
and construed or enforced in accordance with the laws of the State of Alabama.

     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.

     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. 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 company that
is subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended ("Registered Company"), promoted by the Buyer or to an affiliate of a
Registered Company (a "Registered Company Affiliate"). In the event Buyer's
assignee under this Agreement is a Registered Company or a Registered Company
Affiliate, the Registered Company will be required to make certain filings with
the U.S. Securities and Exchange Commission required under SEC Rule 3-14 of
Regulation S-X (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 and the Registered Company with financial information regarding
the Property for the Audited Year requested by Buyer, the Registered Company,
and/or Buyer's or the Registered Company'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 ("SEC Filing Information"). Seller shall deliver the SEC Filing
Information requested by Buyer, the Registered Company and/or Buyer's or the
Registered Company's auditors prior to the expiration of the Study Period, and
Seller agrees to cooperate with Buyer, the Registered Company and Buyer's or the
Registered Company's auditors regarding any inquiries by Buyer, the Registered
Company and Buyer's or the Registered Company'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 or the Registered
Company's auditors ("SEC Filings Letter"). A sample SEC Filings Letter is
attached to the Purchase Agreement as Exhibit I; however, Buyer's and/or the
Registered Company'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 37 shall survive the COE for a period of one (1) year.



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

SELLER:                                 NOM ENTERPRISE, LLC

                                        By: Corporate General, Inc., its Manager


                                        By: /s/ Mark McDonald
                                            ------------------------------------
                                        Name: Mark McDonald
                                        Its: Vice President


BUYER:                                  SERIES C, LLC


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                        Name: John M. Pons
                                        Its: Authorized Officer



                            ESCROW AGENT'S ACCEPTANCE

     The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this 25th day of October, 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.

                                       FIDELITY NATIONAL TITLE INSURANCE COMPANY


                                       By /s/ M. Burton
                                          --------------------------------------
                                       Name M. Burton
                                       Its Asst. Commercial Escrow Officer



                        ASSIGNMENT OF PURCHASE AGREEMENT

                         NOM ENTERPRISE, 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 Purchase Agreement (the "Purchase Agreement") described
herein, to ASSIGNEE and its successors and assigns. The Purchase Agreement is
described as follows:

     DATE OF AGREEMENT:   October 25, 2005

     ORIGINAL BUYER:      Series C, LLC

     ASSIGNED TO:         Cole RA Enterprise AL, LLC

     PROPERTY ADDRESS:    901 Rucker Boulevard, Enterprise, AL 36330

     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 26th day of January, 2006.

ASSIGNOR:                               ASSIGNEE:

SERIES C, LLC,                          COLE RA ENTERPRISE AL, LLC, a Delaware
an Arizona limited liability company    limited liability company

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


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

EX-10.40

                                                                   Exhibit 10.40

                                                           RITE AID - ENTERPRISE
                                                             LOAN NO. 50-2854385

                                 PROMISSORY NOTE

$2,971,000.00                                                   January 26, 2006

     FOR VALUE RECEIVED, the undersigned, COLE RA ENTERPRISE AL, 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 NINE HUNDRED SEVENTY-ONE THOUSAND AND NO/100 DOLLARS
($2,971,000.00), 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 February 11, 2036.

          (d) "Fixed Rate Tranche A" shall mean Two Million Forty-Three Thousand
and No/100 Dollars ($2,043,000.00) 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 Nine Hundred Twenty-Eight
Thousand and No/100 Dollars ($928,000.00) 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 fifty-three one-hundredths percent
(6.53%) 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 February 11, 2016.

          (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 February 11, 2016.

          (o) "Optional Prepayment Determination Date" shall mean December 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 Coffee
County, Alabama.

     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 April 26, 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 four-fifths percent (5.80%) (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 March 11, 2006 (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 RA ENTERPRISE AL, 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                            $2,043,000.00
Note Rate % (Per Annum)                              5.800%
Original Amortization Term (Months)                  999
Monthly Payment Amount (Excluding IO Period)         $9,874.50
Note Date                                            1/26/2006
First Pay Date                                       3/11/2006
Original Loan Term (Months)                          120
Scheduled Maturity Date                              2/11/2016
Interest Accrual Basis During Amortization Periods   ACTUAL/360
Interest Only (IO) Periods (Months)                  120
Interest Accrual Basis During IO Period              ACTUAL/360



COLE RITE AID ENTERPRISE AL 502854385



                                                       INTEREST
                          ACCRUAL                    COMPONENT OF       PRINCIPAL
                          DAYS IN     SCHEDULED       SCHEDULED        COMPONENT OF       ENDING UNPAID
PAY PERIOD    PAY DATE     PERIOD      PAYMENT         PAYMENT      SCHEDULED PAYMENT   PRINCIPAL BALANCE
- ----------   ----------   -------   -------------   -------------   -----------------   -----------------
                                                                      
     0        2/11/2006       16    $        0.00   $    5,266.40     $        0.00       $2,043,000.00
     1        3/11/2006       28    $    9,216.20   $    9,216.20     $        0.00       $2,043,000.00
     2        4/11/2006       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
     3        5/11/2006       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
     4        6/11/2006       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
     5        7/11/2006       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
     6        8/11/2006       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
     7        9/11/2006       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
     8       10/11/2006       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
     9       11/11/2006       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    10       12/11/2006       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    11        1/11/2007       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    12        2/11/2007       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    13        3/11/2007       28    $    9,216.20   $    9,216.20     $        0.00       $2,043,000.00
    14        4/11/2007       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    15        5/11/2007       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    16        6/11/2007       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    17        7/11/2007       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    18        8/11/2007       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    19        9/11/2007       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    20       10/11/2007       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    21       11/11/2007       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    22       12/11/2007       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    23        1/11/2008       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00




                                                                      
    24        2/11/2008       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    25        3/11/2008       29    $    9,545.35   $    9,545.35     $        0.00       $2,043,000.00
    26        4/11/2008       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    27        5/11/2008       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    28        6/11/2008       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    29        7/11/2008       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    30        8/11/2008       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    31        9/11/2008       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    32       10/11/2008       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    33       11/11/2008       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    34       12/11/2008       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    35        1/11/2009       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    36        2/11/2009       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    37        3/11/2009       28    $    9,216.20   $    9,216.20     $        0.00       $2,043,000.00
    38        4/11/2009       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    39        5/11/2009       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    40        6/11/2009       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    41        7/11/2009       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    42        8/11/2009       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    43        9/11/2009       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    44       10/11/2009       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    45       11/11/2009       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    46       12/11/2009       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    47        1/11/2010       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    48        2/11/2010       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    49        3/11/2010       28    $    9,216.20   $    9,216.20     $        0.00       $2,043,000.00
    50        4/11/2010       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    51        5/11/2010       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    52        6/11/2010       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    53        7/11/2010       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    54        8/11/2010       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    55        9/11/2010       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    56       10/11/2010       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    57       11/11/2010       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    58       12/11/2010       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    59        1/11/2011       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    60        2/11/2011       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    61        3/11/2011       28    $    9,216.20   $    9,216.20     $        0.00       $2,043,000.00
    62        4/11/2011       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    63        5/11/2011       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    64        6/11/2011       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    65        7/11/2011       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    66        8/11/2011       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    67        9/11/2011       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    68       10/11/2011       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    69       11/11/2011       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    70       12/11/2011       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    71        1/11/2012       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00





                                                                      
    72        2/11/2012       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    73        3/11/2012       29    $    9,545.35   $    9,545.35     $        0.00       $2,043,000.00
    74        4/11/2012       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    75        5/11/2012       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    76        6/11/2012       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    77        7/11/2012       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    78        8/11/2012       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    79        9/11/2012       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    80       10/11/2012       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    81       11/11/2012       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    82       12/11/2012       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    83        1/11/2013       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    84        2/11/2013       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    85        3/11/2013       28    $    9,216.20   $    9,216.20     $        0.00       $2,043,000.00
    86        4/11/2013       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    87        5/11/2013       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    88        6/11/2013       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    89        7/11/2013       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    90        8/11/2013       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    91        9/11/2013       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    92       10/11/2013       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    93       11/11/2013       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    94       12/11/2013       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
    95        1/11/2014       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    96        2/11/2014       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    97        3/11/2014       28    $    9,216.20   $    9,216.20     $        0.00       $2,043,000.00
    98        4/11/2014       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
    99        5/11/2014       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
   100        6/11/2014       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   101        7/11/2014       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
   102        8/11/2014       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   103        9/11/2014       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   104       10/11/2014       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
   105       11/11/2014       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   106       12/11/2014       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
   107        1/11/2015       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   108        2/11/2015       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   109        3/11/2015       28    $    9,216.20   $    9,216.20     $        0.00       $2,043,000.00
   110        4/11/2015       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   111        5/11/2015       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
   112        6/11/2015       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   113        7/11/2015       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
   114        8/11/2015       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   115        9/11/2015       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   116       10/11/2015       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
   117       11/11/2015       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00
   118       12/11/2015       30    $    9,874.50   $    9,874.50     $        0.00       $2,043,000.00
   119        1/11/2016       31    $   10,203.65   $   10,203.65     $        0.00       $2,043,000.00





                                                                      
   120        2/11/2016       31    $2,053,203.65   $   10,203.65     $2,043,000.00       $        0.00
   120                     3,652    $3,245,055.80   $1,202,055.80     $2,043,000.00






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 LOGO)

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

J.L. Smith                                                       Date __________
1000

          S.R. Smith
          1234 Sample Street
          Any Where, USA 12345

PAY TO THE
ORDER OF _________________________________________________ $ ___________________

__________________________________________________________ DOLLARS

Memo ___________________________________________________________________________

: 000000000 : 10000001234567 1000

ROUTING #   ACCOUNT #

BORROWER'S SIGNATURE ________________   BORROWER'S NAME ________________________
Authorized Signature (as it             Print Name
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-10.41

                                                                   Exhibit 10.41

                            MASTER PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                                     BETWEEN

                               NOM DEFIANCE, LLC;
                             NOM LIMA BATH, LTD; AND
                                 NOM WASEON, LLC

                                    AS SELLER

                                       AND

                                  SERIES A, LLC

                                    AS BUYER

                                  JUNE 22, 2005



                            MASTER PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

DATED:     Dated to be effective as of June 22, 2005 (the "Effective Date").

PARTIES:   This Master Purchase Agreement and Escrow Instructions is between NOM
           DEFIANCE; LLC, NOM LIMA BATH,LTD; NOM WAUSEON, LLC (collectively,
           "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 those
certain parcels of improved property listed by address on Exhibit A attached
hereto, and legally described on Exhibit A-1 attached hereto (collectively, the
"Real Property");

     WHEREAS, as of the Effective Date, each parcel of the Real Property is
improved with a building containing that certain number of square feet set forth
on Exhibit A attached hereto (each, a "Building" and, collectively, the
"Buildings"). The Real Property, the Buildings and the improvements to the Real
Property (collectively, the "Improvements") are leased to Rite Aid of Ohio, Inc.
("Tenant") in accordance with a written lease (each, a "Lease" and,
collectively, the "Leases"). The Real Property, the Buildings, the Improvements,
the personal property, if any, of Seller located on the Real Property and
Seller's interest in each of the Leases and all rents issued and profits due or
to become due thereunder are hereinafter collectively referred to as the
"Premises"; and

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

     WHEREAS, the parties hereto have elected to enter into one contract
affecting all three individual properties comprising the Premises
notwithstanding that legal title is held in three different Seller entities
(i.e. fee title to the Defiance Property is held by NOM Defiance, LLC, fee title
to the Lima Property is held by NOM Lima Bath, Ltd., and fee title to the
Wauseon Property is held by NOM Wauseon, LLC), with the intent that each
constituent Seller comprising the "Seller" is agreeing to sell (and make
representations, warranties and other covenants with respect to) only the
individual property to which such constituent Seller holds legal title.

     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 Premises 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.

     3. INCLUSIONS IN PREMISES.

          (a) The Premises. The term "Premises" shall also 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 thereof for damage to the Premises or any portion
thereof 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 Property;

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

               (7) the Leases 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, the general contractor's one-year construction
warranty with respect to the construction of each Building and other
Improvements on the Real Property and any warranty related to the roof of each
Building), 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 Premises (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 Leases, each of
which shall be transferred by that certain assignment and assumption of lease, a
specimen of which is attached hereto as Exhibit C (each, an "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 each of the Premises 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 (each, a
"Deed"). The Bill of Sale, each Assignment of Lease, the Assignment Agreement
and each Deed are hereinafter collectively referred to as the "Transfer
Documents".

     4. PURCHASE PRICE. The aggregate price to be paid by Buyer to Seller for
the Premises is TWELVE MILLION SEVEN HUNDRED FORTY THOUSAND and no/100 Dollars
($12,740,000.00) (the "Purchase Price"), which Purchase Price is allocated among
the Premises as set forth on Exhibit A attached hereto, and is payable as
follows:

          (a) Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00)
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, Escrow Agent: Mary Garcia ("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) Such amounts, 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), set forth in one or more settlement or closing
statements prepared by Escrow Agent and approved by Buyer and Seller in
connection with COE of each of the Premises purchased by Buyer from Seller
pursuant to this Agreement, to be deposited in escrow with Escrow Agent on or
before COE as to such Premises (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.



          (c) Notwithstanding the allocation of Purchase Price, but subject to
the terms and conditions contained herein, it is understood the Buyer's and
Seller's respective obligations hereunder are to purchase and sell all of such
individual properties constituting the Premises for the full Purchase Price.

     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. (a) Within ten (10) days after
the Opening of Escrow, Escrow Agent shall deliver a current Preliminary Title
Report (each, a "Report" and, collectively, 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 Premises to Buyer and Seller. Each Report
shall show the status of title to the applicable Premises as of the date of such
Report and shall also describe the requirements of Escrow Agent for the issuance
of an Owner's Policy corresponding to such Premises as described herein. The
cost of a standard Owner's Policy corresponding to each of the Premises will be
paid for by Seller; Buyer shall pay additional costs for extended coverage
policies. 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
each Report.

          (b) If Buyer is dissatisfied with any exception to title as shown in
any Report (each such 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 each of the Premises to object to any matters
disclosed on or by such Survey that were not previously disclosed by seller's
existing survey corresponding to such Premises), either (i) terminate this
Agreement in its entirety, whereupon this Agreement shall be canceled as to all
of the Premises 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, or (ii) provisionally accept the title to such Premises corresponding
to such Objectionable Report 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.

          If Buyer gives notice to Seller of its election of option (ii) above,
Seller shall notify Buyer in writing within five (5) business 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 affirmative commitment to remove the objectionable exceptions
(or obtain title insurance endorsements over said exceptions and objections, if
acceptable to Buyer) prior to COE.

          (c) In the event any Report is amended (each such Report, an "Amended
Report") to include new exceptions that are not set forth in the prior Report
corresponding to the same Premises, 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 both such 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 in its entirety, whereupon this Agreement shall be canceled as to all
of the Premises 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, or (Z) to provisionally accept the title to such Premises
corresponding to such Amended Report subject to Seller's agreement to cause the
removal of any disapproved exceptions or objections.

          (d) In the event Buyer provisionally accepts title to a Premises
corresponding to either an Objectionable Report and/or an Amended Report
pursuant to Sections 6(b) and/or 6(c) above, if Seller serves notice to Buyer
that Seller does not intend to remove such exceptions and/or objections from an
Objectionable Report and/or an Amended Report, as applicable, 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 in its entirety, whereupon this Agreement shall be canceled as to
all of the Premises 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, or (ii) waive such objections. If written notice of either
satisfaction or dissatisfaction as to any 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 Premises corresponding to each
such Report, and shall have elected to remove the Premises corresponding to each
such Report from this Agreement as set forth in Section 6 terminate this
agreement above.

     7. BUYER'S STUDY PERIOD.

          (a) The Study Period. As to any particular Premises, Buyer shall have
until the later of 5:00 p.m. MST on (i) the thirtieth (30th) day after the
Opening of Escrow; (ii) thirty (30) days from Buyer's receipt of all deliveries
of Seller's Diligence Materials (as hereinafter defined) related to such
Premises; (iii) that day which is ten (10) days after receipt of the Report and
legible copies of all documents identified in Part Two of Schedule B of the
Report; or (iv) that day which is ten (10) days from Buyer's receipt of the
Survey (as hereinafter defined) (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 each of the Premises, including, without limitation, Buyer's right to:
(x) review and approve each Survey, each Lease, Seller's operating statements
with respect to each of the Premises, and the Contracts; (y) meet and confer
with Tenant; and, (z) obtain, review and approve an environmental study of each
of the Premises (collectively, "Buyer's Diligence").

          (b) Right of Entry. Subject to the prior rights of Tenant in the
Premises, Seller hereby grants to Buyer and Buyer's agents, employees and
contractors the right to enter upon each of the Premises, at any time or times
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 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 as to
some or all of the Premises and waiver of the contingencies as set forth in this
Section 7, this Agreement shall be canceled as to all of the Premises 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.

     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 (including the Certificate of Occupancy for each of the Premises),
repair, zoning (including any zoning verification letters), platting,
engineering, soil tests, water tests, environmental tests (including without
limitation those set forth on the attached Exhibit H), master planning,
architectural drawings and like matters regarding each of the Premises
(collectively, "Seller's Diligence Materials"), all at no cost to Buyer. The
foregoing deliveries shall include, but not be limited to, copies of all: (i)
books of account and records for each of the Premises; (ii) Lease corresponding
to each of the Premises (including any amendments thereto and tenant deposit
list in regard thereto);



(iii) a detailed listing of all capital expenditures on each of the Premises;
(iv) the maintenance history of each of the Premises; (v) current maintenance,
management, and listing contracts for each of the Premises including any
amendments thereto; (vi) all claims or suits by Tenant or third-parties
involving any of the Premises or any of the Leases or any Contracts (whether or
not covered by insurance); and (vii) a list of all claims or suits by or against
Seller regarding any of the Premises for the last thirty-six (36) months; (vii)
any appraisals of any of the Premises or any part therof; (ix) the site plan
with respect to each of the Premises; and (x) any other documents or other
information in the possession or control of Seller or its agents pertaining to
the Premises that Buyer may reasonably request in writing.

          (b) Delivery by Buyer. If this Agreement is canceled as to all of the
Premises 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 investigations, studies and/or tests which Buyer may have
elected to obtain.

     9. THE SURVEYS. 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 comprising each of the Premises (each, a "Survey" and,
collectively, the "Surveys") to be completed by a surveyor licensed in the State
in which the applicable Premises is located and delivered to Buyer and Escrow
Agent, whereupon the legal descriptions in the Surveys shall control over the
descriptions in Exhibit A-1 attached hereto to the extent they may be
inconsistent. Each Survey shall set forth the legal description and boundaries
of the applicable 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 each of the
Premises to Buyer at COE subject only to the rights of Tenant under each of the
Leases as approved by Buyer as part of Buyer's Diligence.

     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 Policies (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 each of the Leases, 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,
without any punch list items remaining, 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 each of the Leases;



          (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 each of the Leases;

          (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 each of the Owner's Policies;

          (g) the delivery by Seller to Buyer of the Certificate of Occupancy
for each of the Premises;

          (h) the delivery by Seller to Buyer of the leasehold title insurance
policy provided to Tenant for each of the Premises, if any is required under the
Leases;

          (h) the delivery by Seller to Buyer of an architect's affidavit for
each of the Premises, in the form attached hereto as Exhibit F;

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

          (i) delivery to Buyer of fully-executed originals of each 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 each of the Premises.

If the foregoing conditions have not been satisfied as to any of the Premises 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 as it relates to such Premises, whereupon the Purchase
Price shall be reduced by the amount corresponding to each of such Premises as
set forth on Exhibit A attached hereto and this Agreement shall continue in full
force and effect as to all remaining Premises. In the event this Agreement is
canceled for all of the Premises, 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:

          (a) there are no unrecorded leases (other than the Leases), liens or
encumbrances which may affect title to any of the Premises;

          (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 any of the Premises
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 any of the
Premises which will result in a lien upon any of the Premises;

          (d) to Seller's knowledge, there is no impending or contemplated
condemnation or taking by inverse condemnation of any of the Premises, 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 any of the Premises, 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 any of the Premises, 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 any of the Premises, 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;

          (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 any
of the Premises 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 any of the Premises (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
any of the Premises, 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;

          (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 each of the Premises as heretofore
operated by Seller subject to Buyer's rights under this Agreement to direct
specific activities of Seller;

               (2) maintain or cause Tenant to maintain each of the Premises in
its current condition and perform required and routine maintenance and make
replacements of each part of the Premises that is tangible property (whether
real or personal) and perform repairs or make replacements to any broken,
defective or disfunctioning portion of any of the Premises 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 Premises up to COE;

               (4) comply or cause Tenant to comply with all governmental
requirements applicable to the Premises;

               (5) except as required by a governmental agency, not place or
permit to be placed on any portion of any of the Premises any new improvements
of any kind or remove or permit any improvements to be removed from any of the
Premises 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 any of the Premises 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 any of the Premises 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 any of the Premises 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) Except as noted in the Environmental Site Assessments listed on
Exhibit H, copies of which have been provided Buyer, to Seller's actual
knowledge, there is not now, nor has there ever been, on or in any of the
Premises 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 any of the
Premises (including Hazardous Materials released on any of the Premises prior to
COE and continuing in existence on any of the Premises at COE);

          (r) to Seller's knowledge, there are no proceedings pending for the
increase of the assessed valuation of any of the Premises or any portion
thereof;

          (s) 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;

          (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.

     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. 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.


     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 all security deposits and
advance rents paid/abatements with respect to any of the Leases, 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:

          (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 ("Sage") and Realty Fund Advisors, LLC ("Realty");

          (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 Sage and/or Realty), 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 Sage in
an amount equal to one percent (1.0%) of the Purchase Price, and a commission to
Realty in an amount equal to one-half percent (0.5%) of the Purchase Price,
which commissions shall be paid at COE.

     17. CLOSE OF ESCROW. COE as to each of the Premises shall be on or before
5:00 p.m. MST on the later of (i) the thirtieth (30th) day after the expiration
of the Study Period (as such Study Period may be extended pursuant to Section
6(b) hereof) or (ii) the date which is ten (10) days after the Tenant commences
paying rent under the Lease, or such earlier date as Buyer may choose by giving
written notice thereof to Seller and Escrow Agent. Notwithstanding the
foregoing, in no event shall COE occur later than December 15, 2005. Buyer may
extend the COE date as to each of the Premises 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 corresponding to such Premises 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 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. 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 Premises which may occur prior to COE. In the event of any loss, damage or
taking with respect to any of the Premises prior to COE, Buyer may, at Buyer's
sole option, by written notice to Seller and Escrow Agent, remove such Premises
from this Agreement (each, a "Rejected Property") and the Purchase Price shall
be reduced by the amount corresponding to such Rejected Property as set forth in
Exhibit A attached hereto, and this Agreement shall continue in full force and
effect with respect to all remaining Premises. 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 remove such Rejected Property from this Agreement
as provided above. If Buyer waives any such loss or damage to any such Premises
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 any loss,
damage or taking with respect to all of the Premises prior to COE and Buyer
elects to remove all Premises from this Agreement, then this Agreement shall
automatically terminate, 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.

     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 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 16.

          (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:         Newton Oldacre McDonald
                      3841 Green Hill Village Drive, Suite 400
                      Nashville, TN 37215
                      Attn: Mark Banks and Woody Camp, Esq.
                      Tel.: (615) 269-5444
                      Fax: (615) 383-6866

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 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: (888) 788-4629

          (b) All notices, elections, requests and other communication hereunder
shall be in writing and shall be deemed given (i) when personally delivered, or
(ii) upon receipt or refusal by the addressee after being deposited in the
United States mail, postage prepaid, certified or registered, or (iii) the next
business day after being deposited with a recognized overnight mail or courier
delivery service, or (iv) when transmitted by facsimile or telecopy
transmission, with receipt acknowledged upon transmission; addressed as follows
(or to such other person or at such other address, of which any party hereto
shall have given written notice as provided 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 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 Premises, 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 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 Deleted.

     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 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 United States District Court for the
District of Arizona in Phoenix and in the Superior Court of Arizona in Maricopa
County, Arizona.

     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.

     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.



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

SELLER:                                 NOM DEFIANCE, LLC

                                        By: Corporate General, Inc.,
                                            sole manager


                                        By: /s/ Mark McDonald
                                            ------------------------------------
                                        Its: V.P.


                                        NOM LIMA BATH, LTD.

                                        By: Corporate General, Inc.,
                                            general partner


                                        By: /s/ Mark McDonald
                                            ------------------------------------
                                        Its: V.P.


                                        NOM WAUSEON, LLC

                                        By: Corporate General, Inc.,
                                            sole manager


                                        By: /s/ Mark McDonald
                                            ------------------------------------
                                        Its: V.P.


BUYER:                                  SERIES A, LLC


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                            John M. Pons
                                            Authorized Officer



                            ESCROW AGENT'S ACCEPTANCE

     The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this 22nd day of June, 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.

                                        FIDELITY NATIONAL TITLE
                                        INSURANCE COMPANY


                                        By: /s/ Mary Garcia
                                            ------------------------------------
                                        Title: VP, Senior Commercial
                                               Escrow Officer



                                    EXHIBIT A

                                THE REAL PROPERTY



                                                  ALLOCATED PURCHASE
PROPERTY ADDRESS        BUILDING SQUARE FOOTAGE          PRICE
- ----------------        -----------------------   ------------------
                                            
North Sessions Ave &    14,564 square feet           $4,220,804.00
North Clinton Street,
Defiance, OH 43512

Belefontaine Ave &      14,564 square feet           $4,625,517.00
S. Leonard Street,
Lima, OH

Shoop Ave & U.S.        14,564 square feet           $3,893,679.00
Highway 20,
Wauseon, OH 43567




                     ASSIGNMENT OF MASTER PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

          NOM DEFIANCE, LLC; NOM LIMA BATH, LTD; AND NOM WAUSEON, LLC,
                             COLLECTIVELY, AS SELLER
                                       AND
                               SERIES A, 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 Master Purchase Agreement and Escrow Instructions (the
"Purchase Agreement") described herein, but only as it relates to the purchase
of the real property described below, to ASSIGNEE and its successors and
assigns. The Purchase Agreement is described as follows:

     DATE OF AGREEMENT:   June 22, 2005

     ORIGINAL BUYER:      Series A, LLC

     ASSIGNED TO:         Cole RA Wauseon OH, LLC

     PROPERTY ADDRESS:    1496 N. Shoop, Wauseon, 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, as it relates to the real property
described above. This Assignment shall be in full force and effect upon its full
execution.

     Executed this 26th day of January, 2006.

ASSIGNOR:                               ASSIGNEE:

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

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


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

EX-10.42

                                                                   Exhibit 10.42

                                                              RITE AID - WAUSEON
                                                             LOAN NO. 50-2852808

                                 PROMISSORY NOTE

$3,115,000.00                                                   January 26, 2006

     FOR VALUE RECEIVED, the undersigned, COLE RA WAUSEON OH, 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 ONE HUNDRED FIFTEEN THOUSAND AND NO/100 DOLLARS ($3,115,000.00),
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 February 11, 2036.

          (d) "Fixed Rate Tranche A" shall mean Two Million One Hundred
Forty-Two Thousand and No/100 Dollars ($2,142,000.00) 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 Nine Hundred Seventy-Three
Thousand and No/100 Dollars ($973,000.00) 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 fifty-three one-hundredths percent
(6.53%) 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 February 11, 2016.

          (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 February 11, 2016.

          (o) "Optional Prepayment Determination Date" shall mean December 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 Fulton
County, Ohio.

     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 April 26, 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 four-fifths percent (5.80%) (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 March 11, 2006 (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 RA WAUSEON OH, 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                            $2,142,000.00
Note Rate % (Per Annum)                              5.800%
Original Amortization Term (Months)                  999
Monthly Payment Amount (Excluding IO Period)         $10,353.00
Note Date                                            1/26/2006
First Pay Date                                       3/11/2006
Original Loan Term (Months)                          120
Scheduled Maturity Date                              2/11/2016
Interest Accrual Basis During Amortization Periods   ACTUAL/360
Interest Only (IO) Periods (Months)                  120
Interest Accrual Basis During IO Period              ACTUAL/360



COLE RITE AID WAUSEON OH 502852808



                                                       INTEREST       PRINCIPAL
                          ACCRUAL                    COMPONENT OF     COMPONENT     ENDING UNPAID
                          DAYS IN     SCHEDULED       SCHEDULED      OF SCHEDULED     PRINCIPAL
PAY PERIOD    PAY DATE     PERIOD      PAYMENT         PAYMENT         PAYMENT         BALANCE
- ----------   ----------   -------   -------------   -------------   -------------   -------------
                                                                  
0            2/11/2006        16    $        0.00   $    5,521.60   $        0.00   $2,142,000.00
1            3/11/2006        28    $    9,662.80   $    9,662.80   $        0.00   $2,142,000.00
2            4/11/2006        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
3            5/11/2006        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
4            6/11/2006        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
5            7/11/2006        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
6            8/11/2006        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
7            9/11/2006        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
8            10/11/2006       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
9            11/11/2006       31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
10           12/11/2006       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
11           1/11/2007        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
12           2/11/2007        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
13           3/11/2007        28    $    9,662.80   $    9,662.80   $        0.00   $2,142,000.00
14           4/11/2007        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
15           5/11/2007        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
16           6/11/2007        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
17           7/11/2007        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
18           8/11/2007        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
19           9/11/2007        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
20           10/11/2007       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
21           11/11/2007       31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
22           12/11/2007       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00



                                                                  
23           1/11/2008        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
24           2/11/2008        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
25           3/11/2008        29    $   10,007.90   $   10,007.90   $        0.00   $2,142,000.00
26           4/11/2008        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
27           5/11/2008        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
28           6/11/2008        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
29           7/11/2008        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
30           8/11/2008        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
31           9/11/2008        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
32           10/11/2008       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
33           11/11/2008       31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
34           12/11/2008       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
35           1/11/2009        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
36           2/11/2009        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
37           3/11/2009        28    $    9,662.80   $    9,662.80   $        0.00   $2,142,000.00
38           4/11/2009        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
39           5/11/2009        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
40           6/11/2009        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
41           7/11/2009        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
42           8/11/2009        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
43           9/11/2009        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
44           10/11/2009       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
45           11/11/2009       31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
46           12/11/2009       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
47           1/11/2010        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
48           2/11/2010        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
49           3/11/2010        28    $    9,662.80   $    9,662.80   $        0.00   $2,142,000.00
50           4/11/2010        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
51           5/11/2010        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
52           6/11/2010        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
53           7/11/2010        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
54           8/11/2010        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
55           9/11/2010        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
56           10/11/2010       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
57           11/11/2010       31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
58           12/11/2010       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
59           1/11/2011        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
60           2/11/2011        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
61           3/11/2011        28    $   9,662.80    $    9,662.80   $        0.00   $2,142,000.00
62           4/11/2011        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
63           5/11/2011        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
64           6/11/2011        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
65           7/11/2011        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
66           8/11/2011        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
67           9/11/2011        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
68           10/11/2011       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
69           11/11/2011       31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
70           12/11/2011       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00




                                                                  
71           1/11/2012        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
72           2/11/2012        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
73           3/11/2012        29    $   10,007.90   $   10,007.90   $        0.00   $2,142,000.00
74           4/11/2012        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
75           5/11/2012        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
76           6/11/2012        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
77           7/11/2012        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
78           8/11/2012        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
79           9/11/2012        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
80           10/11/2012       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
81           11/11/2012       31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
82           12/11/2012       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
83           1/11/2013        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
84           2/11/2013        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
85           3/11/2013        28    $    9,662.80   $    9,662.80   $        0.00   $2,142,000.00
86           4/11/2013        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
87           5/11/2013        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
88           6/11/2013        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
89           7/11/2013        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
90           8/11/2013        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
91           9/11/2013        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
92           10/11/2013       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
93           11/11/2013       31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
94           12/11/2013       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
95           1/11/2014        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
96           2/11/2014        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
97           3/11/2014        28    $    9,662.80   $    9,662.80   $        0.00   $2,142,000.00
98           4/11/2014        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
99           5/11/2014        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
100          6/11/2014        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
101          7/11/2014        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
102          8/11/2014        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
103          9/11/2014        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
104          10/11/2014       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
105          11/11/2014       31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
106          12/11/2014       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
107          1/11/2015        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
108          2/11/2015        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
109          3/11/2015        28    $    9,662.80   $    9,662.80   $        0.00   $2,142,000.00
110          4/11/2015        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
111          5/11/2015        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
112          6/11/2015        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
113          7/11/2015        30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
114          8/11/2015        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
115          9/11/2015        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
116          10/11/2015       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00
117          11/11/2015       31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
118          12/11/2015       30    $   10,353.00   $   10,353.00   $        0.00   $2,142,000.00




                                                                  
119          1/11/2016        31    $   10,698.10   $   10,698.10   $        0.00   $2,142,000.00
120          2/11/2016        31    $2,152,698.10   $   10,698.10   $2,142,000.00   $        0.00
120                        3,652    $3,402,305.20   $1,260,305.20   $2,142,000.00




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 LOGO)
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

J.L. Smith                                                       Date __________
1000

          S.R Smith
          1234 Sample Street
          Any Where, USA 12345

PAY TO THE
ORDER OF _________________________________________________ $ ___________________

__________________________________________________________ DOLLARS

Memo ___________________________________________________________________________

: 000000000 :    10000001234567   1000

ROUTING #       ACCOUNT #

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-10.43

                                                                   Exhibit 10.43

                               PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                                     BETWEEN

                             WILLIAM F. GRAHAM, PTRS

                                    AS SELLER

                                       AND

                                  SERIES C, LLC

                                    AS BUYER

                                   ----------



                   PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

DATED: Dated to be effective as of October 25, 2005 (the "Effective Date").

PARTIES: This Purchase Agreement and Escrow Instructions is between William F.
         Graham PTRS, a Tennessee general partnership, as "Seller", and Series
         C, 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 2547 N. Main Street, Crossville, Tennessee,
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 23,942 square feet (the "Building") which
Building is leased to Staples The Office Superstore East, Inc. ("Tenant") in
accordance with a written lease, and any guaranties related thereto
(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 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.

     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 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 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) 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 Nine Hundred Thousand and no/100 Dollars ($2,900,000.00) (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 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) Two Million Eight Hundred Thousand and no/100 Dollars
($2,800,000.00) 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 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 and the Survey, 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 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 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 the later of 5:00 p.m.
MST on (i) the thirtieth (30th) day after the Opening of Escrow, or (ii) thirty
(30) days from Buyer's receipt of all deliveries of Seller's Diligence Materials
(as hereinafter defined) (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").

          (b) Right of Entry. Subject to the prior rights of the Tenant in the
Property, Seller hereby grants to Buyer and Buyer's agents, employees and
contractors the right to enter upon the Property, at any time or times 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 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. 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 (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"), all at no cost to Buyer. The foregoing deliveries shall include,
but not be limited to, copies of all: (i) books of account and records for the
Property for the last twenty-four (24) months (including year-end Tenant CAM
expense reconciliations); (ii) the Lease, including any amendments thereto and a
copy of the leasehold title insurance policy delivered to Tenant; (iii) a
detailed listing of all capital expenditures on the Property for the last
thirty-six (36) months; (iv) the maintenance history of the Property for the
last twenty-four (24) months; (v) current maintenance, management, and listing
contracts for the Property including any amendments thereto; (vi) all claims or
suits by Tenant or third parties involving the Property or the Lease or any
Contracts (whether or not covered by insurance); (vii) a list of all claims or
suits by or against Seller regarding the Property for the last thirty-six (36)
months; (viii) any appraisals of the Property; (ix) the existing survey and site
plan with respect to the Property; and (x) any other documents or other
information in the possession 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
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 thirty (30) days of
Opening of Escrow, cause a surveyor licensed in the State of Tennessee to
complete and deliver to Escrow Agent and Buyer a current, certified ALTA survey
of the Real Property, Building and Improvements (the "Survey"), 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.

     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 Buyer's Diligence.

     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 not later than ten (10) business
days prior to COE 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, 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 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 the right of first refusal
under the Lease, which Seller shall seek to obtain immediately after the
Effective Date; notwithstanding anything herein, this Agreement shall be deemed
terminated upon receipt of written notice and verifying documentation by Buyer
from Seller that Tenant has exercised its right of first refusal under the
Lease, in which event 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;

          (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 final Certificate of
Occupancy for the Improvements;

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

          (i) delivery of the SEC Filing Information (as hereinafter defined)
and the SEC Filings Letter (as hereinafter defined) by Seller to Buyer not less
than five (5) days prior to COE; and

          (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 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.

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

          (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 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 knowledge after due inquiry, 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 after due inquiry, no default 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) 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) 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;

          (p) to Seller's actual knowledge, there is not now, nor has there ever
been, on or in the Property 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 Hazardous
Materials released on the Property prior to COE and continuing in existence on
the Property at COE);



          (q) 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 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) 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

          (t) 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.

     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. 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.

     15. 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 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 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.

     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 Bryan
Stanley of Great Southern Development ("Seller's Broker") and Gary Turner of
Turner Net Lease Properties, Inc. ("Buyer'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 and/or



Buyer'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 all commissions to
Seller's Broker and Buyer's Broker pursuant to separate agreements between the
parties.

     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 Fifty Thousand and no/100 Dollars ($50,000.00) 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. 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.

     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:       William F. Graham, PTRS
                    P.O. Box 313
                    Crossville, TN 38557
                    Tel.: (931) 456-5123
                    Fax: (931) 456-5123

with copies to:     Looney, Looney & Chadwell, PLLC
                    156 Rector Avenue
                    Crossville, TN 38555
                    Attn: Kenneth Chadwell
                    Tel: (931) 484-7569
                    Fax: (931) 484-4488

if to Buyer:        Series C, 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: J. Craig Cartwright
                    Tel.: (602) 445-3433
                    Fax: (602) 266-9119

If to Escrow Agent: Lawyers Title Insurance Corporation
                    1850 N. Central Ave., 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) 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 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. 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 Lease arising from
events occurring prior to COE.

     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 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 United States District Court for the
District of Arizona in Phoenix and in the Superior Court of Arizona in Maricopa
County, Arizona.

     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.

     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. 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 company that
is subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended ("Registered Company"), promoted by the Buyer or to an affiliate of a
Registered Company (a "Registered Company Affiliate"). In the event Buyer's
assignee under this Agreement is a Registered Company or a Registered Company
Affiliate, the Registered Company will be required to make certain filings with
the U.S. Securities and Exchange Commission required under SEC Rule 3-14 of
Regulation S-X (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 and the Registered Company with financial information regarding
the Property for the Audited Year requested by Buyer, the Registered Company,
and/or Buyer's or the Registered Company'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 ("SEC Filing Information"). Seller shall deliver the SEC Filing
Information requested by Buyer, the Registered Company and/or Buyer's or the
Registered Company's auditors prior to the expiration of the Study Period, and
Seller agrees to cooperate with Buyer, the Registered Company and Buyer's or the
Registered Company's auditors regarding any inquiries by Buyer, the Registered
Company and Buyer's or the Registered Company'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 or the Registered
Company's auditors ("SEC Filings Letter"). A sample SEC Filings Letter is
attached to the Purchase Agreement as Exhibit G; however, Buyer's and/or the
Registered Company'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 37 shall survive the COE for a period of one (1) year.

               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

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

SELLER:                                 WILLIAM F. GRAHAM, PTRS


                                        By: /s/ William F. Graham
                                            ------------------------------------
                                            William F. Graham, Partner


BUYER:                                  SERIES C, LLC, an Arizona limited
                                        liability company


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                            John M. Pons
                                        Its: Authorized Officer



                            ESCROW AGENT'S ACCEPTANCE

     The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this 25 day of October, 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 S. Brown
                                            ------------------------------------
                                        Title: Accounts Administrator



          FIRST AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

     This First Amendment to Purchase Agreement and Escrow Instructions (this
"Amendment") is effective as of the 11 day of November, 2005, by and between
SERIES C, LLC, as Buyer, and WILLIAM F. GRAHAM, PTRS, as Seller, and provides as
follows:

     WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions, effective as of October 25, 2005 (the "Agreement"), with
respect to the improved property located at 2547 N. Main Street, Crossville,
Tennessee (the "Agreement");

     WHEREAS, Seller and Buyer desire to amend the Agreement to revise the
definition of Closing. All capitalized terms used herein shall have the meaning
given to them in the Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1. The first sentence of Section 17 of the Agreement is hereby amended and
restated as follows:

          COE shall be on or before 5:00 p.m. MST on January 11, 2006, or such
     earlier date as Buyer may choose by giving not less than five (5) days
     prior written notice to Seller and Escrow Agent.

     2. Except as provided herein, all terms and conditions of the Agreement
shall remain in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date set forth above.

BUYER:                                  SERIES C, LLC


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                            John M. Pons
                                        Its: Authorized Officer


SELLER:                                 WILLIAM F. GRAHAM, PTRS


                                        By: /s/ William F. Graham
                                            ------------------------------------
                                            William F. Graham
                                        Its: Partner



                     SECOND AMENDMENT TO PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

     This Second Amendment to Purchase Agreement and Escrow Instructions (this
"Amendment") is effective as of the 30th day of November, 2005, by and between
SERIES C, LLC, as Buyer, and WILLIAM F. GRAHAM, PTRS, as Seller, and provides as
follows:

     WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions, effective as of October 25, 2005, as amended by that
certain First Amendment to Purchase Agreement and Escrow Instructions dated as
of November 11, 2005 (collectively, the "Agreement"), with respect to the
improved property located at 2547 N. Main Street, Crossville, Tennessee (the
"Agreement");

     WHEREAS, Seller and Buyer desire to amend the Agreement to revise the date
on which the Study Period expires All capitalized terms used herein shall have
the meaning given to them in the Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1. Section 7(a) of the Agreement is hereby amended and restated as follows:

          Buyer shall have until 5:00 p.m. MST on December 2, 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").

     2. Except as provided herein, all terms and conditions of the Agreement
shall remain in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date set forth above.

BUYER:                                  SERIES C, LLC


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                            John M. Pons
                                        Its: Authorized Officer


SELLER:                                 WILLIAM F. GRAHAM, PTRS


                                        By: /s/ William F. Graham
                                            ------------------------------------
                                            William F. Graham
                                        Its: Partner



          THIRD AMENDMENT TO PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

     This Third Amendment to Purchase Agreement and Escrow Instructions (this
"Amendment") is effective as of the 11th day of January, 2006, by and between
SERIES C, LLC, as Buyer, and WILLIAM F. GRAHAM, PTRS, as Seller, and provides as
follows:

     WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions, effective as of October 25, 2005, as amended (the
"Agreement"), with respect to the improved property located at 2547 N. Main
Street, Crossville, Tennessee (the "Property");

     WHEREAS, Seller and Buyer desire to amend the Agreement to revise the
definition of Closing. All capitalized terms used herein shall have the meaning
given to them in the Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1. The first sentence of Section 17 of the Agreement is hereby amended and
restated as follows:

          COE shall be on or before 5:00 p.m. MST on the later to occur of (a)
     January 31, 2006, or (b) three (3) business days after the satisfaction or
     waiver of the conditions set forth on the attached Schedule I.
     Notwithstanding the foregoing, Buyer may choose an earlier date by giving
     not less than two (2) days prior written notice to Seller and Escrow Agent.

     2. Except as provided herein, all terms and conditions of the Agreement
shall remain in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date set forth above.

BUYER:                                  SERIES C, LLC


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                            John M. Pons
                                        Its: Authorized Officer


SELLER:                                 WILLIAM F. GRAHAM, PTRS


                                        By: /s/ William F. Graham
                                            ------------------------------------
                                            William F. Graham
                                        Its: Partner



                                   SCHEDULE I

1.   Full execution and recordation of the Temporary Driveway Easement, in form
     approved by Tenant and reasonably acceptable to Buyer.

2.   Completion of restriping activities at the Property.

3.   Receipt of Subordination, Nondisturbance and Attornment Agreement, executed
     by Tenant in recordable form.

4.   Receipt of estoppel from Tenant, indicating that the Lease is in full force
     and effect with no defaults by Landlord.



            ASSIGNMENT OF PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

                       WILLIAM F. GRAHAM, PTRS, 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 Purchase Agreement and Escrow Instructions ("Purchase
Agreement") described herein, to ASSIGNEE and its successors and assigns. The
Purchase Agreement is described as follows:

     DATE OF AGREEMENT: October 25, 2005, as amended

     ORIGINAL BUYER:    Series C, LLC

     ASSIGNED TO:       Cole ST Crossville TN, LLC

     PROPERTY ADDRESS:  2547 North Main Street, Crossville, TN

     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 25th day of January, 2006.

ASSIGNOR:                               ASSIGNEE:

SERIES C, LLC,                          COLE ST CROSSVILLE TN, LLC

                                        By: Cole REIT Advisors II, LLC,
                                            its Manager


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

EX-10.44

                                                                   Exhibit 10.44

                                                            STAPLES - CROSSVILLE
                                                             LOAN NO. 50-2854240

                                 PROMISSORY NOTE

$2,320,000.00                                                   January 26, 2006

     FOR VALUE RECEIVED, the undersigned, COLE ST CROSSVILLE TN, 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 THREE HUNDRED TWENTY THOUSAND AND NO/100 DOLLARS ($2,320,000.00),
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 February 11, 2031.

          (d) "Fixed Rate Tranche A" shall mean One Million Eight Hundred
Eighty-Five Thousand and No/100 Dollars ($1,885,000.00) 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 Four Hundred Thirty-Five
Thousand and No/100 Dollars ($435,000.00) 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 fifty-three one-hundredths percent
(6.53%) 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 February 11, 2011.

          (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 February 11, 2011.

          (o) "Optional Prepayment Determination Date" shall mean December 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 Cumberland
County, Tennessee.

     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 April 26, 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 seventy-one one-hundredths percent (5.71%) (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 March 11, 2006 (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 ST CROSSVILLE TN, 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                            $1,885,000.00
Note Rate % (Per Annum)                              5.710%
Original Amortization Term (Months)                  999
Monthly Payment Amount (Excluding IO Period)         $8,969.46
Note Date                                            1/26/2006
First Pay Date                                       3/11/2006
Original Loan Term (Months)                          60
Scheduled Maturity Date                              2/11/2011
Interest Accrual Basis During Amortization Periods   ACTUAL/360
Interest Only (IO) Periods (Months)                  60
Interest Accrual Basis During IO Period              ACTUAL/360



COLE STAPLES CROSSVILLE TN 502854240



                                                   INTEREST        PRINCIPAL
                       ACCRUAL                   COMPONENT OF    COMPONENT OF   ENDING UNPAID
 PAY                   DAYS IN     SCHEDULED       SCHEDULED      SCHEDULED       PRINCIPAL
PERIOD    PAY DATE     PERIOD       PAYMENT         PAYMENT        PAYMENT         BALANCE
- ------   ----------   --------   -------------   ------------   -------------   -------------
                                                              
   0      2/11/2006        16    $        0.00    $  4,783.68   $        0.00   $1,885,000.00
   1      3/11/2006        28    $    8,371.49    $  8,371.49   $        0.00   $1,885,000.00
   2      4/11/2006        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
   3      5/11/2006        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
   4      6/11/2006        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
   5      7/11/2006        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
   6      8/11/2006        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
   7      9/11/2006        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
   8     10/11/2006        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
   9     11/11/2006        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  10     12/11/2006        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  11      1/11/2007        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  12      2/11/2007        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  13      3/11/2007        28    $    8,371.49    $  8,371.49   $        0.00   $1,885,000.00
  14      4/11/2007        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  15      5/11/2007        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  16      6/11/2007        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  17      7/11/2007        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  18      8/11/2007        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  19      9/11/2007        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  20     10/11/2007        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  21     11/11/2007        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  22     12/11/2007        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  23      1/11/2008        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00




                                                              
  24      2/11/2008        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  25      3/11/2008        29    $    8,670.48    $  8,670.48   $        0.00   $1,885,000.00
  26      4/11/2008        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  27      5/11/2008        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  28      6/11/2008        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  29      7/11/2008        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  30      8/11/2008        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  31      9/11/2008        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  32     10/11/2008        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  33     11/11/2008        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  34     12/11/2008        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  35      1/11/2009        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  36      2/11/2009        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  37      3/11/2009        28    $    8,371.49    $  8,371.49   $        0.00   $1,885,000.00
  38      4/11/2009        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  39      5/11/2009        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  40      6/11/2009        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  41      7/11/2009        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  42      8/11/2009        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  43      9/11/2009        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  44     10/11/2009        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  45     11/11/2009        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  46     12/11/2009        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  47      1/11/2010        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  48      2/11/2010        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  49      3/11/2010        28    $    8,371.49    $  8,371.49   $        0.00   $1,885,000.00
  50      4/11/2010        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  51      5/11/2010        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  52      6/11/2010        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  53      7/11/2010        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  54      8/11/2010        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  55      9/11/2010        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  56     10/11/2010        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  57     11/11/2010        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  58     12/11/2010        30    $    8,969.46    $  8,969.46   $        0.00   $1,885,000.00
  59      1/11/2011        31    $    9,268.44    $  9,268.44   $        0.00   $1,885,000.00
  60      2/11/2011        31    $1,894,268.44    $  9,268.44   $1,885,000.00   $        0.00
  60                    1,826    $2,430,941.04    $545,941.04   $1,885,000.00





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 LOGO)

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

J.L. Smith                                                       Date __________
1000

          S.R. Smith
          1234 Sample Street
          Any Where, USA 12345

PAY TO THE
ORDER OF _________________________________________________ $ ___________________

__________________________________________________________ DOLLARS

Memo ___________________________________________________________________________

: 000000000 :   10000001234567   1000

ROUTING #       ACCOUNT #

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-10.45

                                                                   Exhibit 10.45

                               PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                                     BETWEEN

                               PRINCETON-SACO, LLC

                                    AS SELLER

                                       AND

                               COLE TAKEDOWN, LLC

                                    AS BUYER

                                DECEMBER 6, 2005



                   PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

DATED:   Dated to be effective as of December 6, 2005 (the "Effective Date").

PARTIES: This Purchase Agreement and Escrow Instructions is between
         PRINCETON-SACO, LLC, a Maine limited liability company, as "Seller",
         and COLE TAKEDOWN, LLC, a Delaware limited liability company, as
         "Buyer".

     WHEREAS, as of the Effective Date, Seller is the fee title owner of that
certain improved property located at 461 Main Street, Saco, Maine, 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 11,180 square feet (the "Building") which
Building is leased to Rite Aid of Maine, 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.

     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 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 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) the Lease and security deposit, if any, now or hereafter due
thereunder;

               (7) 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"); and

               (8) 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
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
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 (i.e., deed with Maine Quitclaim
Covenant), 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 FIVE HUNDRED THOUSAND and NO/100 Dollars ($2,500,000.00) (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 North Central Avenue, Suite 2850, Phoenix
Arizona 85004, Attention: Ms. Mary Garcia ("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) Two Million Four Hundred Thousand and No/100 Dollars
($2,400,000.00) 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 Buyer.
Any additional costs for an extended coverage policy also shall be paid by
Buyer. In addition 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
on or before expiration of the Study Period, (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 may elect (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
COE. Seller shall notify Buyer in writing within five (5) business days after
receiving Buyer's written notice of disapproval of any exception, if Seller
intends to remove (or endorse over) any such exception and/or objection.
Seller's lack of response shall be deemed as Seller's refusal 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 shall refuse to remove any such exceptions and
objections before COE, Buyer shall, within five (5) business days after Buyer's
receipt of Seller's notice of refusal or deemed refusal, 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. EST on the
thirtieth (30th) day after Escrow Agent's receipt of Seller's original
signatures to this Agreement (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 (as hereinafter defined), 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").

          (b) Right of Entry. Subject to the prior rights of the Tenant in the
Property, Seller hereby grants to Buyer and Buyer's agents, employees and
contractors the right to enter upon the Property, at any time or times 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 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. Seller has delivered to Buyer, on or before
the Effective Date, the following information in Seller's possession or control
regarding the Property (collectively, "Seller's Diligence Materials"), all at no
cost to Buyer:

     i.   copy of the Lease, including any amendments thereto;

     ii.  copy of the Guaranty of the Lease by Rite Aid Corporation, dated Apr.
          15, 1996;

     iii. copy of Seller's owner's policy of title insurance on the Real
          Property (Chicago Title Insurance Company, dated Sept. 24, 1996), as
          endorsed by Endorsement-1 (changing effective date of policy to Feb.
          25, 1997);

     iv.  copy of "ALTA/ACSM Land Title Survey made for Princeton-Saco, LLC,
          Main Street and Smith Lane, Saco, Maine" dated Feb. 11, 1997 by Dow &
          Coulombe, Inc., and accompanying Surveyor's Report dated Feb. 13,
          1997;

     v.   copy of Sept. 21, 1995 environmental report by Haley & Aldrich, and
          Sept. 13, 1996 updated environmental report;

     vi.  copy of Operating Statement (Lease inception to present);

     vii. copy of Statement of Landlord Repair/Maintenance;

     viii. copy of "as-built" building plans with respect to the Property;

     ix.  copy of final Certificate of Occupancy with respect to the Property;
          and

     x.   copy of the Contracts (i.e., Versico Roofing System Warranty - Serial
          Number 049845).

          (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
investigations, studies and/or tests which Buyer may have elected to obtain.

     9. THE SURVEY. Buyer may elect, at Buyer's cost, to cause a surveyor
licensed in the State of Maine to complete and deliver to Escrow Agent and
Seller a current, certified ALTA survey of the Real Property, Building and
Improvements (the "Survey"), whereupon the legal description in the Survey shall
control over the description in Exhibit A attached hereto to the extent they may
be inconsistent. Any such 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 Buyer's Diligence.

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

          (c) the deposit by Seller with Buyer prior to COE 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, in Tenant's standard form, and (ii) a subordination, non-disturbance and
attornment



agreement ("SNDA"), in form and substance reasonably acceptable to Buyer, for
the benefit of Wachovia Bank, National Association, both executed by Tenant
under the Lease;

          (d) the deposit with Escrow Agent of an executed standard title
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;

          (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) delivery of the SEC Filing Information (as hereinafter defined)
and the SEC Filings Letter (as hereinafter defined) by Seller to Buyer prior to
COE; and

          (g) delivery to Buyer of originals of the Lease.

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. Buyer's acceptance of the estoppel certificate or the SNDA referenced
in subsection 12(c) above shall be deemed given unless Buyer shall, within five
(5) business days after receipt of said certificate or SNDA (as the case may
be), give written notice to Seller identifying the objectionable aspect of the
certificate or SNDA. In the event of any such objection by Buyer to said
certificate or SNDA, Buyer shall use reasonable good faith efforts to directly
and promptly resolve the objection with Tenant, and Seller agrees to reasonably
cooperate with Buyer in connection with Buyer's direct negotiations with Tenant.

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

          (a) there are no unrecorded leases other than the Lease, or to
Seller's knowledge any unrecorded liens or encumbrances which may affect title
to the Property; that there is no Personalty; that there are no security
deposits or pre-paid/abated rents (other than monthly rent paid one month in
advance) under the Lease; and that the Tenant has no right of first refusal
under the Lease;

          (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 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



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) to Seller's knowledge, no default of Seller exists under any of
the Contracts and, to Seller's knowledge, no default 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) to Seller's knowledge, 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 Tenant;

          (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) 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;

          (p) to Seller's actual knowledge, there is not now, nor has there ever
been, on or in the Property 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 Hazardous
Materials released on the Property prior to COE and continuing in existence on
the Property at COE);

          (q) 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 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) 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

          (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 after the 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
through said six-month period.

With respect to the foregoing warranties, the phrase "to Seller's knowledge,"
"to Seller's actual knowledge," and similar phrases shall be limited to the
actual knowledge of Jonathan Aron, Seller's Manager, without investigation or
inquiry. Buyer's obligations under this Agreement are conditioned on the
continued truth of the foregoing warranties by Seller as of COE. In the event
that any of the Seller's warranties which are true as of the date of execution
of this Agreement shall cease to be true on or prior to the COE, then Seller
shall give prompt written notice to Buyer of such changed circumstance (a
"Change Notice"), in which event 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. In the event Seller shall give a Change Notice and Buyer
shall not elect to cancel this Agreement, the foregoing warranties made by
Seller as of COE shall be modified in accordance with the Change Notice. Buyer
acknowledges that except as specifically set forth in this Section, Seller makes
and has made no covenant, representation or warranty as to the suitability of
the Property for any purpose whatsoever or as to the physical condition of the
Property, and that the Property is being sold and will be conveyed AS IS.

     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 after the 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
through said six-month period.

     15. 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 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 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.



     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;

          (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, 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.

     17. CLOSE OF ESCROW. COE shall be on or before 5:00 p.m. EST on the
fifteenth (15th) 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 ten (10) 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 part of the Earnest Money Deposit and shall be immediately
non-refundable.

     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 material 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.

     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,
in which event Seller 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, 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:       Princeton-Saco, LLC
                    c/o Jonathan Aron
                    17 Grand Hill Drive
                    Dover, MA 02030
                    Tel.: (617) 457-3400

with copies to:     Verrill Dana, LLP
                    One Portland Square
                    Portland, ME 04112-0586
                    Attn: Anthony M. Calcagni, Esq.
                    Tel.: (207) 253-4516
                    Fax: (207) 253-4517

if to Buyer:        Cole Takedown, 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: Fidelity National Title Insurance Company
                    40 North Central Avenue, Suite 2850
                    Phoenix, AZ 85004
                    Attn: Ms. Mary Garcia
                    Tel. (602) 343-7571
                    Fax: (602) 343-7564

          (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 (1/2) of the transfer tax associated with the sale of
the Property, if any, and (iii) all other costs to be paid by Seller under this
Agreement; and Buyer shall pay (w) the costs of recording the Deed and any other
documents to be recorded, (x) the fees and costs due Escrow Agent for its
services, including (without limitation) the premium for the Owner's Policy, (y)
one-half (1/2) of the transfer tax associated with the sale of the Property, if
any, and (z) all 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 herein. If not otherwise paid by Tenant pursuant to the Lease, 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 in the State of Maine. 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 reasonable cancellation charges
of Escrow Agent. If escrow fails to close because of Buyer's default or for any
other reason, Buyer shall be liable for 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 deleted]

     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 Maine.

     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.

     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. 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 company that
is subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended ("Registered Company"), promoted by the Buyer or to an affiliate of a
Registered Company (a "Registered Company Affiliate"). In the event Buyer's
assignee under this Agreement is a Registered Company or a Registered Company
Affiliate, the Registered Company will be required to make certain filings with
the U.S. Securities and Exchange Commission required under SEC Rule 3-14 of
Regulation S-X (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 and the Registered Company with financial information regarding
the Property for the Audited Year requested by Buyer, the Registered Company,
and/or Buyer's or the Registered Company'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 in Seller's possession or control ("SEC Filing Information").
Seller shall deliver the SEC Filing Information requested by Buyer, the
Registered Company and/or Buyer's or the Registered Company's auditors prior to
the expiration of the Study Period, and Seller agrees to cooperate with Buyer,
the Registered Company and Buyer's or the Registered Company's auditors
regarding any inquiries by Buyer, the Registered Company and Buyer's or the
Registered



Company'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 or the Registered Company's auditors ("SEC Filings
Letter"). A sample SEC Filings Letter is attached to the Purchase Agreement as
Exhibit G; however, Buyer's and/or the Registered Company's auditors may require
additions and/or revisions to such letter following review of the SEC Filing
Information provided by Seller, to the extent reasonably necessary for auditors
to prepare the audit report required by SEC Rule 3-14. 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 37
shall survive the COE for a period of one (1) year.

     38. LIKE-KIND EXCHANGE. Either Party may consummate the purchase or sale
(as applicable) of the Property 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: (i) the closing shall not be delayed or
affected by reason of the Exchange nor shall the consummation or accomplishment
of an Exchange be a condition precedent or condition subsequent to the
exchanging Party's obligations under this Agreement; (ii) the exchanging Party
shall effect its Exchange through an assignment of this Agreement, or its rights
under this Agreement, to a qualified intermediary; (iii) neither Party shall be
required to take an 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 an Exchange desired by the other Party;
and (iv) the exchanging Party shall pay any additional costs that would not
otherwise have been incurred by the non-exchanging Party had the exchanging
Party not consummated the transaction through an Exchange. Neither Party shall
by this Agreement or acquiescence to an Exchange desired by the other Party have
its rights under this Agreement affected or diminished in any manner or be
responsible for compliance with or be deemed to have warranted to the exchanging
Party that its Exchange in fact complies with Section 1031 of the Code.

               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]



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

SELLER:                                 PRINCETON-SACO, LLC,
                                        a Maine limited liability company


                                        By: /s/ Jonathan Aron
                                            ------------------------------------
                                        Its: Manager


BUYER:                                  COLE TAKEDOWN, LLC, a Delaware limited
                                        liability company


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



                            ESCROW AGENT'S ACCEPTANCE

     The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this 13 day of December, 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.

                                       FIDELITY NATIONAL TITLE INSURANCE
                                       COMPANY


                                       By: /s/ M. Burton
                                           -------------------------------------
                                       Title: Asst. Commercial Escrow
                                              Officer



                         AMENDMENT TO PURCHASE AGREEMENT

     This Amendment to Purchase Agreement (this "Amendment") is made and entered
into effective as of the 12th day of January, 2006, by and between
PRINCETON-SACO, LLC ("Seller") and COLE TAKEDOWN, LLC ("Buyer") and provides as
follows:

                                   WITNESSETH:

     WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions dated as of December 6, 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. The final sentence of Section 6 of the Purchase Agreement is hereby
amended by deleting the entirety thereof and substituting the following in lieu
thereof:

          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
          approved of the condition of the title of the Property as shown by the
          Report.

     2. 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. EST on January 12,
          2006 (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 (as hereinafter
          defined), 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").

     3. Section 7(c) of the Purchase Agreement is hereby amended by deleting the
entirety thereof and substituting the following in lieu thereof:

          Cancellation. Only if Buyer notifies Seller and Escrow Agent, in
          writing, on or before the end of the Study Period of Buyer's
          disapproval of Buyer's Diligence and refusal to waive the
          contingencies as set forth in this Section 7 will this Agreement be
          canceled pursuant to this Section 7. In such event, 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.

     4. Section 17 of the Purchase Agreement is hereby amended by deleting the
entirety thereof and substituting the following in lieu thereof:

          CLOSE OF ESCROW. COE SHALL BE ON OR BEFORE 5:00 P.M. EST ON JANUARY
          27, 2006, OR SUCH OTHER DATE AS BUYER AND SELLER MAY AGREE IN WRITING.
          BUYER MAY EXTEND THE COE DATE FOR UP TO AN ADDITIONAL TEN (10) 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 PART OF THE EARNEST MONEY
          DEPOSIT AND SHALL BE IMMEDIATELY NON-REFUNDABLE.



     5. 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.

     6. 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.

                         [SIGNATURES ON FOLLOWING PAGE]

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date set forth above.

BUYER:                                  SELLER:

COLE TAKEDOWN, LLC, a Delaware          PRINCETON-SACO, LLC,
limited liability company               a Maine limited liability company


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



            ASSIGNMENT OF PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

                         PRINCETON-SACO, LLC, AS SELLER
                                       AND
                          COLE TAKEDOWN, 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: December 6, 2005

     ORIGINAL BUYER:    Cole Takedown, LLC

     ASSIGNED TO:       Cole RA Saco ME, LLC

     PROPERTY ADDRESS:  461 Main Street, Saco, Maine

     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 26th day of January, 2006.

ASSIGNOR:                               ASSIGNEE:

COLE TAKEDOWN, LLC,                     COLE RA SACO ME, LLC, a Delaware limited
a Delaware limited liability company    liability company

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


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

EX-10.46

                                                                   Exhibit 10.46

                                                                 RITE AID - SACO
                                                             LOAN NO. 50-2854685

                                 PROMISSORY NOTE

$2,000,000.00                                                   January 27, 2006

     FOR VALUE RECEIVED, the undersigned, COLE RA SACO ME, 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 AND NO/100 DOLLARS ($2,000,000.00), 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 February 11, 2031.

          (d) "Fixed Rate Tranche A" shall mean One Million Three Hundred
Seventy-Five Thousand and No/100 Dollars ($1,375,000.00) 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 Twenty-Five
Thousand and No/100 Dollars ($625,000.00) 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 fifty-three one-hundredths percent
(6.53%) 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 February 11, 2011.

          (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 February 11, 2011.

          (o) "Optional Prepayment Determination Date" shall mean December 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 York County,
Maine.

     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 April 27, 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 eighty-two one-hundredths percent (5.82%) (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 March 11, 2006 (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 RA SACO ME, 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                            $1,375,000.00
Note Rate % (Per Annum)                              5.820%
Original Amortization Term (Months)                  999
Monthly Payment Amount (Excluding IO Period)         $6,722.25
Note Date                                            1/27/2006
First Pay Date                                       3/11/2006
Original Loan Term (Months)                          60
Scheduled Maturity Date                              2/11/2011
Interest Accrual Basis During Amortization Periods   ACTUAL/360
Interest Only (IO) Periods (Months)                  60
Interest Accrual Basis During IO Period              ACTUAL/360



COLE RITE AID SACO ME 502854685



                                             INTEREST   PRINCIPAL
                                            COMPONENT   COMPONENT
                      ACCRUAL                   OF          OF      ENDING UNPAID
  PAY                 DAYS IN   SCHEDULED   SCHEDULED   SCHEDULED     PRINCIPAL
PERIOD    PAY DATE     PERIOD    PAYMENT     PAYMENT     PAYMENT       BALANCE
- ------   ----------   -------   ---------   ---------   ---------   -------------
                                                  
   0      2/11/2006      15     $    0.00   $3,334.35     $0.00     $1,375,000.00
   1      3/11/2006      28     $6,224.17   $6,224.17     $0.00     $1,375,000.00
   2      4/11/2006      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
   3      5/11/2006      30     $6,668.75   $6,668.75     $0.00     $1,375,000.00
   4      6/11/2006      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
   5      7/11/2006      30     $6,668.75   $6,668.75     $0.00     $1,375,000.00
   6      8/11/2006      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
   7      9/11/2006      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
   8     10/11/2006      30     $6,668.75   $6,668.75     $0.00     $1,375,000.00
   9     11/11/2006      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
  10     12/11/2006      30     $6,668.75   $6,668.75     $0.00     $1,375,000.00
  11      1/11/2007      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
  12      2/11/2007      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
  13      3/11/2007      28     $6,224.17   $6,224.17     $0.00     $1,375,000.00
  14      4/11/2007      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
  15      5/11/2007      30     $6,668.75   $6,668.75     $0.00     $1,375,000.00
  16      6/11/2007      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
  17      7/11/2007      30     $6,668.75   $6,668.75     $0.00     $1,375,000.00
  18      8/11/2007      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
  19      9/11/2007      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
  20     10/11/2007      30     $6,668.75   $6,668.75     $0.00     $1,375,000.00
  21     11/11/2007      31     $6,891.04   $6,891.04     $0.00     $1,375,000.00
  22     12/11/2007      30     $6,668.75   $6,668.75     $0.00     $1,375,000.00




                                                      
23    1/11/2008      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
24    2/11/2008      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
25    3/11/2008      29   $    6,446.46   $  6,446.46   $        0.00   $1,375,000.00
26    4/11/2008      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
27    5/11/2008      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
28    6/11/2008      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
29    7/11/2008      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
30    8/11/2008      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
31    9/11/2008      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
32   10/11/2008      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
33   11/11/2008      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
34   12/11/2008      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
35    1/11/2009      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
36    2/11/2009      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
37    3/11/2009      28   $    6,224.17   $  6,224.17   $        0.00   $1,375,000.00
38    4/11/2009      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
39    5/11/2009      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
40    6/11/2009      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
41    7/11/2009      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
42    8/11/2009      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
43    9/11/2009      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
44   10/11/2009      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
45   11/11/2009      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
46   12/11/2009      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
47    1/11/2010      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
48    2/11/2010      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
49    3/11/2010      28   $    6,224.17   $  6,224.17   $        0.00   $1,375,000.00
50    4/11/2010      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
51    5/11/2010      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
52    6/11/2010      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
53    7/11/2010      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
54    8/11/2010      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
55    9/11/2010      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
56   10/11/2010      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
57   11/11/2010      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
58   12/11/2010      30   $    6,668.75   $  6,668.75   $        0.00   $1,375,000.00
59    1/11/2011      31   $    6,891.04   $  6,891.04   $        0.00   $1,375,000.00
60    2/11/2011      31   $1,381,891.04   $  6,891.04   $1,375,000.00   $        0.00
60                1,826   $1,780,904.54   $405,904.54   $1,375,000.00





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 LOGO)

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

J.L. Smith                                                       Date __________
1000

          S.R Smith
          1234 Sample Street
          Any Where, USA 12345

PAY TO THE
ORDER OF _________________________________________________ $____________________

__________________________________________________________ DOLLARS

Memo ___________________________________________________________________________

: 000000000 :    10000001234567   1000

ROUTING #       ACCOUNT #

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-10.47

                                                                   Exhibit 10.47

                AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY
                          AND JOINT ESCROW INSTRUCTIONS

     This Agreement of Purchase and Sale of Real Property and Joint Escrow
Instructions ("AGREEMENT") is dated, for reference purposes only, November 16,
2005 and is made by and between Shadrall Associates, a New York General
Partnership ("SELLER"), and Cole Takedown, LLC, a Delaware limited liability
company and/or its assignee ("BUYER"). Seller and Buyer shall individually
hereinafter be referred to as a "PARTY" and collectively as the "PARTIES".

                                    RECITALS

     A. Seller is the owner of certain improved real property commonly known as
4827 & 4887 S. Wadsworth Way, Denver, Colorado 80124, the legal description of
which is described in EXHIBIT "A" attached hereto (together with all buildings,
structures and improvements located thereon, the "REAL PROPERTY"). The Seller
may also be the owner of certain tangible personal property (the "PERSONAL
PROPERTY") located on and/or used in connection with the Real Property. The Real
Property, all permits, licenses and other matters related to the Real Property,
the Leases, the Personal Property, to the extent that the same exist and are
owned and transferable by Seller, and rights appurtenant thereto are referred to
collectively herein as the "PROPERTY"; and

     B. Seller desires to sell the Property to Buyer, and Buyer desires to
purchase the Property from Seller, all on the terms and conditions contained
herein.

                                    AGREEMENT

1.   PURCHASE AND SALE.

     1.1 AGREEMENT TO BUY AND SELL. On the terms and conditions contained in
this Agreement, Seller agrees to sell the Property to Buyer, and Buyer agrees to
purchase the Property from Seller, at the "CLOSING" (as hereinafter defined).

     1.2 PURCHASE PRICE. The Purchase Price for the Property shall be Nineteen
Million One Hundred and Fifty Thousand Dollars ($19,150,000.00, the "PURCHASE
PRICE"). Buyer's purchase of the Property shall not be contingent on Buyer
obtaining any funds or financing commitments from any person or entity, and
Buyer shall have no right to terminate this Agreement based on any inability or
difficulty on its part to fund the Purchase Price or any part thereof.

     1.3 PAYMENT OF THE PURCHASE PRICE. The Purchase Price shall be payable by
Buyer as follows:

     (a) Within five (5) business days after the execution of this Agreement and
     delivery by each Party to the other of an executed original or copy thereof
     (with such date of delivery being hereinafter referred to as the "EFFECTIVE
     DATE"), Buyer shall deposit for disbursement in accordance with the terms
     and provisions set forth herein the sum of Five Hundred Thousand Dollars
     ($500,000.00) (the "INITIAL DEPOSIT"). The Initial Deposit shall be
     non-refundable, subject only to the terms of this Agreement. The Initial
     Deposit shall be held by "ESCROW" (as hereinafter defined) in an
     interest-bearing account in accordance with the terms of this Agreement,
     and the Initial Deposit, together with any interest accruing thereon, shall
     hereinafter be referred to as the "ACCRUED DEPOSIT".

     (b) Prior to the Closing, Buyer shall deliver or cause to be delivered to
     Escrow, for the benefit of Seller, wire-transferred funds in the amount of
     the balance of the Purchase Price and all other amounts payable by Buyer
     hereunder, calculated by adjusting the Purchase Price for the sum of (i)
     the Accrued Deposit and (ii) the amount, if any, by which credits to Buyer
     exceed or are less than debits to Buyer by reason of the prorations set
     forth in Section 4.2 of this Agreement.

     1.4 EXPECTED CLOSING DATE. Subject to Section 2.9, the Closing shall be
December 28, 2005 (the "EXPECTED CLOSING DATE"). Buyer may extend the Closing
for up to an additional twenty (20) days upon delivery of written notice to
extend the Closing to Escrow and Seller prior to the original Closing Date and
by depositing an



additional Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00) of
earnest money with Escrow. For purposes of this Agreement, any additional
earnest money deposited with Escrow pursuant to this Section 1.4 shall be added
to and become a part of the Accrued Deposit.

2.   ESCROW; TITLE; BUYER'S AND SELLER'S RIGHTS AND OBLIGATIONS.

     2.1 ESCROW. The terms and conditions set forth in this Agreement shall
constitute both an agreement between Seller and Buyer and Escrow instructions
for Escrow. If Escrow requires separate or additional Escrow instructions
("ADDITIONAL INSTRUCTIONS"), Seller and Buyer shall execute and deliver them to
Escrow promptly after any such request from Escrow. If there is any conflict or
inconsistency between this Agreement and the Additional Instructions, this
Agreement shall prevail. Escrow shall promptly place the Initial Deposit, when
received, in an interest-bearing account. At the Closing hereunder, the Accrued
Deposit shall be paid to Seller, and shall be a credit against the Purchase
Price. In the event of a default by Seller, or proper termination of this
Agreement by Buyer, the Accrued Deposit shall be paid to the Buyer; in the event
of default by Buyer or Closing pursuant to this Agreement, the Accrued Deposit
shall be paid to Seller. If either Buyer or Seller makes a written demand upon
Escrow for payment of the Accrued Deposit pursuant to this Agreement, Escrow
shall give written notice of such demand to the other Party; if no written
objection from such notified Party is received by Escrow within four (4)
business days thereafter, Escrow may make the payment so demanded. As used
herein, the term "ESCROW" or "ESCROW AGENT" shall refer to First American Title
Insurance Company, 2425 East Camelback Road, Suite 300, Phoenix, Arizona 85016,
Attention: Mr. Tom Anzaldua, Tel. No. (602) 567-8113, Fax No. (602) 567-8101.

     2.2 CONDITION OF TITLE; TITLE INSURANCE. Within the time period set forth
in Section 2.4, below, Seller shall, at Seller's cost and expense, obtain from
First American Title Company ("TITLE COMPANY") and deliver to Buyer a current
preliminary title report for an ALTA extended coverage title insurance policy
for the Real Property, together with legible copies of all documents reflected
as exceptions to title to the Real Property (collectively, the "PRELIMINARY
TITLE REPORT"). Buyer shall, on or before the Due Diligence Expiration Date,
notify Seller and Escrow in writing of any objections which Buyer has to the
EXCEPTIONS to title, if any. "EXCEPTIONS" shall mean any exceptions in the
Preliminary Title Report other than (a) real estate taxes not yet due and
payable, (b) financing documents to which Seller is a party which shall be
removed at the Closing, and (c) any Exception arising from the action, inaction
or status of Buyer. If written notice of objection is not timely given by Buyer
to Seller pursuant to this Section 2.2, then Buyer shall be deemed to have
objected to all Exceptions. Seller shall have the right, but not the obligation,
to clear all disapproved Exceptions within ten (10) days after Seller's receipt
of Buyer's written objections thereto or, in the alternative, agree in writing
within such ten (10) day period that such Exceptions shall be cleared prior to
or at the Closing. Seller shall deliver at the Closing discharges, releases
and/or terminations of any financing documents to which Seller is a party and
which are of record and the same shall not be deemed PERMITTED EXCEPTIONS, as
such term is defined below. Seller shall not voluntarily place any lien,
encumbrance or other recorded document placed on record after the Effective Date
(hereinafter, the "POST-EFFECTIVE DATE LIEN(S)") that materially and adversely
affect the Real Property or the interest to be acquired by Buyer prior to the
Closing, and if any involuntary Post-Effective Date Liens are placed on the Real
Property, Seller shall forthwith notify Buyer and Seller shall use commercially
reasonable efforts to cause all said Post-Effective Date Liens to be
extinguished prior to Closing, and if Seller is unable to do so, Buyer may
terminate this Agreement. Notwithstanding the foregoing, if, at any time prior
to the Closing, Seller discovers that an involuntary or non-consensual lien in
excess of Fifty Thousand Dollars ($50,000.00) has been placed against the
Property, which lien Seller is unwilling to remove, Seller shall so notify Buyer
in writing, and Buyer shall have the option, as its sole and exclusive remedies
to either (a) terminate this Agreement, or (b) waive its objections to the
lien(s) in question. The failure by Buyer to give notice of its termination of
this Agreement within five (5) business days after receipt of such Seller's
notice shall be deemed to be Buyer's election to terminate this Agreement. If
Buyer elects to terminate this Agreement, the provisions of Section 2.6 shall
apply. At the Closing, the Title Company shall issue an ALTA extended coverage
policy of title insurance in an amount equal to the Purchase Price (the "OWNER'S
POLICY"). Those Exceptions to title set forth in the Preliminary Title Report to
which Buyer has not objected (or for which Buyer has waived its objection) shall
be referred to as the "PERMITTED EXCEPTIONS". Notwithstanding anything to the
contrary herein, the lien and encumbrance restrictions on Seller set forth in
this Section shall be lifted and of no further force or effect if the Closing
has not occurred prior to the date that is ninety (90) days after the Effective
Date.

     2.3 CONDITION OF PROPERTY/ AS IS, WHERE IS CONDITION. It is understood,
acknowledged and agreed by Buyer that, except as otherwise herein expressly
provided, Seller is not making, and specifically disclaims, any



representations, warranties or covenants of any kind or character, express or
implied, with respect to the economic, functional, environmental and physical
condition of the Property, including, but not limited to, representations,
warranties or covenants as to: (i) matters of title (other than Seller's
warranty of title set forth in the grant deed to be delivered at the Close of
Escrow), zoning, tax consequences, physical or environmental conditions,
availability of access, ingress or egress, operating history or projections,
valuation, governmental approvals, governmental regulations or any other matter
or thing relating to or affecting the economical, functional, environmental, or
physical condition of the Property; (ii) the value, condition, merchantability,
marketability, profitability, suitability or fitness for a particular use or
purpose of the Property; (iii) the manner or quality of the construction or
materials incorporated into any of the Property; (iv) the manner, quality, state
of repair, or lack of repair of the Property. Buyer further agrees that with
respect to the Property, except as expressly set forth in this Agreement, Buyer
has not relied upon and will not rely upon, either directly or indirectly, any
representation or warranty of Seller and/or any agent, representative or servant
of Seller regarding any environmental obligations, liabilities, conditions or
other matters ("ENVIRONMENTAL MATTERS"), including but not limited to any
matters under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 et seq, as amended or as it may
hereafter be amended, supplemented or replaced, and any other federal, state or
local environmental law, statute, ordinance, code, rule, regulation or order now
or hereafter in effect. Buyer represents and warrants to Seller that: (i) Buyer
is a knowledgeable purchaser of real estate; (ii) except for those
representations and warranties of Seller expressly set forth in this Agreement,
Buyer is relying solely on Buyer's own expertise and that of Buyer's consultants
with respect to the economic, functional, environmental and physical condition
of the Property; (iii) Buyer has conducted such inspections, tests, studies and
investigations of the Property (including, but not limited to, the physical and
environmental conditions thereof) as Buyer has deemed appropriate and shall rely
upon the same; and (iv) upon Closing, Buyer shall assume the risk that adverse
matters (including, but not limited to, adverse physical or environmental
conditions) may not have been revealed by Buyer's inspections, tests, studies
and investigations of the Property. BUYER ACKNOWLEDGES AND AGREES THAT UPON
CLOSING, SELLER SHALL SELL AND CONVEY TO BUYER, AND BUYER SHALL ACCEPT THE
PROPERTY IN AN "AS IS, WHERE IS" CONDITION WITH ALL FAULTS, AND THAT, EXCEPT FOR
ANY CLAIM OR CLAIMS ARISING OUT OF A BREACH BY SELLER OF ANY REPRESENTATION OR
WARRANTY OF SELLER EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER RELEASES SELLER
FROM, AND WAIVES ALL RIGHTS AND CLAIMS AGAINST SELLER ARISING FROM, RELATING TO
OR IN CONNECTION WITH SUCH MATTERS (INCLUDING, BUT NOT LIMITED TO, ALL CLAIMS
FOR INDEMNITY AND/OR CONTRIBUTION, HOWEVER ARISING, INCLUDING ALL CLAIMS RELATED
TO ENVIRONMENTAL MATTERS) AND THAT THERE ARE NO ORAL AGREEMENTS,
REPRESENTATIONS, WARRANTIES OR COVENANTS COLLATERAL TO OR AFFECTING THE
PROPERTY, BY SELLER AND/OR ANY AGENT, REPRESENTATIVE OR SERVANT OF SELLER OR BY
ANY OTHER PERSON. BUYER EXPRESSLY AGREES THAT THE TERMS AND CONDITIONS OF THIS
SECTION SHALL SURVIVE CLOSING OR ANY TERMINATION OF THIS AGREEMENT BEFORE
CLOSING, AND THAT SELLER IS NOT LIABLE OR BOUND IN ANY MANNER WHATSOEVER BY ANY
VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO THE
PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER
PERSON, UNLESS THE SAME ARE EXPRESSLY SET FORTH AND REFERRED TO HEREIN. FURTHER,
IF BUYER, PRIOR TO THE CLOSING, DISCOVERS THAT ANY WARRANTY OR REPRESENTATION
MADE BY SELLER IS UNTRUE, INACCURATE AND/OR INCOMPLETE, OR THAT SELLER HAS
BREACHED ANY TERM CONTAINED IN THIS AGREEMENT, AND BUYER ELECTS TO PROCEED WITH
THE ACQUISITION OF THE PROPERTY AND DOES, IN FACT, ACQUIRE TITLE TO THE
PROPERTY, THEN BUYER SHALL BE DEEMED TO HAVE WAIVED ANY CLAIMS IT HAD OR MAY
HAVE IN REGARD TO THE WARRANTY, REPRESENTATION OR BREACH DISCOVERED,
NOTWITHSTANDING ANY STATEMENT OF PROTEST, NON-WAIVER OR PRESERVATION OF RIGHTS
BY BUYER, THE FILING BY IT OF LITIGATION OR ANY OTHER ACT TAKEN OR STATEMENT
MADE BY BUYER IN AN ATTEMPT TO AVOID THE FOREGOING ABSOLUTE WAIVER OF RIGHTS.
BUYER ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE FOREGOING PROVISIONS IN
THIS SECTION 2.3, AND BY ITS INITIALS IMMEDIATELY BELOW, AGREES TO BE BOUND BY
ITS TERMS.

     BUYER: JMP



     2.4 PROPERTY DOCUMENTS. Not later than five (5) days after the Effective
Date, Seller shall deliver to Buyer or Buyer's agent, or make available to them,
copies of the documents and other records hereinafter described (to the extent
that same are in Seller's possession or reasonably under its control) that
relate to the Real Property, all of which documents and records shall
collectively hereinafter be referred to as the "PROPERTY DOCUMENTS". The
Property Documents referred to herein, all of which are to be delivered to Buyer
without warranty as to their content, accuracy or completeness, are:

     (a) TITLE. The Preliminary Title Report.

     (b) LEASES, RENTAL STATEMENTS, CONTRACTS. All leases, lease amendments,
     renewals and rental agreements relating to any space within the Real
     Property currently leased or licensed to any person or entity
     (collectively, the "LEASES"); rental statements reflecting the Leases,
     including, to the extent such information is kept in the normal course of
     business by or on behalf of Seller, the names and locations of each tenant
     (each, a "TENANT"), the scheduled rent, the actual collected rent, the
     dates of any rental increases, aging reports for each Tenant, and the
     amounts of any security and other types of deposits; and all service and
     related contracts (including, but not limited to, personnel contracts,
     janitorial and laundry agreements, landscaping, trash removal, parking lot
     maintenance, management and insurance contracts) affecting the Real
     Property.

     (c) FINANCIAL AND OTHER RECORDS. For the twelve (12) month period
     immediately preceding the Effective Date: Seller's IRS Forms 825; existing
     income and expense operating statements for the Property kept in the normal
     course of business by or on behalf of Seller; utility bills; CAM
     reconciliation worksheets; and the property tax bills, including appeals
     and pending or threatened assessments, if any. Seller shall also provide: a
     written inventory of personal property, including furniture and appliances,
     at the Real Property or used in conjunction with its maintenance; and a
     schedule, including a brief summary/explanation of all pending or
     threatened litigation with respect to the Property.

     (d) RECORDS, PLANS AND DRAWINGS. Any soils, environmental and/or geological
     reports; architectural and engineering building plans, permits,
     entitlements and notices received from any governmental entity for the two
     (2) year period immediately preceding the Effective Date; and any drawings,
     documents and/or correspondence relating to any planned, pending or
     conceptualized development of the Real Property.

     (e) SURVEY. The ALTA/ACSM Land Title Survey Prepared for Shadrall
     Associates and Others Dated September 22, 2000 and Revised October 16, 2000
     (the "SURVEY"), a copy of which has been delivered to Buyer. Buyer may, at
     Buyer's sole cost and expense, obtain an update to the Survey. The legal
     description in the Survey, as and if updated, shall control over the
     description in Exhibit "A" attached hereto to the extent, if any, such
     descriptions may be inconsistent.

     2.5 BUYER'S INSPECTION/TESTING. Buyer shall have the right, but not the
obligation, at its sole cost and expense, but not as a condition of this
Agreement, to obtain the following (all of which, collectively, shall
hereinafter be referred to as "BUYER'S INSPECTIONS"): (a) a soils' test report;
(b) an ALTA title supplement based upon the Survey; (c) an inspection of the
physical aspects and condition of the Real Property; (d) a report on the
applicable zoning ordinances affecting the Real Property or the use thereof; and
(e) a review of the Property Documents and the financial feasibility of Buyer's
potential acquisition of the Property. As an additional Buyer's Inspection,
Buyer shall have the option, at its sole cost and expense, to obtain, prior to
the Due Diligence Expiration Date, a Phase I Hazardous Substance Conditions
Report concerning the Real Property and relevant adjoining properties (as used
herein, a "HAZARDOUS SUBSTANCE" shall mean any substance whose nature and/or
quantity of existence, use, manufacture, disposal or effect render it subject to
federal, state or local regulation, investigation, remediation or removal as
potentially injurious to public health or welfare, and shall further 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). Buyer shall undertake all such inspections and
testing in a manner which is not



disruptive to any Tenant's activities at the Real Property; such inspections and
testing shall be non-destructive; and Buyer shall immediately repair any and all
damage caused by such inspections or testing or caused by Buyer, or its agents,
contractors or employees, and Buyer shall, at its sole cost and expense, restore
the Real Property to the condition in which it existed immediately prior to the
testing or inspection or Buyer's entry onto the Real Property. Seller shall use
commercially reasonable efforts to allow Buyer to have access to the Real
Property (with Seller reserving the right to be present on all occasions
whenever Buyer is at the Real Property), however, Seller shall not be
responsible or liable for any failure or refusal by any of the Tenants at the
Real Property to allow Buyer to have access to all or any portion of the Real
Property. All persons and entities performing any testing at the Real Property
(hereinafter, the "CONTRACTORS") shall be properly licensed and qualified, shall
have obtained all permits necessary to conduct such testing.

     2.6 TERMINATION BY BUYER. If Buyer timely elects to terminate this
Agreement in accordance with Sections 2.2, 2.7(a), 3.1(b) or (d), 3.3 or 6.1 of
this Agreement, Buyer shall so notify Seller and Escrow in writing, whereupon
(a) Seller and Escrow shall immediately and without any further instructions
return to Buyer the Accrued Deposit net of disbursements, if any, (b) this
Agreement shall terminate, and (c) neither Party shall have any further rights
or obligations under this Agreement, except for such indemnity obligations and
other obligations that have been expressly declared herein to survive the
termination of this Agreement. Buyer shall be responsible for all of its
expenses and costs incurred through the termination of Escrow as well as Buyer's
share of the costs under Section 4.3, below, which costs may include any
cancellation charges assessed by Escrow and/or the Title Company. Except as set
forth in Sections 2.2, 2.7(a), 3.1(b) or (d), 3.3 or 6.1, Buyer shall have no
right to terminate this Agreement. Upon a termination of this Agreement for any
reason, and at Seller's request and Seller's sole cost and expense, Buyer shall:
(x) execute and deliver to Seller such instruments, including a quitclaim deed,
as are necessary or convenient to confirm such termination as well as the fact
that Buyer has no right to possession of nor maintains any interest in or to the
Property; and (y) inform Seller of the existence of any reports, tests,
materials, studies and the like in Buyer's possession that relate to the Real
Property and/or Buyer's Inspections, including, but not limited to, the Phase I
Hazardous Substance Conditions Report referenced in Section 2.5, above
(collectively, "BUYER'S REPORT(S)"), the cost thereof and a general overview or
summary of the results or findings contained in Buyer's Reports. At Seller's
request and upon payment by Seller to Buyer of one-half of Buyer's acquisition
cost for each Buyer's Report requested by Seller, Buyer shall deliver to Seller
a copy of each Buyer's Report requested,. Buyer shall also return to Seller all
of the Property Documents that were previously provided or made available to
Buyer.

     2.7 OPERATION OF THE PROPERTY; RISK OF LOSS.

     (a) RISK OF LOSS. Until Closing, risk of loss to the Real Property shall
     remain with Seller. If the Real Property shall suffer damage prior to
     Closing whereby Seller reasonably estimates that the cost of repair will be
     less than One Hundred Thousand Dollars ($100,000.00) and require less than
     ninety (90) days to rebuild, repair or restore, then Seller, at its
     election, may either (i) repair and restore the Real Property to the
     condition existing prior to the casualty (as near as practicable), or (ii)
     assign to Buyer the right to receive insurance proceeds relating to the
     damage (including any available rent loss insurance proceeds covering
     post-Closing losses, to the extent that Buyer sustains or will sustain any
     such losses, but under no circumstances shall the assigned insurance
     proceeds exceed the Purchase Price), in which event Buyer shall accept
     possession of the Real Property at Closing "AS IS, WHERE IS." If Seller
     reasonably estimates that the cost of repair will be One Hundred Thousand
     Dollars ($100,000.00) or more or require ninety (90) or more days to
     rebuild, repair or restore, and Buyer is not then in default hereunder
     beyond any applicable cure period, Buyer, at its option to be exercised by
     written notice given to Seller within five (5) business days after Buyer's
     receipt of written notice from Seller of such damage and the estimated cost
     of and time to repair the damage, may either (i) terminate this Agreement
     and receive the return of the Accrued Deposit, or (ii) waive such right to
     terminate and proceed to Closing in accordance with the provisions of this
     Section 2.7. If Buyer does not give timely notice of its intent to waive
     its right to terminate pursuant to sub-part (ii) above, Buyer shall be
     deemed to have terminated this Agreement pursuant to sub-part (i) above, in
     which case the provisions of Section 2.6 of this Agreement shall control.
     If Buyer waives its right to terminate this Agreement, this Agreement shall
     remain in full force and effect, and as Seller's sole obligation hereunder,
     Seller shall assign to Buyer the right to receive any applicable insurance
     proceeds, effective and contingent upon the transfer of title to Buyer, and
     Buyer shall accept the Property "AS IS, WHERE IS". In the event that Seller
     assigns insurance proceeds to Buyer pursuant to this Section, but such
     proceeds are, (i) subject to a deductible, and (ii) insufficient, after
     reducing the proceeds by the deductible,



     to repair the damage and/or compensate Buyer for the loss, then Seller
     shall, at Closing, credit Buyer with the amount of the deductible (to the
     extent necessary to fully compensate Buyer for the damage or loss), but
     under no circumstances shall such credit exceed Twenty-Five Thousand
     Dollars ($25,000.00).

     (b) ONGOING OPERATIONS. During the pendency of this Agreement, but subject
     to the limitations set forth below, Seller shall carry on its businesses
     and activities relating to the Real Property substantially in the same
     manner as it did before the Effective Date of this Agreement.

     (c) NEW AND EXISTING CONTRACTS. Until such time as Buyer has waived all of
     its rights to terminate this Agreement, Seller may, without Buyer's
     consent, enter into contracts relating to the Real Property, provided that
     Seller shall provide Buyer with written notice if such contracts will
     remain in effect after the Close of Escrow. Following the Due Diligence
     Expiration Date and through the Close of Escrow, and provided Buyer is not
     in default or breach hereunder and has not terminated this Agreement,
     Seller will not enter into any contract that will be an obligation
     affecting the Real Property subsequent to the Close of Escrow (except
     contracts entered into in the ordinary course of business that are
     terminable without cause on thirty (30) days' notice or less) without the
     prior written consent of the Buyer, which consent shall not be unreasonably
     withheld, delayed or conditioned. Buyer shall assume the obligations of
     Seller, and hold Seller harmless from any obligations arising from and
     after the Closing Date of any existing or new contract entered into by
     Seller or that relate to the Real Property. Seller shall hold Buyer
     harmless from any obligations arising before the Closing Date of any
     existing or new contract entered into by Seller or that relate to the Real
     Property. Prior to the Closing, Seller shall provide to Buyer copies of all
     such new contracts that relate to the Real Property. Notwithstanding
     anything to the contrary herein, the restrictions on Seller set forth in
     this Section shall be lifted and of no further force or effect if the
     Closing has not occurred prior to the date that is ninety (90) days after
     the Effective Date.

     (d) LEASING ARRANGEMENTS. Following the Effective Date and through the
     Close of Escrow, and provided Buyer is not in default or breach hereunder
     and has not terminated this Agreement, and except for any leasing action
     involving a leasable area within the Real Property having a total square
     footage of twenty-five hundred (2,500) square feet or less (which spaces
     will be exempt from the consent requirement hereinafter described), Seller
     shall obtain Buyer's written consent, which Buyer shall not unreasonably
     withhold, condition or delay, before entering into any new Lease for space
     in the Real Property and before entering into a Lease amendment, expansion,
     or renewal of any Lease. At the Closing, Buyer shall, on a pro-rata basis
     based on the amount of time from the date the expense was incurred through
     the Closing Date, as compared to the amount of time remaining on the Lease
     following the Closing Date, reimburse Seller for all commissions, legal
     fees, the cost of tenant improvements, and all other leasing costs and
     expenses paid or incurred by Seller with respect to all Lease amendments,
     expansions, renewals or new Leases that were entered into after the
     Effective Date, and, at the Closing, Buyer shall assume in writing Seller's
     obligations and hold Seller harmless from any obligations arising from or
     after the Closing Date under all existing and new Leases and Leases
     amendments, expansions or renewals, while Seller shall remain liable for
     and hold Buyer harmless from all obligations under the Leases that arose
     and were required to be performed by Seller prior to the Closing Date.
     Notwithstanding anything to the contrary herein, the restrictions on Seller
     set forth in this Section shall be lifted and of no further force or effect
     if the Closing has not occurred prior to the date that is ninety (90) days
     after the Effective Date.

     2.8 DELIVERIES BY SELLER TO BUYER AT CLOSING. Prior to, and as a condition
of, the Closing, Seller shall deliver to Escrow (a) a duly executed general bill
of sale and assignment of all items of tangible and intangible Personal
Property, if any (the "BILL OF SALE"); (b) a duly executed and acknowledged
grant deed (the "DEED"); (c) financing document lien releases for Seller's
mortgage, if any; (d) a duly executed assignment and assumption of lease, in
recordable form, with respect to each of the Leases; (e) a duly executed
assignment and assumption of all permits, warranties, guaranties (including,
without limitation, any guaranty of a Tenant's obligations under one of the
Leases) and contracts relating to the Real Property; (f) a letter from Seller to
each Tenant requesting that future rent under the Leases be paid to Buyer; (g) a
non-foreign seller affidavit, as required by Section 1445 of the Internal
Revenue Code: (h) the final Certificate of Occupancy for all buildings,
structures and improvements comprising the Real Property (or, if unavailable, a
copy thereof); (i) an executed affidavit of Seller and such other documentation
as may be reasonably required by Escrow to allow for the deletion of the
mechanics' lien exception from the Owner's Policy; (j) delivery of the SEC
Filing Information and the SEC Filings Letter by Seller to Buyer not less than
five (5)



days prior to Closing; (k) originals of the Leases, the contracts, warranties,
guaranties 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; and (l)
such other closing documents as are contemplated or necessary under the terms of
this Agreement or as may reasonably be requested by Escrow to effect the Closing
hereof, all of the foregoing being herein referred to as the "CLOSING
DOCUMENTS".

     2.9 CLOSING. The terms "CLOSING", "CLOSE OF ESCROW" and "CLOSING DATE"
shall mean the date on which the Deed is recorded in the official records of the
County of Arapahoe, Closing Documents are delivered to or at the direction of
Escrow and the balance of the Purchase Price and any other monies due Seller at
the Closing are delivered by Escrow to Seller. Closing shall occur on the
Expected Closing Date, but notwithstanding the foregoing, the Closing may occur
on such other date as Buyer and Seller may hereafter agree. Buyer and Seller may
modify the manner or time of Closing only by written agreement.

     2.10 BUYER'S INDEMNITY AND RELATED OBLIGATIONS. Buyer agrees to indemnify
and hold Seller and its general and limited partners, officers, directors,
shareholders, members, managers, beneficiaries, successors, related entities,
agents and employees (collectively hereinafter the "SELLER RELEASEES") harmless
from any and all injuries, losses, liens, claims, judgments, obligations,
liabilities, costs, expenses or damages (including reasonable attorney's fees
and court costs) sustained by the Seller Releasees to the extent same results
from or arises out of any of Buyer's Inspections or by any of its
representatives pursuant to Section 2.5, above; provided, however, Buyer shall
not have any indemnification obligation or liability to Seller or any third
parties for merely discovering any preexisting condition at the Real Property.
The covenants contained in this Section shall survive the Close of Escrow and
the termination of this Agreement.

3.   CONDITIONS TO CLOSING.

     3.1 SELLER'S OBLIGATIONS. Except as set forth in Section 3.1(d), below, the
Closing and Buyer's obligation to perform at Closing pursuant to this Agreement
are conditioned upon the fulfillment of each and all of the following:

     (a) DUE PERFORMANCE. Seller shall have timely delivered to Escrow such
     Closing Documents as are contemplated or necessary under the terms of this
     Agreement or as may reasonably be requested by Escrow to effect the Closing
     hereof, and Seller shall have duly performed all of Seller's obligations
     under this Agreement.

     (b) CONDEMNATION. No condemnation or eminent domain action which would
     materially and adversely affect the Real Property shall have been
     commenced, and no notice of intent to so commence an action, to acquire the
     Real Property or any portion of the Real Property, shall have been received
     by Seller; provided, however, that in the event a condemnation or eminent
     domain action is commenced or notice of intent to so commence has been
     received by Seller against the Real Property or any portion of the Real
     Property, then Seller may terminate this Agreement by written notice to
     Buyer, or in the event Seller does not terminate this Agreement, Buyer may,
     at its option (i) terminate this Agreement by giving written notice within
     five (5) business days of receipt of notice by Buyer of such action or
     intention from Seller, or (ii) elect (in writing) to close Escrow and have
     all condemnation proceeds payable to Buyer. Notwithstanding the foregoing,
     neither Seller nor Buyer shall have the right to terminate this Agreement
     if the proposed taking (x) does not materially and adversely affect any of
     the buildings, structures or improvements that comprise the Real Property,
     (y) does not have a material adverse affect on any point of ingress, egress
     or access to or from the Real Property, and (z) amounts to less than ten
     percent (10%) of the actual square footage of the unimproved land
     comprising the Real Property.

     (c) BANKRUPTCY. No action or proceeding shall have been commenced by or
     against Seller under the federal bankruptcy code or any state law for the
     relief of debtors, nor shall the Property be subject to an action for the
     enforcement of the rights of creditors.

     (d) TENANT ESTOPPEL CERTIFICATES. As of the Effective Date, there are two
     Tenants occupying the Real Property. The Parties acknowledge that Seller
     may be unable to provide a "TENANT ESTOPPEL



     CERTIFICATE" (in substantially the same form and substance as the Tenant's
     Estoppel Certificate attached hereto as EXHIBIT "B") from both Tenants
     prior to the Closing, and the Parties agree that Seller's failure to obtain
     such a Tenant Estoppel Certificate from both Tenants shall not be a default
     under this Agreement, however, Buyer shall have the right to terminate this
     Agreement pursuant to Section 2.6, above, in the event that either or both
     Tenants fail to deliver a Tenant Estoppel Certificate not less than three
     (3) business days prior to the Closing. Seller shall use commercially
     reasonable efforts to obtain and deliver to Buyer, prior to the Closing, a
     Tenant Estoppel Certificate from each Tenant dated no earlier than thirty
     (30) calendar days prior to the Closing Date, confirming the rent and other
     payments due and alleging no defaults, offsets, or claims against Seller,
     or if there any, setting forth such defaults, offsets, or claims against
     Seller. If both Tenant Estoppel Certificates are timely delivered to Buyer
     and both reflect terms materially consistent with the terms of each such
     Tenant's Lease, and neither of such Tenant Estoppel Certificates alleges a
     material variance from any rent roll delivered to Buyer or a material
     default by Seller under a Lease (unless such variance and/or default was
     disclosed, in writing, to Buyer not later than five (5) business days prior
     to the Due Diligence Expiration Date), then Buyer shall have no right to
     terminate this Agreement under this Subsection 3.1(d). Additionally, and if
     requested by Buyer, Seller shall request that each Tenant execute and
     return to Seller, Buyer and/or Escrow, not later than five (5) business
     days prior to Closing, a subordination, non-disturbance and attornment
     agreement, in form and substance reasonably acceptable to such Tenant (the
     "SNDA"), for the benefit of Wachovia Bank, National Association, however,
     the execution and/or delivery of the SNDA by each Tenant shall not be a
     condition or contingency of this Agreement.

     (e) WAIVER OF RIGHT OF FIRST REFUSAL. The deposit with Escrow and Buyer
     prior to the Due Diligence Expiration Date of an executed waiver by each
     Tenant of any right of first refusal under such Tenant's Lease.

     (f) ISSUANCE OF OWNER'S POLICY. 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.

     (g) DELIVERY OF SECURITY DEPOSITS AND/OR PREPAID RENTS. The delivery by
     Seller to Buyer at Closing 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 Purchase Price.

     3.2 BUYER'S OBLIGATIONS. The Closing and Seller's obligation to perform at
Closing pursuant to this Agreement are conditioned upon the fulfillment of the
following:

     (a) PAYMENT OF PURCHASE PRICE. Buyer shall have timely delivered to Escrow
     the Purchase Price, adjusted as provided in this Agreement.

     (b) DUE PERFORMANCE. Buyer shall have timely delivered to Escrow originals
     of the documents described in Section 2.8(d) and (e), duly executed
     originals by Buyer, and such Closing Documents as are contemplated or
     necessary under the terms of this Agreement or as may reasonably be
     requested by Escrow to effect the Closing hereof, and Buyer shall have duly
     performed all of Buyer's obligations under this Agreement.

     3.3 DUE DILIGENCE CONTINGENCY. The "DUE DILIGENCE CONTINGENCY PERIOD" means
the period commencing on the Effective Date and ending at 6:00 p.m. (Colorado
time) on December 5, 2005 (such latter time and date being hereinafter known as
the "DUE DILIGENCE EXPIRATION DATE"). Buyer, at any time during the Due
Diligence Contingency Period, may, in its sole and absolute discretion, by
written notice to Seller and Escrow, terminate this Agreement and receive back
its Accrued Deposit. If Buyer does not, prior to the expiration of the Due
Diligence Expiration Date, give Escrow and Seller written notice of Buyer's
approval of the Property and election to waive the contingency set forth in this
Section 3.3 (and which notice must be received by Escrow and Seller prior to the
Due Diligence Expiration Date), Buyer will be conclusively deemed to have
elected to terminate the Agreement under this Section, in which case the
provisions of Section 2.6 of this Agreement shall control. Buyer shall have the
right, in the exercise of its sole discretion, to end the Due Diligence
Contingency Period prior to the Due Diligence Expiration Date by delivering not
less than forty-eight (48) hours' prior written notice to Seller of Buyer's
election to waive this contingency.



4.   INSTRUCTIONS ON CLOSING.

     4.1 RECORDATION AND DELIVERY. When all conditions precedent to the Closing
have been satisfied or waived as provided herein:

     (a) GRANT DEED. Escrow shall cause the Deed to be recorded in the official
     records of the County of Arapahoe.

     (b) PURCHASE PRICE. Escrow shall deliver to Seller funds in the amount of
     the Purchase Price, less or plus the net debit or credit to Seller by
     reason of the proration and allocation of Closing Costs provided for in
     this Agreement.

     (c) CLOSING DOCUMENTS. Escrow shall deliver to Buyer and/or Seller the
     other Closing Documents as appropriate.

     4.2 PRORATIONS. The prorations set forth below shall be made as of the date
of Closing, on which date Seller shall be deemed to own the Property:

     (a) COLLECTED AND UNCOLLECTED RENT. All collected and uncollected rent
     (including, without limitation, all base rents, additional rents and
     retroactive rents (hereinafter collectively referred to as "RENT") for the
     Leases at the Real Property in effect on the Closing Date shall be prorated
     as of the Close of Escrow. Any prepaid Rent for the period following the
     Closing Date shall be paid over or credited by Seller to Buyer

     (b) OPERATING COSTS AND ADDITIONAL RENT RECONCILIATION. Seller, as landlord
     under the Leases, is or may be collecting from the Tenants an additional
     estimated amount of Rent to cover common area maintenance charges,
     insurance, taxes and related expenses ("OPERATING COSTS", with the
     estimated additional amounts paid by the Tenants hereinafter referred to as
     "ADDITIONAL RENT") in connection with the ownership, operations,
     maintenance and management of the Real Property. To the extent that any
     Additional Rent is paid by the Tenants to the Seller under the Leases based
     on an estimated payment basis for which a future reconciliation of actual
     Operating Costs to estimated payments is required to be performed at the
     end of a reconciliation period, Buyer and Seller shall make an adjustment
     to the Purchase Price at the Close of Escrow for the applicable
     reconciliation period based on a comparison of the actual Operating Costs
     to the estimated payments at the Close of Escrow. If, as of the Close of
     Escrow, Seller has received Operating Costs' payments in excess of the
     amount that the Tenants will be required to pay, based on the actual
     Operating Costs as of the Close of Escrow, Buyer shall receive a credit in
     the amount of such excess. If, as of the Close of Escrow, Seller has
     received Operating Costs' payments that are less that the amount that the
     Tenants would be required to pay based on the actual Operating Costs as of
     the Close of Escrow, the Purchase Price shall be increased by the estimated
     amount of the underpayments. Operating Costs that are not payable by the
     Tenants either directly or reimbursable under the Leases shall be prorated
     between Seller and Buyer and shall be reasonably estimated by the Parties
     if final bills are not available.

     (c) TAXES AND ASSESSMENTS. Real estate taxes and assessments imposed by any
     governmental authority ("TAXES") with respect to the Real Property for the
     relevant tax year in which the Real Property is being sold that are not yet
     due and payable or that have not yet been paid and that are not (and will
     not be) payable or reimbursable by the Tenants under their Leases as
     Operating Costs shall be prorated as of the Close of Escrow based upon the
     most recent ascertainable assessed values and tax rates and based upon the
     number of days Buyer and Seller will have owned the Real Property during
     such relevant tax year. Seller shall receive a credit for any Taxes paid by
     Seller and applicable to any period after the Close of Escrow.

     (d) LEASING COMMISSIONS AND TENANT IMPROVEMENTS. At the Close of Escrow,
     Buyer shall assume the obligation to pay all (i) leasing costs that are due
     or become due on or after the Closing Date to the extent that the same
     arise from a new Lease or any Lease amendment, extension or expansion
     hereafter entered into by Seller pursuant to Section 2.7(d), above and (ii)
     leasing costs that are due after the Closing Date (subject to Buyer's
     consent rights pursuant to Section 2.7(d), above).



     (e) TENANT DEPOSITS. The Tenants' security deposits, if any, not heretofore
     applied to their obligations under their respective Leases shall be
     transferred or credited to Buyer at the Close of Escrow. As of the Close of
     Escrow, Buyer shall assume all of Seller's obligations related to the
     security deposits.

     (f) UTILITIES AND UTILITY DEPOSITS. Utilities for the Real Property
     (excluding utilities for which payment is made directly by Tenants),
     including water, sewer, electric, and gas, based upon the last reading of
     meters prior to the Close of Escrow, shall be prorated. Seller shall be
     entitled to a credit for all security deposits and Owner Deposits (as
     hereinafter defined) held by any of the utility companies providing service
     to the Real Property; provided, however, Seller must deliver evidence of
     such deposits reasonably satisfactory to Buyer and to Escrow not later than
     five (5) business days prior to Closing to receive such credit. Seller
     shall endeavor to obtain meter readings on the day before the Closing Date,
     and if such readings are obtained, there shall be no proration of such
     items and Seller shall pay at Close of Escrow the bills therefor through
     the Closing Date, and Buyer shall pay the bills therefor for the period
     subsequent thereto. If the utility company will not issue separate bills,
     Buyer will receive a credit against the Purchase Price for Seller's portion
     and will pay the entire bill prior to delinquency after Close of Escrow.
     Buyer shall be responsible for paying any security deposits and Owner
     Deposits required by utility companies providing service to the Real
     Property.

     (g) OWNER DEPOSITS. Seller shall receive a credit at the Close of Escrow
     for all bonds, deposits, letters of credit, set aside letters or other
     similar items, if any, that are outstanding with respect to the Real
     Property that have been provided by Seller or any of its affiliates to any
     governmental agency, public utility or similar entity (collectively, "OWNER
     DEPOSITS") to the extent assignable to Buyer. To the extent any Owner
     Deposits are not assignable to Buyer, Buyer shall replace such Owner
     Deposits and obtain the release of Seller (or its affiliates) from any
     obligations under such Owner Deposits. To the extent that any funds are
     released as a result of the termination of any Owner Deposits for which
     Seller did not get a credit, such funds shall be delivered to Seller
     immediately upon their receipt.

     (h) FINAL ADJUSTMENT AFTER CLOSING. If final prorations cannot be made at
     the Close of Escrow for any item being prorated under this Section 4.2,
     then for any such proration ("POST CLOSING PRORATION"), Buyer and Seller
     agree to allocate such items on a fair and equitable basis as soon as
     invoices or bills are available and applicable reconciliation with Tenants
     have been completed, with final adjustment and payment to be made as soon
     as reasonably possible after the Close of Escrow (but in no event later
     than sixty (60) days after the Close of Escrow), to the effect that income
     and expenses are received and paid by the Parties on a accrual basis with
     respect to their period of ownership.

     4.3 PAYMENT OF CLOSING COSTS. Except as may be expressly set forth in this
Agreement to the contrary, Seller shall pay: the recording and/or filing fees
necessary to discharge liens pursuant to Seller's obligations in Section 2.2,
above; the cost of the Preliminary Title Report, if any; the cost of a standard
coverage owner's policy of title insurance, subject to Section 2.2, above; all
city and county documentary transfer taxes; and one-half of the amount of all
fees and costs charged by Escrow, including the cost of recording the Deed.
Buyer shall pay: all costs incurred by Buyer in investigating the Property and
preparing to take title to the Real Property; the excess cost of an ALTA
extended coverage policy of title insurance, as compared to the cost of a
standard coverage policy; and one-half of the amount of all fees and costs
charged by Escrow, including the cost of recording the Deed.

5.   REPRESENTATIONS, WARRANTIES AND COVENANTS.

     5.1 SELLER. Seller makes the following representations and warranties to
Buyer, which representations and warranties shall be true and correct both as of
the date of this Agreement and as of the Closing, and upon which representations
and warranties Buyer shall be entitled to rely except to the extent that any
inspection or investigation made by Buyer reveals information to the contrary:

     (a) AUTHORITY. This Agreement and all Closing Documents shall be duly
     authorized and executed and when delivered by Seller will be valid, binding
     and enforceable obligations of Seller, and that Seller has the legal
     authority and ability to sell the Property pursuant to this Agreement.



     (b) COMPLIANCE WITH LAWS. Except as set forth herein, Seller has received
     no written notice that any governmental agency considers the Real Property
     or the operation or use thereof to have failed to comply with any law,
     ordinance, regulation or order.

     (c) STATUS OF PROPERTY. Seller has received no written notice regarding
     cancellation of any casualty insurance on the Real Property, or requiring
     performance of any repairs, alterations or other work thereon in order to
     obtain or maintain casualty insurance on the Real Property.

     (d) NO SUITS OR CLAIMS. To Seller's actual knowledge and without
     investigation or inquiry, 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.

     (e) NO ACTION TO CHANGE ZONING OR PERMITTED USES. Seller has not and will
     not, without the prior written consent of Purchaser, 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,. Notwithstanding anything to the contrary herein, the restrictions on
     Seller set forth in this Section shall be lifted and of no further force or
     effect if the Closing has not occurred prior to the date that is ninety
     (90) days after the Effective Date.

     (f) PAYMENT OF PROPERTY EXPENSES. Except for any item to be prorated at
     Closing or paid by Buyer 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
     Closing shall be paid in full by Seller.

     (g) PAYMENT OF TAXES. 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 Closing) have been paid or will
     be so paid by Seller prior to Closing.

     (h) NO UNRECORDED TITLE DEFECTS. To Seller's actual knowledge, and except
     as is disclosed in the Preliminary Title Report, there are no unrecorded
     leases (other than the Leases), liens or encumbrances which may affect
     title to the Property.

     (i) NO INTENDED PUBLIC IMPROVEMENTS. To Seller's actual knowledge, Seller
     has not received any written notice that there are any 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.

     (j) NO CONDEMNATION. To Seller's actual knowledge, Seller has not received
     any written notice that there is any impending or contemplated condemnation
     or taking by inverse condemnation of the Property, or any portion thereof,
     by any governmental authorities.

     (k) NO OTHER AGREEMENTS. 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. Notwithstanding anything to the
     contrary herein, the restriction on Seller set forth in this Section shall
     be lifted and of no further force or effect on the occurrence of the
     earliest of the following events: (i) Buyer's termination of this
     Agreement; or (ii) if the Closing has not occurred by January 17, 2006
     (unless the Parties have agreed, in writing, to extend the Closing Date to
     a later date, in which event the restriction on Seller shall be lifted on
     the day immediately following the extended Closing Date).

     (L) ENVIRONMENTAL. Except as otherwise disclosed in the Property Documents,
     and to Seller's actual knowledge, Seller has not received any written
     notice that there exists or has existed, or that Seller itself has caused
     any generation, production, location, transportation, storage, treatment,
     discharge, disposal, release or threatened release upon, under or about the
     Property of any Hazardous Substances.



     (m) To Seller's actual knowledge, except as otherwise disclosed in the
     Property Documents, Seller has not received any written notice that there
     is now, or there has ever been, on or in the Property any 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 Purchaser, 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 Property
     (including Hazardous Materials released on the Property prior to Closing
     and continuing in existence on the Property at Closing).

     (m) NO INCREASED ASSESSED VALUATION. To Seller's actual knowledge, there
     are no proceedings pending for the increase of the assessed valuation of
     the Property.

     (n) DUTY TO SUPPLEMENT. Should Seller receive notice or knowledge of any
     information regarding any of the matters set forth in this Section 5.1
     after the Effective Date and prior to Closing, Seller will immediately
     notify Purchaser of the same in writing.

     5.2 BUYER. Buyer represents and warrants that this Agreement and all
Closing Documents shall be duly authorized and executed and when delivered by
Buyer will be valid, binding and enforceable obligations of Buyer, and that
Buyer has the legal authority and ability to purchase the Property pursuant to
this Agreement.

     5.3 SURVIVAL. Seller's representations, warranties and covenants, if any,
set forth in Sections 2.4, 3.1 and 5.1 shall terminate and be of no further
force or effect immediately upon the Closing. The representations and
warranties, if any, of Seller elsewhere contained in this Agreement shall
survive for a period of twelve (12) months following the Closing Date.

6.   REMEDIES.

     6.1 BUYER'S REMEDIES. In the event that Seller fails to consummate this
Agreement for any reason, except Buyer's default or a termination of this
Agreement by Buyer or Seller pursuant to a right to do so under the provisions
hereof, Buyer shall have one, but not both, of the following remedies, and no
others:

               (A) BUYER MAY TERMINATE THIS AGREEMENT, IN WHICH CASE AND UPON
EXECUTION OF CANCELLATION INSTRUCTIONS BY BUYER, ESCROW SHALL IMMEDIATELY RETURN
THE ACCRUED DEPOSIT TO BUYER, AND SELLER SHALL PAY ANY ESCROW CANCELLATION
CHARGES.

               (B) BUYER MAY BRING AN ACTION FOR SPECIFIC PERFORMANCE AGAINST
SELLER WITH RESPECT TO THIS AGREEMENT, BUT IN SUCH EVENT, AND EXCEPT FOR THE
ATTORNEY'S FEES AND COSTS ALLOWABLE UNDER SECTION 7.3, BELOW, BUYER MAY NOT SEEK
ANY DAMAGES, GENERAL, SPECIAL OR CONSEQUENTIAL, SUFFERED OR CLAIMED TO HAVE BEEN
SUFFERED BY IT, AND THE COURT SHALL NOT HAVE ANY POWER OR RIGHT TO AWARD ANY
SUCH DAMAGES. ANY CLAIM OR DEMAND FOR SPECIFIC PERFORMANCE SHALL BE ABSOLUTELY
BARRED UNLESS BUYER COMMENCES AN ACTION THEREON WITHIN NINETY (90) DAYS AFTER
THE DATE OF THE INACTION, OMISSION, EVENT, OR DEFAULT OF SELLER THAT GAVE RISE
TO SUCH CLAIM FOR SPECIFIC PERFORMANCE. BUYER ACKNOWLEDGES AND UNDERSTANDS,
AFTER HAVING CONSULTED WITH ITS LEGAL COUNSEL, THAT THE PURPOSE OF THE FOREGOING
IS TO SHORTEN THE PERIOD WITHIN WHICH BUYER WOULD OTHERWISE HAVE TO BRING A
CLAIM FOR SPECIFIC PERFORMANCE.

     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, HOWEVER, IN SUCH
EVENT, BUYER'S DAMAGES SHALL BE LIMITED TO THE LESSER OF ITS ACTUAL DAMAGES OR
FIVE HUNDRED THOUSAND DOLLARS ($500,000.00), AND NO TRIBUNAL



OR COURT SHALL HAVE JURISDICTION OR AUTHORITY TO ISSUE AN AWARD IN EXCESS OF
SUCH AMOUNT .

     6.2 SELLER'S REMEDIES. THE PARTIES AGREE THAT SELLER WILL SUFFER DAMAGES IN
THE EVENT OF BUYER'S DEFAULT UNDER OR BREACH OF THE TERMS OF THIS AGREEMENT,
ALTHOUGH THE AMOUNT OF SUCH DAMAGES IS DIFFICULT OR IMPOSSIBLE TO DETERMINE. IF
BUYER SHOULD FAIL TO CONSUMMATE THIS AGREEMENT AS A RESULT OF BUYER'S DEFAULT
UNDER OR BREACH OF THE TERMS OF THIS AGREEMENT, THEN SELLER MAY TERMINATE THIS
AGREEMENT BY NOTIFYING BUYER AND ESCROW AND SELLER SHALL RECEIVE OR RETAIN THE
ACCRUED DEPOSIT AS LIQUIDATED DAMAGES, BUT NOT AS A PENALTY. THE PARTIES AGREE
THAT THE AMOUNT OF THE ACCRUED DEPOSIT IS A REASONABLE ESTIMATE OF SELLER'S LOSS
IN THE EVENT OF BUYER'S DEFAULT. SELLER HEREBY ACKNOWLEDGES AND AGREES THAT
EXCEPT FOR BUYER'S REPAIR AND INDEMNITY OBLIGATIONS SET FORTH IN SECTIONS 2.5
AND 2.10 AND ELSEWHERE IN THIS AGREEMENT, AND EXCEPT FOR THE ATTORNEY'S FEES AND
COSTS ALLOWABLE UNDER SECTION 7.3, BELOW, SUCH LIQUIDATED DAMAGES SHALL
CONSTITUTE SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER.

          SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE
FOREGOING PROVISIONS IN SECTIONS 6.1 AND 6.2, AND BY THEIR INITIALS IMMEDIATELY
BELOW, AGREE TO BE BOUND BY THEIR TERMS.

                    SELLER: SW   BUYER: JMP

     6.3 LIMITATION OF SELLER'S LIABILITY. Notwithstanding anything to the
contrary in this Agreement, any judgment obtained by Buyer against Seller shall
be satisfied only out of Seller's interest in the Real Property and the rents
receivable by Seller therefrom. The Seller Releasees shall not have any personal
liability for any matter in connection with this Agreement or for the
obligations of the Seller. Buyer shall not institute, seek or enforce any
personal or deficiency judgment against Seller or any of the Seller Releasees,
and none of their property, except the Real Property, shall be available to
satisfy any judgment hereunder. The covenants contained in this Section shall
survive the Close of Escrow and the termination of this Agreement.

     6.4 BUYER'S GENERAL INDEMNITY. Buyer will defend, indemnify and hold the
Seller Releasees harmless from and against: (a) any and all injuries, losses,
liens, claims, judgments, obligations, liabilities, costs, expenses or damages
arising from any breach of the warranties or representations of Buyer contained
in this Agreement; and (b) any and all injuries, losses, liens, claims,
judgments, obligations, liabilities, costs, expenses or damages arising after
the Closing Date regarding the Property or arising as a result of Buyer's
failure to pay all taxes, assessments, fees and other government charges levied
upon or otherwise relating or attributable to the Property or the operations
conducted thereon arising after the Closing Date. The covenants contained in
this Section shall survive the Close of Escrow and the termination of this
Agreement.

     6.5 SELLER'S GENERAL INDEMNITY. Seller will defend, indemnify and hold the
Buyer and its general and limited partners, officers, directors, shareholders,
members, managers, beneficiaries, successors, related entities, agents and
employees (collectively hereinafter the "BUYER RELEASEES") harmless from and
against: (a) any and all injuries, losses, liens, claims, judgments,
obligations, liabilities, costs, expenses or damages arising from any breach of
the warranties or representations of Seller contained in this Agreement; and (b)
any and all injuries, losses, liens, claims, judgments, obligations,
liabilities, costs, expenses or damages arising prior the Closing Date regarding
the Property or arising as a result of Seller's failure to pay all taxes,
assessments, fees and other government charges levied upon or otherwise relating
or attributable to the Property or the operations conducted thereon arising
prior to the Closing Date. The covenants contained in this Section shall survive
the Close of Escrow and the termination of this Agreement. Notwithstanding the
foregoing, Seller shall have no obligation to defend, indemnify or hold the
Buyer Releasees harmless from or against any condition, injury, claim, loss,
expense, cost or damage for which, under Section 2.3, above, Buyer has released
Seller.

7.   GENERAL PROVISIONS.



     7.1 BROKERS AND FINDERS. Seller and Buyer each represent that other than as
set forth herein, neither has dealt with any broker or finder with regard to the
within described transaction or the Property. Seller and Buyer shall each
indemnify the other and the Property from and against any loss, damage or
expense resulting from any claims by any other person or other legal entity with
which such indemnifying Party has had contact, discussion or negotiations
pertaining to the Property for any such brokerage commissions or fees alleged to
have been earned at the request of such indemnifying Party. Seller has used the
services of Patrick Devereaux of Cushman & Wakefield of Colorado, Inc.
("BROKER"), and Buyer has not used the services of any real estate broker or
salesperson in connection with this transaction, and upon the successful Close
of Escrow pursuant to the terms contained herein, Seller shall pay to Broker a
commission pursuant to a separate agreement as Broker's total, and sole,
compensation for the brokerage services rendered in connection with this
Agreement. Broker shall return the foregoing commission upon Seller's demand in
the event that after the Close of Escrow, (a) Seller and Buyer agree to a
rescission of the Agreement and/or a court of competent jurisdiction orders the
rescission of this Agreement, and (b) title to the Property is returned to
Seller. Nothing herein is intended to give Broker any rights under this
Agreement, and Broker shall not be deemed to be a third party beneficiary
hereunder.

     7.2 NOTICES. Any notice, request, demand, instruction or other document to
be given hereunder or pursuant hereto shall be in writing and shall be
personally delivered or sent by registered or certified mail, postage prepaid,
return receipt requested or by nationally recognized overnight delivery service
(such as Federal Express), or facsimile, as follows:

     If to Seller to:   c/o Auburndale Properties, Inc.
                        2951 28th Street, Suite 2050
                        Santa Monica, CA 90405
                        ATTN: Mrs. Chris Felix
                        Facsimile No.: (310) 396-8306
                        cfelix@aubproperties.com

                        With a copy to:

                        c/o Auburndale Properties, Inc.
                        50 Tice Boulevard
                        Woodcliff Lake, New Jersey 07675
                        ATTN: Mr. Shalom Wall
                        Facsimile No.: (201) 930-1833
                        swall@aubproperties.com

                        With a copy to:

                        Leo A. Schwarz, Esq.
                        P.O. Box 8340
                        Calabasas, CA 91372-8340
                        Facsimile No.: (818) 222-2993
                        leolaw@gte.net & wfigueroa@sbcglobal.net

     If to Buyer to:    Cole Takedown, LLC
                        2555 E. Camelback Road, Suite 400
                        Phoenix, AZ 85016
                        ATTN: Todd J. Weiss, Esq.
                        Facsimile No.: (602) 778-8780
                        TWeiss@ColeCapital.com

                        With a copy to:

                        Bennett Wheeler Lytle & Cartwright, PLC
                        3838 N. Central Avenue, Suite 1120
                        Phoenix, AZ 85012



                        ATTN: Kevin T. Lytle, Esq.
                        Facsimile No.: (602) 266-9119
                        klytle@bwlclaw.com

     If to Escrow to:   First American Title Insurance Company
                        2425 E. Camelback Road, Suite 300
                        Phoenix, AZ 85016
                        ATTN:  Mr. Tom Anzaldua
                        Facsimile No.: (602) 567-8101
                        tanzaldua@firstam.com

     Notice shall be deemed to have been given upon receipt or refusal to accept
delivery. The addresses and addressees for purposes of this paragraph may be
changed by giving written notice of such change in the manner provided herein
for giving notice. Unless and until such written notice is received, the last
address and addressee stated by written notice, or provided herein if no written
change has been sent or received, shall be deemed to continue in effect for all
purposes hereunder. Any notice sent by facsimile shall be effective when
received, provided, however, the sending Party immediately thereafter delivers a
copy of the notice to the other Party via one of the other methods of providing
notice set forth above.

     7.3 ATTORNEY'S FEES. If there is any litigation to enforce any provisions
or rights arising herein, 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.

     7.4 ENTIRE AGREEMENT. This Agreement is intended by the Parties as a final
expression and a complete and exclusive statement of the entire agreement of the
Parties with respect to the subject matter hereof, and, as such, this Agreement
supersedes all prior understandings and agreements, whether oral or in writing,
between the Parties respecting the subject matter of this Agreement.

     7.5 SEVERABILITY. In the event any portion of this Agreement shall be
declared by any court of competent jurisdiction to be invalid, illegal or
unenforceable, such portion shall be severed from this Agreement, and the
remaining parts hereof will remain in full force and effect, as fully as if such
invalid, illegal or unenforceable portion had never been part of this Agreement.

     7.6 AMENDMENTS. This Agreement may be amended at any time only by the
written agreement of Seller and Buyer. All amendments, changes, revisions and
discharges of this Agreement, in whole or in part, and from time to time, shall
be binding upon the Parties despite any lack of legal consideration, so long as
the same shall be in writing and executed by the Parties.

     7.7 NO THIRD PARTY BENEFIT. This Agreement is intended to benefit only the
Parties to this Agreement, their successors and assigns, and no person or entity
has or shall acquire any rights under this Agreement except other than such
successors or assigns.

     7.8 TIME OF THE ESSENCE. Time shall be of the essence as to all dates and
times of performance, whether contained in this Agreement or contained in any
Escrow instructions to be executed pursuant to this Agreement, and all Escrow
instructions shall be deemed to contain a provision to this effect. If any date
upon which any Party hereto is required to act shall fall on a Saturday, Sunday
or national holiday, the date as to which action applies shall be deemed to be
the next following business day.

     7.9 FURTHER ACTION. Each Party agrees to execute such further documents or
Escrow instructions and to take such further action as may be reasonably
necessary or desirable to effectuate the intent and purposes of this Agreement
and to consummate the transactions contemplated herein.

     7.10 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which when executed shall be an original and all of which together shall
constitute one and the same Agreement. A signature transmitted



by facsimile shall for all intents and purposes be treated as an original,
however, the Party transmitting such signature by facsimile shall concurrently
deliver to the other, by overnight delivery service, the executed original of
this Agreement.

     7.11 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and
enforceable by and shall inure to the benefit of the successors and assigns of
the Parties hereto. Except as set forth in Section 7.15, below, Buyer shall not
assign this Agreement without the prior written consent of Seller, which consent
may be withheld by Seller for any reason or for no reason, provided, however
that Buyer may assign this Agreement to an entity wholly owned or controlled by
Buyer (hereinafter, a "RELATED ENTITY"), but in such event (a) the assignee
shall assume in writing all of Buyer's obligations and duties under this
Agreement, (b) Buyer shall provide to Seller evidence reasonably satisfactory to
Seller that the assignee is a Related Entity, and (c) Buyer shall promptly
provide Seller with written notice of such assignment, together with a true,
correct and complete copy of the assignment agreement. In no event shall Buyer
be released from or relieved of any of its obligations, duties or liabilities
hereunder for or on account of such assignment.

     7.12 CONSTRUCTION; CHOICE OF LAW. This Agreement shall be construed fairly
and equally as to Seller and Buyer and without regard to which Party drafted the
same. All exhibits to which reference is made in this Agreement are deemed
incorporated in this Agreement, whether or not actually attached. Section
headings contained in this Agreement are for the purposes of reference and
convenience only and shall not limit or otherwise affect the meaning hereof.
This Agreement has been executed and is to be performed in the County of
Arapahoe, and this Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Colorado.

     7.13 WAIVER OF JURY TRIAL. SELLER AND BUYER ACKNOWLEDGE AND AGREE THAT
RECENT CASES HAVE DETERMINED THAT CONTRACTUAL WAIVERS OF A PARTY'S RIGHT TO A
JURY TRIAL MAY BE INVALID, ALTHOUGH FURTHER REVIEW OF THESE HOLDINGS ARE OR MAY
BE PENDING. NOTWITHSTANDING THE ABOVE-REFERENCED HOLDINGS, SELLER AND BUYER EACH
DESIRE TO INCLUDE A JURY TRIAL WAIVER IN THIS AGREEMENT, AND EACH COVENANTS TO
DO SUCH FURTHER ACTS AND TAKE SUCH ADDITIONAL ACTION AS IS HEREAFTER REQUIRED TO
VALIDATE AND/OR ENFORCE THIS WAIVER. BY INITIALING BELOW, SELLER AND BUYER
HEREBY ACKNOWLEDGE THAT EACH WAIVES THE RIGHT TO A TRIAL BY JURY OF ANY ISSUE OR
ACTION BETWEEN THEM RELATING TO THIS AGREEMENT OR THE PROPERTY OR THE
NEGOTIATIONS THAT PRECEDED THIS AGREEMENT.

                    SW       JMP
                    SELLER   BUYER

     7.14 SELLER'S ELECTION OF IRC SECTION 1031 EXCHANGE. Seller may elect to
effect a tax-deferred exchange under Section 1031 of the Internal Revenue Code
by designating other real property (the "EXCHANGE PROPERTY") to be acquired by
an intermediary selected by Seller ("INTERMEDIARY") in exchange for the Real
Property. In such event, Seller shall enter into an exchange agreement with the
Intermediary prior to the Closing by the terms of which the Intermediary shall
receive the sale proceeds of the Real Property, and Seller may transfer this
Agreement to the Intermediary for such purpose, but all transfer documents shall
be executed by Seller and Seller shall remain solely responsible for Seller's
obligations under this Agreement. Notwithstanding Seller's election to effect a
tax-deferred exchange, such an exchange by Seller shall not interfere with or
excuse Seller's obligations under this Agreement, and Seller shall be required
to sell such Real Property to Buyer and Buyer shall be required to purchase the
Real Property for the price and on the terms set forth in this Agreement. In no
event shall Buyer be required (a) to take title to any property other than the
Real Property described herein, or (b) to pay funds in addition to those called
for elsewhere in this Agreement. Buyer shall execute such documents and
undertake such acts as are reasonably necessary and/or convenient to facilitate
the foregoing tax-deferred exchange, but Buyer shall not be required to be
involved in such exchange other than as specified herein.

     7.15 BUYER'S ELECTION OF IRC SECTION 1031 EXCHANGE. Buyer may elect to
effect a tax-deferred exchange under Section 1031 of the Internal Revenue Code
by designating an Intermediary to acquire the Real Property in exchange for
other real property owned by Buyer ("BUYER'S PROPERTY"). In such event, Buyer
shall enter into an exchange agreement with the Intermediary prior to the
Closing by the terms of which the Intermediary shall use the sale proceeds from
Buyer's Property to acquire the Real Property, and Buyer may transfer this



Agreement to the Intermediary for such purpose, but all transfer documents shall
be executed by Buyer and Buyer shall remain solely responsible for Buyer's
obligations under this Agreement. Notwithstanding Buyer's election to effect a
tax-deferred exchange, such an exchange by Buyer shall not interfere with or
excuse Buyer's obligations under this Agreement, and Buyer shall be required to
buy the Real Property from Seller and Seller shall be required to sell the Real
Property for the price and on the terms set forth in this Agreement. In no event
shall Seller be required (a) to take title to any other property other, or (b)
to pay funds in addition to those called for elsewhere in this Agreement. Seller
shall execute such documents and undertake such acts as are reasonably necessary
and/or convenient to facilitate the foregoing tax-deferred exchange, but Seller
shall not be required to be involved in such exchange other than as specified
herein.

     7.16 CONFIDENTIALITY. Seller and Buyer and on behalf of their agents,
representatives and assigns, agree and warrant that they understand and agree
that as a material condition of this Agreement, and in exchange for
consideration hereunder, the negotiations preceding this Agreement and any that
may hereafter take place, the contents of the Property Documents and any other
documents hereafter disclosed to either Party, any financial information
provided to either Party by the other, and the existence of this Agreement
together with its terms and conditions (collectively, the "CONFIDENTIAL
INFORMATION"), are to remain strictly private and confidential to the extent
permitted by law. Seller and Buyer expressly agree that they will not disclose,
request or consent to disclosure or otherwise disseminate the Confidential
Information to anyone with the sole exceptions of their attorneys, accountants,
lenders or tax preparers, and they shall instruct their attorneys, accountants,
lenders or tax preparers not to disclose the Confidential Information to anyone,
unless specifically permitted or required by law, and in that event, only such
information as the law permits or requires to be disclosed. Seller and Buyer,
and on behalf of their agents, representatives and assigns, agree that they
shall not at any time do anything or take any action or make any statement,
written or oral, inconsistent with the terms and provisions of this Agreement.
Seller and Buyer understand that the "lid" on publicity and all other terms
hereof will be enforced and that a breach of this Agreement will make them
responsible for all damages occasioned thereby, including, but not limited to,
attorney's fees incurred therefrom. Notwithstanding the foregoing, each Party,
on or after the Closing, may issue a press release generally describing the sale
and/or acquisition of the Property, but the Purchase Price and financial terms
of this Agreement shall not be disclosed.

     7.17 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 company that
is subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended ("REGISTERED COMPANY"), promoted by the Buyer or to an affiliate of a
Registered Company (a "REGISTERED COMPANY AFFILIATE"). In the event Buyer's
assignee under this Agreement is a Registered Company or a Registered Company
Affiliate, the Registered Company will be required to make certain filings with
the U.S. Securities and Exchange Commission required under SEC Rule 3-14 of
Regulation S-X (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 and the Registered Company with financial information regarding
the Property for the Audited Year requested by Buyer, the Registered Company,
and/or Buyer's or the Registered Company'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 ("SEC FILING INFORMATION"). Notwithstanding the foregoing, under no
circumstances shall Seller be required to deliver or disclose any of its tax
returns or any information that is privileged by law from disclosure, provided,
however, Seller agrees to deliver or disclose to Buyer such component
information used in connection with the preparation of said tax returns as is
necessary for Buyer to satisfy the SEC Filings requirements. Seller shall
deliver the SEC Filing Information requested by Buyer, the Registered Company
and/or Buyer's or the Registered Company's auditors prior to the expiration of
the Study Period, and Seller agrees to cooperate with Buyer, the Registered
Company and Buyer's or the Registered Company's auditors regarding any inquiries
by Buyer, the Registered Company and Buyer's or the Registered Company'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 or the Registered Company's auditors ("SEC FILINGS LETTER"). A sample
SEC Filings Letter is attached to the Purchase Agreement as Exhibit "C";
however, Buyer's and/or the Registered Company'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 7.17 shall survive the Closing for a
period of one (1) year.



IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date(s)
written below.

SELLER:   SHADRALL ASSOCIATES, A NEW YORK GENERAL
          PARTNERSHIP

          By its Managing General Partner,
          Shadrall Corp., a
          Massachusetts Corporation


          By: /s/ Shalom Wall
              -----------------------------------
              Shalom Wall, Vice President
          Dated: 11-16-05


BUYER:    COLE TAKEDOWN, LLC, A DELAWARE LIMITED
          LIABILITY COMPANY


          /s/ John M. Pons
          ---------------------------------------
          BY: John M. Pons
          ITS: Senior Vice President
          Dated: November 16, 2005



                         AMENDMENT TO PURCHASE AGREEMENT

     This Amendment to Purchase Agreement (this "Amendment") is made and entered
into effective as of the 29th day of November, 2005, by and between SHADRALL
ASSOCIATES ("Seller") and COLE TAKEDOWN, LLC ("Buyer") and provides as follows:

                                   WITNESSETH:

     WHEREAS, Seller and Buyer entered into that certain Agreement for Purchase
and Sale of Real Property and Joint Escrow Instructions dated as of November 16,
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. The first sentence of Section 3.3 of the Purchase Agreement is hereby
amended by deleting the entirety thereof and substituting the following in lieu
thereof:

          THE "Due Diligence Contingency Period" MEANS THE PERIOD COMMENCING ON
          THE EFFECTIVE DATE AND ENDING AT 6:00 P.M. (COLORADO TIME) ON DECEMBER
          7, 2005 (SUCH LATTER TIME AND DATE BEING HEREINAFTER KNOWN AS THE "Due
          Diligence Expiration Date").

     2. 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.

     3. 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.

[SIGNATURES ON FOLLOWING PAGE]

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date set forth above.

BUYER:                                   SELLER:

COLE TAKEDOWN, LLC, a Delaware limited   SHADRALL ASSOCIATES, a New York general
liability company                        partnership


By: /s/ John M. Pons                     By: Shadrall Corp., a Massachusetts
    ----------------------------------   corporation
    John M. Pons                         Its General Partner
    Its Senior Vice President


                                         By: /s/ Shalom Wall
                                             -----------------------------------
                                             Shalom Wall
                                             Its Vice President



                     REINSTATEMENT OF AND FIRST AMENDMENT TO
                AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY
                          AND JOINT ESCROW INSTRUCTIONS

     THIS REINSTATEMENT OF AND FIRST AMENDMENT TO AGREEMENT FOR PURCHASE AND
SALE OF REAL PROPERTY AND JOINT ESCROW INSTRUCTIONS (this "Amendment") dated as
of the 3rd day of January, 2006, is executed by and between SHADRALL ASSOCIATES,
a New York general partnership ("Seller"), and COLE TAKEDOWN, LLC, a Delaware
limited liability company ("Buyer").

                                    RECITALS

     A. Seller and Buyer have heretofore entered into a certain Agreement for
Purchase and Sale of Real Property and Joint Escrow Instructions dated November
16, 2005 (the "Agreement"). Unless otherwise defined herein, terms used herein
with initial capital letters shall have the same meanings assigned to such terms
in the Agreement.

     B. Buyer did not approve the Property pursuant to Section 3.3 of the
Agreement or waive the contingencies set forth therein, which, pursuant to said
Section 3.3, was deemed to be an election by Buyer to terminate the Agreement.
Buyer and Seller acknowledge and agree, however, that the Accrued Deposit was
not returned to Buyer as contemplated by Section 2.6 of the Agreement and is
still held in escrow by Escrow.

     C. Seller and Buyer now wish to reinstate the Agreement and to amend
certain of the terms thereof.

     NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Buyer hereby agree as follows:

1.   Seller and Buyer hereby reinstate the Agreement and acknowledge that the
     Agreement is in full force and effect as of the date hereof. Buyer hereby
     waives its right to terminate the Agreement pursuant to Section 3.3.

2.   The Purchase Price shall be $18,500,000.00.

3.   Not later than three (3) business days after the full execution and
     delivery of the Amendment to Escrow, Buyer shall deliver to Escrow
     additional earnest money in the amount of Five Hundred Thousand and No/100
     Dollars ($500,000.00), which amount shall be added to and be a part of the
     Accrued Deposit.

4.   Section 1.4 of the Agreement is deleted in its entirety and replaced by the
     following:

     "1.4 EXPECTED CLOSING DATE. Subject to Section 2.9, the Closing shall be
     January 17, 2006 (the "EXPECTED CLOSING DATE"). Buyer may extend the
     Closing for up to an additional twenty (20) days upon delivery of written
     notice to extend the Closing to Escrow and Seller prior to the original
     Closing Date."

5.   Seller's has responded to Buyer's written objections to the Exceptions
     pursuant to Section 2.2 of the Agreement by notifying Buyer that Seller
     will not cure, clear correct or remove any Exceptions to which Buyer
     objected. The parties hereby acknowledge and agree that Buyer shall have
     the option, exercisable by giving written notice thereof to Seller on or
     before 5 p.m. Phoenix, Arizona time on January 9, 2006, to terminate the
     Agreement under Section 2.2 if Buyer is unable to clear, correct or remove
     the Exceptions to which it has objected. If Buyer elects to terminate the
     Agreement, the provisions of Section 2.6 shall apply. If Buyer fails to
     provide timely written notice of its election to terminate the Agreement,
     Buyer shall be deemed to have waived its objections to the Exceptions.

6.   As reinstated and amended hereby, the Agreement remains in full force and
     effect.



7.   In order to facilitate execution, (a) this Amendment may be executed in as
     many counterparts as may be convenient or required, (b) all counterparts
     shall collectively constitute a single instrument, (c) any signature page
     to any counterpart may be detached from such counterpart without impairing
     the legal effect of the signatures thereon and thereafter attached to
     another counterpart identical thereto except having attached to it
     additional signature pages and (d) delivery of an executed counterpart of
     this Amendment by facsimile shall be binding on the parties so delivering.

     EXECUTED AND DELIVERED as of the date first above written.

                                         SELLER:

                                         SHADRALL ASSOCIATES,
                                         a New York general partnership

                                         By its Managing General Partner,
                                         Shadrall Corp., a Massachusetts
                                         corporation


                                         By /s/ Shalom Wall
                                            ------------------------------------
                                            Shalom Wall, Vice President


                                         BUYER:

                                         COLE TAKEDOWN, LLC,
                                         a Delaware limited liability company


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



    ASSIGNMENT OF AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND JOINT
                               ESCROW INSTRUCTIONS

                         SHADRALL ASSOCIATES, AS SELLER
                                       AND
                          COLE TAKEDOWN, 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 for Purchase and Sale of Real Property and
Joint Escrow Instructions ("Purchase Agreement") described herein, to ASSIGNEE
and its successors and assigns. The Purchase Agreement is described as follows:

     DATE OF AGREEMENT:   November 16, 2005, as amended and reinstated

     ORIGINAL BUYER:      Cole Takedown, LLC

     ASSIGNED TO:         Cole MT Denver CO, LLC

     PROPERTY ADDRESS:    4827 and 4887 South Wadsworth Way, Denver, Colorado


     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 6th day of February, 2006.

ASSIGNOR:                               ASSIGNEE:

COLE TAKEDOWN, LLC                      COLE MT DENVER CO, LLC

                                        By: Cole REIT Advisors II, LLC,
                                            its Manager


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

EX-10.48

                                                                   Exhibit 10.48

                                                   MERS MIN:8000101-0000002500-6

                                 PROMISSORY NOTE

$12,025,000.00                                                New York, New York
                                                                February 6, 2006

          FOR VALUE RECEIVED, COLE MT DENVER CO, LLC, a Delaware limited
liability company, having its principal place of business at 2555 E. Camelback
Road, Ste. 400, Phoenix, Arizona 85016, a maker hereunder (referred to herein as
"BORROWER"), hereby unconditionally promises to pay to the order of BEAR STEARNS
COMMERCIAL MORTGAGE, INC., a New York corporation, as payee, having an address
at 383 Madison Avenue, New York, New York 10179 ("LENDER"), or at such other
place as the holder hereof may from time to time designate in writing, the
principal sum of TWELVE MILLION TWENTY FIVE THOUSAND AND 00/100 DOLLARS
($12,025,000.00), in lawful money of the United States of America with interest
thereon to be computed from the date of this Note at the Interest Rate, and to
be paid in accordance with the terms of this Note and that certain Loan
Agreement, dated as of the date hereof, between Borrower and Lender (the "LOAN
AGREEMENT"). All capitalized terms not defined herein shall have the respective
meanings set forth in the Loan Agreement.

                                    ARTICLE 1

                                  PAYMENT TERMS

          Borrower agrees to pay the principal sum of this Note and interest on
the unpaid principal sum of this Note from time to time outstanding at the rates
and at the times specified in the Loan Agreement and the outstanding balance of
the principal sum of this Note and all accrued and unpaid interest thereon shall
be due and payable on the Maturity Date. This Note shall be the "Note" as
defined in the Loan Agreement.

                                    ARTICLE 2

                            DEFAULT AND ACCELERATION

          The Debt shall without notice become immediately due and payable at
the option of Lender if any payment required in this Note is not paid within
five (5) days of the date when due or if not paid on the Maturity Date or on the
happening of any other Event of Default.

                                    ARTICLE 3

                                 LOAN DOCUMENTS

          This Note is secured by the Mortgage and the other Loan Documents. All
of the terms, covenants and conditions contained in the Loan Agreement, the
Mortgage and the other Loan Documents are hereby made part of this Note to the
same extent and with the same force as if they were fully set forth herein. In
the event of a conflict or inconsistency between the terms of this Note and the
Loan Agreement, the terms and provisions of the Loan Agreement shall govern.

                                    ARTICLE 4

                                 SAVINGS CLAUSE

          Notwithstanding anything to the contrary, (a) all agreements and
communications between Borrower and Lender are hereby and shall automatically be
limited so that, after taking into account all amounts deemed interest, the
interest contracted for, charged or received by Lender shall never exceed the
maximum lawful rate or amount, (b) in calculating whether any interest exceeds
the lawful maximum, all such interest shall be amortized, prorated, allocated
and spread over the full amount and term of all principal indebtedness of
Borrower to



Lender, and (c) if through any contingency or event, Lender receives or is
deemed to receive interest in excess of the lawful maximum, any such excess
shall be deemed to have been applied (without prepayment penalty or premium or
any Yield Maintenance Premium) toward payment of the principal of any and all
then outstanding indebtedness of Borrower to Lender, or if there is no such
indebtedness, shall immediately be returned to Borrower.

                                    ARTICLE 5

                                 NO ORAL CHANGE

          This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.

                                    ARTICLE 6

                                     WAIVERS

          Borrower and all others who may become liable for the payment of all
or any part of the Debt do hereby severally waive presentment and demand for
payment, notice of dishonor, notice of intention to accelerate, notice of
acceleration, protest and notice of protest and non-payment and all other
notices of any kind except with respect to matters for which any of the Loan
Documents specifically provides for the giving of notice by Lender to Borrower.
No release of any security for the Debt or extension of time for payment of this
Note or any installment hereof, and no alteration, amendment or waiver of any
provision of this Note, the Loan Agreement or the other Loan Documents made by
agreement between Lender or any other Person shall release, modify, amend,
waive, extend, change, discharge, terminate or affect the liability of Borrower,
and any other Person who may become liable for the payment of all or any part of
the Debt, under this Note, the Loan Agreement or the other Loan Documents. No
notice to or demand on Borrower shall be deemed to be a waiver of the obligation
of Borrower or of the right of Lender to take further action without further
notice or demand as provided for in this Note, the Loan Agreement or the other
Loan Documents. If Borrower is a partnership, the agreements herein contained
shall remain in force and applicable, notwithstanding any changes in the
individuals comprising the partnership, and the term "Borrower," as used herein,
shall include any alternate or successor partnership, but any predecessor
partnership and their partners shall not thereby be released from any liability.
If Borrower is a limited liability company, the agreements herein contained
shall remain in force and applicable, notwithstanding any changes in the members
comprising the company, and the term "Borrower," as used herein, shall include
any alternate or successor company, but any predecessor company shall not
thereby be released from any liability. If Borrower is a corporation, the
agreements contained herein shall remain in full force and applicable
notwithstanding any changes in the shareholders comprising, or the officers and
directors relating to, the corporation, and the term "Borrower" as used herein,
shall include any alternative or successor corporation, but any predecessor
corporation shall not be relieved of liability hereunder. (Nothing in the
foregoing sentence shall be construed as a consent to, or a waiver of, any
prohibition or restriction on transfers of interests in such entity which may be
set forth in the Loan Agreement, the Mortgage or any other Loan Document.)

                                    ARTICLE 7

                                    TRANSFER

          Upon the transfer of this Note, Borrower hereby waiving notice of any
such transfer except as provided in the Loan Agreement, Lender may deliver all
the collateral mortgaged, granted, pledged or assigned pursuant to the Loan
Documents, or any part thereof, to the transferee who shall thereupon become
vested with all the rights herein or under applicable law given to Lender with
respect thereto, and Lender shall from that date forward forever be relieved and
fully discharged from any liability or responsibility in the matter; but Lender
shall retain all rights hereby given to it with respect to any liabilities and
the collateral not so transferred.



                                    ARTICLE 8

                                   EXCULPATION

          The provisions of Section 9.3 of the Loan Agreement are hereby
incorporated by reference into this Note to the same extent and with the same
force as if fully set forth herein.

                                    ARTICLE 9

                                  GOVERNING LAW

          THIS NOTE SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO
THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED AND SHALL IN ALL RESPECTS
BE GOVERNED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE IN
WHICH THE PROPERTY IS LOCATED AND APPLICABLE FEDERAL LAWS.

                                   ARTICLE 10

                                     NOTICES

          All notices or other written communications hereunder shall be
delivered in accordance with Section 10.6 of the Loan Agreement.

                         [NO FURTHER TEXT ON THIS PAGE]



          IN WITNESS WHEREOF, Borrower has duly executed this Note as of the day
and year first above written.

                                        BORROWER:

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

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


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



                                 ACKNOWLEDGMENT

STATE OF Arizona     )
                     ) ss.
COUNTY OF Maricopa   )

     The foregoing instrument was acknowledged before me this 3rd day of
February, 2006 by John M. Pons, as Senior Vice President of Cole REIT Advisors
II, LLC, a Delaware limited liability company, in its capacity as the manager of
Cole MT Denver CO, LLC, a Delaware limited liability company.

     Witness my hand and official seal.

     My commission expires: 9/3/08


                                        /s/ Mary D. Bates
                                        ----------------------------------------
                                        Notary Public

EX-10.49

                                                                   Exhibit 10.49

================================================================================

                                 LOAN AGREEMENT

                          Dated as of February 6, 2006

                                     Between

                             COLE MT DENVER CO, LLC,
                                   as Borrower

                                       and

                     BEAR STEARNS COMMERCIAL MORTGAGE, INC.,
                                    as Lender

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
I.    DEFINITIONS; PRINCIPLES OF CONSTRUCTION............................     1
      Section 1.1   Definitions..........................................     1
      Section 1.2   Principles of Construction...........................    22
II.   GENERAL TERMS......................................................    22
      Section 2.1   Loan Commitment; Disbursement to Borrower............    22
      Section 2.2   Interest Rate........................................    23
      Section 2.3   Loan Payment.........................................    24
      Section 2.4   Prepayments..........................................    25
      Section 2.5   Defeasance...........................................    26
      Section 2.6   Release of Property..................................    28
      Section 2.7   Cash Management......................................    29
III.  CONDITIONS PRECEDENT...............................................    31
      Section 3.1   Conditions Precedent to Closing......................    31
IV.   REPRESENTATIONS AND WARRANTIES.....................................    35
      Section 4.1   Borrower Representations.............................    35
      Section 4.2   Survival of Representations..........................    43
V.    BORROWER COVENANTS.................................................    43
      Section 5.1   Affirmative Covenants................................    43
VI.   INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS................    57
      Section 6.1   Insurance............................................    57
      Section 6.2   Casualty.............................................    61
      Section 6.3   Condemnation.........................................    61
      Section 6.4   Restoration..........................................    62
VII.  RESERVE FUNDS......................................................    66
      Section 7.1   Required Repairs.....................................    66
      Section 7.2   Tax and Insurance Escrow Fund........................    67
      Section 7.3   Replacements and Replacement Reserve.................    68
      Section 7.4   Rollover Reserve.....................................    72
      Section 7.5   Reserve Funds, Generally.............................    72
VIII. DEFAULTS...........................................................    73
      Section 8.1   Event of Default.....................................    73
      Section 8.2   Remedies.............................................    75
      Section 8.3   Remedies Cumulative; Waivers.........................    76
IX.   SPECIAL PROVISIONS.................................................    77
      Section 9.1   Securitization.......................................    77
      Section 9.2   Securitization.......................................    78
      Section 9.3   Exculpation..........................................    78
      Section 9.4   Matters Concerning Manager...........................    80
      Section 9.5   Servicer.............................................    80
X.    MISCELLANEOUS......................................................    81
      Section 10.1  Survival.............................................    81
      Section 10.2  Lender's Discretion..................................    81
      Section 10.3  Governing Law........................................    81
      Section 10.4  Modification, Waiver in Writing......................    81
      Section 10.5  Delay Not a Waiver...................................    81
      Section 10.6  Notices..............................................    82
      Section 10.7  Trial by Jury........................................    82
      Section 10.8  Headings.............................................    83
      Section 10.9  Severability.........................................    83
      Section 10.10 Schedules Incorporated...............................    85
      Section 10.11 Offsets, Counterclaims and Defenses..................    85
      Section 10.12 No Joint Venture or Partnership; No Third
                    Party Beneficiaries..................................    85
      Section 10.13 Publicity............................................    85
      Section 10.14 Waiver of Marshalling of Assets......................    85




                                                                         
      Section 10.15 Waiver of Counterclaim...............................    86
      Section 10.16 Conflict; Construction of Documents; Reliance........    86
      Section 10.17 Brokers and Financial Advisors.......................    86
      Section 10.18 Prior Agreements.....................................    86
      Section 10.19 Joint and Several Liability..........................    86
      Section 10.20 Certain Additional Rights of Lender (VCOC)...........    87





SCHEDULES

Schedule I   - Rent Roll
Schedule II  - Required Repairs - Deadlines for Completion
Schedule III - Organizational Chart of Borrower
Schedule IV  - Tenant Direction Letter
Schedule V   - Identified Affiliates


                                 LOAN AGREEMENT

     THIS LOAN AGREEMENT, dated as of February 6, 2006 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
"AGREEMENT"), between BEAR STEARNS COMMERCIAL MORTGAGE, INC., a New York
corporation, having an address at 383 Madison Avenue, New York, New York 10179
("LENDER") and COLE MT DENVER CO, LLC, a Delaware limited liability company,
having its principal place of business at 2555 E. Camelback Road, Ste. 400,
Phoenix, Arizona 85016 and an organizational identification number of 4071262
("BORROWER").

                                   WITNESSETH:

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

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

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

     I. DEFINITIONS; PRINCIPLES OF CONSTRUCTIONSECTION 1.1 DEFINITIONS. For all
purposes of this Agreement, except as otherwise expressly required or unless the
context clearly indicates a contrary intent:

     "ACCRUED INTEREST" shall have the meaning set forth in Section 2.3.2
hereof.

     "ACTUAL KNOWLEDGE" shall mean, with respect to Borrower, the conscious
awareness of facts or other information by Borrower after inquiry reasonable for
an institutional owner of properties similar to the Property.

     "AFFILIATE" shall mean, as to any Person, any other Person that, directly
or indirectly, is in Control of, is Controlled by or is under common Control
with such Person.

     "AFFILIATED LOANS" shall mean a loan made by Lender to an Affiliate of
Borrower or Guarantor.

     "AFFILIATED MANAGER" shall mean any Manager that is an Affiliate of
Borrower or Guarantor.

     "AGENT" shall have the meaning set forth in Section 2.7.2 hereof.

     "AGREEMENT" shall mean this Loan Agreement, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

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

     "ANNUAL BUDGET" shall mean the operating budget, including all planned
Capital Expenditures, for the Property prepared by Borrower in accordance with
Section 5.1.11 hereof for the applicable Fiscal Year or other period.

     "ANTICIPATED REPAYMENT DATE" shall mean March 1, 2011.

     "APPLICABLE INTEREST RATE" shall mean (i) prior to the Anticipated
Repayment Date, the Initial Interest Rate and (ii) on and after the Anticipated
Repayment Date, the Revised Interest Rate.

     "APPROVED ANNUAL BUDGET" shall have the meaning set forth in Section 5.1.11
hereof.

     "ASSIGNMENT OF LEASES" shall mean that certain first priority Assignment of
Leases and Rents, dated as of the date hereof, from Borrower, as assignor, to
Mortgage Electronic Registration Systems, Inc., as nominee of



Lender, as assignee, assigning to Lender all of Borrower's interest in and to
the Leases and Rents of the Property as security for the Loan, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.

     "AWARD" shall mean any compensation paid or payable to Borrower by any
Governmental Authority in connection with a Condemnation in respect of all or
any part of the Property.

     "BANKRUPTCY ACTION" shall mean with respect to any Person (a) such Person
filing a voluntary petition under the Bankruptcy Code or any other Federal or
state bankruptcy or insolvency law; (b) the filing of an involuntary petition
against such Person under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law, in which such Person colludes with, or otherwise
assists such Person, or cause to be solicited petitioning creditors for any
involuntary petition against such Person; (c) such Person filing an answer
consenting to or otherwise acquiescing in or joining in any involuntary petition
filed against it, by any other Person under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law; (d) such Person consenting to or
acquiescing in or joining in an application for the appointment of a custodian,
receiver, trustee, or examiner for such person or any portion of the Property;
(e) such Person making an assignment for the benefit of creditors, or admitting,
in writing or in any legal proceeding, its insolvency or inability to pay its
debts as they become due.

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

     "BASIC CARRYING COSTS" shall mean, the sum of the following costs
associated with the Property for the relevant Fiscal Year or payment period: (a)
Taxes, (b) Other Charges and (c) Insurance Premiums.

     "BORROWER" shall have the meaning set forth in the introductory paragraph
hereto, together with its successors and permitted assigns.

     "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or any
other day on which national banks in New York, New York, or the place of
business of any Servicer are not open for business.

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

     "CASH MANAGEMENT ACCOUNT" shall have the meaning set forth in Section 2.7.2
hereof.

     "CASH MANAGEMENT TERMINATION EVENT" shall mean (a) in the case of a Cash
Management Trigger pursuant to clause (ii) of the definition of such term, the
Debt Service Coverage Ratio shall be equal to or greater than 1.25 to l.0 for
two (2) complete, consecutive calendar quarters following the calendar quarter
in which the Cash Management Trigger occurred, provided, however, there shall be
no Cash Management Termination Event following a Cash Management Trigger caused
by clause (i) of the definition of such term, and there shall not be more than
two (2) Cash Management Termination Events during the term of the Loan.

     "CASH MANAGEMENT TRIGGER" shall mean (i) provided the Clearing Bank Option
has not been exercised and implemented, if the Loan has not been repaid on or
before the Payment Date that is three (3) calendar months prior to the
Anticipated Repayment Date, however, if the Clearing Bank Option has been
exercised and implemented, if the Loan has not been repaid on or before the
Payment Date that is one (1) calendar month prior to the Anticipated Repayment
Date, or (ii) Lender's determination that the Debt Service Coverage Ratio for
the preceding twelve (12) months annualized is less than or equal to 1.1 to 1.0.

     "CASUALTY" shall have the meaning set forth in Section 6.2 hereof.

     "CASUALTY CONSULTANT" shall have the meaning set forth in Section
6.4(b)(iii) hereof.



     "CASUALTY RETAINAGE" shall have the meaning set forth in Section 6.4(b)(iv)
hereof.

     "CLEARING ACCOUNT" shall have the meaning set forth in Section 2.7.1
hereof.

     "CLEARING BANK" shall have the meaning set forth in Section 2.7.1 hereof.

     "CLEARING BANK AGREEMENT" shall have the meaning set forth in Section 2.7.1
hereof.

     "CLEARING BANK OPTION" shall have the meaning set forth in Section 2.7.1
hereof.

     "CLOSING DATE" shall mean the date of the funding of the Loan.

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

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

     "CONDEMNATION PROCEEDS" shall have the meaning set forth in Section 6.4(b).

     "CONSENT REGARDING MANAGEMENT AGREEMENT" shall mean that certain Consent
and Agreement, dated as of the date hereof, among Lender, Borrower and Manager,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.

     "CONTROL" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management, policies or activities of a
Person, whether through ownership of voting securities, by contract or
otherwise. "CONTROLLED" and "CONTROLLING" shall have correlative meanings.

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

     "DEBT SERVICE" shall mean, with respect to any particular period of time,
scheduled principal and interest payments due under this Agreement and the Note.

     "DEBT SERVICE COVERAGE RATIO" shall mean a ratio for the applicable period
in which:

          (a) the numerator is the Net Operating Income (excluding interest on
credit accounts and using annualized operating expenses for any recurring
expenses not paid monthly (e.g., Taxes and Insurance Premiums)) for such period
as set forth in the statements required hereunder, without deduction for (i)
actual management fees incurred in connection with the operation of the
Property, or (ii) amounts paid to the Reserve Funds, less (A) management fees
equal to the greater of (1) assumed management fees of four percent (4.0%) of
Gross Income from Operations or (2) the actual management fees incurred, and (B)
Replacement Reserve Fund contributions equal to $0.15 per square foot of gross
leasable area at the Property; and

          (b) the denominator is the aggregate amount of principal and interest
due and payable on the Note for such period.

     "DEBT SERVICE COVERAGE RATIO DETERMINATION DATE" shall mean the date that
Lender determines the Debt Service Coverage Ratio in accordance with this
Agreement.



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

     "DEFAULT RATE" shall mean, with respect to the Loan, a rate per annum equal
to the lesser of (a) the maximum rate permitted by applicable law or (b) four
percent (4%) above the Applicable Interest Rate.

     "DEFEASANCE DATE" shall have the meaning set forth in Section 2.5.1(a)(i)
hereof.

     "DEFEASANCE DEPOSIT" shall mean an amount equal to the remaining principal
amount of the Note, the Defeasance Payment Amount, any costs and expenses
incurred or to be incurred in the purchase of U.S. Obligations necessary to meet
the Scheduled Defeasance Payments and any revenue, documentary stamp or
intangible taxes or any other tax or charge due in connection with the transfer
of the Note or otherwise required to accomplish the agreements of Sections 2.4
and 2.5 hereof (including, without limitation, any fees and expenses of
accountants, attorneys and the Rating Agencies incurred in connection
therewith).

     "DEFEASANCE EVENT" shall have the meaning set forth in Section 2.5.1(a)
hereof.

     "DEFEASANCE EXPIRATION DATE" shall mean the date that is two (2) years from
the "startup day" within the meaning of Section 860G(a)(9) of the Code for the
REMIC Trust.

     "DEFEASANCE PAYMENT AMOUNT" shall mean the amount (if any) which, when
added to the remaining principal amount of the Note, will be sufficient to
purchase U.S. Obligations providing the required Scheduled Defeasance Payments.

     "DISCLOSURE DOCUMENT" shall have the meaning set forth in Section 9.2
hereof.

     "ELIGIBLE ACCOUNT" shall mean a separate and identifiable account from all
other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the definition of Eligible Institution or (b)
a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. Section
9.10(b), having in either case a combined capital and surplus of at least Fifty
Million and 00/100 Dollars ($50,000,000.00) and subject to supervision or
examination by federal and state authority. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other instrument.

     "ELIGIBLE INSTITUTION" shall mean a depository institution or trust
company, the short term unsecured debt obligations or commercial paper of which
are rated at least "A-1+" by S&P, "P-1" by Moody's and "F-1+" by Fitch in the
case of accounts in which funds are held for thirty (30) days or less (or, in
the case of accounts in which funds are held for more than thirty (30) days, the
long-term unsecured debt obligations of which are rated at least "AA" by Fitch
and S&P and "Aa2" by Moody's).

     "EMBARGOED PERSON" shall have the meaning set forth in Section 5.1.23
hereof.

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

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

     "EVENT OF DEFAULT" shall have the meaning set forth in Section 8.1(a)
hereof.

     "EXCESS CASH FLOW" shall have the meaning set forth in Section 2.7.2(b)
hereof.

     "EXCHANGE ACT" shall have the meaning set forth in Section 9.2 hereof.



     "EXTRAORDINARY EXPENSE" shall have the meaning set forth in Section 5.1.11
hereof.

     "FISCAL YEAR" shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during each year of the term of the Loan.

     "FITCH" shall mean Fitch, Inc.

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

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

     "GROSS INCOME FROM OPERATIONS" shall mean, for any period, all income,
computed in accordance with the GAAP (or another basis of accounting acceptable
to Lender and consistently applied), derived from the ownership and operation of
the Property from whatever source during such period, including, but not limited
to, Rents from tenants in occupancy, open for business and paying full
contractual rent without right of offset or credit, utility charges,
escalations, forfeited security deposits, interest on credit accounts, service
fees or charges, license fees, parking fees, rent concessions or credits,
business interruption or other loss of income or rental insurance proceeds or
other required pass-throughs and interest on Reserve Accounts, if any, but
excluding Rents from month-to-month tenants or tenants that are included in any
Bankruptcy Action, sales, use and occupancy or other taxes on receipts required
to be accounted for by Borrower to any Governmental Authority, refunds and
uncollectible accounts, sales of furniture, fixtures and equipment, Insurance
Proceeds (other than business interruption or other loss of income or rental
insurance), Awards, unforfeited security deposits, utility and other similar
deposits and any disbursements to Borrower from the Reserve Funds, if any. Gross
income shall not be diminished as a result of the Mortgage or the creation of
any intervening estate or interest in the Property or any part thereof.

     "GUARANTOR" shall mean Cole Operating Partnership II, LP, a Delaware
limited partnership.

     "HOBBY LOBBY" shall mean HOB-LOB, Limited Partnership, an Oklahoma limited
partnership.

     "IDENTIFIED AFFILIATES" shall have the meaning set forth on Schedule V
hereof.

     "IMPROVEMENTS" shall have the meaning set forth in the granting clause of
the Mortgage.

     "INDEBTEDNESS" of a Person, at a particular date, means the sum (without
duplication) at such date of (a) all indebtedness or liability of such Person
(including, without limitation, amounts for borrowed money and indebtedness in
the form of mezzanine debt or preferred equity); (b) obligations evidenced by
bonds, debentures, notes, or other similar instruments; (c) obligations for the
deferred purchase price of property or services (including trade obligations);
(d) obligations under letters of credit; (e) obligations under acceptance
facilities; (f) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds, to invest in any Person
or entity, or otherwise to assure a creditor against loss; and (g) obligations
secured by any Liens, whether or not the obligations have been assumed (other
than the Permitted Encumbrances).

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

     "INITIAL INTEREST RATE" shall mean a rate of five and fifty seven
hundredths percent (5.57%) per annum.

     "INSURANCE PREMIUMS" shall have the meaning set forth in Section 6.1(b)
hereof.

     "INSURANCE PROCEEDS" shall have the meaning set forth in Section 6.4(b)
hereof.



     "LEASE" shall mean any lease, sublease or subsublease, letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in the
Property, and every modification, amendment or other agreement relating to such
lease, sublease, subsublease, or other agreement entered into in connection with
such lease, sublease, subsublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.

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

     "LENDER" shall have the meaning set forth in the introductory paragraph
hereto, together with its successors and assigns.

     "LICENSES" shall have the meaning set forth in Section 4.1.22 hereof.

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

     "LOAN" shall mean the loan made by Lender to Borrower pursuant to this
Agreement.

     "LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note, the
Mortgage, the Assignment of Leases, the Environmental Indemnity, the Consent
Regarding Management Agreement, the Indemnity, and all other documents executed
and/or delivered in connection with the Loan.

     "MANAGEMENT AGREEMENT" shall mean the management agreement entered into
among Manager, Cole Operating Partnership II, L.P., and Cole Credit Property
Trust II, Inc. pursuant to which Manager is to provide management and other
services with respect to the Property and certain other properties, or, if the
context requires, the Replacement Management Agreement.

     "MANAGER" shall mean Fund Realty Advisors, Inc., an Arizona corporation,
or, if the context requires, a Qualified Manager who is managing the Property in
accordance with the terms and provisions of this Agreement pursuant to a
Replacement Management Agreement.

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



     "MATURITY DATE" shall mean March 1, 2036, or such other date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.

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

     "MONTHLY DEBT SERVICE PAYMENT AMOUNT" shall mean a payment of interest only
at the Initial Interest Rate for the calendar month preceding the related
Payment Date.

     "MOODY'S" shall mean Moody's Investors Service, Inc.

     "MORTGAGE" shall mean, that certain first priority Deed of Trust and
Security Agreement, dated the date hereof, executed and delivered by Borrower to
Mortgage Electronic Registration Systems, Inc., as nominee of Lender as security
for the Loan and encumbering the Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

     "NET CASH FLOW" shall mean, for any period, the amount obtained by
subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income from Operations for such period.

     "NET CASH FLOW SCHEDULE" shall have the meaning set forth in Section
5.1.11(b) hereof.

     "NET OPERATING INCOME" shall mean, for any period, the amount obtained by
subtracting Operating Expenses for such period from Gross Income from Operations
for such period.

     "NET PROCEEDS" shall have the meaning set forth in Section 6.4(b) hereof.

     "NET PROCEEDS DEFICIENCY" shall have the meaning set forth in Section
6.4(b)(vi) hereof.

     "NOTE" shall mean that certain Promissory Note, dated the date hereof, in
the principal amount of Twelve Million Twenty Five Thousand and 00/100 Dollars
($12,025,000.00), made by Borrower in favor of Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

     "OFFICER'S CERTIFICATE" shall mean a certificate delivered to Lender by
Borrower which is signed by an authorized officer of the general partner or
managing member of Borrower.

     "OPERATING EXPENSES" shall mean the total of all expenditures incurred by
or on behalf of Borrower, computed in accordance with the GAAP (or another basis
of accounting acceptable to Lender and consistently applied), of whatever kind
relating to the operation, maintenance and management of the Property that are
incurred on a regular monthly or other periodic basis, including without
limitation, utilities, ordinary repairs and maintenance, insurance, license
fees, property taxes and assessments, advertising expenses, management fees,
payroll and related taxes, computer processing charges, operational equipment or
other lease payments as approved by Lender, and other similar costs, but
excluding depreciation, Debt Service, Capital Expenditures (including any
reserves therefore maintained by Borrower but not required hereunder),
contributions to the Reserve Funds, tenant expenditures related to the operation
and maintenance of the Property to the extent such items are the responsibility
of tenant under its Lease.

     "OTHER CHARGES" shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.

     "OTHER OBLIGATIONS" shall have the meaning as set forth in the Mortgage.



     "PAYMENT DATE" shall mean the first (1st) day of each calendar month during
the term of the Loan or, if such day is not a Business Day, the immediately
preceding Business Day.

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

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

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

          (ii) Federal Housing Administration debentures;

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

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



     move proportionately with that index, and (D) such investments must not be
     subject to liquidation prior to their maturity;

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

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

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

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

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

     provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest



payments on such obligation or security are derived from an underlying
investment that provides a yield to maturity in excess of 120% of the yield to
maturity at par of such underlying investment.

     "PERMITTED RELEASE DATE" shall mean the date that is the fourth (4th)
anniversary of the first Payment Date.

     "PERMITTED TRANSFER" shall have the meaning set forth in Section 5.2.10(d)
hereof.

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

     "PERSONAL PROPERTY" shall have the meaning set forth in the granting clause
of the Mortgage.

     "PHYSICAL CONDITIONS REPORT" shall mean that certain Property Conditions
Report for Mortgage Financing Purposes dated November 29, 2005 from IVI Due
Diligence Services, Inc.

     "POLICIES" shall have the meaning specified in Section 6.1(b) hereof.

     "POLICY" shall have the meaning specified in Section 6.1(b) hereof.

     "PREPAYMENT RATE" shall mean the bond equivalent yield (in the secondary
market) on the United States Treasury Security that as of the Prepayment Rate
Determination Date has a remaining term to maturity closest to, but not
exceeding, the remaining term to the Anticipated Repayment Date as most recently
published in the "Treasury Bonds, Notes and Bills" section in The Wall Street
Journal as of such Prepayment Rate Determination Date. If more than one issue of
United States Treasury Securities has the remaining term to the Anticipated
Repayment Date, the "Prepayment Rate" shall be the yield on such United States
Treasury Security most recently issued as of the Prepayment Rate Determination
Date. The rate so published shall control absent manifest error. If the
publication of the Prepayment Rate in The Wall Street Journal is discontinued,
Lender shall determine the Prepayment Rate on the basis of "Statistical Release
H.15 (519), Selected Interest Rates," or any successor publication, published by
the Board of Governors of the Federal Reserve System, or on the basis of such
other publication or statistical guide as Lender may reasonably select.

     "PREPAYMENT RATE DETERMINATION DATE" shall mean the date which is five (5)
Business Days prior to the date that such prepayment shall be applied in
accordance with the terms and provisions of Section 2.4.1 hereof.

     "PROPERTY" shall mean the parcel of real property, the Improvements thereon
and all personal property owned by Borrower and encumbered by the Mortgage,
together with all rights pertaining to such property and Improvements, as more
particularly described in the granting clauses of the Mortgage and referred to
therein as the "Property".

     "PROVIDED INFORMATION" shall mean any and all financial and other
information provided at any time by, or on behalf of, Borrower, Guarantor and/or
Manager.

     "QUALIFIED MANAGER" shall mean either (a) Manager; (b) [reserved]; or (c)
in the reasonable judgment of Lender, a reputable and experienced management
organization (which may be an Affiliate of Borrower) possessing experience in
managing properties similar in size, scope, use and value as the Property,
provided, that Borrower shall have obtained prior written confirmation from the
applicable Rating Agencies that management of the Property by such Person will
not cause a downgrade, withdrawal or qualification of the then current ratings
of the Securities or any class thereof.

     "RATING AGENCIES" shall mean each of S&P, Moody's and Fitch, or any other
nationally recognized statistical rating agency which has been approved by
Lender.

     "RELATED ENTITIES" shall have the meaning set forth in Section 5.2.10(e)(v)
hereof.



     "RELATED PARTIES" shall have the meaning set forth in the definition of
Special Purpose Entity.

     "RELATED PARTY" shall have the meaning set forth in the definition of
Special Purpose Entity.

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

     "RENTS" shall mean, all rents (including percentage rents), rent
equivalents, moneys payable as damages or in lieu of rent or rent equivalents,
royalties (including, without limitation, all oil and gas or other mineral
royalties and bonuses), income, receivables, receipts, revenues, deposits
(including, without limitation, security, utility and other deposits), accounts,
cash, issues, profits, charges for services rendered, all other amounts payable
as rent under any Lease or other agreement relating to the Property, including,
without limitation, charges for electricity, oil, gas, water, steam, heat,
ventilation, air-conditioning and any other energy, telecommunication,
telephone, utility or similar items or time use charges, HVAC equipment charges,
sprinkler charges, escalation charges, license fees, maintenance fees, charges
for Taxes, Operating Expenses or other reimbursables payable to Borrower (or to
the Manager for the account of Borrower) under any Lease, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower or its agents or employees from any and all
sources arising from or attributable to the Property.

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

     "REPLACEMENT RESERVE ACCOUNT" shall have the meaning set forth in Section
7.3.1 hereof.

     "REPLACEMENT RESERVE FUND" shall have the meaning set forth in Section
7.3.1 hereof.

     "REPLACEMENT RESERVE MONTHLY DEPOSIT" shall have the meaning set forth in
Section 7.3.1 hereof.

     "REPLACEMENTS" shall have the meaning set forth in Section 7.3.1 hereof.

     "REQUIRED REPAIR ACCOUNT" shall have the meaning set forth in Section 7.1.1
hereof.

     "REQUIRED REPAIR FUND" shall have the meaning set forth in Section 7.1.1
hereof.

     "REQUIRED REPAIRS" shall have the meaning set forth in Section 7.1.1
hereof.

     "RESERVE FUNDS" shall mean, collectively, the Tax and Insurance Escrow
Fund, the Replacement Reserve Fund, the Required Repair Fund and any other
escrow fund established by the Loan Documents.

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

     "RESTRICTED PARTY" shall mean collectively, Borrower, Guarantor, and any
direct members or general partners of Borrower or Guarantor.

     "REVISED INTEREST RATE" shall mean the Initial Interest Rate plus two
percent (2%) per annum.



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

     "SALE OR PLEDGE" shall mean a voluntary or involuntary sale, conveyance,
assignment, transfer, encumbrance, pledge, grant of option or other transfer or
disposal of a legal or beneficial interest, whether direct or indirect.

     "SAM'S CLUB" shall mean Sam's P.W., Inc., a Delaware statutory trust.

     "SCHEDULED DEFEASANCE PAYMENTS" shall have the meaning set forth in Section
2.5.1(b) hereof.

     "SECURITIES" shall have the meaning set forth in Section 9.1 hereof.

     "SECURITIES ACT" shall have the meaning set forth in Section 9.2 hereof.

     "SECURITIZATION" shall have the meaning set forth in Section 9.1 hereof.

     "SECURITY AGREEMENT" shall have the meaning set forth in Section
2.5.1(a)(vi) hereof.

     "SERVICER" shall have the meaning set forth in Section 9.5 hereof.

     "SERVICING AGREEMENT" shall have the meaning set forth in Section 9.5
hereof.

     "SEVERED LOAN DOCUMENTS" shall have the meaning set forth in Section 8.2(c)
hereof.

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

          (i) is and shall be organized solely for the purpose of acquiring,
     developing, owning, holding, selling, leasing, transferring, exchanging,
     managing and operating the Property, entering into and performing its
     obligations under the Loan Documents with Lender, refinancing the Property
     in connection with a permitted repayment of the Loan, and transacting
     lawful business that is incident, necessary and appropriate to accomplish
     the foregoing;

          (ii) has not engaged and shall not engage in any business unrelated to
     the acquisition, development, ownership, management or operation of the
     Property;

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

          (iv) does not have, shall not have and at no time had any assets other
     than the Property and personal property necessary or incidental to its
     ownership and operation of the Property;

          (v) has not engaged in, sought, consented or permitted to and shall
     not engage in, seek, consent to or permit (A) any dissolution, winding up,
     liquidation, consolidation or merger, or (B) any sale or other transfer of
     all or substantially all of its assets or any sale of assets outside the
     ordinary course of its business, except as permitted by the Loan Documents;

          (vi) except as permitted under the Loan Documents, shall not cause,
     consent to or permit any amendment of its limited partnership agreement,
     articles of incorporation, articles of organization, certificate of
     formation, operating agreement or other formation document or
     organizational document (as applicable) with respect to the matters set
     forth in this definition without the consent of Lender;



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

          (viii) if such entity is a corporation, shall not cause or permit the
     board of directors of such entity to take any Material Action without the
     unanimous vote of one hundred percent (100%) of the members of its board of
     directors;

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

          (x) if such entity is a single-member limited liability company, (A)
     is and shall be a Delaware limited liability company, and (B) has and shall
     have either (1) a member which owns no economic interest in the company,
     has signed the company's limited liability company agreement and has no
     obligation to make capital contributions to the company, or (2) two natural
     persons or one entity that is not a member of the company, that has signed
     its limited liability company agreement and that, under the terms of such
     limited liability company agreement becomes a member of the company
     immediately prior to the withdrawal or dissolution of the last remaining
     member of the company;

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

          (xii) has at all times been and shall at all times remain solvent and
     has paid and shall pay its debts and liabilities (including, a
     fairly-allocated portion of any personnel and overhead expenses that it
     shares with any Affiliate) from its assets as the same shall become due,
     and has maintained and shall maintain adequate capital for the normal
     obligations reasonably foreseeable in a business of its size and character
     and in light of its contemplated business operations;

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

          (xiv) has maintained and shall maintain its bank accounts, books of
     account, books and records separate from those of any other Person and, to
     the extent that it is required to file tax returns under applicable law,
     has filed and shall file its own tax returns, except to the extent that it
     is required by law to file consolidated tax returns and, if it is a
     corporation, has not filed and shall not file a consolidated federal income
     tax return with any other corporation, except to the extent that it is
     required by law to file consolidated tax returns;



          (xv) has maintained and shall maintain its own records, books,
     resolutions and agreements;

          (xvi) has not commingled and shall not commingle its funds or assets
     with those of any other Person and has not participated and shall not
     participate in any cash management system with any other Person, other than
     as contemplated herein;

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

          (xviii) has conducted and shall conduct its business in its name or in
     a name franchised or licensed to it by an entity other than an Affiliate of
     itself or of Borrower, except for business conducted on behalf of itself by
     another Person under a business management services agreement that is on
     commercially-reasonable terms, so long as the manager, or equivalent
     thereof, under such business management services agreement holds itself out
     as an agent of Borrower;

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

          (xx) has paid and shall pay its own liabilities and expenses,
     including the salaries of its own employees, out of its own funds and
     assets, and has maintained and shall maintain a sufficient number of
     employees in light of its contemplated business operations;

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

          (xxii) has not incurred any Indebtedness other than (i) acquisition
     financing with respect to the Property; construction financing with respect
     to the Improvements and certain off-site improvements required by municipal
     and other authorities as conditions to the construction of the
     Improvements; and first mortgage financings secured by the Property; and
     Indebtedness pursuant to letters of credit, guaranties, interest rate
     protection agreements and other similar instruments executed and delivered
     in connection with such financings, (ii) unsecured trade payables and
     operational debt not evidenced by a note, (iii) Indebtedness incurred in
     the financing of equipment and other personal property used on the
     Property, and (iv) unsecured loans from Affiliates used to acquire the
     Property, which loans shall be repaid in full on or before the date hereof;

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

          (xxiv) has not assumed, guaranteed or become obligated and shall not
     assume or guarantee or become obligated for the debts of any other Person,
     has not held out and shall not hold out its credit as being available to
     satisfy the obligations of any other Person or has not pledged and shall
     not pledge its assets for the benefit of any other Person, in each case
     except as permitted pursuant to this Agreement;

          (xxv) has not acquired and shall not acquire obligations or securities
     of its partners, members or shareholders or any other owner or Affiliate;



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

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

          (xxviii) has not pledged and shall not pledge its assets to or for the
     benefit of any other Person other than with respect to loans secured by the
     Property and no such pledge remains outstanding except to Lender to secure
     the Loan;

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

          (xxx) has maintained and shall maintain its assets in such a manner
     that it shall not be costly or difficult to segregate, ascertain or
     identify its individual assets from those of any other Person;

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

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

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

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

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

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

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

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

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



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

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

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

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

          (xliv) has no material contingent or actual obligations not related to
     the Property.

     "STATE" shall mean, the State or Commonwealth in which the Property or any
part thereof is located.

     "SUCCESSOR BORROWER" shall have the meaning set forth in Section 2.5.3
hereof.

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

     "TAX AND INSURANCE ESCROW FUND" shall have the meaning set forth in Section
7.2 hereof.

     "TAXES" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against the Property or part thereof.

     "TENANT DIRECTION LETTER" shall mean a letter in the form of Schedule IV
attached hereto from Borrower to the tenant under each Lease with respect to the
Property (whether such Lease is presently effective or executed after the
Closing Date) directing such tenant to send directly to the Cash Management
Account all payments of Rent payable to Borrower under such Lease.

     "THRESHOLD AMOUNT" shall have the meaning set forth in Section 5.1.21
hereof.

     "TITLE INSURANCE POLICY" shall mean, an ALTA mortgagee title insurance
policy in the form acceptable to Lender (or, if the Property is in a State which
does not permit the issuance of such ALTA policy, such form as shall be
permitted in such State and acceptable to Lender) issued with respect to the
Property and insuring the lien of the Mortgage.

     "TRANSFER" shall have the meaning set forth in Section 5.2.10(b) hereof.

     "TRANSFEREE" shall have the meaning set forth in Section 5.2.10(e)(iii)
hereof.

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

     "UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code
as in effect in the State in which the Property is located.

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



     "YIELD MAINTENANCE DEFAULT PREMIUM" shall mean an amount equal to the
greater of (a) two percent (2%) of the outstanding principal balance of the Loan
to be prepaid or satisfied and (b) the Defeasance Payment Amount that would be
required if a Defeasance Event were to occur at such time (whether or not then
permitted) in an amount equal to the outstanding principal amount of the Loan to
be prepaid or satisfied.

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

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

     II.  GENERAL TERMS

     SECTION 2.1 LOAN COMMITMENT; DISBURSEMENT TO BORROWER.

          2.1.1 AGREEMENT TO LEND AND BORROW. Subject to and upon the terms and
conditions set forth herein, Lender hereby agrees to make and Borrower hereby
agrees to accept the Loan on the Closing Date.

          2.1.2 SINGLE DISBURSEMENT TO BORROWER. Borrower may request and
receive only one (1) borrowing hereunder in respect of the Loan and any amount
borrowed and repaid hereunder in respect of the Loan may not be reborrowed.

          2.1.3 THE NOTE, MORTGAGE AND LOAN DOCUMENTS. The Loan shall be
evidenced by the Note and secured by the Mortgage, the Assignment of Leases and
the other Loan Documents.

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

     SECTION 2.2 INTEREST RATE.

          2.2.1 INTEREST RATE. Interest on the outstanding principal balance of
the Loan shall accrue from (and including) the Closing Date to but excluding the
Anticipated Repayment Date at the Initial Interest Rate. Interest on the
outstanding principal balance of the Loan shall accrue from and including the
Anticipated Repayment Date to but excluding the Maturity Date at the Revised
Interest Rate.

          2.2.2 INTEREST CALCULATION. Interest on the outstanding principal
balance of the Loan shall be calculated by multiplying (a) the actual number of
days elapsed in the period for which the calculation is being made by (b) a
daily rate based on a three hundred sixty (360) day year by (c) the outstanding
principal balance.



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

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

     SECTION 2.3 LOAN PAYMENT.

          2.3.1 MONTHLY DEBT SERVICE PAYMENTS PRIOR TO THE ANTICIPATED REPAYMENT
DATE. (a) Borrower shall pay to Lender on the Closing Date, an amount equal to
interest only on the outstanding principal balance of the Loan from the Closing
Date up to and including February 28, 2006, and (b) on each Payment Date
thereafter up to and including the Anticipated Repayment Date, Borrower shall
make a payment to Lender of interest only in an amount equal to the Monthly Debt
Service Payment Amount, which shall be applied to interest on the outstanding
principal amount of the Loan for the prior calendar month at the Initial
Interest Rate.

          2.3.2 PAYMENTS AFTER ANTICIPATED REPAYMENT DATE. From and after the
Anticipated Repayment Date, interest shall accrue on the unpaid principal
balance from time to time at the Revised Interest Rate. On each Payment Date
occurring after the Anticipated Repayment Date Borrower shall (a) make a payment
to Lender of interest only calculated at the Initial Interest Rate, such payment
to be applied to interest in an amount equal to interest that would have accrued
on the outstanding principal balance of the Loan (without adjustment for Accrued
Interest) at the Initial Interest Rate, and (b) pay to Lender the other amounts
required to be paid in accordance with the terms hereof. Interest accrued at the
Revised Interest Rate and not paid pursuant to the preceding sentence shall be
added to the outstanding principal balance on the first day following such
Payment Date and shall earn interest at the Revised Interest Rate to the extent
permitted by law (such accrued interest referred to as, "Accrued Interest").

          2.3.3 PAYMENTS GENERALLY. The first (1st) interest accrual period
hereunder shall commence on and include the Closing Date and shall end on and
include February 28, 2006. Each interest accrual period thereafter shall
commence on the first (1st) day of each calendar month during the term of this
Agreement and shall end on and include the final calendar date of such calendar
month. For purposes of making payments hereunder, but not for purposes of
calculating interest accrual periods, if the day on which such payment is due is
not a Business Day, then amounts due on such date shall be due on the
immediately preceding Business Day and with respect to payments of principal due
on the Maturity Date, interest shall be payable at the Applicable Interest Rate
or the Default Rate, as the case may be, through and including the day
immediately preceding such Maturity Date. All amounts due under this Agreement
and the other Loan Documents shall be payable without setoff, counterclaim,
defense or any other deduction whatsoever.

          2.3.4 PAYMENT ON MATURITY DATE. Borrower shall pay to Lender on the
Maturity Date the outstanding principal balance of the Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Note, the
Mortgage and the other Loan Documents.



          2.3.5 LATE PAYMENT CHARGE. If any principal, interest or any other
sums due under the Loan Documents (including the amounts due on the Maturity
Date) are not paid by Borrower on or prior to the date on which it is due,
Borrower shall pay to Lender upon demand an amount equal to the lesser of five
percent (5%) of such unpaid sum or the Maximum Legal Rate in order to defray the
expense incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment. Any
such amount shall be secured by the Mortgage and the other Loan Documents to the
extent permitted by applicable law.

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

     SECTION 2.4 PREPAYMENTS.

          2.4.1 VOLUNTARY PREPAYMENTS. Except as otherwise provided in this
Section 2.4, Borrower shall not have the right to prepay the Loan in whole or in
part prior to the Anticipated Repayment Date. On the Payment Date three (3)
months prior to the Anticipated Repayment Date, or on any Payment Date
thereafter, Borrower may, at its option and upon thirty (30) days prior written
notice to Lender, prepay the Debt in whole or in part without payment of the
Yield Maintenance Premium or any other prepayment premium or penalty, provided,
however, if for any reason Borrower prepays the Loan on a date other than a
Payment Date, Borrower shall pay Lender, in addition to the Debt, all interest
which would have accrued on the amount of the Loan through and including the
Payment Date next occurring following the date of such prepayment.

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

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

          2.4.4 PREPAYMENT PRIOR TO DEFEASANCE EXPIRATION DATE. If the Permitted
Release Date has occurred but the Defeasance Expiration Date has not occurred,
the Debt may be prepaid in whole (but not in part) prior to the date permitted
under Section 2.4.1 hereof upon not less than thirty (30) days prior written
notice to Lender specifying the Payment Date on which prepayment is to be made
(a "Prepayment Date") provided no Event of Default exists and upon payment of an
amount equal to the Yield Maintenance Premium. Lender shall notify Borrower of
the amount and the basis of determination of the required prepayment
consideration. If any notice of prepayment is given, the Debt shall be due and
payable on the Prepayment Date. Lender shall not be obligated to accept any
prepayment of the Debt unless it is accompanied by the prepayment consideration
due in connection therewith. If for any reason Borrower prepays the Loan on a
date other than a Payment Date, Borrower shall pay Lender, in addition to the
Debt, all interest which would have accrued on the amount of the Loan through
and including the Payment Date next occurring following the date of such
prepayment.



     SECTION 2.5 DEFEASANCE.

          2.5.1 VOLUNTARY DEFEASANCE. (a) Provided no Event of Default shall
then exist, Borrower shall have the right at any time after the Defeasance
Expiration Date and prior to the date voluntarily prepayments are permitted
under Section 2.4.1 hereof to voluntarily defease all, but not part, of the Loan
by and upon satisfaction of the following conditions (such event being a
"DEFEASANCE EVENT"):

          (i) Borrower shall provide not less than thirty (30) days prior
     written notice to Lender specifying the Payment Date (the "DEFEASANCE
     DATE") on which the Defeasance Event is to occur;

          (ii) Borrower shall pay to Lender all accrued and unpaid interest on
     the principal balance of the Loan to and including the Defeasance Date. If
     for any reason the Defeasance Date is not a Payment Date, the Borrower
     shall also pay interest that would have accrued on the Note through and
     including the Payment Date immediately preceding the next Payment Date,
     provided, however, if the Defeasance Deposit shall include short-term
     interest computed from the date of such prepayment through to the next
     succeeding Payment Date, Borrower shall not be required to pay such short
     term interest pursuant to this sentence;

          (iii) Borrower shall pay to Lender all other sums, not including
     scheduled interest or principal payments, then due under the Note, this
     Agreement, the Mortgage and the other Loan Documents;

          (iv) Borrower shall pay to Lender the required Defeasance Deposit for
     the Defeasance Event;

          (v) Intentionally omitted;

          (vi) Borrower shall execute and deliver a pledge and security
     agreement, in form and substance that would be reasonably satisfactory to a
     prudent lender creating a first priority lien on the Defeasance Deposit and
     the U.S. Obligations purchased with the Defeasance Deposit in accordance
     with the provisions of this Section 2.5 (the "Security Agreement");

          (vii) Borrower shall deliver an opinion of counsel for Borrower that
     is standard in commercial lending transactions and subject only to
     customary qualifications, assumptions and exceptions opining, among other
     things, that Borrower has legally and validly transferred and assigned the
     U.S. Obligations and all obligations, rights and duties under and to the
     Note to the Successor Borrower, that Lender has a perfected first priority
     security interest in the Defeasance Deposit and the U.S. Obligations
     delivered by Borrower and that any REMIC Trust formed pursuant to a
     Securitization will not fail to maintain its status as a "real estate
     mortgage investment conduit" within the meaning of Section 860D of the Code
     as a result of such Defeasance Event;

          (viii) Borrower shall deliver confirmation in writing from each of the
     applicable Rating Agencies to the effect that such release will not result
     in a downgrade, withdrawal or qualification of the respective ratings in
     effect immediately prior to such Defeasance Event for the Securities issued
     in connection with the Securitization which are then outstanding. If
     required by the applicable Rating Agencies, Borrower shall also deliver or
     cause to be delivered an Additional Insolvency Opinion with respect to the
     Successor Borrower in form and substance satisfactory to Lender and the
     applicable Rating Agencies;

          (ix) Borrower shall deliver an Officer's Certificate certifying that
     the requirements set forth in this Section 2.5.1(a) have been satisfied;

          (x) Borrower shall deliver a certificate of Borrower's independent
     certified public accountant certifying that the U.S. Obligations purchased
     with the Defeasance Deposit will generate monthly amounts equal to or
     greater than the Scheduled Defeasance Payments;


          (xi) Borrower shall deliver such other certificates, documents or
     instruments as Lender may reasonably request; and

          (xii) Borrower shall pay all reasonable costs and expenses of Lender
     incurred in connection with the Defeasance Event, including (A) any
     reasonable costs and expenses associated with a release of the Lien of the
     Mortgage as provided in Section 2.6 hereof, (B) reasonable attorneys' fees
     and expenses incurred in connection with the Defeasance Event, (C) the
     reasonable costs and expenses of the Rating Agencies, (D) any revenue,
     documentary stamp or intangible taxes or any other tax or charge due in
     connection with the transfer of the Note, or otherwise required to
     accomplish the defeasance and (E) the reasonable costs and expenses of
     Servicer and any trustee, including reasonable attorneys' fees.

          (b) In connection with the Defeasance Event, Borrower shall use the
Defeasance Deposit to purchase U.S. Obligations which provide payments on or
prior to, but as close as possible to, all successive scheduled Payment Dates
after the Defeasance Date upon which interest and principal payments are
required under this Agreement and the Note, and in amounts equal to the
scheduled payments due on such dates under this Agreement and the Note
(including, without limitation, scheduled payments of principal, interest,
servicing fees (if any), and any other amounts due under the Loan Documents on
such Payment Dates) and assuming the Note is prepaid in full on the Anticipated
Repayment Date (the "Scheduled Defeasance Payments"). Borrower, pursuant to the
Security Agreement or other appropriate document, shall authorize and direct
that the payments received from the U.S. Obligations may be made directly to
Lender (or its designee) and applied to satisfy the Debt Service obligations of
Borrower under this Agreement and the Note. Any portion of the Defeasance
Deposit in excess of the amount necessary to purchase the U.S. Obligations
required by this Section 2.5 and satisfy Borrower's other obligations under this
Section 2.5 and Section 2.6 shall be remitted to Borrower.

          2.5.2 COLLATERAL. Each of the U.S. Obligations that are part of the
defeasance collateral shall be duly endorsed by the holder thereof as directed
by Lender or accompanied by a written instrument of transfer in form and
substance that would be satisfactory to a prudent lender (including, without
limitation, such instruments as may be required by the depository institution
holding such securities or by 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
collateral a first priority security interest therein in favor of Lender in
conformity with all applicable state and federal laws governing the granting of
such security interests.

          2.5.3 SUCCESSOR BORROWER. In connection with any Defeasance Event,
Borrower may at its option, or if so required by the applicable Rating Agencies
shall, establish or designate a successor entity (the "Successor Borrower")
acceptable to Lender, which shall be a Special Purpose Entity and Borrower shall
transfer and assign all obligations, rights and duties under and to the Note,
together with the pledged U.S. Obligations to such Successor Borrower. Such
Successor Borrower shall assume the obligations under the Note and the Security
Agreement and Borrower shall be relieved of its obligations under such
documents. Borrower shall pay One Thousand and 00/100 Dollars ($1,000) to any
such Successor Borrower as consideration for assuming the obligations under the
Note and the Security Agreement. Notwithstanding anything in this Agreement to
the contrary, no other assumption fee shall be payable upon a transfer of the
Note in accordance with this Section 2.5.3, but Borrower shall pay all
reasonable costs and expenses incurred by Lender, including Lender's reasonable
attorneys' fees and expenses and any reasonable fees and expenses of any Rating
Agencies, incurred in connection therewith.

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

          2.6.1 RELEASE OF PROPERTY.

          (a) If Borrower has elected to defease the entire Loan and the
requirements of Section 2.5 and this Section 2.6 have been satisfied, all of the
Property shall be released from the Lien of the Mortgage and the U.S.
Obligations, pledged pursuant to the Security Agreement, shall be the sole
source of collateral securing the Note.



          (b) In connection with a defeasance of the Loan, Borrower shall submit
to Lender, not less than thirty (30) days prior to the Defeasance Date, a
release of Lien (and related Loan Documents) for the Property for execution by
Lender. Such release shall be in a form appropriate in the jurisdiction in which
the Property is located and that would be satisfactory to a prudent lender and
contains standard provisions, if any, protecting the rights of the releasing
lender. In addition, Borrower shall provide all other documentation Lender
reasonably requires to be delivered by Borrower in connection with such release,
together with an Officer's Certificate certifying that such documentation (i) is
in compliance with all Legal Requirements, and (ii) will effect such releases in
accordance with the terms of this Agreement.

          2.6.2 RELEASE ON PAYMENT IN FULL. Lender shall, upon the written
request and at the expense of Borrower, upon payment in full of all principal
and interest due on the Loan and all other amounts due and payable under the
Loan Documents in accordance with the terms and provisions of the Note and this
Agreement, release the Lien of the Mortgage on the Property.

     SECTION 2.7 CASH MANAGEMENT.

          2.7.1 CLEARING BANK OPTION. Borrower shall have the option, to be
exercised and implemented not less than six months prior to the Anticipated
Repayment Date (the "CLEARING BANK OPTION"), to establish an account (the
"CLEARING ACCOUNT") at a bank acceptable to Lender in its reasonable discretion
(the "CLEARING BANK") to which each tenant at the Property shall be instructed
to deliver all Rents due under their respective Leases. Lender, Borrower and
Clearing Bank shall execute an agreement in form and substance acceptable to
Lender in its reasonable discretion (the "CLEARING BANK AGREEMENT") whereby
Clearing Bank agrees, among other things, that upon its receipt from Lender of a
notice that a Cash Management Trigger has occurred, all funds on deposit in the
Clearing Account shall be swept on a daily basis to the Cash Management Account.
Borrower shall be responsible for all fees, including fees charged by Clearing
Bank, in connection with the Clearing Account.

          2.7.2 CASH MANAGEMENT ACCOUNT.

          (a) In connection with the Closing, Borrower shall execute and deliver
to Lender a Tenant Direction Letter for each of the tenants at the Property,
which Tenant Direction Letter instructs each such tenant to deposit Rent and
other receivables related to the Property directly into an account (the "Cash
Management Account") to be owned and controlled by Lender or Servicer (on behalf
of Lender) (the "Agent"). Lender shall have a first priority security interest
in the Cash Management Account and all deposits at any time contained therein
and the proceeds thereof and will take all actions necessary to maintain in
favor of Lender a perfected first priority security interest in the Cash
Management Account, including, without limitation, executing and filing UCC-1
Financing Statements and continuations thereof. Such Cash Management Account
shall bear interest for the benefit of Borrower, and shall, at Lender's option,
be an Eligible Account. Borrower covenants and agrees to execute and deliver to
Lender a Tenant Direction Letter for each new tenant at the Property within
thirty (30) days after the execution of each new Lease for premises at the
Property. Lender will hold all Tenant Direction Letters in escrow; provided,
however, upon the occurrence of a Cash Management Trigger, unless the Clearing
Bank Option shall have been exercised and implemented, Lender shall have the
right to deliver a Tenant Direction Letter to each tenant at the Property.
Borrower constitutes and appoints Lender its true and lawful attorney in fact
with full power of substitution for purposes of executing the Tenant Direction
Letters should Borrower fail to do so within five (5) Business Days after
Lender's request. Such power of attorney shall be deemed to be a power coupled
with an interest and cannot be revoked.

          (b) Borrower shall be responsible for all fees, including fees charged
by Agent, in connection with the Cash Management Account.

          (c) Following a Cash Management Trigger, and provided no Event of
Default shall then exist, on each Payment Date (or, if such Payment Date is not
a Business Day, on the immediately preceding Business Day) all funds on deposit
in the Cash Management Account shall be applied by Lender to the payment of the
following items in the order indicated:



          (i) First, payments to the Tax and Insurance Escrow Fund in accordance
     with the terms and conditions of Section 7.2 hereof;

          (ii) Second, payment of the Monthly Debt Service Payment Amount,
     applied to the payment of interest computed at the Initial Interest Rate;

          (iii) Third, required payments to the Replacement Reserve Fund in
     accordance with the terms and conditions hereof;

          (iv) Fourth, payment to the Lender of any other amounts then due and
     payable under the Loan Documents (other than Accrued Interest);

          (v) Fifth, on or after the Anticipated Repayment Date, payments for
     monthly Operating Expenses incurred in accordance with the related Approved
     Annual Budget pursuant to a written request for payment submitted by
     Borrower to Lender specifying the individual Operating Expenses in a form
     acceptable to Lender;

          (vi) Sixth, on or after the Anticipated Repayment Date, payments for
     Extraordinary Expenses approved by Lender, if any, pursuant to a written
     request for payment submitted by Borrower to Lender specifying the
     individual Extraordinary Expenses in a form acceptable to Lender;

          (vii) Seventh, on or after the Anticipated Repayment Date, payments to
     Lender in reduction of the outstanding principal balance of the Loan;

          (viii) Eighth, on or after the Anticipated Repayment Date, payments to
     Lender for Accrued Interest; and

          (ix) Lastly, payment of any excess amounts, if any, ("EXCESS CASH
     FLOW") to Borrower.

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

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

          (f) Notwithstanding anything herein to the contrary, upon a Cash
Management Termination Event, Lender promptly shall send revised Tenant
Direction Letters to each tenant directing such tenants to remit all rent due to
Borrower, and all funds remaining in the Cash Management Account shall be
returned to Borrower.

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

     III. CONDITIONS PRECEDENT

     SECTION 3.1 CONDITIONS PRECEDENT TO CLOSING. The obligation of Lender to
make the Loan hereunder is subject to the fulfillment by Borrower or waiver by
Lender of the following conditions precedent no later than the Closing Date:



          3.1.1 REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH CONDITIONS. The
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date with the same effect as if made on and as of such date,
and no Default or Event of Default shall have occurred and be continuing; and
Borrower shall be in compliance in all material respects with all terms and
conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed.

          3.1.2 LOAN AGREEMENT AND NOTE. Lender shall have received a copy of
this Agreement and the Note, in each case, duly executed and delivered on behalf
of Borrower.

          3.1.3 DELIVERY OF LOAN DOCUMENTS; TITLE INSURANCE; REPORTS; LEASES.

          (a) MORTGAGE, ASSIGNMENT OF LEASES. Lender shall have received from
Borrower fully executed and acknowledged counterparts of the Mortgage and the
Assignment of Leases and evidence that counterparts of the Mortgage and
Assignment of Leases have been delivered to the title company for recording, in
the reasonable judgment of Lender, so as to effectively create upon such
recording valid and enforceable Liens upon the Property, of the requisite
priority, in favor of Lender (or such other trustee as may be required or
desired under local law), subject only to the Permitted Encumbrances and such
other Liens as are permitted pursuant to the Loan Documents. Lender shall have
also received from Borrower fully executed counterparts of the other Loan
Documents.

          (b) TITLE INSURANCE. Lender shall have received the Title Insurance
Policy issued by a title company acceptable to Lender and dated as of the
Closing Date, with, to the extent reasonably required by Lender, reinsurance and
direct access agreements acceptable to Lender. Such Title Insurance Policy shall
(i) provide coverage in amounts satisfactory to Lender, (ii) insure Lender that
the Mortgage creates a valid lien on the Property of the requisite priority,
free and clear of all exceptions from coverage other than Permitted Encumbrances
and standard exceptions and exclusions from coverage (as modified by the terms
of any endorsements), (iii) contain such endorsements and affirmative coverages
as Lender may reasonably request, and (iv) name Lender as the insured. The Title
Insurance Policy shall be assignable. Lender also shall have received evidence
that all premiums in respect of such Title Insurance Policy have been paid.

          (c) SURVEY. Lender shall have received a current survey for the
Property, certified to the title company and Lender and their successors and
assigns, in form and content satisfactory to Lender and prepared by a
professional and properly licensed land surveyor satisfactory to Lender in
accordance with the Accuracy Standards for ALTA/ACSM Land Title Surveys as
adopted by American Land Title Association, American Congress on Surveying &
Mapping and National Society of Professional Surveyors in 2005. The survey shall
reflect the same legal description contained in the Title Insurance Policy
referred to in clause (b) above and shall include, among other things, a metes
and bounds description of the real property comprising part of the Property
reasonably satisfactory to Lender. The surveyor's seal shall be affixed to the
survey and the surveyor shall provide a certification for the survey in form and
substance acceptable to Lender.

          (d) INSURANCE. Lender shall have received valid certificates of
insurance for the policies of insurance required hereunder, satisfactory to
Lender in its sole discretion, and evidence of the payment of all premiums
payable for the existing policy period.

          (e) ENVIRONMENTAL REPORTS. Lender shall have received a Phase I
environmental report (and, if recommended by the Phase I environmental report, a
Phase II environmental report) in respect of the Property, in each case
satisfactory in form and substance to Lender.

          (f) ZONING. Lender shall have received, at Lender's option, (i)
letters or other evidence with respect to the Property from the appropriate
municipal authorities (or other Persons) concerning applicable zoning and
building laws, and (ii) either (A) an ALTA 3.1 zoning endorsement for the
applicable Title Insurance Policy or (B) a zoning opinion letter, in each case
in substance reasonably satisfactory to Lender.



          (g) ENCUMBRANCES. Borrower shall have taken or caused to be taken such
actions in such a manner so that Lender has a valid and perfected first priority
Lien as of the Closing Date with respect to the Mortgage, subject only to
applicable Permitted Encumbrances and such other Liens as are permitted pursuant
to the Loan Documents, and Lender shall have received satisfactory evidence
thereof.

          3.1.4 RELATED DOCUMENTS. Each additional document not specifically
referenced herein, but relating to the transactions contemplated herein, shall
be in form and substance reasonably satisfactory to Lender, and shall have been
duly authorized, executed and delivered by all parties thereto and Lender shall
have received and approved copies thereof.

          3.1.5 DELIVERY OF ORGANIZATIONAL DOCUMENTS. On or before the Closing
Date, Borrower shall deliver or cause to be delivered to Lender copies certified
by Borrower of all organizational documentation related to Borrower and/or the
formation, structure, existence, good standing and/or qualification to do
business, as Lender may request in its sole discretion, including, without
limitation, amendments (as requested by Lender), good standing certificates,
qualifications to do business in the appropriate jurisdictions, resolutions
authorizing the entering into of the Loan and incumbency certificates as may be
requested by Lender.

          3.1.6 OPINIONS OF BORROWER'S COUNSEL. Lender shall have received
opinions from Borrower's counsel with respect to due execution, authority,
enforceability of the Loan Documents and such other matters as Lender may
require, all such opinions in form, scope and substance satisfactory to Lender
and Lender's counsel in their reasonable discretion.

          3.1.7 BUDGETS. Borrower shall have delivered, and Lender shall have
approved, the Annual Budget for the current Fiscal Year.

          3.1.8 BASIC CARRYING COSTS. Borrower shall have paid or cause to be
paid all Basic Carrying Costs relating to the Property which are in arrears,
including without limitation, (a) accrued but unpaid Insurance Premiums due
pursuant to the Policies, (b) currently due Taxes (including any in arrears)
relating to the Property, and (c) currently due Other Charges relating to the
Property, which amounts shall be funded with proceeds of the Loan.

          3.1.9 COMPLETION OF PROCEEDINGS. All organizational and other
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all documents
incidental thereto shall be satisfactory in form and substance to Lender, and
Lender shall have received all such counterpart originals or certified copies of
such documents as Lender may reasonably request.

          3.1.10 PAYMENTS. All payments, deposits or escrows required to be made
or established by Borrower under this Agreement, the Note and the other Loan
Documents on or before the Closing Date shall have been paid or will be paid out
of the proceeds of the Loan.

          3.1.11 TENANT ESTOPPELS. Lender shall have received an executed tenant
estoppel letter, which shall be in form and substance satisfactory to Lender,
from (a) each tenant identified by Lender as an "anchor tenant" of the Property,
(b) each tenant leasing an entire building at the Property, (c) each tenant
paying base rent in an amount equal to or exceeding five percent (5%) of the
Gross Income from Operations from the Property occupied by such tenant and (d)
disregarding the area leased by those described in clauses (a), (b) and (c),
lessees of not less than seventy-five percent (75%) of the remaining gross
leasable area of the Property.

          3.1.12 TRANSACTION COSTS. Borrower shall have paid or reimbursed
Lender for all title insurance premiums, recording and filing fees, costs of
environmental reports, Physical Conditions Report, appraisals and other reports,
the reasonable fees and costs of Lender's counsel and all other reasonable third
party out-of-pocket expenses incurred in connection with the origination and
closing of the Loan.

          3.1.13 MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in the financial condition or business condition of Borrower,
Guarantor or the Property since the date of the most recent



financial statements delivered to Lender. The income and expenses of the
Property, the occupancy thereof, and all other features of the transaction shall
be as represented to Lender without material adverse change. Neither Borrower
nor Guarantor shall be the subject of any bankruptcy, reorganization, or
insolvency proceeding.

          3.1.14 LEASES AND RENT ROLL. Lender shall have received copies of all
tenant leases, which tenant leases shall be certified by Borrower as being true,
correct and complete and certified copies of all ground leases affecting the
Property, if any. Lender shall have received a current certified rent roll of
the Property, reasonably satisfactory in form and substance to Lender.

          3.1.15 SUBORDINATION, NONDISTURBANCE AND ATTORNMENT. Lender shall have
received appropriate instruments acceptable to Lender in its reasonable
discretion subordinating all of the Leases designated by Lender to the Mortgage.
Lender shall have received an agreement to attorn to Lender satisfactory to
Lender from any tenant under a Lease that does not provide for such attornment
by its terms. Lender shall agree in any such agreement to provide the applicable
tenant non-disturbance protection provided the applicable Lease is not in
default beyond applicable notice and grace periods.

          3.1.16 TAX LOT. Lender shall have received evidence that the Property
constitutes one (1) or more separate tax lots, which evidence shall be
reasonably satisfactory in form and substance to Lender.

          3.1.17 PHYSICAL CONDITIONS REPORT. Lender shall have received a
Physical Conditions Report with respect to the Property, which report shall be
issued by an engineer selected by Lender and shall be reasonably satisfactory in
form and substance to Lender.

          3.1.18 MANAGEMENT AGREEMENT. Lender shall have received a copy of the
Management Agreement with respect to the Property which shall be satisfactory in
form and substance to Lender.

          3.1.19 APPRAISAL. Lender shall have received an appraisal of the
Property, from an appraiser selected by Lender, which appraisal shall be
satisfactory in form and substance to Lender.

          3.1.20 FINANCIAL STATEMENTS. To the extent available to Borrower,
Lender shall have received a balance sheet with respect to the Property for the
two (2) most recent Fiscal Years and statements of income and statements of cash
flows with respect to the Property for the three (3) most recent Fiscal Years,
each in form and substance satisfactory to Lender.

          3.1.21 FURTHER DOCUMENTS. Lender or its counsel shall have received
such other documents and further approvals, opinions, documents and information
as Lender or its counsel may have reasonably requested including the Loan
Documents in form and substance satisfactory to Lender and its counsel.

     IV. REPRESENTATIONS AND WARRANTIES

     SECTION 4.1 BORROWER REPRESENTATIONS. Borrower represents and warrants as
of the date hereof and as of the Closing Date that:

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



          4.1.2 PROCEEDINGS. Borrower has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents. This Agreement and such other Loan Documents have been
duly executed and delivered by or on behalf of Borrower and constitute legal,
valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, subject only to applicable bankruptcy,
insolvency and similar laws affecting rights of creditors generally, and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).

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

          4.1.4 LITIGATION. There are no actions, suits or proceedings at law or
in equity by or before any Governmental Authority or other agency now pending or
threatened against or affecting Borrower, Guarantor or, to Borrower's actual
knowledge, the Property, which actions, suits or proceedings, if determined
against Borrower, Guarantor or the Property, might materially adversely affect
the condition (financial or otherwise) or business of Borrower, Guarantor or the
condition or ownership of the Property.

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

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

          4.1.7 SOLVENCY. Borrower has (a) not entered into this transaction or
executed the Note, this Agreement or any other Loan Documents with the actual
intent to hinder, delay or defraud any creditor and



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

          4.1.8 FULL AND ACCURATE DISCLOSURE. No statement of fact made by
Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading. There
is no material fact presently known to Borrower which has not been disclosed to
Lender which adversely affects, nor as far as Borrower can foresee, might
adversely affect, the Property or the business, operations or condition
(financial or otherwise) of Borrower.

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

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

          4.1.11 FINANCIAL INFORMATION. All financial data, including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered to Lender in connection with the Loan (i) are true, complete
and correct in all material respects, (ii) accurately represent the financial
condition of Borrower and the Property, as applicable, as of the date of such
reports, and (iii) to the extent prepared or audited by an independent certified
public accounting firm, have been prepared in accordance with GAAP (or another
basis of accounting acceptable to Lender and consistently applied), throughout
the periods covered, except as disclosed therein. Except for Permitted
Encumbrances, Borrower does not have any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments that are known to Borrower and
reasonably likely to have a materially adverse effect on the Property or the
operation thereof as a retail center, except as referred to or reflected in said
financial statements. Since the date of



such financial statements, there has been no materially adverse change in the
financial condition, operations or business of Borrower from that set forth in
said financial statements.

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

          4.1.13 FEDERAL RESERVE REGULATIONS. No part of the proceeds of the
Loan will be used for the purpose of purchasing or acquiring any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.

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

          4.1.15 NOT A FOREIGN PERSON. Borrower is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.

          4.1.16 SEPARATE LOTS. To Borrower's actual knowledge, the Property is
comprised of one (1) or more parcels which constitute a separate tax lot or lots
and does not constitute a portion of any other tax lot not a part of the
Property.

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

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

          4.1.19 NO PRIOR ASSIGNMENT. There are no prior assignments as security
of the landlord's interest in the Leases or any portion of the Rents due and
payable or to become due and payable which are presently outstanding.

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

          4.1.21 USE OF PROPERTY. The Property is used exclusively for retail
purposes and other appurtenant and related uses.



          4.1.22 CERTIFICATE OF OCCUPANCY; LICENSES. All certifications,
permits, licenses and approvals, including without limitation, certificates of
completion and occupancy permits required for the legal use, occupancy and
operation of the Property as a retail center (collectively, the "Licenses"),
have been obtained and are in full force and effect. Borrower shall keep and
maintain (or cause to be kept and maintained) all Licenses necessary for the
operation of the Property as a retail center. The use being made of the Property
is in conformity with the certificate of occupancy issued for the Property.

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

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

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

          4.1.26 LEASES. The Property is not subject to any leases other than
the Leases described in the rent roll attached hereto as Schedule I and made a
part hereof. Borrower is the owner and lessor of landlord's interest in the
Leases. No Person has any possessory interest in the Property or right to occupy
the same except under and pursuant to the provisions of the Leases. The current
Leases are in full force and effect and, to Borrower's actual knowledge and
except as may be disclosed in any tenant estoppel certificates delivered to
Lender, there are no material defaults thereunder by either party and there are
no conditions that, with the passage of time or the giving of notice, or both,
would constitute material defaults thereunder. No Rent (including security
deposits) has been paid more than one (1) month in advance of its due date. To
Borrower's actual knowledge and except as may be disclosed in any tenant
estoppel certificates delivered to Lender, all work to be performed by Borrower
under each Lease has been performed as required and has been accepted by the
applicable tenant, and any payments, free rent, partial rent, rebate of rent or
other payments, credits, allowances or abatements required to be given by
Borrower to any tenant has already been received by such tenant. There has been
no prior sale, transfer or assignment (other than to Borrower), hypothecation or
pledge of any Lease or of the Rents received therein (other than sales,
transfers, assignments, hypothecations or pledges which may have been made by
the tenants under the Leases). To Borrower's actual knowledge and except as
indicated on Schedule I, no tenant listed on Schedule I has assigned its Lease
or sublet all or any portion of the premises demised thereby, no such tenant
holds its leased premises under assignment or sublease, nor does anyone except
such tenant and its employees occupy such leased premises. No tenant under any
Lease has a right or option pursuant to such Lease or otherwise to purchase all
or any part of the leased premises or the building of which the leased premises
are a part, other than rights of first refusal or rights of first offer
described in any Leases delivered to Lender prior to the date hereof. No tenant
under any Lease has any right or option for additional space in the
Improvements. To Borrower's actual knowledge and except as disclosed in any
environmental reports delivered to Lender in connection with the Loan, no
hazardous wastes or toxic substances, as defined by applicable federal, state or
local statutes, rules and regulations, have been disposed, stored or treated by
any tenant under any Lease on or about the leased premises nor does Borrower
have any actual knowledge of any tenant's intention to use its leased premises
for any activity which, directly or indirectly, involves



the use, generation, treatment, storage, disposal or transportation of any
petroleum product or any toxic or hazardous chemical, material, substance or
waste, other than substances of kinds and in amounts ordinarily and customarily
used or stored for the purposes of cleaning or other maintenance or operations
and otherwise in compliance with applicable environmental laws.

          4.1.27 SURVEY. To Borrower's actual knowledge, the Survey does not
fail to reflect any material matter affecting the Property or the title thereto.

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

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

          4.1.30 SPECIAL PURPOSE ENTITY/SEPARATENESS.

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

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

          (c) Intentionally omitted.

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

          4.1.32 ILLEGAL ACTIVITY. No portion of the Property has been or will
be purchased by Borrower with proceeds of any illegal activity.

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



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

          4.1.35 EMBARGOED PERSON. As of the Closing Date, to Borrower's
knowledge, (a) none of the funds or other assets of Borrower constitute property
of, or are beneficially owned, directly or indirectly, by any Embargoed Person;
(b) no Embargoed Person has any interest of any nature whatsoever in Borrower
with the result that the investment in Borrower (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law; and (c)
none of the funds of Borrower have been derived from any unlawful activity with
the result that the investment in Borrower (whether directly or indirectly), is
prohibited by law or the Loan is in violation of law, provided, however, with
respect to direct or indirect interests in Cole Credit Property Trust, Inc. or
Cole Credit Property Trust II, Inc., Lender acknowledges that Borrower has
relied exclusively on its broker-dealer network to implement the normal and
customary investor screening practices mandated by applicable law and NASD
regulations in making the foregoing representation. [subject to Bear's internal
review]

          4.1.36 PRINCIPAL PLACE OF BUSINESS; STATE OF ORGANIZATION. Borrower's
principal place of business as of the date hereof is the address set forth in
the introductory paragraph of this Agreement. The Borrower is organized under
the laws of the State of Delaware.

          4.1.37 LOAN TO VALUE. Based on the appraisal delivered pursuant to
Section 3.1.19, the maximum principal amount of the Loan does not exceed 65% of
the fair market value of the Property.

          4.1.38 CASH MANAGEMENT ACCOUNT. Borrower hereby represents and
warrants to Lender that:

          (a) Upon the establishment of the Cash Management Account, this
Agreement, together with the other Loan Documents, will create a valid and
continuing security interest (as defined in the Uniform Commercial Code of the
state in which such account is located) in the Cash Management Account in favor
of Lender, which security interest is prior to all other Liens, other than
Permitted Encumbrances, and is enforceable as such against creditors of and
purchasers from Borrower;

          (b) Upon its establishment, the Cash Management Account will
constitute a "deposit account" and/or "securities account" within the meaning of
the Uniform Commercial Code of the state in which such account is located); and

          (c) Upon its establishment, the Cash Management Account will not be in
the name of any Person other than Borrower, as pledgor, or Lender, as pledgee.
Borrower has not consented to Agent complying with instructions with respect to
the Cash Management Account from any Person other than Lender.

     SECTION 4.2 SURVIVAL OF REPRESENTATIONS. Borrower agrees that all of the
representations and warranties of Borrower set forth in Section 4.1 hereof and
elsewhere in this Agreement and in the other Loan Documents shall survive for so
long as any amount remains owing to Lender under this Agreement or any of the
other Loan Documents by Borrower. All representations, warranties, covenants and
agreements made in this Agreement or in the other Loan Documents by Borrower
shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf.

     V. BORROWER COVENANTS

     SECTION 5.1 AFFIRMATIVE COVENANTS. From the date hereof and until payment
and performance in full of all obligations of Borrower under the Loan Documents
or the earlier release of the Lien of the Mortgage encumbering the Property (and
all related obligations) in accordance with the terms of this Agreement and the
other Loan Documents, Borrower hereby covenants and agrees with Lender that:



          5.1.1 EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower shall do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its existence, rights, licenses, permits and franchises and
comply with all Legal Requirements applicable to it and the Property. There
shall never be committed by Borrower, and Borrower shall never permit any other
Person in occupancy of or involved with the operation or use of the Property to
commit any act or omission affording the federal government or any state or
local government the right of forfeiture against the Property or any part
thereof or any monies paid in performance of Borrower's obligations under any of
the Loan Documents. Borrower hereby covenants and agrees not to commit, permit
or suffer to exist any act or omission affording such right of forfeiture.
Borrower shall at all times maintain, preserve and protect all franchises and
trade names and preserve all the remainder of its property used or useful in the
conduct of its business and shall keep the Property in good working order and
repair, and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and improvements thereto,
all as more fully provided in the Mortgage. Borrower shall cause the Property to
be insured at all times by financially sound and reputable insurers, to such
extent and against such risks, and cause to be maintained liability and such
other insurance, as is more fully provided in this Agreement. After prior
written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding promptly initiated and conducted in good faith and
with due diligence, the validity of any Legal Requirement, the applicability of
any Legal Requirement to Borrower or the Property or any alleged violation of
any Legal Requirement, provided that (i) no Event of Default has occurred and
remains uncured; (ii) Borrower is permitted to do so under the provisions of any
mortgage or deed of trust superior in lien to the Mortgage; (iii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any instrument to which Borrower is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable statutes, laws and ordinances; (iv) neither the
Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, cancelled or lost; (v) Borrower shall promptly upon
final determination thereof comply with any such Legal Requirement determined to
be valid or applicable or cure any violation of any Legal Requirement; (vi) such
proceeding shall suspend the enforcement of the contested Legal Requirement
against Borrower or the Property; and (vii) Borrower shall furnish such security
as may be required in the proceeding, or as may be requested by Lender, to
insure compliance with such Legal Requirement, together with all interest and
penalties payable in connection therewith. Lender may apply any such security,
as necessary to cause compliance with such Legal Requirement at any time when,
in the reasonable judgment of Lender, the validity, applicability or violation
of such Legal Requirement is finally established or the Property (or any part
thereof or interest therein) shall be in danger of being sold, forfeited,
terminated, cancelled or lost.

          5.1.2 TAXES AND OTHER CHARGES. Borrower shall pay or cause to be paid
all Taxes and Other Charges now or hereafter levied or assessed or imposed
against the Property or any part thereof as the same become due and payable;
provided, however, Borrower's obligation to directly pay (or cause to be paid)
Taxes shall be suspended for so long as Borrower complies with the terms and
provisions of Section 7.2 hereof. Borrower will deliver to Lender receipts for
payment or other evidence satisfactory to Lender that the Taxes and Other
Charges have been so paid or are not then delinquent no later than ten (10) days
prior to the date on which the Taxes and/or Other Charges would otherwise be
delinquent if not paid, provided, however, if the tenant under a Lease pays such
Taxes or Other Charges directly to the applicable authority and Borrower timely
requests and diligently pursues evidence of payment, and further provided that
no enforcement action has been commenced by the applicable authority resulting
from such tenant's failure to pay Taxes or Other Charges, Borrower shall have an
additional thirty (30) day period to provide such evidence to Lender. Borrower
shall not suffer and shall promptly cause to be paid and discharged any Lien or
charge whatsoever which may be or become a Lien or charge against the Property
(other than Permitted Encumbrances), and shall promptly pay for or cause to be
paid all utility services provided to the Property. After prior written notice
to Lender, Borrower, at its own expense, may contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any
Taxes or Other Charges, provided that (i) no Event of Default has occurred and
remains uncured; (ii) Borrower is permitted to do so under the provisions of any
mortgage or deed of trust superior in lien to the Mortgage; (iii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable statutes, laws and ordinances; (iv) neither the
Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, cancelled or lost; (v) Borrower shall promptly upon
final determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (vi) such



proceeding shall suspend the collection of such contested Taxes or Other Charges
from the Property; and (vii) Borrower shall furnish such security as may be
required in the proceeding, or as may be requested by Lender, to insure the
payment of any such Taxes or Other Charges, together with all interest and
penalties thereon. Lender may pay over any such cash deposit or part thereof
held by Lender to the claimant entitled thereto at any time when, in the
judgment of Lender, the entitlement of such claimant is established or the
Property (or part thereof or interest therein) shall be in danger of being sold,
forfeited, terminated, cancelled or lost or there shall be any danger of the
Lien of the Mortgage being primed by any related Lien (other than Permitted
Encumbrances).

     Notwithstanding the foregoing provisions of this Section 5.1.2, to the
extent the Leases with Hobby Lobby and Sam's Club remain in effect and each such
tenant remains liable for the obligations under its respective Lease, the right
to contest the validity, applicability or amount of any asserted tax or
assessment shall be governed by such Leases.

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

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

          5.1.5 NOTICE OF DEFAULT. Borrower shall promptly advise Lender of any
material adverse change in Borrower's condition, financial or otherwise, or of
the occurrence of any Event of Default of which Borrower has actual knowledge.

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

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

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

          5.1.9 FURTHER ASSURANCES. Borrower shall, at Borrower's sole cost and
expense:

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

          (b) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require; and



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

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

          5.1.11 FINANCIAL REPORTING. Borrower shall keep accurate books and
records of account of the Property and its own financial affairs sufficient to
permit the preparation of financial statements therefrom on the income tax basis
of accounting. Lender and its duly authorized representatives shall have the
right to examine, copy and audit Borrower's records and books of account at all
reasonable times. So long as this Agreement continues in effect, Borrower shall
provide to Lender, in addition to any other financial statements required
hereunder or under any of the other Loan Documents, the following financial
statements and information, all of which must be certified to Lender as being
true and correct by Borrower or the person or entity to which they pertain, as
applicable, and be prepared in accordance with the income tax basis of
accounting and be in form and substance reasonably acceptable to Lender:

          (a) copies of any tax returns filed by Borrower, within thirty (30)
days after the date of filing;

          (b) [reserved]; and

          (c) quarterly operating statements for the Property, within forty-five
(45) days after the end of each March, June, September and December commencing
with March, 2006;

          (d) annual balance sheets for the Property and annual financial
statements for Borrower, each principal or general partner in Borrower, and each
Guarantor, within ninety (90) days after the end of each calendar year; and

          (e) such other information with respect to the Property, Borrower, the
principals or general partners in Borrower, and each Guarantor, which may be
reasonably requested from time to time by Lender, within a reasonable time after
the applicable request.

If any of the aforementioned materials are not furnished to Lender within the
applicable time periods or Lender is dissatisfied with the contents of any of
the foregoing and has notified Borrower of its dissatisfaction, in addition to
any other rights and remedies of Lender contained herein, (i) Borrower shall pay
to Lender upon demand, at Lender's option and in its sole discretion, an amount
equal to $1,000 for each of the aforementioned materials that is not delivered
in accordance with the income tax basis of accounting, provided Lender has given
Borrower at least 30



days prior written notice of such failure, and (ii) Lender shall have the right,
but not the obligation, to obtain the same by means of an audit by an
independent certified public accountant selected by Lender, in which event
Borrower agrees to pay, or to reimburse Lender for, any reasonable expense of
such audit and further agrees to provide all reasonably necessary information to
said accountant and to otherwise cooperate in the making of such audit.

Within sixty (60) days after the occurrence of a Cash Management Trigger, and
not later than sixty (60) days prior to the commencement of each Fiscal Year
thereafter until a Cash Management Termination Event shall have occurred,
Borrower shall submit to Lender an Annual Budget in form reasonably satisfactory
to Lender. The Annual Budget shall be subject to Lender's written approval (each
such approved Annual Budget, an "Approved Annual Budget"). In the event that
Lender objects to a proposed Annual Budget submitted by Borrower, Lender shall
advise Borrower of such objections within fifteen (15) days after receipt
thereof (and deliver to Borrower a reasonably detailed description of such
objections) and Borrower shall promptly revise such Annual Budget and resubmit
the same to Lender. Lender shall advise Borrower of any objections to such
revised Annual Budget within ten (10) days after receipt thereof (and deliver to
Borrower a reasonably detailed description of such objections) and Borrower
shall promptly revise the same in accordance with the process described in this
subsection until Lender approves the Annual Budget. Until such time that Lender
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 Taxes, Insurance Premiums and Other Charges. In the
event that, Borrower must incur an extraordinary operating expense or capital
expense not set forth in the Approved Annual Budget (each an "Extraordinary
Expense"), then Borrower shall promptly deliver to Lender a reasonably detailed
explanation of such proposed Extraordinary Expense for Lender's approval.

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

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

          5.1.14 COSTS OF ENFORCEMENT. In the event (a) that the Mortgage
encumbering the Property is foreclosed in whole or in part or that the Mortgage
is put into the hands of an attorney for collection, suit, action or
foreclosure, (b) of the foreclosure of any mortgage encumbering the Property
prior to or subsequent to the Mortgage in which proceeding Lender is made a
party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Borrower or Guarantor or an assignment by Borrower or
Guarantor for the benefit of its creditors, Borrower, its successors or assigns,
shall be chargeable with and agrees to pay all costs of collection and defense,
including reasonable attorneys' fees and costs, incurred by Lender or Borrower
in connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, together with all required service or use
taxes.

          5.1.15 ESTOPPEL STATEMENT.

          (a) After request by Lender, Borrower shall within ten (10) days
furnish Lender with a statement, duly acknowledged and certified, setting forth
(i) the original principal amount of the Note, (ii) the unpaid principal amount
of the Note, (iii) the Applicable Interest Rate of the Note, (iv) the date
installments of



interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Debt, if any, and (vi) that the Note, this Agreement, the
Mortgage and the other Loan Documents are valid, legal and binding obligations
and have not been modified or if modified, giving particulars of such
modification.

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

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

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

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

          5.1.19 NO JOINT ASSESSMENT. Borrower shall not suffer, permit or
initiate the joint assessment of the Property (a) with any other real property
constituting a tax lot separate from the Property, and (b) which constitutes
real property with any portion of the Property which may be deemed to constitute
personal property, or any other procedure whereby the lien of any taxes which
may be levied against such personal property shall be assessed or levied or
charged to such real property portion of the Property.

          5.1.20 LEASING MATTERS. Any Leases with respect to the Property
written after the date hereof, for more than 5,000 square feet shall be approved
by Lender, which approval shall not be unreasonably withheld, conditioned or
delayed. Upon request, Borrower shall furnish Lender with executed copies of all
Leases. All renewals of Leases and all proposed Leases shall provide for rental
rates comparable to existing local market rates. All proposed Leases shall be on
commercially reasonable terms and shall not contain any terms which would
materially affect Lender's rights under the Loan Documents. All Leases executed
after the date hereof shall provide that they are subordinate to the Mortgage
and that the lessee agrees to attorn to Lender or any purchaser at a sale by
foreclosure or power of sale. Borrower (i) shall observe and perform the
obligations imposed upon the lessor under the Leases in a commercially
reasonable manner; (ii) shall enforce and may amend or terminate the terms,
covenants and conditions contained in the Leases upon the part of the lessee
thereunder to be observed or performed in a commercially reasonable manner and
in a manner not to impair the value of the Property involved except that no
termination by Borrower or acceptance of surrender by a tenant of any Leases
shall be permitted unless by reason of a tenant default and then only in a
commercially reasonable manner to preserve and protect the Property; provided,
however, that no such termination or surrender of any Lease covering more than
5,000 square feet will be permitted without the written consent of Lender; (iii)
shall not collect any of the rents more than one (1) month in advance (other
than security deposits); (iv) shall not execute any other assignment of lessor's
interest in the Leases or the Rents (except as contemplated by the Loan
Documents); (v) shall not alter, modify or change the terms of the Leases in a
manner inconsistent with the provisions of the Loan Documents; and (vi) shall
execute and deliver at the request of Lender all such further assurances,
confirmations and assignments in connection with the Leases as Lender shall from
time to time reasonably require. Notwithstanding anything to the contrary
contained herein, Borrower shall not enter into a lease of all or substantially
all of the Property without Lender's prior written consent. Borrower shall
provide Lender, at least ten (10) Business Days prior notice for the approval or
rejection of any proposed Lease demising over 5,000 square feet (each a
"Material Lease"). Each such request shall include the notation "IMMEDIATE
RESPONSE REQUIRED" prominently displayed in bold, all caps and fourteen (14)
point or larger font at the top of the first page of the Material Lease approval
request and the envelope containing such request. In



the event that Lender fails to respond within such time period, Borrower shall
submit a second approval request to which Lender shall respond within five (5)
Business Days. If Lender fails to respond to such second notice within such
period, such failure shall be deemed to be the consent and approval of the
Material Lease by Lender if (I) Borrower has delivered to Lender all required
documents and information necessary to adequately and completely evaluate the
Material Lease, (II) Borrower has resubmitted the Material Lease with the
notation "IMMEDIATE RESPONSE REQUIRED, FAILURE TO RESPOND TO THIS LEASE APPROVAL
REQUEST WITHIN FIVE (5) BUSINESS DAYS FROM RECEIPT SHALL BE DEEMED TO BE
LENDER'S APPROVAL OF THE LEASE" prominently displayed in bold, all caps and
fourteen (14) point or larger font at the top of the first page of the Material
Lease approval request and the envelope containing such request, and (III) the
proposed tenant (or its parent if such parent guarantees the tenant's
obligations under such proposed Lease) shall have a credit rating issued by
Standard and Poor's of BB or better (or an equivalent rating issued by another
nationally recognized rating agency reasonably acceptable to Lender).

          5.1.21 ALTERATIONS. Borrower shall obtain Lender's prior written
consent to any alterations to any Improvements, which consent shall not be
unreasonably withheld or delayed except with respect to alterations that may
have a material adverse effect on Borrower's financial condition, the value of
the Property or the Net Operating Income. Notwithstanding the foregoing,
Lender's consent shall not be required in connection with (a) tenant improvement
work performed pursuant to the terms of any Lease executed on or before the date
hereof, (b) tenant improvement work performed pursuant to the terms of any Lease
executed after the date hereof, provided that such Lease shall satisfy the
requirements of Section 5.1.20, or (c) alterations performed in connection with
the Restoration of the Property after the occurrence of a Casualty or
Condemnation in accordance with the terms and provisions of this Agreement, and
in the case of clause (c), provided such alterations will not have a material
adverse effect on Borrower's financial condition, the value of the Property or
the Net Operating Income. If the total unpaid amounts due and payable with
respect to alterations to the Improvements at the Property (other than such
amounts to be paid or reimbursed by tenants under the Leases) shall at any time
exceed One Hundred Thousand and 00/100 Dollars ($100,000.00) (the "Threshold
Amount"), Borrower shall promptly deliver to Lender as security for the payment
of such amounts and as additional security for Borrower's obligations under the
Loan Documents any of the following: (A) cash, (B) U.S. Obligations, (C) other
securities having a rating acceptable to Lender and that the applicable Rating
Agencies have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned to any Securities or any class thereof in connection
with any Securitization or (D) a completion and performance bond or an
irrevocable letter of credit (payable on sight draft only) issued by a financial
institution having a rating by S&P of not less than "A-1+" if the term of such
bond or letter of credit is no longer than three (3) months or, if such term is
in excess of three (3) months, issued by a financial institution having a rating
that is acceptable to Lender and that the applicable Rating Agencies have
confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned to any Securities or class thereof in connection with any
Securitization. Such security shall be in an amount equal to the excess of the
total unpaid amounts with respect to alterations to the Improvements on the
Property (other than such amounts to be paid or reimbursed by tenants under the
Leases) over the Threshold Amount and Lender may apply such security from time
to time at the option of Lender to pay for such alterations.

          5.1.22 OPERATION OF PROPERTY.

          (a) Borrower shall cause the Property to be operated, in all material
respects, in accordance with the Leases and Management Agreement (or Replacement
Management Agreement) as applicable. In the event that the Management Agreement
expires or the Property is removed from the application of the Management
Agreement (without limiting any obligation of Borrower to obtain Lender's
consent to any removal of the Property from the application of the Management
Agreement or modification of the Management Agreement as it relates to the
Property if required in accordance with the terms and provisions of this
Agreement), Borrower shall promptly enter into a Replacement Management
Agreement with Manager or another Qualified Manager, as applicable.

          (b) Borrower shall: (i) promptly perform and/or observe, in all
material respects, all of the covenants and agreements required to be performed
and observed by it under the Management Agreement and do all things necessary to
preserve and to keep unimpaired its material rights thereunder; (ii) promptly
notify Lender of any material default under the Management Agreement of which it
is aware; (iii) promptly deliver to Lender a copy



of each financial statement, business plan, capital expenditures plan, notice,
report and estimate received by it with respect to the Property under the
Management Agreement; and (iv) enforce the performance and observance of all of
the covenants and agreements required to be performed and/or observed by Manager
under the Management Agreement, in a commercially reasonable manner.

          5.1.23 EMBARGOED PERSON. Borrower has performed and shall perform
reasonable due diligence to insure that at all times throughout the term of the
Loan, including after giving effect to any Transfers permitted pursuant to the
Loan Documents, (a) none of the funds or other assets of Borrower and Guarantor
constitute property of, or are beneficially owned, directly or indirectly, by
any person, entity or government subject to trade restrictions under U.S. law,
including, but not limited to, The USA PATRIOT Act (including the anti-terrorism
provisions thereof), the International Emergency Economic Powers Act, 50 U.S.C.
Sections 1701, et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et
seq., and any Executive Orders or regulations promulgated thereunder including
those related to Specially Designated Nationals and Specially Designated Global
Terrorists, with the result that the investment in Borrower or Guarantor, as
applicable (whether directly or indirectly), is prohibited by law or the Loan
made by the Lender is in violation of law ("Embargoed Person"); (b) no Embargoed
Person has any interest of any nature whatsoever in Borrower or Guarantor, as
applicable, with the result that the investment in Borrower or Guarantor, as
applicable (whether directly or indirectly), is prohibited by law or the Loan is
in violation of law; and (c) none of the funds of Borrower or Guarantor, as
applicable, have been derived from, or are the proceeds of, any unlawful
activity, including money laundering, terrorism or terrorism activities, with
the result that the investment in Borrower or Guarantor, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of
law, or may cause the Property to be subject to forfeiture or seizure.
Notwithstanding the foregoing, with respect to the direct and indirect interests
in Cole Credit Property Trust, Inc. or Cole Credit Property Trust II, Inc.,
Borrower shall be permitted to rely exclusively on the implementation by its
broker-dealer network of the normal and customary investor screening practices
mandated by applicable law and NASD regulations in satisfaction of the foregoing
covenant. [subject to Bear's internal review]

     SECTION 5.2 NEGATIVE COVENANTS. From the date hereof until payment and
performance in full of all obligations of Borrower under the Loan Documents or
the earlier release of the Lien of the Mortgage encumbering the Property (and
all related obligations) in accordance with the terms of this Agreement and the
other Loan Documents, Borrower covenants and agrees with Lender that it will not
do, directly or indirectly, any of the following:

          5.2.1 OPERATION OF PROPERTY.

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

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

          5.2.2 LIENS. Borrower shall not create, incur, assume or suffer to
exist any Lien on any portion of the Property or permit any such action to be
taken, except:

          (a) Permitted Encumbrances;

          (b) Liens created by or permitted pursuant to the Loan Documents; and



          (c) Liens for Taxes or Other Charges not yet due.

          5.2.3 DISSOLUTION. Borrower shall not, without obtaining the prior
written consent of Lender or Lender's designee (a) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity,
(b) engage in any business activity not related to the ownership and operation
of the Property, (c) transfer, lease or sell, in one transaction or any
combination of transactions, the assets or all or substantially all of the
properties or assets of Borrower except to the extent permitted by the Loan
Documents, or (d) modify, amend, waive or terminate its organizational documents
(other than to evidence transfers permitted under this Agreement) or its
qualification and good standing in any jurisdiction.

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

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

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

          5.2.7 INTENTIONALLY OMITTED.

          5.2.8 INTENTIONALLY OMITTED.

          5.2.9 ERISA.

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

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

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

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

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

          5.2.10 TRANSFERS.


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

          (b) Without the prior written consent of Lender, and except to the
extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall
not permit any Restricted Party do any of the following (collectively, a
"Transfer"): (i) sell, convey, mortgage, grant, bargain, encumber, pledge,
assign, grant options with respect to, or otherwise transfer or dispose of
(directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) the Property or
any part thereof or any legal or beneficial interest therein or (ii) permit a
Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant
to Leases of space in the Improvements to tenants in accordance with the
provisions of Section 5.1.20 and (B) Permitted Transfers.

          (c) A Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower's right, title and interest
in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation
or trust, the sale, conveyance, transfer, disposition, alienation, hypothecation
or encumbering of more than 10% of the issued and outstanding capital stock of
such Restricted Party (or the issuance of new shares of capital stock in such
Restricted Party so that immediately after such issuance (in one or a series of
transactions) the total capital stock then issued and outstanding is more than
110% of the total immediately prior to such issuance); (iv) if a Restricted
Party is a limited or general partnership or joint venture, a change in the
ownership interests in any general partner or any joint venturer, either
voluntarily, involuntarily or otherwise, or the sale, conveyance, transfer,
disposition, alienation, hypothecation or encumbering of all or any portion of
the interest of any such general partner or joint venturer (whether in the form
of a beneficial, membership or partnership interest or in the form of a power of
direction, control or management, or otherwise); or (v) if a Restricted Party is
a limited liability company, a change in the ownership interests in any managing
member, either voluntarily, involuntarily or otherwise, or the sale, conveyance,
transfer, disposition, alienation, hypothecation or encumbering of all or any
portion of the interest of any such managing member (whether in the form of a
beneficial, membership or partnership interest or in the form of a power of
direction, control or management, or otherwise).

          (d) Notwithstanding the foregoing, however, (i) limited partnership
interests in any Restricted Party shall be freely transferable without the
consent of Lender, (ii) any involuntary transfer caused by the death of any
Restricted Party or any general partner, shareholder, joint venturer, manager,
member or beneficial owner of a trust shall not be an Event of Default so long
as Borrower is reconstituted, if required, following such death and so long as
those persons responsible for the management of the Property and Borrower remain
unchanged as a result of such death or any replacement management is approved by
Lender, (iii) gifts for estate planning purposes of any individual's interests
in any Restricted Party to the spouse or any lineal descendant of such
individual, or to a trust for the benefit of any one or more of such individual,
spouse or lineal descendant, shall not be an Event of Default so long as
Borrower is reconstituted, if required, following such gift and so long as those
persons responsible for the management of the Property and Borrower remain
unchanged following such gift or any replacement management is approved by
Lender, and (iv) membership interests in any Restricted Party and interests in
any member of any Restricted Party (collectively, "Permitted Transfers") may be
transferred to any Affiliate of a Restricted Party without the consent of
Lender, provided that, at all times, Christopher H. Cole or Cole Credit Property
Trust II, Inc. must continue to Control Borrower and Guarantor.

          (e) Notwithstanding the foregoing provisions of this Section, at any
time other than the period commencing ninety (90) days prior to a Securitization
and ending thirty (30) days after such Securitization, Lender shall not withhold
its consent to a Transfer of the Property provided that Lender receives not less
than sixty (60) days prior written notice of such Transfer and no Event of
Default has occurred and is continuing, and further provided that the following
additional requirements are satisfied:



          (i) Borrower shall pay Lender an administrative fee of not more than
     $5,000 and an assumption fee equal to one-half-of-one percent (0.5%) of the
     outstanding principal balance of the Loan at the time of such transfer,
     provided, however, that (A) no administrative or assumption fee shall be
     payable in connection with a Transfer by the initial Borrower to an
     Identified Affiliate, and (B) an administrative fee of not more than
     $5,000, and no assumption fee, shall be payable in connection with a
     Transfer by an Identified Affiliate to another Identified Affiliate;

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

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

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

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

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

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

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

          (ix) Transferee and Transferee's Principals must be able to satisfy
     all the representations and covenants set forth in Sections 4.1.30 and
     5.2.9 of this Agreement, no Event of Default shall otherwise occur as a
     result of such Transfer, and Transferee and Transferee's Principals shall
     deliver (A) all organizational documentation reasonably requested by
     Lender, which shall be reasonably satisfactory to Lender and (B) all
     certificates, agreements and covenants reasonably required by Lender,
     provided that such certificates, agreements and covenants shall not
     materially increase the obligations of Borrower under the Loan Documents or
     materially decrease the rights of Borrower under the Loan Documents;

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

          (xi) Intentionally omitted;

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



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

          (xiv) The Property shall be managed by a Qualified Manager pursuant to
     a Replacement Management Agreement.

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

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

     VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS

     SECTION 6.1 INSURANCE.

          (a) From the date hereof until payment and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the
Lien of the Mortgage encumbering the Property (and all related obligations) in
accordance with the terms of this Agreement and the other Loan Documents,
Borrower shall obtain and maintain, or cause to be maintained, insurance for
Borrower and the Property providing at least the following coverages:

          (i) comprehensive all risk insurance ("Special Form") including, but
     not limited to, loss caused by any type of windstorm or hail on the
     Improvements and the Personal Property, (A) in an amount equal to one
     hundred percent (100%) of the "Full Replacement Cost," which for purposes
     of this Agreement shall mean actual replacement value (exclusive of costs
     of excavations, foundations, underground utilities and footings) with a
     waiver of depreciation, but the amount shall in no event be less than the
     outstanding principal balance of the Loan; (B) containing an agreed amount
     endorsement with respect to the Improvements and Personal Property waiving
     all co-insurance provisions or to be written on a no co-insurance form; (C)
     providing for no deductible in excess of Ten Thousand and 00/100 Dollars
     ($10,000.00) for all such insurance coverage excluding windstorm and
     earthquake and (D) if any of the Improvements or the use of the Property
     shall at any time constitute legal non-conforming structures or uses,
     coverage for loss due to operation of law in an amount equal to the full
     Replacement Cost, coverage for demolition costs and coverage for increased
     costs of construction. In addition, Borrower shall obtain: (x) if any
     portion of the Improvements is currently or at any time in the future
     located in a federally designated "special flood hazard area", flood hazard
     insurance in an amount equal to the lesser of (1) the outstanding principal
     balance of the Note or (2) the maximum amount of such insurance available
     under the National Flood Insurance Act of 1968, the Flood Disaster
     Protection Act of 1973 or the National Flood Insurance Reform Act of 1994,
     as each may be amended or such greater amount as Lender shall reasonably
     require and (y) earthquake insurance in amounts and in form and substance
     reasonably satisfactory to Lender in the event the Property is located in
     an area with a high degree of seismic activity;

          (ii) business income insurance (A) with loss payable to Lender; (B)
     covering all risks required to be covered by the insurance provided for in
     subsection (i) above; (C) in an amount equal to one hundred percent (100%)
     of the projected gross revenues from the operation of the Property (as
     reduced to reflect expenses not incurred during a period of Restoration)
     for a period of at least twelve (12) months



     after the date of the Casualty; and (D) containing an extended period of
     indemnity endorsement which provides that after the physical loss to the
     Improvements and Personal Property has been repaired, the continued loss of
     income will be insured until such income either returns to the same level
     it was at prior to the loss, or the expiration of six (6) months from the
     date that the Property is repaired or replaced and operations are resumed,
     whichever first occurs, and notwithstanding that the policy may expire
     prior to the end of such period. The amount of such business income
     insurance shall be determined prior to the date hereof and at least once
     each year thereafter based on Borrower's reasonable estimate of the gross
     revenues from the Property for the succeeding twelve (12) month period.
     Notwithstanding the provisions of Section 2.7.1 hereof, all proceeds
     payable to Lender pursuant to this subsection shall be held by Lender and
     shall be applied to the obligations secured by the Loan Documents from time
     to time due and payable hereunder and under the Note; provided, however,
     that nothing herein contained shall be deemed to relieve Borrower of its
     obligations to pay the obligations secured by the Loan Documents on the
     respective dates of payment provided for in this Agreement and the other
     Loan Documents except to the extent such amounts are actually paid out of
     the proceeds of such business income insurance;

          (iii) at all times during which structural construction, repairs or
     alterations are being made with respect to the Improvements, and only if
     the Property coverage form does not otherwise apply, (A) owner's contingent
     or protective liability insurance, otherwise known as Owner Contractor's
     Protective Liability, covering claims not covered by or under the terms or
     provisions of the below mentioned commercial general liability insurance
     policy and (B) the insurance provided for in subsection (i) above written
     in a so-called builder's risk completed value form (1) on a non-reporting
     basis, (2) against all risks insured against pursuant to subsection (i)
     above, (3) including permission to occupy the Property and (4) with an
     agreed amount endorsement waiving co-insurance provisions;

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

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

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

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

          (viii) umbrella and excess liability insurance in an amount not less
     than Three Million and 00/100 Dollars ($3,000,000.00) per occurrence on
     terms consistent with the commercial general liability insurance policy
     required under subsection (v) above, including, but not limited to,
     supplemental coverage for employer liability and automobile liability,
     which umbrella liability coverage shall apply in excess of the automobile
     liability coverage in clause (vi) above;

          (ix) If the policy or policies of insurance covering the risks
     required to be covered under Section 6.1(a) do not provide coverage for
     acts of terrorism, Borrower shall make commercially reasonable efforts to
     obtain and maintain a separate policy providing such coverages in the event
     of any act of



     terrorism, provided such coverage is available for properties similar to
     the Property and located in or around the region in which the Property is
     located; and

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

          (b) All insurance provided for in Section 6.1(a) hereof, shall be
obtained under valid and enforceable policies (collectively, the "Policies" or
in the singular, the "Policy"), and shall be subject to the approval of Lender
as to insurance companies, amounts, deductibles, loss payees and insureds. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State and having a claims paying
ability rating of "A-" or better (and the equivalent thereof) by at least two
(2) of the Rating Agencies rating the Securities (one (1) of which shall be S&P
if they are rating the Securities and one (1) of which will be Moody's if they
are rating the Securities), or if only one (1) Rating Agency is rating the
Securities, then only by such Rating Agency. The Policies described in Section
6.1 hereof (other than those strictly limited to liability protection) shall
designate Lender as loss payee. Not less than ten (10) days prior to the
expiration dates of the Policies theretofore furnished to Lender, certificates
of insurance evidencing the Policies accompanied by evidence satisfactory to
Lender of payment of the premiums due thereunder (the "Insurance Premiums"),
shall be delivered by Borrower to Lender.

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

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

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

          (i) no act or negligence of Borrower, or anyone acting for Borrower,
     or of any tenant or other occupant, or failure to comply with the
     provisions of any Policy, which might otherwise result in a forfeiture of
     the insurance or any part thereof, shall in any way affect the validity or
     enforceability of the insurance insofar as Lender is concerned;

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

          (iii) the issuers thereof shall give written notice to Lender if the
     Policy has not been renewed thirty (30) days prior to its expiration; and

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

          (f) If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right, without notice to Borrower, to take such action as Lender deems
necessary to protect its interest in the Property, including, without
limitation, the obtaining of such insurance coverage as Lender in its sole
discretion deems appropriate after three (3) Business Days notice to Borrower if
prior to the date upon which any such coverage will lapse or at any time Lender
deems necessary (regardless of prior notice to Borrower) to avoid the lapse of
any such coverage. All premiums incurred by Lender



in connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by Borrower to Lender upon demand and, until paid, shall be
secured by the Mortgage and shall bear interest at the Default Rate.

          (g) To the extent that any portion of the Improvements consisting of
an entire building separate in all respects from any other building comprising
part of the Improvements is occupied by a single tenant, and such tenant
provides insurance satisfying the requirements hereof with respect to such
Improvements (including, without limitation, naming Lender as an additional
insured or loss payee, as applicable), such insurance shall satisfy Borrower's
obligations hereunder. In addition, provided no default shall exist under such
tenant's Lease, and further provided that such tenant (or the corporate
guarantor of such tenant's Lease) shall maintain a credit rating issued by
Standard and Poor's of BB or better (or an equivalent rating issued by another
nationally recognized rating agency reasonably acceptable to Lender), such
tenant shall be permitted to self-insure in accordance with its Lease with
respect to the coverage required hereunder, and such self-insurance shall be
deemed to satisfy the requirements hereof. Lender acknowledges that the
insurance in place as of the date hereof, as evidenced by the certificates of
insurance provided by Borrower and each tenant in connection with the closing of
the Loan, shall be deemed to satisfy the foregoing requirements as in effect on
the date hereof.

     SECTION 6.2 CASUALTY. If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty (a "Casualty"), Borrower shall give
prompt notice of such damage to Lender and shall promptly commence and
diligently prosecute the completion of the Restoration of the Property pursuant
to Section 6.4 hereof as nearly as possible to the condition the Property was in
immediately prior to such Casualty, with such alterations as may be reasonably
approved by Lender and otherwise in accordance with Section 6.4 hereof. Borrower
shall pay (or cause to be paid) all costs of such Restoration whether or not
such costs are covered by insurance. Lender may, but shall not be obligated to
make proof of loss if not made promptly by Borrower. In addition, Lender may
participate in any settlement discussions with any insurance companies (and
shall approve the final settlement, which approval shall not be unreasonably
withheld or delayed) with respect to any Casualty in which the Net Proceeds or
the costs of completing the Restoration are equal to or greater than One Hundred
Thousand and 00/100 Dollars ($100,000.00) and Borrower shall deliver to Lender
all instruments required by Lender to permit such participation.

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

     SECTION 6.4 RESTORATION. The following provisions shall apply in connection
with the Restoration of the Property:

          (a) If the Net Proceeds shall be less than One Hundred Thousand and
00/100 Dollars ($100,000.00) and the costs of completing the Restoration shall
be less than One Hundred Thousand and 00/100 Dollars ($100,000.00), the Net
Proceeds will be disbursed by Lender to Borrower upon receipt, provided that all
of the conditions set forth in Section 6.4(b)(i) hereof are met and Borrower
delivers to Lender a written undertaking to



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

          (b) If the Net Proceeds are equal to or greater than One Hundred
Thousand and 00/100 Dollars ($100,000.00) or the costs of completing the
Restoration are equal to or greater than One Hundred Thousand and 00/100 Dollars
($100,000.00) Lender shall make the Net Proceeds available for the Restoration
in accordance with the provisions of this Section 6.4. The term "Net Proceeds"
for purposes of this Section 6.4 shall mean: (i) the net amount of all insurance
proceeds received by Lender pursuant to Section 6.1 (a)(i), (iv), (ix) and (x)
as a result of such damage or destruction, after deduction of its reasonable
costs and expenses (including, but not limited to, reasonable counsel fees), if
any, in collecting same ("Insurance Proceeds"), or (ii) the net amount of the
Award, after deduction of its reasonable costs and expenses (including, but not
limited to, reasonable counsel fees), if any, in collecting same ("Condemnation
Proceeds"), whichever the case may be.

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

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

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

               (C) Intentionally omitted;

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

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

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

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

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

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

               (J) the Debt Service Coverage Ratio for the Property, after
     giving effect to the Restoration, shall be equal to or greater than 1.7 to
     1.0;



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

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

          (ii) The Net Proceeds shall be held by Lender in an interest-bearing
     account and, until disbursed in accordance with the provisions of this
     Section 6.4(b), shall constitute additional security for the Debt and Other
     Obligations under the Loan Documents. The Net Proceeds shall be disbursed
     by Lender to, or as directed by, Borrower from time to time during the
     course of the Restoration, upon receipt of evidence satisfactory to Lender
     that (A) all materials installed and work and labor performed (except to
     the extent that they are to be paid for out of the requested disbursement)
     in connection with the Restoration have been paid for in full, and (B)
     there exist no notices of pendency, stop orders, mechanic's or
     materialman's liens or notices of intention to file same, or any other
     liens or encumbrances of any nature whatsoever on the Property which have
     not either been fully bonded to the satisfaction of Lender or discharged of
     record or in the alternative fully insured to the satisfaction of Lender by
     the title company issuing the Title Insurance Policy.

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

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



     Casualty Retainage shall be approved by the surety company, if any, which
     has issued a payment or performance bond with respect to the contractor,
     subcontractor or materialman.

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

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

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

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

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

          (e) Notwithstanding the foregoing provisions of this Section 6.4, to
the extent the lease agreements with Hobby Lobby and Sam's Club remain in effect
and each such tenant remains liable for the obligations under its respective
Lease, the disposition of any Casualty insurance proceeds and any Award shall be
governed by such leases.

     VII. RESERVE FUNDS

     SECTION 7.1 REQUIRED REPAIRS.

          7.1.1 DEPOSITS. Borrower shall perform or cause to be performed the
repairs at the Property, as more particularly set forth on Schedule II hereto
(such repairs hereinafter referred to as "Required Repairs"). Borrower shall
complete the Required Repairs on or before the required deadline for each repair
as set forth on Schedule II. It shall be an Event of Default under this
Agreement if Borrower does not complete the Required Repairs at the Property by
the required deadline for each repair as set forth on Schedule II, provided,
that if such repair cannot reasonably be completed by the required deadline for
such repair and Borrower has commenced such repair before the required deadline
and thereafter diligently and expeditiously proceeds to complete the same, the



required deadline shall be extended for such time as is reasonably necessary for
Borrower to complete such repair in the exercise of due diligence. Upon the
occurrence of such an Event of Default, Lender, at its option, may withdraw all
Required Repair Funds from the Required Repair Account and Lender may apply such
funds either to completion of the Required Repairs at the Property or toward
payment of the Debt in such order, proportion and priority as Lender may
determine in its sole discretion. Lender's right to withdraw and apply Required
Repair Funds shall be in addition to all other rights and remedies provided to
Lender under this Agreement and the other Loan Documents. On the Closing Date,
Borrower shall deposit with Lender the amount for the Property set forth on such
Schedule II hereto to perform the Required Repairs for the Property. Amounts so
deposited with Lender shall be held by Lender in accordance with Section 7.5
hereof. Amounts so deposited shall hereinafter be referred to as Borrower's
"Required Repair Fund" and the account in which such amounts are held shall
hereinafter be referred to as Borrower's "Required Repair Account".

          7.1.2 RELEASE OF REQUIRED REPAIR FUNDS. Lender shall disburse to
Borrower the Required Repair Funds from the Required Repair Account from time to
time upon satisfaction by Borrower of each of the following conditions: (a)
Borrower shall submit a written request for payment to Lender at least fifteen
(15) days prior to the date on which Borrower requests such payment be made and
specifies the Required Repairs to be paid, (b) on the date such payment is to be
made, no Event of Default shall exist and remain uncured, (c) Lender shall have
received an Officers' Certificate (i) stating that all Required Repairs to be
funded by the requested disbursement have been completed in good and workmanlike
manner and in accordance with all applicable federal, state and local laws,
rules and regulations, such certificate to be accompanied by a copy of any
license, permit or other approval by any Governmental Authority required to
commence and/or complete the Required Repairs, (ii) identifying each Person that
supplied materials or labor in connection with the Required Repairs to be funded
by the requested disbursement, and (iii) stating that each such Person has been
paid in full or will be paid in full upon such disbursement, such Officers'
Certificate to be accompanied by lien waivers or other evidence of payment
satisfactory to Lender, (d) at Lender's option, a title search for the Property
indicating that the Property is free from all liens, claims and other
encumbrances other than Permitted Encumbrances and those previously approved by
Lender, and (e) Lender shall have received such other evidence as Lender shall
reasonably request that the Required Repairs to be funded by the requested
disbursement have been completed and are paid for or will be paid upon such
disbursement to Borrower. Lender shall not be required to make disbursements
from the Required Repair Account with respect to the Property unless such
requested disbursement is in an amount greater than Twenty-five Thousand and
00/100 Dollars ($25,000.00) (or a lesser amount if the total amount in the
Required Repair Account is less than Twenty-five Thousand and 00/100 Dollars
($25,000.00), in which case only one disbursement of the amount remaining in the
account shall be made) and such disbursement shall be made only upon
satisfaction of each condition contained in this Section 7.1.2.

     SECTION 7.2 TAX AND INSURANCE ESCROW FUND. Borrower shall pay to Lender on
each Payment Date (a) one-twelfth (1/12) of the Taxes and Other Charges that
Lender estimates will be payable during the next ensuing twelve (12) months in
order to accumulate with Lender sufficient funds to pay all such Taxes and Other
Charges at least thirty (30) days prior to their respective due dates, and (b)
one-twelfth (1/12) of the Insurance Premiums that Lender estimates will be
payable for the renewal of the coverage afforded by the Policies upon the
expiration thereof in order to accumulate with Lender sufficient funds to pay
all such Insurance Premiums at least thirty (30) days prior to the expiration of
the Policies (said amounts in (a) and (b) above hereinafter called the "Tax and
Insurance Escrow Fund"). The Tax and Insurance Escrow Fund and the Monthly Debt
Service Payment Amount, shall be added together and shall be paid as an
aggregate sum by Borrower to Lender. Lender will apply the Tax and Insurance
Escrow Fund to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to Sections 5.1.2 and 6.1 hereof and under the Mortgage. In
making any payment relating to the Tax and Insurance Escrow Fund, Lender may do
so according to any bill, statement or estimate procured from the appropriate
public office (with respect to Taxes) or insurer or agent (with respect to
Insurance Premiums), without inquiry into the accuracy of such bill, statement
or estimate or into the validity of any tax, assessment, sale, forfeiture, tax
lien or title or claim thereof. If the amount of the Tax and Insurance Escrow
Fund shall exceed the amounts due for Taxes, Other Charges and Insurance
Premiums pursuant to Sections 5.1.2 and 6.1 hereof, Lender shall, in its sole
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Tax and Insurance Escrow Fund. Any amount remaining
in the Tax and Insurance Escrow Fund after the Debt has been paid in full shall
be returned to Borrower. If at any time Lender reasonably determines that the
Tax and Insurance Escrow Fund is not or will not be sufficient to pay Taxes,
Other Charges and Insurance Premiums by the dates set forth in (a) and



(b) above, Lender shall notify Borrower of such determination and Borrower shall
increase its monthly payments to Lender by the amount that Lender estimates is
sufficient to make up the deficiency at least thirty (30) days prior to the due
date of the Taxes and Other Charges and/or thirty (30) days prior to expiration
of the Policies, as the case may be.

     Notwithstanding the foregoing, provided no Event of Default shall exist, in
the event that Borrower provides (1) evidence satisfactory to Lender that the
Property is insured in accordance with Section 6.1 of this Agreement, and (2)
evidence satisfactory to Lender that the Taxes and Other Charges for the
Property have been paid in accordance with the requirements set forth in this
Agreement, Lender waives the requirement set forth herein for Borrower to make
deposits into the Tax and Insurance Escrow Fund for the payment of Insurance
Premiums and for payment of Taxes and Other Charges, provided, however, Lender
expressly reserves the right to require Borrower to make deposits to the Tax and
Insurance Escrow Fund for the payment of Insurance Premiums and/or for payment
of Taxes and Other Charges if an Event of Default shall exist, or Borrower fails
to provide to Lender evidence that the Property is insured in accordance with
Section 6.1 of this Agreement or that Taxes and Other Charges have been paid in
accordance with the requirements of this Agreement, in either case, within ten
(10) days of Lender's request.

     SECTION 7.3 REPLACEMENTS AND REPLACEMENT RESERVE.

          7.3.1 REPLACEMENT RESERVE FUND. Borrower shall pay to Lender on each
Payment Date one-twelfth (1/12) of an annualized amount equal to $0.15 per gross
leaseable square foot at the Property (the "Replacement Reserve Monthly
Deposit") reasonably estimated by Lender in its sole discretion to be due for
replacements and repairs required to be made to the Property during the calendar
year (collectively, the "Replacements"). Amounts so deposited shall hereinafter
be referred to as Borrower's "Replacement Reserve Fund" and the account in which
such amounts are held shall hereinafter be referred to as Borrower's
"Replacement Reserve Account". Lender may reassess its estimate of the amount
necessary for the Replacement Reserve Fund from time to time, and may increase
the monthly amounts required to be deposited into the Replacement Reserve Fund
upon thirty (30) days notice to Borrower if Lender determines in its reasonable
discretion that an increase is necessary to maintain the proper maintenance and
operation of the Property. Notwithstanding the foregoing, provided no Event of
Default shall exist, in the event that Lender determines, in its reasonable
discretion, that the Property is being maintained at a standard required under
any applicable Lease and consistent with similar properties owned by other
national retail property owners operating in the market in which the Property is
located, Lender waives the requirement set forth herein for Borrower to make the
Replacement Reserve Monthly Deposit, provided, however, Lender expressly
reserves the right to require Borrower to make the Replacement Reserve Monthly
Deposit if an Event of Default shall exist, or Lender determines that the
Property is not being so maintained.

          7.3.2 DISBURSEMENTS FROM REPLACEMENT RESERVE ACCOUNT.

          (a) Lender shall make disbursements from the Replacement Reserve
Account to pay Borrower only for the costs of the Replacements. Lender shall not
be obligated to make disbursements from the Replacement Reserve Account to
reimburse Borrower for the costs of routine maintenance to the Property,
replacements of inventory or for costs which are to be reimbursed from the
Required Repair Fund.

          (b) Lender shall, upon written request from Borrower and satisfaction
of the requirements set forth in this Section 7.3.2, disburse to Borrower
amounts from the Replacement Reserve Account necessary to pay for the actual
approved costs of Replacements or to reimburse Borrower therefor, upon
completion of such Replacements (or, upon partial completion in the case of
Replacements made pursuant to Section 7.3.2(e) hereof) as determined by Lender.
In no event shall Lender be obligated to disburse funds from the Replacement
Reserve Account if a Default or Event of Default exists.

          (c) Each request for disbursement from the Replacement Reserve Account
shall be in a form specified or approved by Lender and shall specify (i) the
specific Replacements for which the disbursement is requested, (ii) the quantity
and price of each item purchased, if the Replacement includes the purchase or
replacement of specific items, (iii) the price of all materials (grouped by type
or category) used in any Replacement



other than the purchase or replacement of specific items, and (iv) the cost of
all contracted labor or other services applicable to each Replacement for which
such request for disbursement is made. With each request Borrower shall certify
that all Replacements have been made in accordance with all applicable Legal
Requirements of any Governmental Authority having jurisdiction over the
Property. Each request for disbursement shall include copies of invoices for all
items or materials purchased and all contracted labor or services provided and,
unless Lender has agreed to issue joint checks as described below in connection
with a particular Replacement, each request shall include evidence satisfactory
to Lender of payment of all such amounts. Except as provided in Section 7.3.2(e)
hereof, each request for disbursement from the Replacement Reserve Account shall
be made only after completion of the Replacement for which disbursement is
requested. Borrower shall provide Lender evidence of completion of the subject
Replacement satisfactory to Lender in its reasonable judgment.

          (d) Borrower shall pay all invoices in connection with the
Replacements with respect to which a disbursement is requested prior to
submitting such request for disbursement from the Replacement Reserve Account
or, at the request of Borrower, Lender will issue joint checks, payable to
Borrower and the contractor, supplier, materialman, mechanic, subcontractor or
other party to whom payment is due in connection with a Replacement. In the case
of payments made by joint check, Lender may require a waiver of lien from each
Person receiving payment prior to Lender's disbursement from the Replacement
Reserve Account. In addition, as a condition to any disbursement, Lender may
require Borrower to obtain lien waivers from each contractor, supplier,
materialman, mechanic or subcontractor who receives payment in an amount equal
to or greater than Twenty-five Thousand and 00/100 Dollars ($25,000.00) for
completion of its work or delivery of its materials. Any lien waiver delivered
hereunder shall conform to the requirements of applicable law and shall cover
all work performed and materials supplied (including equipment and fixtures) for
the Property by that contractor, supplier, subcontractor, mechanic or
materialman through the date covered by the current reimbursement request (or,
in the event that payment to such contractor, supplier, subcontractor, mechanic
or materialmen is to be made by a joint check, the release of lien shall be
effective through the date covered by the previous release of funds request).

          (e) If (i) the cost of a Replacement exceeds Twenty-five Thousand and
00/100 Dollars ($25,000.00), (ii) the contractor performing such Replacement
requires periodic payments pursuant to terms of a written contract, and (iii)
Lender has approved in writing in advance such periodic payments (such approval
not to be unreasonably, withheld, delayed or conditioned), a request for
reimbursement from the Replacement Reserve Account may be made after completion
of a portion of the work under such contract, provided (A) such contract
requires payment upon completion of such portion of the work, (B) the materials
for which the request is made are on site at the Property and are properly
secured or have been installed in the Property, (C) all other conditions in this
Agreement for disbursement have been satisfied, (D) funds remaining in the
Replacement Reserve Account are, in Lender's judgment, sufficient to complete
such Replacement and other Replacements when required, and (E) if required by
Lender, each contractor or subcontractor receiving payments under such contract
shall provide a waiver of lien with respect to amounts which have been paid to
that contractor or subcontractor.

          (f) Borrower shall not make a request for disbursement from the
Replacement Reserve Account more frequently than once in any calendar month and
(except in connection with the final disbursement) the total cost of all
Replacements in any request shall not be less than Twenty-five Thousand and
00/100 Dollars ($25,000.00).

          7.3.3 PERFORMANCE OF REPLACEMENTS.

          (a) Borrower shall make or cause to be made Replacements when required
in order to keep the Property in condition and repair consistent with other
first class retail centers in the same market segment in the metropolitan area
in which the Property is located, and to keep the Property or any portion
thereof from deteriorating in any material respect. Borrower shall complete or
cause to be completed all Replacements in a good and workmanlike manner as soon
as practicable following the commencement of making each such Replacement.

          (b) Lender reserves the right, at its option, to approve all contracts
or work orders with materialmen, mechanics, suppliers, subcontractors,
contractors or other parties providing labor or materials in connection with the
Replacements, such approval not to be unreasonably, withheld, delayed or
conditioned. Upon Lender's request, Borrower shall assign any contract or
subcontract to Lender.



          (c) In the event Lender determines in its reasonable discretion that
any Replacement is not being performed in a workmanlike or timely manner or that
any Replacement has not been completed in a workmanlike or timely manner, Lender
shall have the option, upon prior notice to Borrower, to withhold disbursement
for such unsatisfactory Replacement and to proceed under existing contracts or
to contract with third parties to complete such Replacement and to apply the
Replacement Reserve Fund toward the labor and materials necessary to complete
such Replacement.

          (d) In order to facilitate Lender's completion or making of such
Replacements pursuant to Section 7.3.3(c) above, Borrower grants Lender the
right to enter onto the Property and perform any and all work and labor
necessary to complete or make such Replacements and/or employ watchmen to
protect the Property from damage. All sums so expended by Lender, to the extent
not from the Replacement Reserve Fund, shall be deemed to have been advanced
under the Loan to Borrower and secured by the Mortgage. For this purpose
Borrower constitutes and appoints Lender its true and lawful attorney-in-fact
with full power of substitution to complete or undertake such Replacements in
the name of Borrower. Such power of attorney shall be deemed to be a power
coupled with an interest and cannot be revoked. Borrower empowers said
attorney-in-fact as follows: (i) to use any funds in the Replacement Reserve
Account for the purpose of making or completing such Replacements; (ii) to make
such additions, changes and corrections to such Replacements as shall be
necessary or desirable to complete such Replacements; (iii) to employ such
contractors, subcontractors, agents, architects and inspectors as shall be
required for such purposes; (iv) to pay, settle or compromise all existing bills
and claims which are or may become Liens against the Property, or as may be
necessary or desirable for the completion of such Replacements, or for clearance
of title; (v) to execute all applications and certificates in the name of
Borrower which may be required by any of the contract documents; (vi) to
prosecute and defend all actions or proceedings in connection with the Property
or the rehabilitation and repair of the Property; and (vii) to do any and every
act which Borrower might do in its own behalf to fulfill the terms of this
Section 7.3.

          (e) Nothing in this Section 7.3.3 shall: (i) make Lender responsible
for making or completing any Replacements; (ii) require Lender to expend funds
in addition to the Replacement Reserve Fund to make or complete any Replacement;
(iii) obligate Lender to proceed with any Replacements; or (iv) obligate Lender
to demand from Borrower additional sums to make or complete any Replacement.

          (f) Borrower shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect, or
inspector) or third parties making Replacements pursuant to this Section 7.3.3
to enter onto the Property during normal business hours (subject to the rights
of tenants under their Leases) to inspect the progress of any Replacements and
all materials being used in connection therewith, to examine all plans and shop
drawings relating to such Replacements which are or may be kept at the Property,
and to complete any Replacements made pursuant to this Section 7.3.3 if Borrower
shall fail to do so. Borrower shall cause all contractors and subcontractors to
cooperate with Lender or Lender's representatives or such other persons
described above in connection with inspections described in this Section
7.3.3(f) or the completion of Replacements pursuant to this Section 7.3.3.

          (g) Lender may require an inspection of the Property at Borrower's
expense prior to making a monthly disbursement from the Replacement Reserve
Account in order to verify completion of the Replacements for which
reimbursement is sought. Lender may require that such inspection be conducted by
an appropriate independent qualified professional selected by Lender and/or may
require a copy of a certificate of completion by an independent qualified
professional acceptable to Lender prior to the disbursement of any amounts from
the Replacement Reserve Account. Borrower shall pay the reasonable expense of
the inspection as required hereunder, whether such inspection is conducted by
Lender or by an independent qualified professional.

          (h) The Replacements and all materials, equipment, fixtures, or any
other item comprising a part of any Replacement shall be constructed, installed
or completed, as applicable, free and clear of all mechanic's, materialmen's or
other liens (except for those Liens which constitute Permitted Encumbrances or
which otherwise have been approved in writing by Lender).

          (i) Before each disbursement from the Replacement Reserve Account,
Lender may require Borrower to provide Lender with a search of title to the
Property effective to the date of the disbursement, which search shows that no
mechanic's or materialmen's liens or other liens of any nature have been placed
against the



Property since the date of recordation of the related Mortgage and that title to
the Property is free and clear of all Liens (other than the lien of the related
Mortgage, Permitted Encumbrances and any other Liens previously approved in
writing by Lender, if any).

          (j) All Replacements shall comply with all applicable Legal
Requirements of all Governmental Authorities having jurisdiction over the
Property and applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental regulations, and
requirements of insurance underwriters.

          (k) In addition to any insurance required under the Loan Documents,
Borrower shall provide or cause to be provided workmen's compensation insurance,
builder's risk, and public liability insurance and other insurance to the extent
required under applicable law in connection with a particular Replacement. All
such policies shall be in form and amount reasonably satisfactory to Lender. All
such policies which can be endorsed with standard mortgagee clauses making loss
payable to Lender or its assigns shall be so endorsed. Certified copies of such
policies shall be delivered to Lender.

          7.3.4 FAILURE TO MAKE REPLACEMENTS.

          (a) It shall be an Event of Default under this Agreement if Borrower
fails to comply with any provision of this Section 7.3 and such failure is not
cured within thirty (30) days after notice from Lender. Upon the occurrence and
during the continuance of such an Event of Default, Lender may use the
Replacement Reserve Fund (or any portion thereof) for any purpose, including but
not limited to completion of the Replacements as provided in Section 7.3.3, or
for any other repair or replacement to the Property or toward payment of the
Debt in such order, proportion and priority as Lender may determine in its sole
discretion. Lender's right to withdraw and apply the Replacement Reserve Fund
shall be in addition to all other rights and remedies provided to Lender under
this Agreement and the other Loan Documents.

          (b) Nothing in this Agreement shall obligate Lender to apply all or
any portion of the Replacement Reserve Fund on account of an Event of Default to
payment of the Debt or in any specific order or priority.

          7.3.5 BALANCE IN THE REPLACEMENT RESERVE ACCOUNT. The insufficiency of
any balance in the Replacement Reserve Account shall not relieve Borrower from
its obligation to fulfill all preservation and maintenance covenants in the Loan
Documents.

     SECTION 7.4 INTENTIONALLY OMITTED.

     SECTION 7.5 RESERVE FUNDS, GENERALLY. Borrower grants to Lender a
first-priority perfected security interest in each of the Reserve Funds and any
and all monies now or hereafter deposited in each Reserve Fund as additional
security for payment of the Debt. Until expended or applied in accordance
herewith, the Reserve Funds shall constitute additional security for the Debt.
Upon the occurrence and during the continuance of an Event of Default, Lender
may, in addition to any and all other rights and remedies available to Lender,
apply any sums then present in any or all of the Reserve Funds to the payment of
the Debt in any order in its sole discretion. The Reserve Funds shall not
constitute trust funds and may be commingled with other monies held by Lender.
The Reserve Funds shall be held in an Eligible Account in Permitted Investments
in accordance with the terms and provisions hereof. All interest on a Reserve
Fund shall not be added to or become a part thereof and shall be the sole
property of and shall be paid to Lender. Borrower shall be responsible for
payment of any federal, state or local income or other tax applicable to the
interest earned on the Reserve Funds that is credited or paid to Borrower, if
any. Borrower shall not, without obtaining the prior written consent of Lender,
further pledge, assign or grant any security interest in any Reserve Fund or the
monies deposited therein or permit any lien or encumbrance to attach thereto, or
any levy to be made thereon, or any UCC-1 Financing Statements, except those
naming Lender as the secured party, to be filed with respect thereto. Lender
shall not be liable for any loss sustained on the investment of any funds
constituting the Reserve Funds. Borrower shall indemnify Lender and hold Lender
harmless from and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations and costs and expenses (including
litigation costs and reasonable attorneys fees and expenses) arising from or in
any way connected with the



Reserve Funds or the performance of the obligations for which the Reserve Funds
were established, unless arising from the gross negligence, willful misconduct
or bad faith of Lender. Borrower shall assign to Lender all rights and claims
Borrower may have against all persons or entities supplying labor, materials or
other services which are to be paid from or secured by the Reserve Funds;
provided, however, that Lender may not pursue any such right or claim unless an
Event of Default has occurred and remains uncured.

     VIII. DEFAULTS

     SECTION 8.1 EVENT OF DEFAULT.

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

          (i) if any payment of the Monthly Debt Service Payment Amount or any
     other payment required hereunder or under the other Loan Documents is not
     paid within five (5) days of the applicable due date, or the payment of all
     sums due hereunder and under the other Loan Documents on the Maturity Date
     is not paid when due;

          (ii) if any of the Taxes or Other Charges are not paid prior to the
     date when the same become delinquent, except to the extent that there are
     sufficient funds in the Tax and Insurance Escrow Fund to pay such Taxes or
     Other Charges and Lender fails to or refuses to release the same from the
     Tax and Insurance Escrow Fund;

          (iii) if the Policies are not kept in full force and effect, or if
     certified copies of the Policies are not delivered to Lender within fifteen
     (15) days after request;

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

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

          (vi) if Borrower, Guarantor or any other guarantor under any guaranty
     issued in connection with the Loan shall make an assignment for the benefit
     of creditors;

          (vii) if a receiver, liquidator or trustee shall be appointed for
     Borrower, Guarantor or any other guarantor under any guarantee issued in
     connection with the Loan or if Borrower, Guarantor or such other guarantor
     shall be adjudicated a bankrupt or insolvent, or if any petition for
     bankruptcy, reorganization or arrangement pursuant to federal bankruptcy
     law, or any similar federal or state law, shall be filed by or against,
     consented to, or acquiesced in by, Borrower, Guarantor or such other
     guarantor, or if any proceeding for the dissolution or liquidation of
     Borrower, Guarantor or such other guarantor shall be instituted; provided,
     however, if such appointment, adjudication, petition or proceeding was
     involuntary and not consented to by Borrower, Guarantor or such other
     guarantor, upon the same not being discharged, stayed or dismissed within
     one hundred eighty (180) days;

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

          (ix) if Borrower breaches any covenant contained in Section 4.1.30
     hereof;



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

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

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

          (xiii) if Borrower shall continue to be in default under any of the
     other terms, covenants or conditions of this Agreement not specified in
     subsections (i) to (xii) above, for ten (10) days after notice to Borrower
     from Lender, in the case of any Default which can be cured by the payment
     of a sum of money, or for thirty (30) days after notice from Lender in the
     case of any other Default; provided, however, that if such non-monetary
     Default is susceptible of cure but cannot reasonably be cured within such
     thirty (30) day period and provided further that Borrower shall have
     commenced to cure such Default within such thirty (30) day period and
     thereafter diligently and expeditiously proceeds to cure the same, such
     thirty (30) day period shall be extended for such time as is reasonably
     necessary for Borrower in the exercise of due diligence to cure such
     Default, such additional period not to exceed one hundred eighty (180)
     days; or

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

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

     SECTION 8.2 REMEDIES.

          (a) Upon the occurrence and during the continuance of an Event of
Default, subject to Section 9.3, all or any one or more of the rights, powers,
privileges and other remedies available to Lender against Borrower under this
Agreement or any of the other Loan Documents executed and delivered by, or
applicable to, Borrower or at law or in equity may be exercised by Lender at any
time and from time to time, whether or not all or any of the Debt shall be
declared due and payable, and whether or not Lender shall have commenced any



foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to all or any part of the
Property. Subject to Section 9.3, any such actions taken by Lender shall be
cumulative and concurrent and may be pursued independently, singularly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, Borrower agrees
that if an Event of Default is continuing and to the fullest extent permitted by
law (i) Lender is not subject to any "one action" or "election of remedies" law
or rule, and (ii) all liens and other rights, remedies or privileges provided to
Lender shall remain in full force and effect until Lender has exhausted all of
its remedies against the Property and the Mortgage has been foreclosed, sold
and/or otherwise realized upon in satisfaction of the Debt or the Debt has been
paid in full.

          (b) With respect to Borrower and the Property, nothing contained
herein or in any other Loan Document shall be construed as requiring Lender to
resort to the Property for the satisfaction of any of the Debt in any preference
or priority, and Lender may seek satisfaction out of the Property, or any part
thereof, in its absolute discretion in respect of the Debt. In addition, to the
fullest extent permitted by law, Lender shall have the right from time to time
to partially foreclose the Mortgage in any manner and for any amounts secured by
the Mortgage then due and payable as determined by Lender in its sole discretion
including, without limitation, the following circumstances: (i) in the event
Borrower defaults beyond any applicable grace period in the payment of one or
more scheduled payments of principal and interest, Lender may foreclose the
Mortgage to recover such delinquent payments or (ii) in the event Lender elects
to accelerate less than the entire outstanding principal balance of the Loan,
Lender may foreclose the Mortgage to recover so much of the principal balance of
the Loan as Lender may accelerate and such other sums secured by the Mortgage as
Lender may elect. Notwithstanding one or more partial foreclosures, the Property
shall remain subject to the Mortgage to secure payment of sums secured by the
Mortgage and not previously recovered, to the fullest extent permitted by law.

          (c) Lender shall have the right from time to time to sever the Note
and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the "Severed Loan Documents") in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender and provided that such severance
agreement and other documents incorporate the provisions of Section 9.3.
Borrower hereby absolutely and irrevocably appoints Lender as its true and
lawful attorney, coupled with an interest, in its name and stead to make and
execute all documents necessary or desirable to effect the aforesaid severance,
Borrower ratifying all that its said attorney shall do by virtue thereof;
provided, however, Lender shall not make or execute any such documents under
such power until ten (10) days after notice has been given to Borrower by Lender
of Lender's intent to exercise its rights under such power. Borrower shall be
obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents and
the Severed Loan Documents shall not contain any representations, warranties or
covenants not contained in the Loan Documents and any such representations and
warranties contained in the Severed Loan Documents will be given by Borrower
only as of the Closing Date.

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

     IX. SPECIAL PROVISIONS



     SECTION 9.1 SECURITIZATION.

          9.1.1 SALE OF NOTES AND SECURITIZATION. Borrower acknowledges and
agrees that Lender may sell all or any portion of the Loan and the Loan
Documents, or issue one or more participations therein, or consummate one or
more private or public securitizations of rated single- or multi-class
securities (the "Securities") secured by or evidencing ownership interests in
all or any portion of the Loan and the Loan Documents or a pool of assets that
include the Loan and the Loan Documents (such sales, participations and/or
securitizations, collectively, a "Securitization"). At the request of Lender,
and to the extent not already required to be provided by or on behalf of
Borrower under this Agreement, Borrower shall use reasonable efforts to provide
information not in the possession of Lender or which may be reasonably required
by Lender or take other actions reasonably required by Lender, in each case in
order to satisfy the market standards to which Lender customarily adheres or
which may be reasonably required by prospective investors and/or the Rating
Agencies in connection with any such Securitization including, without
limitation, to:

          (a) provide additional and/or updated Provided Information;

          (b) assist in preparing descriptive materials for presentations to any
or all of Lender's prospective investors or the Rating Agencies;

          (c) if required by any prospective investor and/or any Rating Agency,
use commercially reasonable efforts to deliver such additional tenant estoppel
letters, subordination agreements or other agreements from parties to agreements
that affect the Property, which estoppel letters, subordination agreements or
other agreements shall be reasonably satisfactory to Lender, prospective
investors and/or the Rating Agencies;

          (d) execute such certifications and/or amendments to the Loan
Documents as may be requested by Lender, prospective investors and/or the Rating
Agencies to effect the Securitization, provided that Borrower shall not be
required to modify or amend any Loan Document if such modification or amendment
would (i) initially change the weighted average interest rate on the Loan, the
stated maturity or the amortization of principal set forth herein or in the
Note, (ii) modify or amend any other material economic term of the Loan, or
(iii) materially increase the obligations, or decrease the rights, of Borrower
under the Loan Documents;

          (e) if requested by Lender, review any information regarding the
Property, Borrower, Guarantor, Manager and the Loan which is contained in a
preliminary or final private placement memorandum, prospectus, prospectus
supplement (including any amendment or supplement to either thereof), or other
disclosure document to be used by Lender or any affiliate thereof; and

          (f) supply to Lender such documentation, financial statements and
reports regarding the Property, Borrower, Guarantor, Manager and the Loan in
form and substance required in order to comply with any applicable securities
laws.

          9.1.2 SECURITIZATION COSTS. All reasonable third party costs and
expenses incurred by Borrower in connection with Borrower's complying with
requests made under this Section 9.1 shall be paid by Borrower, provided,
however, such costs and expenses shall not exceed $2,500.

     SECTION 9.2 SECURITIZATION. Borrower understands that certain of the
Provided Information may be included in disclosure documents in connection with
the Securitization, including, without limitation, a prospectus, prospectus
supplement or private placement memorandum (each, a "Disclosure Document") and
may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower will cooperate with the
holder of the Note in updating the Disclosure Document by providing all current
information necessary to keep the Disclosure Document accurate and complete in
all material respects.



     SECTION 9.3 EXCULPATION. Notwithstanding anything to the contrary contained
in this Agreement, the Note, the Mortgage or the other Loan Documents but
subject to the qualifications below, Lender shall not enforce the liability and
obligation of Borrower to perform and observe the obligations contained in the
Note, this Agreement, the Mortgage or the other Loan Documents by any action or
proceeding wherein a money judgment shall be sought against Borrower, except
that Lender may bring a foreclosure action, an action for specific performance
or any other appropriate action or proceeding to enable Lender to enforce and
realize upon its interest under the Note, this Agreement, the Mortgage and the
other Loan Documents, or in the Property, the Rents, or any other collateral
given to Lender pursuant to the Loan Documents; provided, however, that, except
as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Borrower only to the extent of Borrower's interest
in the Property, in the Rents and in any other collateral given to Lender, and
Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan
Documents, agrees that it shall not sue for, seek or demand any deficiency
judgment against Borrower in any such action or proceeding under or by reason of
or under or in connection with the Note, this Agreement, the Mortgage or the
other Loan Documents. The provisions of this Section shall not, however, (a)
constitute a waiver, release or impairment of any obligation evidenced or
secured by any of the Loan Documents; (b) impair the right of Lender to name
Borrower as a party defendant in any action or suit for foreclosure and sale
under the Mortgage as long as Lender shall not sue for, seek or demand any
deficiency judgment against Borrower; (c) affect the validity or enforceability
of or any guaranty made in connection with the Loan or any of the rights and
remedies of Lender thereunder; (d) impair the right of Lender to obtain the
appointment of a receiver; (e) impair the enforcement of any of the Assignment
of Leases; (f) constitute a prohibition against Lender to seek a deficiency
judgment against Borrower if necessary in order to fully realize the security
granted by the Mortgage or to commence any other appropriate action or
proceeding in order for Lender to exercise its remedies against the Property; or
(g) constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Lender (including attorneys' fees and costs reasonably incurred) arising out of
or in connection with the following:

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

          (ii) the willful misconduct of Borrower;

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

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

          (v) the misapplication or conversion by Borrower of (A) any Insurance
     Proceeds paid by reason of any loss, damage or destruction to the Property,
     which are not applied by Borrower in accordance with this Agreement, (B)
     any Awards received in connection with a Condemnation of all or a portion
     of the Property, which are not applied by Borrower in accordance with this
     Agreement, (C) any Rents following an Event of Default, (D) any Rents paid
     more than one month in advance, or (E) any amounts paid to Borrower by
     tenants of the Property specifically for Taxes and Other Charges, which are
     not applied by Borrower to pay such Taxes and Other Charges or in
     accordance with this Agreement;

          (vi) failure to pay charges incurred by Borrower or any Affiliate of
     Borrower for labor or materials that can create Liens on any portion of the
     Property, subject to any right to contest such charges pursuant to the
     terms of this Agreement; and

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



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

     SECTION 9.4 MATTERS CONCERNING MANAGER. If (a) the Debt has been
accelerated pursuant to Section 8.1(b) hereof, (b) Manager shall become bankrupt
or insolvent or (c) a default occurs under the Management Agreement which is not
cured within any applicable notice or grace period, Borrower shall, at the
request of Lender, remove the Property from the application of the Management
Agreement if permitted to do so by the terms of the Management Agreement and the
Consent Regarding Management Agreement, and replace the Manager of the Property
with a Qualified Manager pursuant to a Replacement Management Agreement, it
being understood and agreed that the management fee for such Qualified Manager
shall not exceed then prevailing market rates.

     SECTION 9.5 SERVICER. At the option of Lender, the Loan may be serviced by
a servicer/trustee (any such servicer/trustee, together with its agents,
nominees or designees, are collectively referred to as "Servicer") selected by
Lender and Lender may delegate all or any portion of its responsibilities under
this Agreement and the other Loan Documents to Servicer pursuant to a servicing
agreement (the "Servicing Agreement") between Lender and Servicer. Borrower
shall not be responsible for payment of any set-up fees or any other initial
costs relating to or arising under the Servicing Agreement or the monthly
servicing fee due to Servicer under the Servicing Agreement.

     X. MISCELLANEOUS

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


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

     SECTION 10.3 GOVERNING LAW.

THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED AND SHALL IN ALL RESPECTS BE
GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE IN WHICH THE PROPERTY IS LOCATED AND APPLICABLE FEDERAL LAWS.

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

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

     SECTION 10.6 NOTICES. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, and by telecopier (with
answer back acknowledged), addressed as follows (or at such other address and
Person as shall be designated from time to time by any party hereto, as the case
may be, in a written notice to the other parties hereto in the manner provided
for in this Section):

          If to Lender:     Bear Stearns Commercial Mortgage, Inc.
                            383 Madison Avenue
                            New York, New York 10179
                            Attention: J. Christopher Hoeffel
                            Facsimile No.: (212) 272-7047

          with a copy to:   Katten Muchin Rosenman LLP
                            401 South Tryon Street, Ste. 2600
                            Charlotte, North Carolina 28202
                            Attention: Daniel S. Huffenus, Esq.
                            Facsimile No.: (704) 344-3056

          If to Borrower:   Cole MT Denver CO, LLC
                            2555 East Camelback Road, Ste. 400
                            Phoenix, Arizona 85016



                            Attention: General Counsel
                            Facsimile No.: (602) 778-8780

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

     SECTION 10.7 TRIAL BY JURY. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH
IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.

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

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

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

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

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

          10.9.4 EXPENSES; INDEMNITY.


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

          (b) Borrower shall indemnify, defend and hold harmless Lender from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), that may be imposed on, incurred
by, or asserted against Lender in any manner relating to or arising out of (i)
any material breach by Borrower of its obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the "Indemnified Liabilities"); provided, however, that Borrower
shall not have any obligation to Lender hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or
willful misconduct of Lender. To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Lender.

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

     SECTION 10.10 SCHEDULES INCORPORATED. The Schedules annexed hereto are
hereby incorporated herein as a part of this Agreement with the same effect as
if set forth in the body hereof.

     SECTION 10.11 OFFSETS, COUNTERCLAIMS AND DEFENSES. Any assignee of Lender's
interest in and to this Agreement, the Note and the other Loan Documents shall
take the same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower may otherwise have against any
assignor of such documents, and no such unrelated counterclaim or defense shall
be interposed or asserted by Borrower in any



action or proceeding brought by any such assignee upon such documents and any
such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.

     SECTION 10.12 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES.

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

          (b) This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole
discretion, Lender deems it advisable or desirable to do so.

     SECTION 10.13 PUBLICITY All news releases, publicity or advertising by
Borrower or its Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the Loan
Documents, to Lender, or any of their Affiliates shall be subject to the prior
written approval of Lender.

     SECTION 10.14 WAIVER OF MARSHALLING OF ASSETS. To the fullest extent
permitted by law, Borrower, for itself and its successors and assigns, waives
all rights to a marshalling of the assets of Borrower, Borrower's partners and
others with interests in Borrower, and of the Property, and agrees not to assert
any right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of estates
of decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Lender under the Loan Documents to a sale of the Property for the
collection of the Debt without any prior or different resort for collection or
of the right of Lender to the payment of the Debt out of the net proceeds of the
Property in preference to every other claimant whatsoever.

     SECTION 10.15 WAIVER OF COUNTERCLAIM. Borrower hereby waives the right to
assert a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or its agents.

     SECTION 10.16 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE. In the event
of any conflict between the provisions of this Agreement and any of the other
Loan Documents, the provisions of this Agreement shall control. The parties
hereto acknowledge that they were represented by competent counsel in connection
with the negotiation, drafting and execution of the Loan Documents and that such
Loan Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue
of the ownership by it or any parent, subsidiary or Affiliate of Lender of any
equity interest any of them may acquire in Borrower, and Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Lender's exercise of any such rights or
remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.

     SECTION 10.17 BROKERS AND FINANCIAL ADVISORS. Each party hereby represents
to the other that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the



transactions contemplated by this Agreement. Each party hereby agrees to
indemnify, defend and hold the other harmless from and against any and all
claims, liabilities, costs and expenses of any kind (including reasonable
attorneys' fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of such party in connection with the
transactions contemplated herein. The provisions of this Section 10.17 shall
survive the expiration and termination of this Agreement and the payment of the
Debt.

     SECTION 10.18 PRIOR AGREEMENTS. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, are superseded by the terms of
this Agreement and the other Loan Documents.

     SECTION 10.19 JOINT AND SEVERAL LIABILITY. If Borrower consists of more
than one (1) Person the obligations and liabilities of each Person shall be
joint and several.

     SECTION 10.20 CERTAIN ADDITIONAL RIGHTS OF LENDER (VCOC). Notwithstanding
anything to the contrary contained in this Agreement, Lender shall have:

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

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

          (c) the right, in accordance with the terms of this Agreement to
receive the financial statements required to be delivered under Section 5.1.11
hereof; and

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

The rights described above in this Section 10.20 may be exercised by any entity
which owns and controls, directly or indirectly, substantially all of the
interests in Lender.

                         [NO FURTHER TEXT ON THIS PAGE]



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

                                        BORROWER:

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

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


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


                                        LENDER:

                                        BEAR STEARNS COMMERCIAL MORTGAGE, INC.,
                                        a New York corporation


                                        By: /s/ Michael A. Forastiere
                                            ------------------------------------
                                            Michael A. Forastiere
                                            Managing Director


                                   Schedule V

                              Identified Affiliates

Each of the following entities shall be deemed to be an "Identified Affiliate"
for purposes hereof:

Series A, LLC, an Arizona limited liability company;
Series B, LLC, an Arizona limited liability company;
Series C, LLC, an Arizona limited liability company;
Series D, LLC, an Arizona limited liability company;
Cole Operating Partnership I, LP, a Delaware limited partnership; and
Any entity wholly-owned by one or more of the foregoing


                                  Schedule V-1

EX-10.50

                                                                   Exhibit 10.50

                                 PROMISSORY NOTE

U.S. $2,275,000.00                                              February 6, 2006

          FOR VALUE RECEIVED, Cole Operating Partnership II, LP, a Delaware
limited partnership ("Borrower"), hereby promises to pay to the order of Series
C, LLC, a Delaware limited liability company ("Lender"), at the office of Lender
located at 2555 East Camelback Road, Suite 400, Phoenix, AZ 85016, the principal
amount of $2,275,000.00, together with interest on the principal balance
outstanding hereunder, from (and including) the date of disbursement until (but
not including) the date of payment, at a per annum rate equal to the Stated
Interest Rate specified below or, to the extent applicable, the Default Interest
Rate specified below, in accordance with the following terms and conditions:

     1. Contracted For Rate of Interest. The contracted for rate of interest of
the indebtedness evidenced hereby, without limitation, shall consist of the
following:

          (a) The Stated Interest Rate (as hereinafter defined), as from time to
time in effect, calculated daily on the basis of actual days elapsed over a
360-day year, applied to the principal balance from time to time outstanding
hereunder;

          (b) The Default Interest Rate (as hereinafter defined), as from time
to time in effect, calculated daily on the basis of actual days elapsed over a
360-day year, applied to the principal balance from time to time outstanding
hereunder; and

          (c) All Additional Sums (as hereinafter defined), if any.

Borrower agrees to pay an effective contracted for rate of interest which is the
sum of the Stated Interest Rate referred to in Subsection 1(a) above, plus any
additional rate of interest resulting from the application of the Default
Interest Rate referred to in Subsection 1(b) above, and the Additional Sums, if
any, referred to in Subsection 1(c) above.

     2. Stated Interest Rate. Except as provided in Section 3 below, interest
shall accrue on the principal balance outstanding hereunder during each Interest
Period (as hereinafter defined) at the Stated Interest Rate. The Stated Interest
Rate shall be a rate per annum equal to the 1-month LIBOR plus 2.0%. "Interest
Period" means each period commencing on the first day of the calendar month and
ending on the first day of the next succeeding calendar month; provided (i) the
first Interest Period shall commence on the date hereof and (ii) any Interest
Period that would otherwise extend past the maturity date of this Note shall end
on the maturity date of this Note. "LIBOR" means, with respect to each Interest
Period, the rate for U.S. dollar deposits with a maturity equal to the number of
months specified above, as reported on Telerate page 3750 as of 11:00 a.m.,
London time, on the second London business day before such Interest Period
begins, or, in the case of the first Interest Period, the second London business
day before the first day of the calendar month during which such Interest Period
begins (or if not so reported, then as determined by the Lender from another
recognized source or interbank quotation).

     3. Default Interest Rate. The Default Interest Rate shall be the Stated
Interest Rate plus 4.0% per annum. The principal balance outstanding hereunder
from time to time shall bear interest at the Default Interest Rate from the date
of the occurrence of an Event of Default (as hereinafter defined) hereunder
until the earlier of: (a) the date on which the principal balance outstanding
hereunder, together with all accrued interest and other amounts payable
hereunder, are paid in full; or (b) the date on which such Event of Default is
timely cured in a manner satisfactory to Lender, (i) if Borrower is specifically
granted a right to cure such Event of Default in any of the Loan Documents (as
hereinafter defined) or (ii) if no such right to cure is specifically granted,
then Lender, in its sole and absolute discretion, permits such Event of Default
to be cured.

     4. Payment. Accrued interest under this Note shall be due and payable in
consecutive monthly payments, commencing on March 1, 2006, and continuing on the
same day of each month thereafter until the Note is



paid in full. In any event, the principal balance outstanding hereunder,
together with all accrued interest and other amounts payable hereunder, if not
sooner paid as provided herein or in any of the Loan Documents, shall be due and
payable on December 31, 2006.

     5. Application and Place of Payments. Payments received by Lender with
respect to the indebtedness evidenced hereby shall be applied in such order and
manner as Lender in its sole and absolute discretion may elect. Unless otherwise
elected by Lender, all such payments shall first be applied to accrued and
unpaid interest at the Stated Interest Rate and, to the extent applicable, the
Default Interest Rate, next to the principal balance then outstanding hereunder,
and the remainder to any Additional Sums or other costs or added charges
provided for herein or in any of the Loan Documents. Payments hereunder shall be
made at the address for Lender first set forth above, or at such other address
as Lender may specify to Borrower in writing.

     6. Prepayments. Payments of principal hereof may be made at any time, or
from time to time, in whole or in part, without penalty, provided that all
previously matured interest and other charges accrued to the date of prepayment
are also paid in full. Notwithstanding any partial prepayment of principal
hereof, there will be no change in the due date or amount of scheduled payments
due hereunder unless Lender, in its sole and absolute discretion, agrees in
writing to such change.

     7. Events of Default; Acceleration. The occurrence of any one or more of
the following events shall constitute an "Event of Default" hereunder, and upon
such Event of Default, the entire principal balance outstanding hereunder,
together with all accrued interest and other amounts payable hereunder, at the
election of Lender, shall become immediately due and payable, without any notice
to Borrower:

          (a) Nonpayment of principal, interest or other amounts when the same
shall become due and payable hereunder;

          (b) The failure of Borrower to comply with any provision of this Note;

          (c) The failure of Borrower to comply with any provision of any
document, instrument or agreement executed in connection with the indebtedness
evidenced hereby including, without limitation, the Security Agreement, of even
date herewith, executed by Borrower, as grantor, and Lender, as secured party,
wherein Borrower granted a security interest in all of its right, title and
interest in the limited liability company membership interests of Cole MT Denver
CO, LLC ("Cole MT Denver"), or any other security document executed in
connection with this Note (collectively, the "Loan Documents") if such failure
is not cured within 30 days after written notice by Lender to Borrower, as
applicable;

          (d) The dissolution, winding-up or termination of the existence of
Borrower or Cole MT Denver;

          (e) The calling of a meeting of the creditors of Borrower or Cole MT
Denver or the making by Borrower or Cole MT Denver of an assignment for the
benefit of its creditors; or

          (f) The filing by Borrower or Cole MT Denver of a petition or
application for relief under federal bankruptcy law or any similar state or
federal law.

     8. Additional Sums. All fees, charges, goods, things in action or any other
sums or things of value, other than the interest resulting from the Stated
Interest Rate and the Default Interest Rate, as applicable, paid or payable by
Borrower (collectively, the "Additional Sums"), whether pursuant to this Note,
the Loan Documents or any other document or instrument in any way pertaining to
this lending transaction, or otherwise with respect to this lending transaction,
that, under the laws of the State of Arizona, may be deemed to be interest with
respect to this lending transaction, for the purpose of any laws of the State of
Arizona that may limit the maximum amount of interest to be charged with respect
to this lending transaction, shall be payable by Borrower as, and shall be
deemed to be, additional interest, and for such purposes only, the agreed upon
and "contracted for rate of interest" of this lending transaction shall be
deemed to be increased by the rate of interest resulting from the Additional
Sums. Borrower understands and believes that this lending transaction complies
with the usury laws of the State of



Arizona; however, if any interest or other charges in connection with this
lending transaction are ever determined to exceed the maximum amount permitted
by law, then Borrower agrees that: (a) the amount of interest or charges payable
pursuant to this lending transaction shall be reduced to the maximum amount
permitted by law; and (b) any excess amount previously collected from Borrower
in connection with this lending transaction that exceeded the maximum amount
permitted by law, will be credited against the principal balance then
outstanding hereunder. If the outstanding principal balance hereunder has been
paid in full, the excess amount paid will be refunded to Borrower.

     9. Waivers. Except as set forth in this Note or the Loan Documents, to the
extent permitted by applicable law, Borrower, and each person who is or may
become liable hereunder, severally waive and agree not to assert: (a) any
exemption rights; (b) demand, diligence, grace, presentment for payment,
protest, notice of nonpayment, nonperformance, extension, dishonor, maturity,
protest and default; and (c) recourse to guaranty or suretyship defenses
(including, without limitation, the right to require the Lender to bring an
action on this Note). Lender may extend the time for payment of or renew this
Note, release collateral as security for the indebtedness evidenced hereby or
release any party from liability hereunder, and any such extension, renewal,
release or other indulgence shall not alter or diminish the liability of
Borrower or any other person or entity who is or may become liable on this Note
except to the extent expressly set forth in a writing evidencing or constituting
such extension, renewal, release or other indulgence.

     10. Costs of Collection. Borrower agrees to pay all reasonable costs of
collection, including, without limitation, attorneys' fees, whether or not suit
is filed, and all costs of suit and preparation for suit (whether at trial or
appellate level), in the event any payment of principal, interest or other
amount is not paid when due. In the event of any court proceeding, attorneys'
fees shall be set by the court and not by the jury and shall be included in any
judgment obtained by Lender.

     11. No Waiver by Lender. No delay or failure of Lender in exercising any
right hereunder shall affect such right, nor shall any single or partial
exercise of any right preclude further exercise thereof.

     12. Governing Law. This Note shall be construed in accordance with and
governed by the laws of the State of Arizona, without regard to the choice of
law rules of the State of Arizona.

     13. Time of Essence. Time is of the essence of this Note and each and every
provision hereof.

     14. Amendments. No amendment, modification, change, waiver, release or
discharge hereof and hereunder shall be effective unless evidenced by an
instrument in writing and signed by the party against whom enforcement is
sought.

     15. Severability. If any provision hereof is invalid or unenforceable, the
other provisions hereof shall remain in full force and effect and shall be
liberally construed in favor of Lender in order to effectuate the other
provisions hereof.

     16. Binding Nature. The provisions of this Note shall be binding upon
Borrower and the heirs, personal representatives, successors and assigns of
Borrower, and shall inure to the benefit of Lender and any subsequent holder of
all or any portion of this Note, and their respective successors and assigns.
Lender may from time to time transfer all or any part of its interest in this
Note and the Loan Documents, without notice to Borrower.

     17. Notice. Any notice or other communication with respect to this Note
shall: (a) be in writing; (b) be effective on the day of hand-delivery thereof
to the party to whom directed, one day following the day of deposit thereof with
delivery charges prepaid, with a national overnight delivery service, or two
days following the day of deposit thereof with postage prepaid, with the United
States Postal Service, by regular first class, certified or registered mail; (c)
if directed to Lender, be addressed to Lender at the office of Lender set forth
above, or to such other address as Lender shall have specified to Borrower by
like notice; and (d) if directed to Borrower, be addressed to Borrower at the
address for Borrower set forth below Borrower's name, or to such other address
as Borrower shall have specified by like notice.



     18. Section Headings. The section headings set forth in this Note are for
convenience only and shall not have substantive meaning hereunder or be deemed
part of this Note.

     19. Construction. This Note shall be construed as a whole, in accordance
with its fair meaning, and without regard to or taking into account any
presumption or other rule of law requiring construction against the party
preparing this Note.

     IN WITNESS WHEREOF, Borrower has executed this Note as of the date first
set forth above.

                                        COLE OPERATING PARTNERSHIP II, LP,
                                        a Delaware limited partnership

                                        By: Cole Credit Property Trust II, Inc.,
                                            a Maryland corporation, its
                                            general partner


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                        Name: John M. Pons
                                        Title: Secretary

                                        Address of Borrower:
                                        2555 E. Camelback Road, Suite 400
                                        Phoenix, AZ 85016

EX-10.51

                                                                   Exhibit 10.51

                               SECURITY AGREEMENT

     THIS SECURITY AGREEMENT (this "Agreement") is made and entered into as of
February 6, 2006, by and between Cole Operating Partnership II, LP, a Delaware
limited partnership ("Grantor"), whose address is 2555 East Camelback Road,
Suite 400, Phoenix, Arizona 85016, and Series C, LLC, a Delaware limited
liability company ("Lender"), whose address is 2555 East Camelback Road, Suite
400, Phoenix, Arizona 85016.

1.   SECURITY INTEREST

     Grantor, as collateral security for the payment and performance of the
Secured Obligations (as defined below), hereby grants to Lender a security
interest (the "Security Interest") in all of Grantor's right, title and interest
in the limited liability company membership interests of Cole MT Denver CO, LLC,
a Delaware limited liability company (the "Cole MT Denver"), whether now owned
or hereafter acquired, whether now existing or hereafter arising, and wherever
located, together with all of the following, whether now owned or hereafter
acquired, whether now existing or hereafter arising, and wherever located: (a)
all of Grantor's membership interests, or any other interest, in the Cole MT
Denver; (b) all rights, benefits and privileges held by Grantor under the
Limited Liability Company Agreement of Cole MT Denver CO, LLC dated as of
February 6, 2006, as it may be amended, modified or restated from time to time,
including all voting rights and rights to receive dividends, distributions and
other payments from the Cole MT Denver; (c) all proceeds of the above-described
property; and (d) all books and records pertaining to the above-described
property, including any computer readable memory and computer hardware or
software necessary to process such memory (collectively, the "Collateral").

2.   SECURED OBLIGATIONS

     The Collateral shall secure, in such order of priority as Lender may elect,
the following (collectively, the "Secured Obligations"):

          (a) payment and performance of all obligations of Grantor under the
terms of the Promissory Note of even date herewith (the "Note"), in the original
principal amount of $2,275,000.00, executed by the Grantor in favor of Lender,
together with all extensions, modifications, substitutions or renewals thereof,
or other advances made thereunder;

          (b) payment and performance of every obligation, covenant and
agreement of Grantor contained in this Agreement, together with all extensions,
modifications, substitutions or renewals hereof; and

          (c) payment and performance of every obligation, covenant and
agreement of Grantor and Cole MT Denver contained in each of the Loan Documents
(as defined in the Note), together with all extensions, modifications,
substitutions or renewals thereof.

3.   REPRESENTATIONS AND WARRANTIES OF GRANTOR

     Grantor hereby represents and warrants to Lender that:

     3.1 Other Agreements. The execution, delivery and performance by Grantor of
this Agreement and all other documents and instruments relating to the Secured
Obligations will not result in any breach of the terms and conditions or
constitute a default under any agreement or instrument under which Grantor is a
party or is obligated.

     3.2 Priority. The Security Interest in the Collateral granted to Lender
constitutes, and hereafter will constitute, a security interest of first
priority.

     3.3 Title. Grantor is the owner of, and has good title to, the Collateral
free of all security interests or other encumbrances, and no financing statement
covering the Collateral is filed or recorded in any public office.



     3.4 Authority. Grantor has the full power, authority and legal right to
grant to Lender the Security Interest, and no further consent, authorization,
approval or other action is required for the grant of the Security Interest or
for Lender's exercise of its rights and remedies under this Agreement, except as
may be required in connection with the sale of the Collateral by Lender by the
laws affecting the offering and sale of securities.

     3.5 State of Organization; Name. Grantor is organized under the laws of the
State of Delaware and the exact legal name of Grantor is "Cole Operating
Partnership II, LP".

4.   COVENANTS OF GRANTOR

     4.1 Transfers. Grantor shall not sell, transfer, assign or otherwise
dispose of any Collateral or any interest therein (except as permitted herein)
without obtaining the prior written consent of Lender and shall keep the
Collateral free of all security interests or other encumbrances.

     4.2 Payments of Charges. Grantor shall pay when due all taxes, assessments
and other charges which may be levied or assessed against the Collateral.

     4.3 Notice to Lender. Grantor shall give Lender 45 days' prior written
notice of any change of the names under which it does business or the state of
its organization.

     4.4 Defense of Collateral. Grantor, at its cost and expense, shall protect
and defend this Agreement, all of the rights of Lender hereunder, and the
Collateral against all claims and demands of other parties, including defenses,
setoffs, claims and counterclaims asserted by any Obligor against Grantor and/or
Lender. Grantor shall pay all claims and charges that in the reasonable opinion
of Lender might prejudice, imperil or otherwise affect the Collateral or the
Security Interest.

     4.5 Perfection of Security Interest. The Security Interest, at all times,
shall be perfected and shall be prior to any other interests in the Collateral.
Grantor shall act and perform as necessary and shall execute and file all
security agreements, financing statements, continuation statements, control
agreements, and other documents requested by Lender to establish, maintain and
continue the perfected Security Interest. Grantor further authorizes Lender to
file an initial financing statement, including all necessary amendments, without
any signature of Grantor, to perfect the Security Interest in the Collateral.
Grantor, on written demand, shall promptly pay all costs and expenses of filing
and recording, including the costs of any searches, deemed necessary by Lender
from time to time to establish and determine the validity and the continuing
priority of the Security Interest.

     4.6 Payment of Charges. If Grantor fails to pay any taxes, assessments,
expenses or charges, or fails to keep all of the Collateral free from other
security interests, encumbrances or to perform otherwise as required herein,
Lender may advance the monies necessary to pay the same or to so perform.

5.   EVENTS OF DEFAULT; REMEDIES

     5.1 Events of Default. The occurrence of any of the following events or
conditions shall constitute an "Event of Default":

               (i) Any failure to pay any principal or interest or any other
part of the Secured Obligations when the same shall become due and payable.

               (ii) The occurrence of an "Event of Default" under and as defined
in the Note or any of the other Loan Documents.

     5.2 Remedies. Upon the occurrence of any Event of Default, and at any time
while such Event of Default is continuing, Lender shall have the following
rights and remedies and may do one or more of the following:



               (i) Declare all or any part of the Secured Obligations to be
immediately due and payable, and the same, with all costs and charges, shall be
collectible thereupon by action at law.

               (ii) Without further notice or demand and without legal process,
take possession of the Collateral wherever found and, for this purpose, enter
upon any property occupied by or in the control of Grantor. Grantor, upon demand
by Lender, shall assemble the Collateral and deliver it to Lender or to a place
designated by Lender that is reasonably convenient to both parties.

               (iii) Pursue any legal or equitable remedy available to collect
the Secured Obligations, to enforce its title in and right to possession of the
Collateral and to enforce any and all other rights or remedies available to it.

               (iv) Upon obtaining possession of the Collateral or any part
thereof, after written notice to Grantor as provided in Section 5.4 hereof, sell
such Collateral at public or private sale either with or without having such
Collateral at the place of sale. The proceeds of such sale, after deducting
therefrom all reasonable expenses of Lender in taking, storing, repairing and
selling the Collateral (including attorneys' fees) shall be applied to the
payment of the Secured Obligations, and any surplus thereafter remaining shall
be paid to Grantor or any other person that may be legally entitled thereto. In
the event of a deficiency between such net proceeds from the sale of the
Collateral and the total amount of the Secured Obligations, Grantor, upon
demand, shall promptly pay the amount of such deficiency to Lender.

     5.3 Purchase of Collateral. Lender, so far as may be lawful, may purchase
all or any part of the Collateral offered at any public or private sale made in
the enforcement of Lender's rights and remedies hereunder.

     5.4 Notice. Any demand or notice of sale, disposition or other intended
action hereunder or in connection herewith, whether required by the Uniform
Commercial Code or otherwise, shall be deemed to be commercially reasonable and
effective if such demand or notice is given to Grantor at least ten days prior
to such sale, disposition or other intended action, in the manner provided
herein for the giving of notices.

     5.5 Costs and Expenses. Grantor shall pay all reasonable costs and expenses
of Lender, including costs of uniform commercial code searches, court costs and
reasonable attorneys' fees, incurred by Lender in enforcing payment and
performance of the Secured Obligations or in exercising the rights and remedies
of Lender hereunder. All such reasonable costs and expenses shall be secured by
this Agreement and by other lien and security documents securing the Secured
Obligations. In the event of any court proceedings, court costs and attorneys'
fees shall be set by the court and not by jury and shall be included in any
judgment obtained by Lender.

     5.6 Additional Remedies. In addition to any remedies provided herein for an
Event of Default, Lender shall have all the rights and remedies afforded a
secured party under the Uniform Commercial Code and all other legal and
equitable remedies allowed under applicable law. No failure on the part of
Lender to exercise any of its rights hereunder arising upon any Event of Default
shall be construed to prejudice its rights upon the occurrence of any other or
subsequent Event of Default. No delay on the part of Lender in exercising any
such rights shall be construed to preclude it from the exercise thereof at any
time while that Event of Default is continuing. Lender may enforce any one or
more rights or remedies hereunder successively or concurrently. By accepting
payment or performance of any of the Secured Obligations after its due date,
Lender shall not thereby waive the agreement contained herein that time is of
the essence, nor shall Lender waive either its right to require prompt payment
or performance when due of the remainder of the Secured Obligations or its right
to consider the failure to so pay or perform an Event of Default.

6.   MISCELLANEOUS PROVISIONS

     6.1 Power of Attorney. Grantor hereby appoints Lender as its true and
lawful attorney-in-fact, with full power of substitution to do the following:
(i) to demand, collect, receive, receipt for, sue and recover all sums of money
or other property which may now or hereafter become due, owing or payable from
the Collateral; (ii) to execute, sign and endorse any and all claims,
instruments, receipts, checks, drafts or warrants issued in payment for the
Collateral; (ii) to settle or compromise any and all claims arising under the
Collateral, and, in the place and stead



of Grantor to execute and deliver its release and settlement for the claim; (iv)
to file any claim or claims or to take any action or institute or take part in
any proceedings, either in its own name or in the name of Grantor, or otherwise,
which in the reasonable discretion of Lender may seem to be necessary or
advisable; and (v) to execute any documents necessary to perfect or continue the
Security Interest; provided, however, that the powers specified in clauses (i)
through (iv) may not be exercised by Lender except during the continuance of an
Event of Default. This power is a power coupled with an interest and is given as
security for the Secured Obligations, and the authority hereby conferred is and
shall be irrevocable and shall remain in full force and effect until renounced
by Lender.

     6.2 Actions by Lender. Without notice or demand, without affecting the
obligations of Grantor hereunder, and without affecting the Security Interest or
the priority thereof, Lender, from time to time, may: (i) extend the time for
payment of all or any part of the Secured Obligations, accept a renewal note
therefor, reduce the payments thereon, release any person liable for all or any
part thereof, or otherwise change the terms of all or any part of the Secured
Obligations; (ii) take and hold other security for the payment or performance of
the Secured Obligations and enforce, exchange, substitute, subordinate, waive or
release any such security; (iii) join in any extension or subordination
agreement; or (iv) release any part of the Collateral from the Security
Interest.

     6.3 Waivers. Grantor waives and agrees not to assert: (i) any right to
require Lender to proceed against any guarantor, to proceed against or exhaust
any other security for the Secured Obligations, to pursue any other remedy
available to Lender, or to pursue any remedy in any particular order or manner;
(ii) the benefits of any legal or equitable doctrine or principle of
marshalling; (iii) the benefits of any statute of limitations affecting the
enforcement hereof; (iv) demand, diligence, presentment for payment, protest and
demand, and notice of extension, dishonor, protest, demand and nonpayment,
relating to the Secured Obligations; and (v) any benefit of, and any right to
participate in, any other security now or hereafter held by Lender.

     6.4 Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Arizona, without regard to the choice of
law rules of the State of Arizona.

     6.5 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but such counterparts shall together
constitute but one and the same agreement.

     6.6 Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties with respect to the subject matter hereof,
supersedes all other prior understandings, oral or written, with respect to the
subject matter hereof, and are intended by Lender and Grantor as the final,
complete and exclusive statement of the terms agreed to by them.

     6.7 Amendments. No amendment, modification, change, waiver, release or
discharge hereof and hereunder shall be effective unless evidenced by an
instrument in writing and signed by the party against whom enforcement is
sought.

     6.8 Section Headings. The section headings set forth in this Agreement are
for convenience only and shall not have substantive meaning hereunder or be
deemed part of this Agreement.

     6.9 Time of Essence. Time is of the essence of this Agreement and each and
every provision hereof.

     6.10 Severability. If any provision hereof is invalid or unenforceable, the
other provisions hereof shall remain in full force and effect and shall be
liberally construed in favor of Lender in order to effectuate the other
provisions hereof.

     6.11 Binding Nature. The provisions of this Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their heirs,
personal representatives, successors and assigns. The provisions hereof shall
apply to the parties according to the context thereof and without regard to the
number or gender of words or expressions used.



     6.12 Construction. This Agreement shall be construed as a whole, in
accordance with its fair meaning, and without regard to or taking into account
any presumption or other rule of law requiring construction against the party
preparing this Agreement. As used here, the words "include(s)" means
"include(s), without limitation," and the word "including" means "including, but
not limited to."

     6.13 Notices. Any notice or other communication with respect to this
Agreement shall: (a) be in writing; (b) be effective on the day of hand-delivery
thereof to the party to whom directed, one day following the day of deposit
thereof with delivery charges prepaid, with a national overnight delivery
service, or two days following the day of deposit thereof with postage prepaid,
with the United States Postal Service, by regular first class, certified or
registered mail; (c) if directed to Lender, be addressed to Lender at the office
of Lender set forth above, or to such other address as Lender shall have
specified to Grantor by like notice; and (d) if directed to Grantor, be
addressed to Grantor at the address for Grantor set forth above, or to such
other address as Grantor shall have specified by like notice.

                 [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]

     IN WITNESS WHEREOF, this Agreement was executed by Grantor and Lender as of
the date first set forth above.

                                        "GRANTOR":

                                        COLE OPERATING PARTNERSHIP II, LP,
                                        a Delaware limited partnership

                                        By: Cole Credit Property Trust II, Inc.,
                                            a Maryland corporation,
                                            its general partner


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                        Name: John M. Pons
                                        Title: Secretary


                                        "LENDER":

                                        SERIES C, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Blair D. Koblenz
                                            ------------------------------------
                                        Name: Blair D. Koblenz
                                        Title: Executive Vice President

EX-10.52

                                                                   Exhibit 10.52

                               PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                                     BETWEEN

                           ALMA SCHOOL TOWN CENTER LLC

                                    AS SELLER

                                       AND

                                  SERIES D, LLC

                                    AS BUYER

                                OCTOBER 25, 2005



                   PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

DATED:   Dated to be effective as of October 25, 2005 (the "Effective Date").

PARTIES: This Purchase Agreement and Escrow Instructions is between  ALMA SCHOOL
         TOWN CENTER LLC, an Arizona limited liability company, as "Seller", and
         SERIES D, 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 1920 South Alma School Road, Chandler,
Arizona 85248, 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 31,063 square feet (the "Building") which
Building is leased to Mountainside Fitness Centers of Ocotillo LLC ("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.

     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 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 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) 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 FIVE MILLION EIGHT HUNDRED SIXTY-THREE THOUSAND and NO/100 Dollars
($5,863,000.00) (the "Purchase Price"), payable as follows:

          (a) Seventy-Five Thousand and No/100 Dollars ($75,000.00) earnest
money (the "Earnest Money Deposit") to be deposited in escrow with Fidelity
National Title Insurance Company, 40 North Central Avenue, Suite 2850, Phoenix,
Arizona 85004, Attention: Ms. Mary Garcia ("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) Five Million Seven Hundred Eighty-Eight Thousand and No/100
Dollars ($5,788,000.00) 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 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 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 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 the later of 5:00 p.m.
MST on (i) the thirtieth (30th) day after the Opening of Escrow, (ii) thirty
(30) days from Buyer's receipt of all deliveries of Seller's Diligence Materials
(as hereinafter defined), or (iii) that day which is ten (10) days from Buyer's
receipt of the Report and legible copies of all documents identified in Part Two
of Schedule B of the Report (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").

          (b) Right of Entry. Subject to the prior rights of the Tenant in the
Property, Seller hereby grants to Buyer and Buyer's agents, employees and
contractors the right to enter upon the Property, at any time or times 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 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. 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 (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"), all at no cost to Buyer. The foregoing deliveries shall include,
but not be limited to, copies of all: (i) books of account and records for the
Property for the last twenty-four (24) months (including year-end Tenant CAM
expense reconciliations); (ii) the Lease, including any amendments thereto and a
copy of the leasehold title insurance policy delivered to Tenant; (iii) a
detailed listing of all capital expenditures on the Property for the last
thirty-six (36) months; (iv) the maintenance history of the Property for the
last twenty-four (24) months; (v) current maintenance, management, and listing
contracts for the Property including any amendments thereto; (vi) all claims or
suits by Tenant or third parties involving the Property or the Lease or any
Contracts (whether or not covered by insurance); (vii) a list of all claims or
suits by or against Seller regarding the Property for the last thirty-six (36)
months; (viii) any appraisals of the Property; (ix) the site plan with respect
to the Property; and (x) any other documents or other information in the
possession 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
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. Buyer, at Buyer's cost, may cause a surveyor licensed in the
State of Arizona to complete and deliver to Escrow Agent and Seller a current,
certified ALTA survey of the Real Property, Building and Improvements (the
"Survey"), 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.

     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 Buyer's Diligence.

     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 not later than ten (10) business
days prior to COE 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, 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 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 final Certificate of
Occupancy for the Improvements;

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

          (i) delivery of the SEC Filing Information (as hereinafter defined)
and the SEC Filings Letter (as hereinafter defined) by Seller to Buyer not less
than five (5) days prior to COE; and

          (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 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.

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

          (a) there are no unrecorded leases (other than the 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;

          (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 knowledge after due inquiry,
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 after due inquiry, no default 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) 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) 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;

          (p) to Seller's actual knowledge, there is not now, nor has there ever
been, on or in the Property 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 Hazardous
Materials released on the Property prior to COE and continuing in existence on
the Property at COE);

          (q) 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 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) 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

          (t) 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.

     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. 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.

     15. 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 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 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.

     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 Jeff
Levine and Steve Cook and ESCEE Commercial 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, without limitation, 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 pursuant to a separate written agreement between Seller and
Seller's Broker, which commission shall be paid at COE.

     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 Fifty Thousand and no/100 Dollars ($50,000.00) of earnest money with
Escrow Agent, which shall be immediately non-refundable. 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. Buyer shall deliver a copy of any such assignment not
fewer than two (2) days prior to COE. 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.

     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:       Alma School Town Center LLC
                    c/o Glenwood Development Company
                    1333 N. Greenfield Road, Suite 104
                    Mesa, AZ 85205
                    Attn: Jerry Gerard
                    Tel.: (480) 775-4650
                    Fax: (480) 775-4650

if to Buyer:        Series D, 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: Fidelity National Title Insurance Company
                    40 North Central Avenue, Suite 2850
                    Phoenix, AZ 85004
                    Attn: Mary Garcia
                    Tel.: (602) 343-7550
                    Fax: (602) 343-7564

          (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) 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 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. 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 Lease arising from
events occurring prior to COE.

     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 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 United States District Court for the
District of Arizona in Phoenix and in the Superior Court of Arizona in Maricopa
County, Arizona.

     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.

     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. 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 company that
is subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended ("Registered Company"), promoted by the Buyer or to an affiliate of a
Registered Company (a "Registered Company Affiliate"). In the event Buyer's
assignee under this Agreement is a Registered Company or a Registered Company
Affiliate, the Registered Company will be required to make certain filings with
the U.S. Securities and Exchange Commission required under SEC Rule 3-14 of
Regulation S-X (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 and the Registered Company with financial information regarding
the Property for the Audited Year requested by Buyer, the Registered Company,
and/or Buyer's or the Registered Company'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 ("SEC Filing Information"). Seller shall deliver the SEC Filing
Information requested by Buyer, the Registered Company and/or Buyer's or the
Registered Company's auditors prior to the expiration of the Study Period, and
Seller agrees to cooperate with Buyer, the Registered Company and Buyer's or the
Registered Company's auditors regarding any inquiries by Buyer, the Registered
Company and Buyer's or the Registered Company'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 or the Registered
Company's auditors ("SEC Filings Letter"). A sample SEC Filings Letter is
attached to the Purchase Agreement as Exhibit G; however, Buyer's and/or the
Registered Company'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 37 shall survive the COE for a period of one (1) year.

               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]



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

SELLER:                                 ALMA SCHOOL TOWN CENTER LLC,
                                        an Arizona limited liability company

                                        By: GFG Equities Limited Partnership, a
                                            California limited partnership
                                            Its Managing Member

                                        By: GFG Properties, Inc., a California
                                            corporation
                                            Its General Partner


                                        By: /s/ Robert W. Klepinger
                                            ------------------------------------
                                            Robert W. Klepinger
                                            Its Vice President


BUYER:                                  SERIES D, LLC, an Arizona limited
                                        liability company


                                        By: /s/ John M. Pons
                                            ------------------------------------
                                            John M. Pons
                                        Its: Authorized Officer



                            ESCROW AGENT'S ACCEPTANCE

     The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this 28 day of October, 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.

                                        FIDELITY NATIONAL TITLE INSURANCE
                                        COMPANY


                                        By: /s/ M. Burton
                                            ------------------------------------
                                        Title: Asst. Commercial Escrow Officer



                         AMENDMENT TO PURCHASE AGREEMENT

     This Amendment to Purchase Agreement (this "Amendment") is made and entered
into effective as of the 13th day of January, 2006, by and between ALMA SCHOOL
TOWN CENTER LLC ("Seller") and SERIES D, LLC ("Buyer") and provides as follows:

                                   WITNESSETH:

     WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions dated as of October 25, 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 17 of the Purchase Agreement is hereby amended by deleting the
entirety thereof and substituting the following in lieu thereof:

          CLOSE OF ESCROW. COE SHALL BE ON OR BEFORE 5:00 P.M. MST ON JANUARY
          10, 2006, OR SUCH OTHER DATE AS BUYER AND SELLER MAY AGREE IN WRITING.
          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 FIFTY
          THOUSAND AND NO/100 DOLLARS ($50,000.00) OF EARNEST MONEY WITH ESCROW
          AGENT, WHICH SHALL BE IMMEDIATELY NON-REFUNDABLE. FOR PURPOSES OF THIS
          AGREEMENT, ANY ADDITIONAL EARNEST MONEY DEPOSITED WITH ESCROW AGENT
          PURSUANT TO THIS SECTION 17 SHALL BE ADDED TO AND BECOME PART OF THE
          EARNEST MONEY DEPOSIT AND SHALL BE IMMEDIATELY NON-REFUNDABLE.

     2. 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.

     3. 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.

                         [SIGNATURES ON FOLLOWING PAGE]



     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date set forth above.

BUYER:                                  SELLER:

SERIES D, LLC, an Arizona limited       ALMA SCHOOL TOWN CENTER LLC, an Arizona
liability company                       limited liability company


By: /s/ John M. Pons                    By GFG Equities Limited Partnership, a
    ---------------------------------      California limited partnership
    John M. Pons                           Its Managing Member
    Its Authorized Officer
                                        By GFG Properties, Inc., a California
                                           corporation
                                           Its General Partner


                                        By: /s/ Robert W. Klepinger
                                            ------------------------------------
                                        Name: Robert W. Klepinger
                                        Its: Officer



                        ASSIGNMENT OF PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                           SERIES D, LLC, AS ASSIGNOR
                                       AND
                      COLE MF CHANDLER AZ, LLC, AS ASSIGNEE

     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, to and under that certain Purchase Agreement and Escrow
Instructions (the "Purchase Agreement") described herein, including, without
limitation, Assignor's right, title and interest in and to the Earnest Money
Deposit, to Assignee and its successors and assigns. The Purchase Agreement is
described as follows:

DATE OF AGREEMENT: October 25, 2005

ORIGINAL BUYER:    Series D, LLC

ASSIGNED TO:       Cole MF Chandler AZ, LLC

PROPERTY ADDRESS:  1920 South Alma School, Chandler, Arizona

     Assignor acknowledges that it is not released from any obligations or
liabilities under said Purchase Agreement, with the exception of the obligation
to deliver the Earnest Money Deposit which has been delivered into escrow by
Assignor.

     Assignee hereby agrees to assume and be responsible for all obligations and
liabilities under said Purchase Agreement, with the exception of the obligation
to deliver the Earnest Money Deposit which has been delivered into escrow by
Assignor. This Assignment shall be in full force and effect upon its full
execution.

     Executed this 8th day of February, 2006.

ASSIGNOR:                               ASSIGNEE:

SERIES D, LLC,                          COLE MF CHANDLER AZ, LLC,
an Arizona limited liability company    a Delaware limited liability company

                                        By: Cole REIT ADVISORS II,
                                            a Delaware limited liability company
                                            its Manager


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

EX-10.53

                                                                   Exhibit 10.53

                           PURCHASE AND SALE AGREEMENT

     This PURCHASE AND SALE AGREEMENT ("AGREEMENT"), dated as of December 16,
2005 is entered into by and between HICKORY BUSINESS PARK, LLC, a Delaware
limited liability company ("SELLER"), and COLE TAKEDOWN, LLC, a Delaware limited
liability company ("BUYER").

                                    RECITALS:

     A. Seller is the fee simple owner of the Property, as hereinafter defined,
consisting of approximately 30.26 acres of improved real property located in
Hickory, North Carolina.

     B. Buyer desires to purchase the Property from Seller and Seller is willing
to sell the Property to Buyer on the terms and conditions set forth in this
Agreement.

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

1.   PURCHASE AND SALE.

     Seller agrees to sell the Property to Buyer and Buyer agrees to purchase
the Property from Seller, all on the terms, covenants and conditions set forth
in this Agreement. The "PROPERTY" includes the following:

     A. Land. The land ("LAND") consisting of approximately 30.26 acres commonly
known as 2839 Second Avenue NW, Longview, North Carolina and legally described
as set forth on EXHIBIT "A" attached to this Agreement and made a part hereof,
together with all of Seller's right, title and interest in and to all easements,
utility reservations, mineral rights, rights of way, strips of land, tenements,
hereditaments, privileges, licenses, appurtenances, reversions, remainders in
any way belonging, remaining or appertaining thereto;

     B. Improvements. The building, containing approximately 261,057 square
feet, and certain other fixtures and improvements located on the Land
(collectively, the "IMPROVEMENTS");

     C. Lease. That certain lease of the Land and Improvements to Drexel
Heritage Furniture Industries, Inc. ("TENANT") dated as of August 8, 2005, and
any guaranties thereof (collectively, the "LEASE");

     D. Personalty. All of Seller's interest, if any, in any equipment,
machinery and personal property on or used in connection with the Land and the
Improvements (the "PERSONALTY"); and

     E. Intangible Property. Any and all right, title and interest of Seller in
all (i) development rights and entitlements, permits, contracts, warranties
(including, without limitation, the general contractor's one-year construction
warranty with respect to construction of the Improvements and any warranty
related to the roof of the building), licenses and other intangible property
owned by Seller and related to the Property; and (ii) any reports, studies,
surveys and other comparable analyses, depictions or examinations of the Land,
or pertaining to the Land, or the use thereof and which in any way relates to
the ownership, management or operation of the Property (collectively,
"INTANGIBLE PROPERTY").

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 "D"
(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 "E" (the "ASSIGNMENT OF LEASE"), the Intangible Property which are to be
transferred by that certain assignment agreement, a specimen of which is
attached hereto as EXHIBIT "F" (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 "G" (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".

2.   PURCHASE PRICE.

     The purchase price for the Property shall be Four Million Two Hundred Fifty
Thousand Dollars ($4,250,000.00) (the "PURCHASE PRICE").

3.   PAYMENT OF PURCHASE PRICE.

     The Purchase Price shall be paid to Seller by Buyer as follows:

     A. Escrow. Upon the full execution of this Agreement and the Right of
Access Agreement attached hereto as EXHIBIT "B" ("RIGHT OF ACCESS AGREEMENT"),
an escrow ("ESCROW") will be opened with an escrow agent ("ESCROW AGENT") at
First American Title Insurance Company ("TITLE COMPANY"), by delivery to Escrow
Agent of a copy of this Agreement executed by Seller and Buyer. If Escrow Agent
requires any supplemental or additional instructions, then Seller and Buyer
shall promptly provide the same consistent with the provisions of this
Agreement. The parties acknowledge and agree that the Deposit (defined below)
shall be held by Escrow Agent located at Title Company's Glendale, California
office in accordance with the terms of this Agreement, but that all other
obligations of Title Company under this Agreement are to be handled by Title
Company's Phoenix, Arizona national office.

     B. Deposit. Not later than five (5) business days following the full
execution of this Agreement and the Right of Access Agreement and the opening of
Escrow, Buyer shall deposit with the Escrow Agent the sum of Fifty Thousand
Dollars ($50,000.00) (the "INITIAL DEPOSIT"). If Buyer has not exercised its
right to terminate this Agreement before expiration of the Review Period (as
defined in Paragraph 5.A), Buyer shall deposit an additional sum of One Hundred
Fifty Thousand ($150,000.00) with Escrow Agent (the "ADDITIONAL DEPOSIT") on or
before the expiration of the Review Period. The Initial Deposit and the
Additional Deposit, together with all interest earned thereon, are hereinafter
referred to as the "DEPOSIT." The Deposit shall be placed in an interest-bearing
account, and all interest accrued thereon shall become part of the Deposit and
shall be payable to the party entitled to receive the Deposit. On the Closing
Date (as defined in Paragraph 8), the Deposit shall be applied against the
Purchase Price. In the event Buyer terminates this Agreement before the
expiration of the Review Period pursuant to Paragraph 5.A, the Initial Deposit
(less any escrow cancellation charges payable by Buyer pursuant to this
Agreement) shall be returned to Buyer and Buyer shall not be required to deposit
the Additional Deposit. Upon the expiration of the Review Period, if this
Agreement has not been previously terminated, the Deposit shall be
non-refundable to Buyer unless the transaction contemplated by this Agreement is
not consummated solely as the result of Seller's default or otherwise as
specifically set forth in this Agreement.

     C. Balance of Purchase Price. Buyer shall pay the balance of the Purchase
Price, plus or minus Buyer's share of closing costs, prorations and other
charges or amounts payable pursuant to this Agreement, to Seller in immediately
available funds through the Escrow at the Closing Date. Concurrent with
execution of this Agreement by Buyer, Buyer shall provide Seller with reasonable
evidence that Buyer has or will have on the Closing Date sufficient funds to
purchase the Property.

4.   TITLE.

     A. Title Policy. On the Closing Date, Seller shall cause good and
marketable title to the Property to be conveyed to Buyer by special warranty
deed, subject only to the following exceptions to title ("PERMITTED
EXCEPTIONS"):

          (i) A lien to secure payment of real estate taxes, personal property
     taxes, water charges, sewer charges and assessments related thereto not yet
     due and payable;

          (ii) Such other exceptions to title as may be approved (or are deemed
     approved) by Buyer pursuant to the provisions of Paragraph 4.B.



     On the Closing Date, the Title Company shall issue to Buyer its ALTA
Extended Coverage Owner's Policy of Title Insurance ("OWNER'S POLICY") in the
face amount of the Purchase Price, showing title to the Property vested of
record in Buyer, subject only to the Permitted Exceptions.

     B. Survey and Title Documents. Within five (5) days after the opening of
Escrow and the funding of the Initial Deposit, Seller shall order and promptly
thereafter deliver to Buyer a preliminary title report for the issuance of the
Owner's Policy ("TITLE REPORT"), together with legible copies of all title
exception documents shown thereon ("TITLE DOCUMENTS"). Seller shall also deliver
to Buyer a copy of the most current ALTA survey of the Land, if any, in Seller's
possession ("SURVEY"). If Buyer wishes to have the Survey updated or
re-certified, or if required by the Title Company in connection with the
issuance of the Owner's Policy, Buyer shall be responsible for paying all costs
in connection therewith. On the later to occur of (i) the expiration of the
Review Period, or (ii) the date which is ten (10) days after Seller's delivery
of the Survey, Title Report and Title Documents to Buyer, Buyer shall furnish to
Seller a written list of any objections to matters shown on the Title Report or
the Survey, stating the items to which Buyer objects and the reasons therefor
("DISAPPROVAL NOTICE"). In the event the Title Report is amended to include new
exceptions/requirements that are not set forth in a prior Title Report and Buyer
has any objections to such new exceptions/requirements, Buyer shall have until
the later of (i) the expiration of the Review Period, or (ii) the date three (3)
days after Buyer's receipt of the amended Title Report and copies of the
documents identified in the new exceptions/requirements, within which to provide
Seller with a Disapproval Notice with respect to such objections. Seller shall
then have fourteen (14) days after the date of any Disapproval Notice to make
such arrangements or take such steps to satisfy Buyer's objection(s) set forth
therein ("TITLE CURE PERIOD"). If (i) Seller is either unable or unwilling to
remove or correct such objection(s) within the Title Cure Period and (ii) Buyer
does not waive, in writing, its disapproval, then this Agreement shall
terminate, the Deposit (less any escrow cancellation charges) shall be returned
to Buyer, and the parties shall have no further obligations to each other except
for such provisions that specifically survive the termination of this Agreement.
If Buyer fails to timely give the Disapproval Notice as set forth herein, the
condition in this Paragraph 4.B shall be deemed satisfied, and Buyer shall be
deemed to have accepted all matters contained in the Title Report and the
Survey.

5.   PROPERTY REVIEW.

     A. Review Period. Buyer shall have thirty (30) days following the funding
of the Initial Deposit to perform such inspections, investigations, inquiries,
and feasibility studies relating to the Property and to review the Property
Information (as defined in Paragraph 5.C) as Buyer deems appropriate to decide
whether the Property is acceptable to Buyer ("REVIEW PERIOD"). All costs and
expenses of such inspections, investigations, inquiries, studies, and document
reviews shall be borne solely by Buyer. Buyer's obligation to purchase the
Property as herein provided shall be subject to Buyer's approval of the Property
in Buyer's sole discretion. If, before the expiration of the Review Period,
Buyer fails to send written notice to Seller that the Property is acceptable to
Buyer, then this Agreement shall terminate, the Deposit (less any escrow
cancellation charges payable by Buyer pursuant to this Agreement) shall be
returned to Buyer, and the parties shall have no further obligations to each
other except for such provisions that specifically survive the termination of
this Agreement.

     B. Property Inspection. Promptly following the opening of Escrow and the
funding of the Initial Deposit, Seller shall provide access to the Property to
Buyer and Buyer's agents and consultants during normal business hours, upon no
less than twenty four (24) hours' notice to Seller prior to any entry on the
Property, for the purpose of conducting any such investigations, inquiries or
feasibility studies.

     C. Document Review. Within five (5) days after the opening of Escrow and
the funding of the Initial Deposit, Seller shall deliver to Buyer the documents
and items relating to the Property that Seller has in its possession or under
its control, if any, which documents are listed on EXHIBIT "C" attached hereto
(collectively, "PROPERTY INFORMATION"). If Seller fails to timely deliver any of
the Property Information to Buyer, Buyer's sole remedy shall be to terminate
this Agreement before expiration of the Review Period. If this Agreement is
terminated for any reason, Buyer shall promptly return to Seller the Property
Information and copies of any third party reports ordered, requested or prepared
by Buyer with respect to the Property. The obligations of Buyer pursuant to the
foregoing sentence shall survive the termination of this Agreement.



     D. No Representation or Warranty By Seller. Buyer acknowledges that much of
the Property Information was prepared by third parties other than Seller, that
Seller acquired the Property on September 7, 2005, and in some instances was
prepared prior to Seller's ownership of the Property. Buyer further
acknowledges, understands and agrees that except as otherwise specifically set
forth herein, (i) neither Seller nor any of its respective agents, employees or
contractors has made any warranty or representation regarding the truth,
accuracy or completeness of the Property Information or the source(s) thereof,
and Buyer shall not rely on the truth or completeness of the Property
Information in making its decision to purchase the Property; (ii) that Seller
makes no representations or warranties whatsoever respecting the Property; (iii)
Seller is selling the Property and Buyer is purchasing the Property in an AS-IS
and with all faults condition; and (iv) Seller has not undertaken any
independent investigation or inquiry as to the truth, accuracy or completeness
of the Property Information and is providing the Property Information or making
the Property Information available to Buyer solely as an accommodation to Buyer.

     E. Indemnification. Buyer will indemnify, defend, and hold Seller, and its
agents, representatives and affiliates, free and harmless from and against any
loss, injury, damage, claim, lien, cost or expense, including reasonable
attorneys' fees, resulting from or arising out of any study, inspection or test
conducted at the Property by Buyer, its employees, agents, consultants, or
independent contractors. Such indemnity shall survive the termination of this
Agreement.

6.   CONDITIONS PRECEDENT TO BUYER'S OBLIGATION.

     The obligation of Buyer to buy the Property shall be subject to timely
satisfaction or waiver of the following conditions precedent:

     A. Buyer's approval (or deemed approval) of the conditions of title in
accordance with Paragraph 4.

     B. The Title Company's commitment to issue the Owner's Policy in the form
provided in Paragraph 4.A.

     C. Buyer's approval (or deemed approval) of the Property within the Review
Period in accordance with Paragraph 5.A.

     D. The truth and accuracy of each representation and warranty of Seller
contained herein as if made on and as of the Closing Date.

     E. The deposit by Seller with Buyer not later than five (5) business days
prior to the Closing Date 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, in Tenant's standard form,
without any punch list items remaining, 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.

     F. The deposit with Escrow Agent of a letter from Seller to Tenant
requesting that future rent under the Lease be paid to Buyer.

     Buyer may waive any of the conditions precedent to Buyer's obligation to
perform under this Agreement. If the conditions set forth in Paragraphs 6.A
through 6.J are not satisfied or waived by Buyer, then this Agreement shall at
Buyer's option terminate, the Deposit (less any escrow cancellation charges)
shall be returned to Buyer, and the parties shall have no further obligations to
each other except for such provisions that specifically survive the termination
of this Agreement.



7.   CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE.

     The obligation of Seller to sell the Property shall be subject to timely
satisfaction or waiver of the following conditions precedent:

     A. Buyer's timely delivery to Escrow Agent of the Deposit, the Additional
Deposit, the balance of the Purchase Price and any other funds required of
Buyer.

     B. The truth and accuracy of each representation and warranty of Buyer
contained herein as if made on and as of the Closing Date.

     C. Buyer shall not then be in default of any covenant or agreement to be
performed by Buyer under this Agreement.

     Seller may waive any of the conditions precedent to Seller's obligation to
perform under this Agreement. If the conditions set forth in Paragraphs 7.A
through 7.C are not satisfied or waived by Seller, then this Agreement shall at
Seller's option terminate, the Deposit (less any escrow cancellation charges)
shall be paid to Seller, and the parties shall have no further obligations to
each other except for such provisions that specifically survive the termination
of this Agreement.

8.   CLOSING.

     The sale and purchase of the Property provided herein shall be consummated
at a closing ("CLOSING"), which shall be held on the Closing Date at the offices
of Title Company, or at such other time and place as Seller and Buyer may agree
upon. As used herein, "CLOSING DATE" means thirty (30) days after the expiration
of the Review Period, or such earlier date as Seller and Buyer may agree upon.
Buyer may extend the Closing Date for a period of up to an additional ten (10)
days upon delivery to Escrow Agent prior to the original Closing Date of written
notice to extend the Closing Date and by simultaneously depositing with Escrow
Agent an additional Fifty Thousand Dollars ($50,000.00) of earnest money (the
"EXTENSION DEPOSIT"). The Extension Deposit submitted to Escrow Agent pursuant
to this Paragraph 8 shall be added to and become a part of the Deposit. At the
Closing, Seller and Buyer shall deliver to the other party such documents as are
typical and customary for transactions involving properties of similar size,
type and location as the Property, and as may be necessary or appropriate to
consummate the transactions contemplated in this Agreement including, but not
limited to the deposit with Escrow Agent of an affidavit of Seller and such
other documentation as may be reasonably required by Title Company to allow for
the deletion of the mechanics' lien exception from the Owner's Policy.

9.   CLOSING COSTS AND PRORATIONS.

     Seller shall pay one-half (1/2) of the escrow fees, the premium for
standard portion of the Owner's Policy, realty transfer taxes and any other
costs of Seller hereunder. Buyer shall pay one-half (1/2) of the escrow fees and
any incremental increase in the cost of the Owner's Policy resulting from the
extended coverage and/or any special title endorsements requested by Buyer, the
recording fees, the cost of the title policy and/or endorsements required by
Buyer's lender (if any) and any other costs of Buyer hereunder. Seller and Buyer
shall each pay their own attorneys' fees. Security deposits held by Seller under
leases with respect to the Property shall be credited to Buyer at the Closing.
Rent and other items paid by tenants shall be prorated as of the Closing Date,
with Buyer getting credit for the Closing Date. Operating expenses and utility
charges shall be prorated as of the Closing Date. Real property taxes shall be
prorated as of the Closing Date based upon the latest tax bill available. Buyer
and Seller agree to prorate as of the Closing Date any taxes assessed against
the Property by a supplemental bill levied by reason of an event occurring prior
to the Closing. It is the intent of the parties that, except to the extent
payable by Tenant under the Lease, all property taxes attributable to the period
prior to Closing be the responsibility of Seller and all property taxes
attributable to the period after Closing be the responsibility of Buyer. All
prorations as of the Closing Date shall be made as of 12:01 a.m. on the Closing
Date.



10.  REPRESENTATIONS AND WARRANTIES BY SELLER.

     Effective as of the date of this Agreement and as of the Closing Date,
Seller hereby represents and warrants to Buyer, which representations and
warranties shall be accurate and true in all material respects on the Closing
Date as if made on the Closing Date, and acknowledges that Buyer is relying upon
such representations and warranties in purchasing the Property, as follows:

     A. Seller is a limited liability company duly organized, validly existing,
and in good standing under the laws of the State of Delaware. Seller has full
power and authority to execute and deliver this Agreement and all of Seller's
closing documents, to engage in the transactions contemplated by this Agreement,
and to perform and observe all of Seller's obligations under this Agreement.

     B. Seller and the persons signing this Agreement for Seller have the
authority and power to sign this Agreement, to perform all of Seller's
obligations under this Agreement and to sign and deliver all of the documents
required to be signed and delivered by Seller without the consent or approval of
any other person.

     C. This Agreement has been duly executed and delivered by Seller and is a
legal, valid and binding instrument, enforceable against Seller in accordance
with its terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally; and (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

     D. Seller is not a "foreign person" and is not subject to withholding
within the meaning of Section 1445 of the Internal Revenue Code. Seller will
execute and deliver to Buyer through and at the Close of Escrow a non-foreign
affidavit in form reasonably acceptable to Buyer.

     E. There are no unrecorded leases (other than the Lease), and to Seller's
knowledge, no written 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.

     F. There are no suits or claims pending with respect to or in any manner
affecting the Property.

     G. From the date hereof until Closing 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.

     I. All representations made in this Agreement by Seller shall survive the
execution and delivery of this Agreement and for a period of six (6) months
following the Closing. 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 herein shall
survive for a period of six (6) months following the Closing.



11.  REPRESENTATIONS AND WARRANTIES BY BUYER.

     Effective as of the date of this Agreement and as of the Closing Date,
Buyer hereby represents and warrants to Seller, which representations and
warranties shall be accurate and true in all material respects on the Closing
Date as if made on the Closing Date, and acknowledges that Seller is relying
upon such representations and warranties in purchasing the Property, as follows:

     A. Buyer is a limited liability company, duly organized, validly existing,
and in good standing under the laws of the State of Delaware. Buyer has full
power and authority to execute and deliver this Agreement and all of Buyer's
closing documents, to engage in the transactions contemplated by this Agreement,
and to perform and observe all of Buyer's obligations under this Agreement.

     B. Buyer and the persons signing this Agreement for Buyer have the
authority and power to sign this Agreement, to perform all of Buyer's
obligations under this Agreement and to sign and deliver all of the documents
required to be signed and delivered by Buyer without the consent or approval of
any other person.

     C. This Agreement has been duly executed and delivered by Buyer and is a
legal, valid and binding instrument, enforceable against Buyer in accordance
with its terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally; and (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

     D. All representations made in this Agreement by Buyer shall survive the
execution and delivery of this Agreement and for a period of six (6) months
following the Closing. 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 herein shall survive for a period of six (6) months following the
Closing.

12.  INTENTIONALLY OMITTED.

13.  CONDEMNATION/CASUALTY.

     As between Buyer and Seller, Seller shall bear all risk of loss, damage or
taking of the Property which may occur prior to Closing. If, prior to the
Closing, all or a material portion of the Property or the means of ingress or
egress thereon suffers a casualty or is taken by eminent domain (or is the
subject of a pending or contemplated taking which has not been consummated),
including, but not limited to, any land donation or public space requirements or
encumbrances on the Property requiring contributions by Seller, Seller shall
promptly notify Buyer of such fact. For purposes of this Paragraph 13,
"material" shall mean (i) any amount more than Seventy Five Thousand Dollars
($75,000.00) is required to restore any such damage, or (ii) the completion of
such restoration can reasonably be expected to exceed ninety (90) days after the
receipt of such notice. In such event, Buyer shall then have the option to
terminate this Agreement upon notice to Seller given not later than twenty (20)
days after receipt of Seller's notice. If as a result of any such condemnation
or casualty of a material portion of the Property or the means of ingress or
egress thereon, the Tenant under the Lease is permitted to and in fact does
exercise any right which it may have to terminate the Lease, then in such event,
Seller shall give Buyer notice thereof and Buyer shall then have the option to
terminate this Agreement upon notice to Seller given not later than twenty (20)
days after receipt of Seller's notice. Upon Seller's failure to provide written
evidence of Tenant's election under the Lease within thirty (30) days after such
condemnation or casualty, Buyer may elect to terminate this Agreement upon
notice to Seller given not later than ten (10) days after expiration of such
thirty day period.

     If Buyer elects to terminate this Agreement, the Deposit (less any escrow
cancellation charges) shall be returned to Buyer, and the parties shall have no
further obligations to each other except for such provisions that specifically
survive the termination of this Agreement. If Buyer does not elect to terminate
this Agreement, Seller shall assign and turn over to Buyer, and Buyer shall be
entitled to receive and keep, all proceeds relating to the



casualty or awards for the taking by eminent domain, as applicable, and shall be
obligated to proceed to Closing with no reduction in the Purchase Price.

     If the Property is damaged in an amount which is not deemed material (as
defined above), then this Agreement shall remain in effect, there shall be
credited against the Purchase Price the amount of Seller's insurance deductible,
and Seller shall assign to Buyer at Closing any insurance proceeds available to
Seller on account of the damage or destruction, with no delay in the Closing.

14.  SPECIFIC PERFORMANCE.

     If Seller is in breach or default of this Agreement or fails to close the
transaction for purchase of the Property when required by this Agreement, Buyer,
as its sole and exclusive remedy hereunder, may either elect to:

     A. Terminate this Agreement and recover the Deposit; or

     B. Enforce Seller's obligation to convey the Property; provided, however,
that no action for specific performance shall require Seller to do any of the
following (i) change the condition of the Property in any way or restore the
Property after any fire or other casualty; (ii) expend money or post a bond to
remove any title encumbrance or defect or to correct any matter shown on a
survey of the Property; or (iii) expend money or post a bond to remedy any
environmental condition of the Property. If Buyer elects specific performance as
its remedy, then Buyer shall not be entitled to recover any damages (whether
actual, direct, indirect, consequential, punitive or otherwise), notwithstanding
such failure to close, breach or default by Seller. Notwithstanding the
foregoing, if specific performance is unavailable as a remedy to Buyer because
of Seller's affirmative acts, such as a sale to a third party or the placement
of a lien which cannot be removed, Buyer shall be entitled to pursue its rights
and remedies available at law or in equity, provided however that such rights
and remedies of Buyer shall have as a limitation on its damages the same dollar
amount as the Deposit.

     Upon the exercise of Buyer's remedies hereunder, this Agreement shall
terminate and the parties shall have no further obligations to each other except
for such provisions that specifically survive the termination of this Agreement.

15.  LIQUIDATED DAMAGES.

     If Buyer fails to close the transaction for purchase of the Property when
required by this Agreement, the Deposit shall be retained by Seller as
liquidated damages as Seller's sole and exclusive remedy for Buyer's breach or
default, whereupon this Agreement shall terminate and the parties shall have no
further obligations to each other except for such provisions that specifically
survive the termination of this Agreement. Seller and Buyer acknowledge that it
would be extremely impractical and difficult to ascertain actual damages that
would be suffered by Seller if Buyer fails to consummate the purchase of the
Property as and when contemplated by this Agreement. This liquidated damages
provision shall not limit Seller's right to (i) receive reimbursement for or
recover damages in connection with any obligations of Buyer that survive the
Closing or the termination of this Agreement (such as the indemnities set forth
in Paragraphs 5.E and 18.F) or (ii) pursue any and all remedies available at law
or in equity in the event that, following any termination of this Agreement,
Buyer or any party related to or affiliated with Buyer asserts any claims or
right to the Property that would otherwise delay or prevent Seller from having
clear, indefeasible and marketable title to the Property.

16.  POSSESSION.

     Possession of the Property, subject to all of the terms and conditions of
the Lease, shall be delivered to Buyer at the Closing.



17.  SALE "AS IS".

     Except as specifically set forth in this Agreement, Buyer represents that
it is a knowledgeable and experienced buyer of real estate and that, in
purchasing the Property, Buyer shall rely solely on (i) its own expertise and
that of its consultants; and (ii) its own knowledge of the Property based on its
investigations and inspections of the Property. Buyer has conducted or will
conduct such inspections and investigations of the Property as Buyer has deemed
or will deem necessary, including the physical and environmental conditions
thereof, and shall rely upon such independent investigation of the Property.
Upon Closing, Buyer shall assume the risk that adverse matters and physical and
environmental conditions may not have been revealed by Buyer's inspections and
investigations. Buyer acknowledges and agrees that upon closing, except as
specifically provided otherwise in this Agreement and/or the Transfer Documents,
Seller shall sell and convey to Buyer and Buyer shall accept the Property in its
"AS-IS, WHERE-IS," condition WITH ALL FAULTS, subject to any and all defects
(latent and apparent). The terms and conditions of this Paragraph 17 shall
expressly survive the Closing or earlier termination of this Agreement. Seller
is not liable or bound in any manner by any oral or written statements,
representations, or information pertaining to the Property furnished by Seller,
any real estate broker, contractor, agent, employee, servant or other person,
unless the same are specifically set forth in this Agreement. Buyer acknowledges
that the Purchase Price reflects the "As-Is, Where- Is" nature of this sale and
any faults, liabilities, defects or other adverse matters that may be associated
with the Property.

18.  MISCELLANEOUS.

     A. Final and Entire Agreement; Integration. This Agreement is the final,
entire and exclusive agreement between the parties and supersedes any and all
prior agreements, negotiations and communications, oral or written. No
representation, promise, inducement or statement of intention has been made by
any of the parties not embodied in this Agreement or in the documents referred
to herein, and no party shall be bound by or liable for any alleged
representation, promise, inducement or statements of intention not set forth or
referred to in this Agreement. No supplement, modification, or amendment to this
Agreement shall be binding or effective unless executed in writing by the
parties and by no other means.

     B. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective shareholders,
partners, directors, officers, heirs, beneficiaries, successors, representatives
and assigns.

     C. Assignment. No party to this Agreement may assign its rights or delegate
its duties hereunder without the prior written consent of all parties to this
Agreement; provided, however, that either Buyer or Seller may assign its rights
or delegate its duties hereunder to another person or entity, but any such
assignment shall not relieve the party assigning its rights of its obligations
hereunder.

     D. Notices. Any notice, demand, consent, approval or documents which any
party is required or may desire to give or deliver to the other shall be given
in writing by (i) personal delivery; (ii) certified mail, return receipt
requested, postage prepaid; (iii) a national overnight courier service that
provides written evidence of delivery; or (iv) facsimile transmission and
addressed as follows:

          To Seller:          Hickory Business Park, LLC
                              One West Avenue
                              Larchmont, NY 10538
                              Attention: Stuart Lichter
                              Phone: (914) 834-2600
                              Fax: (914)834-2002



          With a copy to:     Fainsbert, Mase & Snyder, LLP
                              11835 West Olympic Boulevard
                              Suite 1100
                              Los Angeles, CA 90064
                              Attention: John A. Mase, Esq.
                              Phone: (310) 473-6400
                              Fax: (310) 473-8702

          To Buyer:           Cole Takedown, LLC
                              2555 East Camelback Road, Suite 400
                              Phoenix, AZ 85016
                              Attention: Legal Department
                              Phone: (602) 778-8700
                              Fax: (602) 778-8780

          With a copy to:     Bennett Wheeler Lytle & Cartwright, PLC
                              3838 N. Central Avenue, Suite 1120
                              Phoenix, AZ 85012
                              Attention: J. Craig Cartwright, Esq.
                              Phone: (602) 445-3433
                              Fax: (602) 266-9119

          To Title Company:   First American Title Insurance Company
                              520 North Central Avenue, 8th Floor
                              Glendale, CA 91203
                              Attention: Carolyn Marcial
                              Phone: (818) 242-5800
                              Fax: (818) 242-5916

          And to:             First American Title Insurance Company
                              The Esplanade Commercial Center
                              2425 East Camelback Road, Suite 300
                              Phoenix, AZ 85016
                              Attention: Tom Anzaldua
                              Phone: (602) 567-8119
                              Fax: (866) 383-3243

     Any party may change its notice address and/or facsimile number by giving
written notice thereof in accordance with this Paragraph. All notices hereunder
shall be deemed given: (a) if delivered personally, when delivered; (b) if sent
by certified mail, return receipt requested, postage prepaid, on the third day
after deposit in the U.S. mail; (c) if sent by overnight courier, on the first
business day after delivery to the courier; and (d) if sent by facsimile, on the
date of transmission if sent on a business day before 5:00 p.m. Pacific time, or
on the next business day, if sent on a day other than a business day or if sent
after 5:00 p.m. Pacific time, provided that a hard copy of such notice is also
sent by either a nationally recognized overnight courier or by U.S. mail, first
class, postage prepaid.

     E. Attorneys' Fees. In the event any suit, action or proceeding is
instituted by any party in connection with the breach, enforcement or
interpretation of this Agreement, the prevailing party therein shall be entitled
to the award of reasonable attorneys' fees and related costs in addition to
whatever relief the prevailing party may be awarded.

     F. Real Estate Commission. Buyer represents and warrants to Seller and
Seller represents and warrants to Buyer that no broker has been engaged by it in
connection with the transaction contemplated by this Agreement, other than ICA
Realty Corporation ("BROKER"). Seller covenants and agrees to pay two and
one-half



percent (2 1/2%) of the Purchase Price to Broker as any and all commissions due
to Broker in connection with this Agreement pursuant to a separate written
commission agreement. Each party shall indemnify, protect, defend and hold
harmless the other party, including reasonable attorneys' fees, in respect of
any breach of such representation and warranty, which indemnity shall survive
the Closing or earlier termination of this Agreement.

     G. Severability. The invalidity, illegality, or unenforceability of any
provision of this Agreement shall in no way affect the validity of any other
provision of this Agreement. In the event that any provision of this Agreement
is contrary to any present or future statute, law, ordinance, or regulation, the
latter shall prevail, but in any such event the provisions of this Agreement
affected shall be curtailed and limited only to the extent necessary to bring it
within the requirements of the law.

     H. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina. In the event of any
legal action arising from this Agreement, the parties hereto agree that venue
shall be properly in any state or federal court located in Catawba County or
Burke County, North Carolina.

     I. Waiver. The waiver or failure to enforce any provision of this Agreement
shall not operate as a waiver of any future breach of such provision or any
other provision hereof. No waiver shall be binding unless executed in writing by
the party making the waiver. The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions of this Agreement by
the other party shall not be deemed a waiver of that term, covenant, or
condition.

     J. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
Agreement. The parties shall be entitled to sign a facsimile copy of this
Agreement which shall be binding on the party signing by facsimile. Any party
signing by facsimile agrees to promptly execute and deliver to the other parties
an original signed Agreement.

     K. Review; Interpretation. Each party to this Agreement has carefully
reviewed this Agreement, is familiar with the terms and conditions herein, and
was advised by legal counsel of his or its own choice with respect thereto. This
Agreement is the product of negotiation among the parties hereto and is not to
be interpreted or construed against any party hereto.

     L. Headings; Constructions. The headings which have been used throughout
this Agreement have been inserted for convenience of reference only and do not
constitute matter to be construed in interpreting this Agreement. Words of any
gender used in this Agreement shall be held and construed to include any other
gender, and words in the singular number shall be held to include the plural,
and vice versa, unless the context requires otherwise. The words "herein",
"hereof", "hereunder" and other similar compounds of the word "here" when used
in this Agreement shall refer to the entire Agreement and not to any particular
provision or section. If the last day of any time period stated herein shall
fall on a Saturday, Sunday or legal holiday, then the duration of such time
period shall be extended so that it shall end on the next succeeding day which
is not a Saturday, Sunday or legal holiday.

     M. Survival. All of the representations, warranties, covenants, indemnities
and agreements set forth herein shall survive the closing of the transaction and
the delivery of the deed.

     N. Number, Gender and Tense. All words used in this Agreement shall be
construed to include the plural as well as the singular number, the present
tense shall include the past and future tense, and the masculine gender shall
include the feminine and neuter gender.

     O. Independent Counsel. Each party to this Agreement represents and
warrants that he has carefully reviewed and understands this Agreement,
acknowledges that he has been advised to seek his own independent legal counsel
with respect to this Agreement and the transactions contemplated hereby, has
sought the advice of independent counsel of his own choosing or has knowingly
and voluntarily declined the opportunity to obtain such counsel and signs this
Agreement freely, knowingly and voluntarily. Buyer hereby represents and
warrants to Seller



that: (i) Buyer is not in a significantly disparate bargaining position in
relation to Seller; and (ii) Buyer is purchasing the Property for business,
commercial, investment or other similar purpose.

     P. Time of Essence. Time is of the essence with respect to all matters
contained in this Agreement.

     Q. Exchange Cooperation. Buyer and Seller agree to cooperate with each
other in accomplishing a tax-deferred exchange for either party under Section
1031 of the Internal Revenue Code, which shall include the signing of reasonably
necessary exchange documents; provided, however, that (i) neither party shall
incur any additional liability or financial obligations as a consequence of such
exchange; (ii) such exchange shall not delay the Closing Date; and (iii) neither
party shall be required to take title to any property as part of an exchange
other than Buyer receiving title to the Property. This Agreement is not subject
to or contingent upon either party's ability to effectuate a tax-deferred
exchange. In the event any exchange contemplated by either party should fail to
occur, for whatever reason, the sale of the Property shall nonetheless be
consummated as provided herein.

     R. Further Acts. The parties agree to cooperate with each other to
effectuate this Agreement. In addition to the acts recited in this Agreement to
be performed by Seller and Buyer, Seller and Buyer agree to perform or cause to
be performed before or after the Closing any and all such further acts as may be
reasonably necessary or appropriate to accomplish the intent and purposes of
this Agreement and to consummate the transaction contemplated hereby.

     S. Confidentiality. It is the intent of the parties hereto that the terms
and conditions of this Agreement shall remain confidential. As such, neither
party, nor its principals, agents, or affiliates shall disclose any information
regarding this transaction, including but not limited to, the contents of the
Letter of Intent executed on November 7, 2005, or the terms of this Agreement
except to the parties' respective accountants, attorneys, contractors,
consultants, lenders and advisors.

     T. 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 (1/2)
of any cancellation charges of Escrow Agent. The provisions of this Paragraph
18.T shall survive cancellation of this Agreement.

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURES ON THE FOLLOWING PAGE]



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

SELLER:

HICKORY BUSINESS PARK, LLC,
a Delaware limited liability company

By: S.L. PROPERTIES, INC.,
    a Delaware corporation,
    its managing member


    By: /s/ Stuart Lichter
        --------------------------------
        Stuart Lichter, President


BUYER:

COLE TAKEDOWN, LLC


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



                 FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT

     This First Amendment to Purchase and Sale Agreement (this "Amendment") is
effective as of the 24 day of January, 2006, by and between COLE TAKEDOWN, LLC,
as Buyer, and HICKORY BUSINESS PARK, LLC, as Seller, and provides as follows:

     WHEREAS, Seller and Buyer entered into that certain Purchase and Sale
Agreement, effective as of December 15, 2005 (the "Agreement"), with respect to
the improved property located at 2839 Second Avenue NW, Long View, North
Carolina (the "Agreement");

     WHEREAS, Seller and Buyer desire to amend the Agreement to revise the date
on which the Review Period expires. All capitalized terms used herein shall have
the meaning given to them in the Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1. The first sentence of Section 5.A. of the Agreement is hereby amended
and restated as follows:

          Buyer shall have until 5:00 p.m. MST on January 25, 2006 to perform
     such inspections, investigations, inquiries, and feasibility studies
     relating to the Property and to review the Property Information (as defined
     in Paragraph 5.C) as Buyer deems appropriate to decide whether the Property
     is acceptable to Buyer ("REVIEW PERIOD").

     2. Except as provided herein, all terms and conditions of the Agreement
shall remain in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date set forth above.

BUYER:                                  COLE TAKEDOWN, LLC


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


SELLER:                                 HICKORY BUSINESS PARK, LLC,
                                        a Delaware limited liability company

                                        By: S.L. PROPERTIES, INC.,
                                            a Delaware corporation,
                                            its managing member


                                            By: /s/ Stuart Lichter
                                                --------------------------------
                                                Stuart Lichter, President



                    ASSIGNMENT OF PURCHASE AND SALE AGREEMENT

         COLE ACQUISITIONS I, LLC, F/K/A COLE TAKEDOWN, LLC, AS ASSIGNOR
                                       AND
                      COLE DH HICKORY NC, LLC, AS ASSIGNEE

     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, to and under that certain Purchase and Sale Agreement (the
"Purchase Agreement") described herein, including, without limitation,
Assignor's right, title and interest in and to the Deposit, to Assignee and its
successors and assigns. The Purchase Agreement is described as follows:

                       
     DATE OF AGREEMENT:   December 16, 2005

     ORIGINAL BUYER:      Cole Acquisitions I, LLC, f/k/a Cole Takedown, LLC

     ASSIGNED TO:         Cole DH Hickory NC, LLC

     PROPERTY ADDRESS:    2839 Second Avenue NW, Hickory, NC



     Assignor acknowledges that it is not released from any obligations or
liabilities under said Purchase Agreement, with the exception of the obligation
to deliver the Deposit which has been delivered into escrow by Assignor.

     Assignee hereby agrees to assume and be responsible for all obligations and
liabilities under said Purchase Agreement, with the exception of the obligation
to deliver the Deposit which has been delivered into escrow by Assignor. This
Assignment shall be in full force and effect upon its full execution.

     Executed this 23rd day of February, 2006.

ASSIGNOR:                               ASSIGNEE:

COLE ACQUISITIONS I, LLC,               Cole DH Hickory NC, LLC,
a Delaware limited liability company    a Delaware limited liability company

                                        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
                                        Its: Senior Vice President

EX-10.54

                                                                   Exhibit 10.54

                                                       DREXEL HERITAGE - HICKORY
                                                             LOAN NO. 50-1000016

                                 PROMISSORY NOTE

$3,400,000.00                                                  February 24, 2006

     FOR VALUE RECEIVED, the undersigned, COLE DH HICKORY NC, 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 THOUSAND AND NO/100 DOLLARS ($3,400,000.00), 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 March 11, 2031.

          (d) "Fixed Rate Tranche A" shall mean Two Million Seven Hundred
Sixty-Three Thousand and No/100 Dollars ($2,763,000.00) 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 Thirty-Seven
Thousand and No/100 Dollars ($637,000.00) 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 fifty-seven one-hundredths percent
(6.57%) 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 March 11, 2011.

          (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 March 11, 2011.

          (o) "Optional Prepayment Determination Date" shall mean January 11,
2011.

          (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 the Counties
of Burke and Catawba, North Carolina.

     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 May 24, 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 four-fifths percent (5.80%) (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 April 11, 2006 (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 DH HICKORY NC, 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                            $2,763,000.00
Note Rate % (Per Annum)                              5.800%
Original Amortization Term (Months)                  999
Monthly Payment Amount (Excluding IO Period)         $13,354.50
Note Date                                            2/24/2006
First Pay Date                                       4/11/2006
Original Loan Term (Months)                          60
Scheduled Maturity Date                              3/11/2011
Interest Accrual Basis During Amortization Periods   ACTUAL/360
Interest Only (IO) Periods (Months)                  60
Interest Accrual Basis During IO Period              ACTUAL/360



COLE DREXEL HERITAGE                                                   501000016



                                                  INTEREST       PRINCIPAL
                      ACCRUAL                   COMPONENT OF    COMPONENT OF   ENDING UNPAID
PAY                   DAYS IN     SCHEDULED       SCHEDULED      SCHEDULED       PRINCIPAL
PERIOD    PAY DATE     PERIOD      PAYMENT         PAYMENT        PAYMENT         BALANCE
- ------   ----------   -------   -------------   ------------   -------------   -------------
                                                             
   0      3/11/2006       15    $        0.00    $  6,677.25   $        0.00   $2,763,000.00
   1      4/11/2006       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
   2      5/11/2006       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
   3      6/11/2006       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
   4      7/11/2006       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
   5      8/11/2006       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
   6      9/11/2006       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
   7     10/11/2006       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
   8     11/11/2006       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
   9     12/11/2006       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  10      1/11/2007       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  11      2/11/2007       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  12      3/11/2007       28    $   12,464.20    $ 12,464.20   $        0.00   $2,763,000.00
  13      4/11/2007       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  14      5/11/2007       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  15      6/11/2007       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  16      7/11/2007       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  17      8/11/2007       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  18      9/11/2007       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  19     10/11/2007       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  20     11/11/2007       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  21     12/11/2007       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  22      1/11/2008       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00




                                                          
  23      2/11/2008       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  24      3/11/2008       29    $   12,909.35    $ 12,909.35   $        0.00   $2,763,000.00
  25      4/11/2008       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  26      5/11/2008       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  27      6/11/2008       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  28      7/11/2008       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  29      8/11/2008       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  30      9/11/2008       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  31     10/11/2008       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  32     11/11/2008       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  33     12/11/2008       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  34      1/11/2009       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  35      2/11/2009       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  36      3/11/2009       28    $   12,464.20    $ 12,464.20   $        0.00   $2,763,000.00
  37      4/11/2009       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  38      5/11/2009       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  39      6/11/2009       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  40      7/11/2009       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  41      8/11/2009       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  42      9/11/2009       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  43     10/11/2009       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  44     11/11/2009       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  45     12/11/2009       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  46      1/11/2010       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  47      2/11/2010       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  48      3/11/2010       28    $   12,464.20    $ 12,464.20   $        0.00   $2,763,000.00
  49      4/11/2010       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  50      5/11/2010       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  51      6/11/2010       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  52      7/11/2010       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  53      8/11/2010       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  54      9/11/2010       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  55     10/11/2010       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  56     11/11/2010       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  57     12/11/2010       30    $   13,354.50    $ 13,354.50   $        0.00   $2,763,000.00
  58      1/11/2011       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  59      2/11/2011       31    $   13,799.65    $ 13,799.65   $        0.00   $2,763,000.00
  60      3/11/2011       28    $2,775,464.20    $ 12,464.20   $2,763,000.00   $        0.00
  60                   1,826    $3,575,843.90    $812,843.90   $2,763,000.00





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 LOGO)

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

J.L. Smith                                                       Date __________
1000

          S.R Smith
          1234 Sample Street
          Any Where, USA 12345

PAY TO THE
ORDER OF _________________________________________________ $ ___________________

__________________________________________________________ DOLLARS

Memo ___________________________________________________________________________

: 000000000 :    10000001234567   1000

ROUTING #       ACCOUNT #

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-10.55

                                                                   Exhibit 10.55

                                CONTRACT OF SALE

     THIS CONTRACT OF SALE (this "Contract") is made by and between RPI
INTERESTS II, LTD., a Texas limited partnership, acting by and through its sole
general partner, RPI INTERESTS GP, LLC, a Texas limited liability company
("Seller"), and COLE CAPITAL PARTNERS, L.L.C., an Arizona limited liability
company (and its assigns as permitted by this Contract):

     1. Purchase and Sale. Subject to the terms and provisions of this Contract,
Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, all of
the following described property (sometimes referred to herein in the aggregate
as the "Property"):

          (a) Land. That certain tract of land (the "Land") located in Spring,
     Montgomery County, Texas, being more particularly shown on EXHIBIT "A"
     attached hereto and made a part hereof.

          (b) Easements. All of Seller's right, title and interest in and to any
     easements, if any, benefiting the Land or the Improvements (as hereafter
     defined), but without recourse, representation or warranty on Seller's
     part.

          (c) Rights and Appurtenances. All of Seller's right, title and
     interest in and to any rights and appurtenances pertaining to the Land,
     including any right, title and interest of Seller in and to adjacent
     streets, alleys or rights-of-way, but without recourse, representation or
     warranty on Seller's part.

          (d) Improvements. All buildings, structures, fixtures and other
     improvements, consisting of the so-called "RAYFORD SQUARE SHOPPING CENTER"
     (the "Improvements") in and on the Land, excluding property owned by
     tenants.

          (e) Leases. All of Seller's right, title and interest in and to all
     leases with tenants (the "Tenants") applicable to the Property or any part
     thereof (collectively, the "Leases").

          (f) Security Deposits. All of Seller's right, title and interest in
     and to all tenant security deposits held by Seller (the "Deposits").

          (g) Tangible Personal Property. All of Seller's right, title and
     interest, if any, in and to all appliances, equipment, machinery and other
     personal property, if any, located on or about the Land and the
     Improvements, owned by Seller and used in the operation and maintenance
     thereof, excluding any property of the tenants or third parties (the
     "Tangible Personal Property").

          (h) Contracts. Seller's right, title and interest in and to any
     assignable warranties or maintenance or service contracts related to the
     maintenance and operation of the Land and/or Improvements which can be
     assigned to Buyer upon Closing (the "Contracts"). Seller is not aware of
     any such assignable Contracts. For example, the current management
     agreement for the Property with RPI MANAGEMENT COMPANY, LLC (an affiliate
     of Seller) shall be terminated upon Closing and accordingly, is not
     referred to as a Contract hereunder.

          (i) Permits. Seller's right, title and interest in and to any licenses
     and permits with respect to the operation, repair, maintenance or
     improvement of the Property (the "Permits").

          (j) Name. Seller's right, title and interest, if any, in and to the
     name "RAYFORD SQUARE SHOPPING CENTER".

     2.Purchase Price. The purchase price for the Property (the "Purchase
Price") shall be the exact amount of NINE MILLION NINE HUNDRED THOUSAND AND
00/100 ($9,900,000.00) DOLLARS, payable in CASH at the Closing (as hereafter
defined).

     3. Earnest Money. Not later than five (5) business days after the Effective
Date, Buyer shall deliver the "Earnest Money" (herein so called) to LAWYERS
TITLE INSURANCE CORPORATION, Attn: Mr. Allen S.



Brown, 1850 North Central Avenue, Suite 300, Phoenix, Arizona 85004 (the "Title
Company") in the amount of $500,000.00, and the same shall thereafter be held by
the Title Company in escrow to be applied or disposed of by it as is provided in
this Contract. All interest earned on the Earnest Money shall become part of the
Earnest Money to be applied or disposed of in the same manner as the Earnest
Money is applied or disposed of pursuant to this Contract.

     If, for any reason, Buyer fails to deliver the Earnest Money to the Title
Company within five (5) business days after the Effective Date, the Contract
shall, at Seller's option, be deemed to be terminated, whereupon neither party
shall have any further rights or obligations under this Contract other than
those obligations which expressly survive any such termination. The Title
Company shall deposit the Earnest Money in its possession in an insured interest
bearing account(s) in an FDIC insured institution.

     In order to facilitate the return of the Earnest Money to Buyer in the
event Buyer timely exercises its right to terminate pursuant to Section 5.1,
Seller and Buyer agree that in the event Buyer timely delivers written notice of
its election to terminate, the Title Company shall return the Earnest Money, to
Buyer without the need for any approval by Seller, provided Buyer has complied
with the requirements of this Contract. The parties covenant and agree to
promptly execute the necessary documentation to facilitate the release of the
Earnest Money hereunder. This obligation shall survive the termination of this
Contract.

     4. Title Commitment and Survey.

     4.1 Title Commitment. Within ten (10) business days after the Effective
Date, Title Company shall deliver a current preliminary title report (the
"Commitment") for a TLTA extended coverage title insurance policy (the "Owner's
Policy") on the Property to Buyer and Seller, together with legible copies of
all title exceptions (the "Title Exceptions") referred to in the Commitment.
Buyer shall have a period (the "Title Review Period") ending upon the expiration
of the Inspection Period in which to notify Seller of any objections (the
"Objections") Buyer has as to any matters set forth on or referred to in the
Commitment or on the New Survey (as provided pursuant to Section 4.2). Buyer
may, at its option and at its cost and expense, provide to Seller and the Title
Company the New Survey pursuant to Section 4.2. Buyer shall have until the end
of the Title Review Period to also make objections to the New Survey (such
timely objections being referred to as the "Survey Objections"). Any title
encumbrances, matters or exceptions which are set forth in the Commitment or on
the New Survey and to which Buyer does not object within the Title Review
Period, shall be deemed to be Permitted Exceptions to the status of Seller's
title (the "Permitted Exceptions"). Likewise, any Survey Objections that Buyer
does not timely make with respect to the Survey, if any, shall also be deemed to
be Permitted Exceptions. Notwithstanding the foregoing, if notice of Objections
and/or Survey Objections (collectively, the "Buyer's Objections") is not timely
given by Buyer, then Buyer shall be deemed to have objected to all matters set
forth in the Commitment and the New Survey and shall have elected to terminate
this Contract.

     4.2 Survey. Within two (2) business days after the Effective Date, Seller
will deliver to Buyer a copy of its existing surveys (the "Seller's Survey"), to
the extent Seller has not previously provided the same to Buyer. Seller's Survey
was prepared before the Academy building was constructed and therefore related
modifications made to the Shopping Center at that time are not shown on Seller's
Survey. Delivery by Seller of Seller's Survey will be without representation or
warranty whatsoever. Buyer shall have the right to obtain a current, certified
ALTA survey of the Land and Improvements, completed by a surveyor licensed in
the state of Texas (the "New Survey"), whereupon the legal description in the
New Survey shall control over the description in Exhibit A attached hereto to
the extent they may be inconsistent. The New Survey shall set forth the legal
description and boundaries of the Property and all easements, encroachments and
improvements thereon.

     4.3 Objections. In the event that Buyer shall timely make any Buyer's
Objections during the Title Review Period, Seller shall have the right (but not
the obligation) within five (5) business days after receipt thereof to notify
Buyer in writing of Seller's intent to cure (by removal from the Commitment or
endorsing over) any such Buyer's Objections. In the event that Seller shall be
unwilling and/or unable to cure Buyer's Objections, Buyer shall have the option,
as its sole and exclusive remedy in such event, to either: (1) waive those
Buyer's Objections which Seller is unable and/or unwilling to cure and purchase
the Property as otherwise contemplated in this Contract without any reduction in
the Purchase Price, notwithstanding such Buyer's Objections, in which event such
Buyer's



Objections shall become Permitted Exceptions; or (2) terminate this Contract, in
which event the Earnest Money shall, subject to Section 9.3, be delivered to
Buyer. In the event Seller fails to take any action or otherwise fails to timely
respond to Buyer's Objections, it shall be deemed that Seller has chosen not to
cure any of the Buyer's Objections. Buyer shall make its election (i.e. -- (1)
or (2) above) within five (5) business days following the earlier of: notice
from Seller describing which of the Buyer's Objections Seller will or will not
cure, or the expiration of Seller's five business day reply period. If Buyer
fails to timely give such notice, Buyer shall be deemed to have elected option
(2) above. Seller assumes no duty to expend any money, file a lawsuit or
otherwise timely delay Closing to cure any of the Buyer's Objections.

     5. Inspection Period.

     5.1 Inspection Period. Buyer shall have until thirty-five (35) days after
the Effective Date (such period being herein called the "Inspection Period") in
which to order, review and approve all inspections or studies which Buyer may
elect to make and address SEC matters pursuant to Section 7.2 (in each case at
Buyer's sole risk, cost and expense), including, without limitation,
feasibility, marketing, soils, asbestos, environmental, architectural and
engineering studies with respect to the Property and otherwise satisfy itself
with the Property pursuant to this Article 5. This Contract shall terminate upon
the end of the Inspection Period unless Buyer delivers written notice (the
"Notice of Acceptance") to Seller on or before 4:00 p.m. MST on the last day of
the Inspection Period stating that Buyer waives its right of termination
pursuant to this Article 5. Buyer may also terminate this Contract by the end of
the Inspection Period by delivering written notice to Seller on or before 4:00
p.m. MST on the last day of the Inspection Period stating that Buyer terminates
this Contract pursuant to this Article 5. Unless Buyer timely provides the
Notice of Acceptance to Seller, in writing, on or before the end of the
Inspection Period, this Contract shall be terminated. In the event Buyer timely
delivers its Notice of Termination or is deemed to have terminated this
Contract, the Contract shall be terminated. Upon such termination pursuant to
this Section 5.1, the Earnest Money shall be returned to Buyer, subject to
Buyer's compliance with Section 9.3, and, except as otherwise provided in this
Contract, neither of the parties shall have any further liability or obligation
under this Contract. Any attempt by Buyer to exercise such right of termination
after such date and time as provided in this Section 5.1 shall be of no force or
effect and it will be deemed that Buyer is satisfied with the condition of the
Property (including the physical condition of the Improvements and the
environmental condition of the Land and the Improvements), as well as the other
matters specified in this Section 5.1.

     5.2 Indemnity. Buyer shall be liable to the Seller for the repair of any
damage to the Property occurring as a result of any of Buyer's tests,
inspections or other activities on or about the Property. Buyer shall defend,
indemnify and hold harmless Seller, its officers, directors, shareholders,
partners, venturers, employees and affiliates, and the officers, directors,
shareholders and employees, partners, venturers, and those of the affiliates of
Seller (all such parties being referred to as the "Seller Related Parties"), of
and from any claims, damages, expenses and causes of action of any and every
type proximately caused by or directly resulting from any such entry or
activities upon the Property. Buyer does hereby release and forever discharge
Seller and the other Seller Related Parties, from any and all claims, demands,
and causes of action of any kind or nature proximately caused by or directly
resulting from Buyer's activities related to such entry, inspections or testing.
Buyer shall not suffer or permit the filing of any mechanic's liens as a result
of Buyer's tests, inspections or other activities on or about the Property (and,
to the extent such mechanic's liens are or may be filed as a result of Buyer's
activities, such mechanic's liens, or the right to file such liens, shall be
deemed to be a Permitted Exception, or if Closing does not occur, will be paid
out of the Earnest Money and the Title Company is authorized to pay such liens
or claim, and Seller may pursue all of its rights and remedies). Buyer shall
provide Seller at least two (2) days advance notice of any invasive physical
inspections or environmental testing at the Property. The provisions of this
Section 5.2 will survive Closing or termination of this Contract.

     5.3 Right of Inspection. During the Inspection Period, and thereafter until
the Closing hereof, so long as this Contract has not been terminated, Buyer, its
officers, employees, agents, contractors, engineers and consultants, may enter
upon the Property upon reasonable notice to Seller (and Seller's agent(s) have
the right to accompany such party while at the Property) for the purpose of
making an examination and investigation of the Property. Buyer shall be solely
responsible for the payment of any and all expenses incurred with respect to any
such investigations or examinations, including any examinations or
investigations for hazardous wastes or toxic substances in the soil or ground
water of the Land which Buyer may elect to conduct or have conducted, and Seller



shall have no responsibility for the initiation of or payment for any such
investigations or examinations. All such examinations and investigations shall
be undertaken at Buyer's sole cost, risk and expense.

     5.4 Confidentiality. The Buyer agrees, for itself and its partners,
officers, employees, attorneys, lenders, accountants, engineers, environmental
auditors and other consultants (collectively, "Buyer Related Parties") to
maintain strict confidentiality of all aspects of this Contract and the subject
matter thereof, any associated negotiations, and all inspections undertaken by
Buyer with respect to this Contract and the Property, including, without
limitation, the Project Documentation. Except as may be required by law, the
Buyer Related Parties will not divulge any such information to other persons or
entities including, without limitation, appraisers, real estate brokers, or
competitors of the Seller. Notwithstanding the foregoing, the Buyer shall have
the right to disclose information with respect to the Property to the Buyer
Related Parties to the extent necessary for the Buyer Related Parties to
evaluate the acquisition of the Property, provided that the Buyer Related
Parties are told that such information is confidential and agree to keep such
information confidential. If Buyer terminates this Contract for any reason, then
all such materials received by the Buyer Related Parties from Seller, including
leases, operating statements and all the Project Documentation, shall be
returned to Seller within five (5) days from the date of said termination and
the Buyer Related Parties shall not retain copies.

     6. Delivery of Documentation. Within five (5) business days after the
Effective Date, Seller shall deliver to Buyer (or make available for inspection
in Seller's office) the following (the "Initial Seller Documentation"), to the
extent in Seller's possession or control to its actual knowledge without
independent investigation of any kind, to the extent not heretofore delivered to
Buyer:

          (a)  a current rent roll of all Leases affecting the Property
               confirmed by Seller or its property manager to be materially true
               and correct to such party's actual knowledge;

          (b)  copies of all Leases, including any modifications, supplements,
               or amendments thereto;

          (c)  contact information for the tenants on the basis of Landlord's
               records;

          (d)  a current inventory of all Tangible Personal Property, if any,
               owned by Seller and located on, attached to, or used in
               connection with the Property;

          (e)  a copy of Seller's income and expense statements for the Property
               from January 1, 2003 to December 31, 2004; and the current year
               to date statement through September 30, 2005;

          (f)  copies of any environmental assessments, studies, or analyses
               affecting the Property, if any, in Seller's possession or control
               to Seller's actual knowledge;

          (g)  copies of 2004 Ad Valorem Tax Statements; and

          (h)  Building plans (to be inspected at Seller's office and copied at
               Buyer's option and expense). Buyer may have Seller's copies of
               those plans upon Closing without representation or warranty on
               Seller's part.

Notwithstanding the foregoing provisions of this Article 6, or any other
provision in this Contract, Buyer acknowledges that it shall not be entitled to
receive any confidential information or documentation relating to the formation
or operation of the entity that comprises the Seller or its partners, or the
identity of its limited partners, or copies of its formation documentation
(other than as required by the Title Company to evidence due formation and
authorization to enter into this transaction), correspondence or other
communications between the partners, tax returns or related correspondence, or
any similar documentation (Buyer acknowledging and agreeing that same is
confidential). All such documentation provided by Seller to and received by
Buyer regarding the Property, including the Initial Seller Documentation, is
referred to as the "Project Documentation".

     7. Interim Responsibilities of Seller.



     7.1 Seller's Operations Generally. Seller agrees that during the period
between the Effective Date and the Scheduled Closing Date:

          (a)  Seller will fully comply with the terms of, and will not, without
               the prior written consent of Buyer, amend or permit to be
               amended, any indebtedness secured by a lien or security interest
               against all or any part of the Property to such an extent that
               the same could not be released at Closing with the Purchase Price
               proceeds;

          (b)  Seller will not voluntarily further encumber or permit the
               encumbrance of the Property in any manner to such an extent that
               the same could not be released at Closing with the Purchase Price
               proceeds;

          (c)  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 Property, or
               any portion thereof, or its potential use, and, to Seller's
               actual knowledge after due inquiry, there are no pending
               proceedings, the object of which would be to change the present
               zoning or other land-use limitations; and

          (d)  Subject to force majeure conditions, Seller agrees to use
               commercially reasonable efforts, to the extent customary at the
               Property, to:

               (1) Generally perform, or cause to be performed, all material
          obligations of the landlord arising under the tenant leases and
          service contracts and other agreements which are applicable to the
          Property and will survive Closing or have a material effect on Buyer
          following the Closing;

               (2) Maintain the Property in its current condition, reasonable
          wear and tear, casualty and condemnation excepted; and

               (3) Continue to operate and manage said Property generally as
          presently operated, to the extent deemed reasonable by Seller.

     7.2 SEC S-X 3-14 Audit. Seller acknowledges that Buyer may, subject to
Section 16.4, elect to assign all of its right, title and interest in and to
this Contract to a company that is subject to the reporting requirements of the
Securities Exchange Act of 1934 ("SEC"), as amended ("Registered Company"),
promoted by the Buyer or to an affiliate of a Registered Company (a "Registered
Company Affiliate") which is promoted by Buyer. Buyer advises Seller that in the
event Buyer's assignee under this Contract is a Registered Company or a
Registered Company Affiliate, the Registered Company will be required to make
certain filings with the U.S. Securities and Exchange Commission required under
SEC Rule 3-14 of Regulation S-X (the "SEC Filings") that relate to the most
recent pre-acquisition fiscal year (the "Subject Year") for the Property. To
assist the Registered Company with the preparation of the SEC Filings, Seller
agrees to provide Buyer and the Registered Company during the Inspection Period
with certain unaudited, financial information regarding the Property for the
Subject Year as provided in this Contract (See Article 6). Such information
shall be provided by Seller on the basis of Seller's actual existing business
records applicable to the Property and shall consist of (to the extent
comprising a part of Seller's existing business records): (i) a trial balance
for year ended 12/31/04 and for year-to-date 2005 through 9/30/05, (ii) October,
November and December, 2005 bank statements to the extent of deposits made which
are applicable to the Property, (iii) accounts receivable aging for year ended
12/31/04 and for year-to-date 2005 through 9/30/05, (iv) accounts receivable
detail for year ended 12/31/04 and for year-to-date 2005 through 9/30/05 that
ties to the general ledger, (v) accounts payable accrued expense detail for year
ended 12/31/04 and for year-to-date 2005 through 9/30/05, (vi) copies of
selected specific invoices and checks as reasonably requested by Buyer, the
Registered Company or Buyer's or Registered Company's auditors, (vii)
rollforward of partners' capital as of 12/31/04 and as of 9/30/05, (viii)
detailed schedule showing activity of distributions of partners' capital for
2004 and for 2005 through 9/30/05, (ix) calculation of management fees with
respect to the Property, (x) a copy of any



management agreement(s) with respect to the Property, (xi) proof of payment of
real estate tax bills related to 2004 and 2005, (xii) copies of insurance bills
with respect to the Property for 2004 and 2005, (xiii) proof of payment of 2004
and 2005 insurance bills, (xiv) schedule of rental revenue for year ended
12/31/04 and for year-to-date 2005 through 9/30/05, and (xv) CAM reimbursement
estimates (including reasonable support for the calculation and tie-outs to the
general ledger) (collectively, the "SEC Filing Information"); provided, however,
to the extent Seller is requested to prepare and/or provide such existing
information in a format different than it exists in Seller's existing records,
Seller shall cooperate with Buyer in the preparation and/or provision of such
reformatted records with such qualifications as Seller reasonably determines to
be appropriate and, provided further, that Buyer shall pay Seller's reasonable
costs in connection therewith. Any other documentation requested by Buyer is
subject to Seller's approval and shall expressly exclude tax returns, bank
statements and insurance policies, as well as other documentation which may
relate also to other properties owned or controlled by Seller (i.e. not only
covering the Property), or other information Seller considers confidential.
Seller shall provide such documentation prior to the expiration of the
Inspection Period, and Seller agrees to cooperate with Buyer, the Registered
Company and Buyer's or the Registered Company's auditors regarding any inquiries
by Buyer, the Registered Company and Buyer's or the Registered Company's
auditors following receipt of such information (consistent with this Section 7.2
and this Contract generally), including delivery by Seller of an executed
representation letter prior to the end of the Inspection Period in form and
substance requested by Buyer's or the Registered Company's auditors ("SEC
Filings Letter") and approved by Seller. A sample SEC Filings Letter is attached
to this Contract as Exhibit G; however, Buyer's and/or the Registered Company's
auditors may request additions and/or revisions to such letter following review
of the SEC Filing Information provided by Seller, but such revisions are subject
to Seller's approval in its sole discretion. Seller consents to the disclosure
of the SEC Filing Information in any SEC Filings by the Registered Company
excluding confidential information. Buyer shall reimburse Seller for Seller's
reasonable costs associated with providing the SEC Filing Information. The
provisions of this Section 7.2 shall survive the Closing for a period of one (1)
year. Either party may terminate this Contract in the event of an unresolved
dispute concerning this Section 7.2 or the SEC Filing Letter as such party's
sole remedy in such event.

     7.3 Leases. Between the date hereof and the Closing Date, Seller shall have
the right to continue to operate and maintain the Property in the ordinary
course of business including, without limitation, the right to deal with
existing tenants in a customary fashion and by way of example, sign customary
non-disturbance and landlord waiver agreements as are typical for landlords of
similar Shopping Centers in Montgomery County, Texas. However:

          (a) After the Effective Date, and until the Scheduled Closing Date,
          such period being referred to as the "Lease Restriction Period",
          Seller shall not modify or cancel a Lease or enter into any proposed
          Lease of all or any portion of the Property, other than renewals
          authorized in this Section 7.3(a), without Buyer's prior written
          consent in each instance, which consent shall not be required if Buyer
          is in default under this Contract. To the extent such consent is
          requested by Seller, Buyer agrees not to unreasonably withhold, delay,
          or condition such consent. However, Seller may permit an existing
          tenant to exercise an existing renewal or extension right without
          Buyer's consent.

          (b) The provisions of this Section 7.3 shall survive the Closing.

          (c) With respect to any proposed action by Seller to be submitted to
          Buyer for its consent pursuant to this Section 7.3, Buyer shall
          consent or deny its consent with the reasons for any such denial,
          within two (2) business days after receipt by Buyer of Seller's notice
          requesting Buyer's consent to the proposed action relating to such
          existing or proposed New Lease. If Buyer fails to timely reply to
          Seller's request for consent pursuant to the provisions of this
          Section 7.3 in a notice given within the above-described applicable
          time period, such consent shall be deemed to have been given.

     7.4 Actual Knowledge. Reference in this Contract to "Seller's actual
knowledge" or similar terms relating to Seller shall mean, refer and be limited
to the current actual knowledge of the officers of the general partner of
Seller, which does not include constructive knowledge or inquiry knowledge, with
no examination or investigation of its files or any duty of inquiry on the part
of any of them.



     8. Closing.

     8.1 Closing Date. The Closing (the "Closing") shall be held not later than
2:00 p.m. MST on or before thirty (30) days following the expiration of the
Inspection Period, or as Buyer and Seller may otherwise mutually agree upon in
writing (the "Scheduled Closing Date"). Neither Seller nor Buyer need be
physically present at the Closing and either or both may handle the closing
through the Title Company. The actual date of the Closing is referred to as the
"Closing Date".

     8.2 Closing Documents from Seller. At Closing, Seller shall deliver or
cause to be delivered to Buyer the following (collectively, the "Seller Closing
Deliveries"):

          (1) Original, executed Special Warranty Deed ("Deed") conveying to
     Buyer fee simple title to the Property, free and clear from any and all
     liens, restrictions, easements and other encumbrances and title exceptions,
     except for Permitted Exceptions and matters that a correct Survey of the
     Property shall reflect, in the form attached hereto as EXHIBIT "B".

          (2) Original, executed Bill of Sale and Assignment ("Bill of Sale"),
     in form suitable for recording in the real property records of Montgomery
     County, Texas, conveying to Buyer, with a special warranty of title,
     Seller's right, title and interest in and to the Leases, Contracts, Permits
     and Tangible Personal Property, subject to the Permitted Exceptions, in the
     form attached hereto as EXHIBIT "C". Buyer shall assume the Contracts upon
     the Closing unless the parties otherwise agree in writing.

          (3) With respect to each tenant under the Leases, an original estoppel
     certificate naming Buyer (or its designee) and Wachovia Bank, National
     Association as addressees, in form provided by Buyer to Seller not later
     than fifteen (15) days after the Effective Date and reasonably acceptable
     to each tenant consistent with the terms of its respective lease (in
     connection herewith, Buyer and its lender shall approve or disapprove of
     any tenant modification to Buyer's form of estoppel within seven (7) days
     of their receipt of such modification), executed by each such tenant.

          (4) With respect to each tenant under the Leases, an original
     subordination, non-disturbance and attornment agreement (and "SNDA"), in
     form provided by Buyer to Seller not later than fifteen (15) days after the
     Effective Date and reasonably acceptable to each tenant consistent with the
     terms of its respective lease (in connection herewith, Buyer and its lender
     shall approve or disapprove of any tenant modification to Buyer's form of
     SNDA within seven (7) days of their receipt of such modification), for the
     benefit of Wachovia Bank, National Association, executed by each such
     tenant.

          (5) A Non-Foreign Person Affidavit.

          (6) Such organizational and authorizing documents of Seller as shall
     be reasonably required by the Title Company to evidence Seller's authority
     to consummate the transactions contemplated by this Contract.

          (7) A complete and accurate inventory of any Tangible Personal
     Property, if any, as of the Closing Date.

          (8) An updated list of the tenants occupying the Property certified by
     Seller or its property manager to be materially accurate to its actual
     knowledge as of the Closing Date ("Rent Roll").

          (9) An amount in cash or as a credit against the Purchase Price equal
     to the total sum of all prepaid rents and Deposits, as reflected on the
     Rent Roll.

          (10) To the extent in Seller's possession: (i) the Leases; (ii) the
     Contracts, if any; and (iii) without representation on Seller's part, any
     plans and specifications covering the Improvements (including tenant
     build-out plans and specifications), constituting part of the Property, and
     all other documents or



     contracts pertaining to the ownership, operation and maintenance of the
     Property as herein required.

          (11) Reimburse Buyer upon Closing for the cost of the Survey, but not
     to exceed $2,500.00 in any event.

          (12) All other customary documentation reasonably required by the
     Title Company not inconsistent with the terms of this Contract.

     8.3 Closing Documents from Buyer. At the Closing, Buyer shall:

          (1) Pay or cause to be paid to Seller the Purchase Price, in
     immediately available U.S. funds by wire transfer, it being agreed that
     Buyer shall receive a credit against the Purchase Price for the Earnest
     Money.

          (2) Deliver to Seller such organizational and authorizing documents of
     Buyer as shall be reasonably requested by Seller or Title Company to
     evidence Buyer's authority to consummate the transactions contemplated by
     this Contract.

          (3) Execute and deliver to Seller the Bill of Sale and Assignments
     which are to be provided by Seller pursuant to this Contract.

          (4) Execute and deliver the "Closing Certificate" pursuant to Section
     13.2(b) which is to be provided by Seller pursuant to this Contract.

          (5) Pay for the Survey, if any (except to the extent Seller is
     obligated to pay for same pursuant to Section 8.2(9).

          (6) Execute and deliver to Seller and the Title Company such other
     documents reasonably required by the Title Company.

     8.4 Buyer's Conditions Precedent. In addition to all other conditions
precedent set forth in this Contract, Buyer's obligations to perform under this
Contract and to close escrow are expressly subject to the following:

          (1) The delivery by Seller to Title Company, for delivery to Buyer at
     Closing, of the Seller's Closing Deliveries").

          (2) 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 Contract.

          (3) The deposit with Title Company and Buyer prior to the expiration
     of the Inspection Period of an executed waiver by each tenant under the
     Leases of any right of first refusal under said Leases.

          (4) Intentionally Omitted.

          (5) The deposit with Title Company of an executed standard owner's
     affidavit in form and substance reasonably acceptable to Buyer and Seller.

          (6) The deposit with Title Company of a letter from Seller to each
     tenant under the Leases requesting that future rent under such Leases be
     paid to Buyer.

     8.5 Tenant Contact. Buyer is not Seller's agent and shall not hold itself
out as same or enter into any agreements which are binding on Seller or
otherwise create any obligation on Seller's part without Seller's written
consent, and Buyer shall indemnify, defend and hold Seller harmless from any
claim by or through a tenant or a prospective tenant to the contrary. The
provisions of this Section 8.5 will survive termination of this Contract.

     8.6 Tenant Rent Prorations and Other Prorations. Current rents for the
month of Closing and



estimated, prorated year-end additional rent adjustments (so-called Operating
Expense adjustments as per the applicable Leases) shall be prorated as of the
Closing Date and reflected upon the Closing Statement. Seller will retain the
exclusive right to collect any unpaid amounts owing to Seller pursuant to any
Leases with prior tenants who do not occupy the Property either at the time of
Closing or when those collection proceedings are commenced, and such unpaid
amounts will remain the sole and exclusive property of Seller. Buyer will have
the exclusive right to collect any unpaid amounts due at or before the time of
Closing pursuant to any Lease with a tenant who occupies the Property at
Closing, and such unpaid amount, if collected, will be promptly paid by Buyer to
Seller. Additional rent adjustment paid by the tenants for the calendar year
preceding the year of Closing shall be paid directly to Seller upon receipt
thereof by Buyer (to the extent received by Buyer), and Buyer shall otherwise
cooperate with Seller and regularly keep Seller informed with respect to the
collection thereof. Additional rent charges for the year of Closing to be
received after the Closing with respect to each tenant shall be estimated by
Buyer and Seller and equitably prorated between Seller and Buyer based on the
number of days Seller owned and the Buyer or its successors will own the
Property for the year of Closing. Buyer shall otherwise cooperate with Seller
with respect to the collection thereof. Buyer shall have no responsibility to
Seller to collect any amounts due Seller under any Lease of the Property. The
provisions of this Section will survive Closing. Additional Rent which includes
Common Area Maintenance Charges, Insurance and Tax Charges ("Tenant
Reimbursements"), operating expenses, real estate and personal property ad
valorem taxes and any other taxes and assessments for the year of Closing which
are assessed or are assessable as of the date of Closing, shall be prorated
between Seller and Buyer as of the Closing Date with Buyer assuming liability to
pay the same (to the extent applicable) after Closing. Such items will be
prorated at Closing on the basis of (in the event of taxes) the preceding year's
tax rate applied against the latest assessed valuation, or (in the case of other
items), on the best available evidence. After Closing, Seller and Buyer will
make any cash adjustment between themselves regarding ad valorem taxes; provided
such adjustment shall not be made more than twelve (12) months after Closing.
The foregoing provision will survive Closing.

     8.7 Closing Prorations. Except as otherwise provided for in this Contract,
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 Closing based upon the
latest available information. Seller agrees that all closing costs payable by
Seller shall be deducted from Seller's proceeds otherwise payable to Seller at
Closing. Buyer and Seller shall each pay one-half of Title Company's escrow or
processing fees provided Buyer does not agree to pay more than $300.00 in this
regard. Buyer shall deposit with Title Company sufficient cash to pay all of
Buyer's closing costs. Buyer shall pay all costs arising from or relating to
Buyer's financing, if any, and any costs to update existing or to obtain new
environmental studies, reports or surveys, all recording fees, all transfer,
sales excise applicable to the Buyer, and all other costs applicable to the
Buyer arising from the transfer of the Property to Buyer. Each party otherwise
agrees to pay their respective normal closing costs as so determined to be
customary in Montgomery County to the extent not expressly allocated to the
parties under this Contract.

     8.8 Title Policy and Survey. Buyer shall pay the premium for the Owner's
Policy to be delivered at Closing (including any additional cost of extended
coverage of any kind or amending the survey exception to read "shortages in
area", or deleting the boundary exception, and the Mortgagee Title Policy if
Buyer elects to obtain same, and timely furnished a satisfactory survey for this
purpose, which shall be at the sole cost and expense of Buyer). Buyer shall pay
for the New Survey, if any, but Seller shall reimburse Buyer at the Closing (and
conditioned upon the Closing) for the documented cost of the New Survey up to
$2,500.00. Buyer shall pay all costs arising from or relating to Buyer's
financing, if any, and any costs to update existing or to obtain new
environmental studies, reports or surveys.

     8.9 Possession. Possession of the Property, subject to all Permitted
Exceptions, shall be delivered to Buyer upon Closing.

     9. Default.

     9.1 Buyer Default. In the event Buyer, in an attempt to terminate this
Contract, does not timely and in the manner required under this Contract
exercise the right of termination pursuant to Article 5; fails to timely deposit
the Earnest Money; fails to consummate the purchase of the Property in
accordance with this Contract, other than by reason of a default by Seller; or
breaches any of Buyer's agreements and covenants contained in this Contract,
Seller



shall be entitled to terminate this Contract and receive and retain all Earnest
Money theretofore paid (including all interest accrued thereon) as liquidated
damages. Other than those rights and remedies intended to survive the
termination of this Contract (expressly including Buyer's indemnification
obligations hereunder), the foregoing stated remedy is Seller's sole remedy, it
being stipulated and agreed that such amount is a reasonable estimate of the
damages if this provision is applicable upon a breach by Buyer of Buyer's
obligations under this Contract.

     9.2 Seller Default. In the event this Contract is not terminated under any
provision granting a right of termination at or prior to Closing, and Seller
fails to consummate the sale of the Property in accordance with this Contract
(after all conditions and matters to which this Contract and/or the rights
and/or obligations of the parties hereto are subject have been satisfied), Buyer
shall either (i) terminate this Contract and receive back the Earnest Money from
the Title Company, or (ii) seek specific performance of the obligation to convey
the Property, including all reasonable and necessary costs and expenses in
enforcing specific performance, as its sole and exclusive remedy in such event,
Buyer expressly recognizing that Seller has no obligation to cure title or
survey defects or make any representations or warranties (other than the limited
warranty of title to be contained in the closing documents executed at the
Closing). Buyer waives any claim for damages as a result of Seller's failure to
perform hereunder, Buyer's sole remedies being described in the preceding
sentence. Buyer covenants and agrees not to assert a claim against Seller or any
other Seller Related Party in contravention of this Section 9.2. Notwithstanding
the foregoing, from and after the date hereof until Closing, Seller covenants
not to convey the Property or take any other act such that the consequence
thereof would be to prevent Buyer from exercising its right to enforce specific
performance of this Contract where Buyer would otherwise have the right to do
so. If Seller does breach this covenant, and in lieu of the right by Buyer to
exercise its right of specific performance (which remedy would not be available
to Buyer), Seller shall be liable for all actual damages proximately resulting
from Seller's said breach of this covenant, including, without limitation,
reasonable attorney fees and costs of court incurred by Buyer in enforcing this
Contract. This covenant shall become null and void upon Buyer's termination of
this Contract for any reason, conveyance of the Property to Buyer (or its
designee or assignee) as contemplated by this Contract or Buyer's breach
hereunder. Accordingly, this covenant shall not survive either party's
termination of this Contract where such party has exercised that right pursuant
to this Contract or Closing.

     9.3 Release of Documents upon Failure to Close. If Buyer elects to
terminate this Contract pursuant to a right granted to Buyer hereunder or
otherwise fails to close, upon payment by Seller to Buyer of Buyer's reasonable
cost thereof, Buyer shall furnish to Seller a copy of the New Survey. Upon
payment by Seller to Buyer of Buyer's reasonable cost thereof, Buyer shall also
furnish to Seller any inspection reports Buyer has conducted with respect to the
Property, environmental or otherwise (and Seller shall have the right to use
same thereafter without further obligation to Buyer), save and except "work
product" materials of the Buyer or its representative. If Buyer does not close,
upon payment by Seller to Buyer of Buyer's reasonable cost thereof, it shall
provide Seller with copies of its studies or other similar data it develops or
obtains during its property review, and it will return to Seller all information
pertaining to the Property which Seller provided, and confirm in writing to
Seller that it has complied with this Section 9.3, and Article 5. The provisions
of this Section 9.3 will survive Closing or termination of this Contract.

     9.4 Authority of Title Company. In the event either party hereto becomes
entitled to all or any part of the Earnest Money in accordance with the terms
and conditions of this Contract, Buyer and Seller covenant and agree that the
Title Company shall make any such disbursements of the Earnest Money.

     10. Risk of Loss; Condemnation. In the event of any material damage or
destruction to, or any threatened or actual condemnation or conveyance in lieu
of condemnation of a material part of, the Property, then Seller shall notify
Buyer and Buyer shall have the option to terminate this Contract on written
notice to the other on or before the first to occur of: fifteen (15) days after
Seller notifies Buyer of such damage, destruction, condemnation or conveyance in
lieu thereof, or the date and time herein specified for the Closing. If Buyer
does not exercise such termination right and/or in the event such damage or
destruction is not material, or less than a material part of the Property has
been condemned or conveyed in lieu thereof, Seller shall assign to Buyer at the
Closing, Seller's right, title and interest, if any, to receive any insurance
proceeds for damage to the Improvements and/or the condemnation proceeds or
proceeds for sale in lieu of condemnation payable in connection with such
damage, destruction, taking or sale and the sale will proceed without reduction
in Purchase Price. In such event, Seller shall also deliver to Buyer, in the
form of a credit to Buyer at Closing, any insurance proceeds for damage to the
Improvements, or condemnation proceeds or proceeds from a sale in lieu of
condemnation, which may have been received by Seller prior to the Closing and
attributable to the damage, destruction, condemnation or conveyance in



lieu thereof which was the subject of Seller's notice described above, to the
extent not used for repairs or restoration, and shall credit the Purchase Price
in an amount equal to the cost of such repairs not theretofore completed. For
purposes of this Section 10, "material" means a taking, condemnation, conveyance
in lieu of condemnation, damage or destruction which, as applicable, either (i)
is reasonably estimated to cost more than $350,000.00 to repair, rebuild or
restore, (ii) is reasonably expected to take more than 210 days to repair,
rebuild or restore, (iii) that prevents the full and complete use of 10.0% or
more of the parking spaces present immediately prior to such taking,
condemnation, conveyance in lieu of condemnation, damage or destruction, or (iv)
that prevents the full and complete use of any means of ingress, egress or
access to or from the Property.

     11. Brokerage Commissions. Seller shall pay a real estate commission (the
"Commission") pursuant to a separate written agreement in cash at the Closing to
BETZ COMMERCIAL BROKERAGE, INC., said Commission being payable at and
conditioned upon the Closing and funding of this transaction. Buyer and Seller
each represent and warrant to the other that it has not used or dealt with any
other broker or finder in connection with the sale of the Property. Buyer agrees
to defend, indemnify and hold Seller harmless of and from any such brokerage
commissions and/or fees which may be payable with respect to the transaction
provided for hereunder claimed through or under Buyer. Seller agrees to defend,
indemnify and hold Buyer harmless of and from any brokerage commissions and/or
fees which may be payable with respect to the transaction provided for hereunder
claimed through or under Seller. The provisions of this Section 11 shall survive
termination of the Contract and shall remain binding upon the parties regardless
of whether Closing occurs.

     IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS REAL ESTATE LICENSE ACT,
BUYER IS HEREBY ADVISED BY BROKER THAT IT SHOULD BE FURNISHED WITH OR OBTAIN A
POLICY OF TITLE INSURANCE OR HAVE THE ABSTRACT COVERING THE PROPERTY EXAMINED BY
ANY ATTORNEY OF ITS OWN SELECTION.

     12. Entire Agreement. This Contract embodies the entire agreement of the
parties and supersedes all prior agreements and understandings, written or oral,
relating to the Property, and can be modified or varied only by written
agreement executed by all the parties. No representation, warranty, covenant,
agreement, or condition not expressed in this Contract shall be binding upon the
parties hereto or shall affect or be effective to interpret, change, or restrict
the provisions of this Contract.

     BUYER COVENANTS AND AGREES NOT TO CLAIM THAT THERE ARE ANY VERBAL
AGREEMENTS, REPRESENTATIONS OR WARRANTIES ON THE PART OF SELLER OR ANY OTHER
SELLER RELATED PARTY.

     13. Representations.

     13.1 Seller's Representations and Warranties. Seller represents (and where
indicated, warrants) to Buyer as follows:

          (a) Seller represents and warrants that it owns the Property, subject
     to all matters of record and has full right, title, financial ability,
     authority and capacity to execute and perform this Contract and to
     consummate all of the transactions contemplated herein;

          (b) Seller represents and warrants that the person(s) signing this
     Contract on behalf of Seller is(are) duly authorized to sign for and bind
     Seller;

          (c) Seller represents to Seller's actual knowledge, that there are no
     prohibitions against Seller consummating the transactions contemplated in
     this Contract by any law, regulation, agreement, instrument, restriction,
     order or judgment applicable to Seller;

          (d) Seller represents to Seller's actual knowledge, that there are no
     unrecorded leases (other than the Leases), liens or encumbrances which are
     applicable to the Property which are not set forth in the Title Commitment;

          (e) Seller represents to Seller's actual knowledge, that Seller has
     not received written notice of a material uncured notice of violation which
     has been issued by any governmental authority during the



     last twenty-four (24) months with regard to any applicable regulation or
     law, ordinance, requirement, covenant, condition or restriction relating to
     the present use or occupancy of the Property;

          (f) Seller represents to Seller's actual knowledge, that there are no
     specific 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;

          (g) Seller represents to Seller's actual knowledge, that Seller has
     not received written notice in the last twenty-four (24) months of any
     impending or contemplated condemnation or taking by inverse condemnation of
     the Property, or any portion thereof, by any governmental authorities (and
     to Seller's actual knowledge, none is pending); (however, Seller advises
     Buyer that Rayford Road is presently being widened which may affect or
     reduce available parking not located on the Property and no representation
     or warranty is made in connection therewith);

          (h) Seller represents to Seller's actual knowledge, there are no suits
     or claims pending or threatened in writing with respect to the Property,
     nor does Seller have actual knowledge of any circumstances on the basis of
     any written notice it may have received which should reasonably form the
     basis for any such suits or claims which have not been disclosed in writing
     to Buyer by Seller;

          (i) Seller represents and warrants that there is not existing any
     written agreement, 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 prior to the Scheduled Closing
     Date, but only so long as Buyer is not in default hereunder (but Seller
     reserves the right to continue to evaluate back-up offers);

          (j) Seller represents that, to Seller's actual knowledge, the
     jurisdiction in which the Property is located did not issue Certificates of
     Occupancy at the time the Improvements were constructed and does not, as of
     the date hereof, have any zoning ordinances applicable to the Property;

          (k) To Seller's actual knowledge, no default of Seller exists under
     any of the Leases and no default of any tenant exists under any of the
     Leases;

          (l) To Seller's actual knowledge, no Contracts applicable to the
     Property exist which would be assigned to Buyer upon Closing (Seller shall
     terminate the existing management contract with its affiliate upon
     Closing);

          (m) Seller represents to Seller's actual knowledge, that no consent of
     any third party is required in order for Seller to enter into this Contract
     and perform Seller's obligations hereunder;

          (n) Seller represents to Seller's actual knowledge, except for any
     item to be prorated at Closing in accordance with this Contract or other
     disclosed matters pursuant to the Leases or Tenant Estoppel Letters (or
     otherwise disclosed in writing during the Inspection Period), 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
     Closing shall be paid in full by Seller;

          (o) All general real estate taxes, assessments that have become due
     with respect to the Property through December 31, 2005 (and those for 2006
     will be prorated at Closing) have been paid or will be so paid by Seller
     prior to Closing;

          (p) Subject to matters disclosed on environmental reports provided by
     Seller to Buyer, Seller represents that it has neither received actual
     written notice, nor has it any actual knowledge, that there exists or that
     Seller caused any generation, production, location, transportation,
     storage, treatment, discharge, disposal, release or threatened release
     upon, under or about the Property of any Hazardous Materials in violation
     of applicable laws. "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) which is not
     permitted to exist under applicable law, 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) Seller represents that to Seller's actual knowledge, that there is
     not now, nor has there ever been, on or in the Property underground storage
     tanks, any polychlorinated biphenyls, including those used in hydraulic
     oils, electric transformers, or other equipment, in violation of applicable
     laws, Seller hereby assigns to Buyer, on a non-exclusive basis, 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
     Property (including Hazardous Materials released on the Property prior to
     Closing and continuing in existence on the Property at Closing);

          (r) To Seller's actual knowledge, that there are no proceedings
     pending for the increase of the assessed valuation of the Property for
     2005;

          (s) Should Seller receive written notice or discover in its files any
     information not theretofore provided to Buyer by Seller regarding any of
     the matters set forth in this Section 13.1 after the Effective Date and
     prior to Closing, Seller will immediately notify Buyer of the same in
     writing;

          (t) All representations made in this Contract by Seller shall survive
     the execution and delivery of this Contract and Closing for eighteen (18)
     months. Provided this transaction closes, Seller shall and does hereby
     indemnify against and hold Buyer harmless from any actual loss, damage, or
     expense, together with all court costs and reasonable attorneys' fees which
     Buyer may incur, by reason of any material misrepresentation by Seller or
     any material breach of any of Seller's warranties, provided such claim is
     asserted in writing and made within eighteen (18) months following the
     Closing; and Seller is afforded a reasonable opportunity to cure, remediate
     or mitigate the damages resulting therefrom same. Seller's indemnity and
     hold harmless obligations shall survive Closing for a period of eighteen
     (18) months from Closing only.

Except as provided above in this Section 13.1, and the limited warranty of title
to be contained in the Deed, Seller makes no representations or warranty
whatsoever regarding the Property and/or this Contract and this sentence shall
prevail over any conflicting provision to the contrary.

     13.2 Limitations of Seller's Representations and Warranties.

          (a) BUYER ACKNOWLEDGES AND AGREES THAT BUYER IS EXPERIENCED IN THE
     OWNERSHIP AND OPERATION OF PROPERTIES SIMILAR TO THE PROPERTY AND THAT
     BUYER PRIOR TO THE CLOSING DATE WILL HAVE INSPECTED THE PROPERTY TO ITS
     SATISFACTION AND IS QUALIFIED TO MAKE SUCH INSPECTION. BUYER ACKNOWLEDGES
     THAT EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH
     HEREIN AND EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, IT IS FULLY
     RELYING ON BUYER'S (OR BUYER'S REPRESENTATIVES') INSPECTIONS OF THE
     PROPERTY AND NOT UPON ANY STATEMENTS (ORAL OR WRITTEN) WHICH MAY HAVE BEEN
     MADE OR MAY BE MADE (OR PURPORTEDLY MADE) BY SELLER OR ANY OF ITS OFFICERS,
     REPRESENTATIVES, AGENTS, ATTORNEYS OR PARTNERS. BUYER ACKNOWLEDGES THAT
     BUYER HAS (OR BUYER'S REPRESENTATIVES HAVE), OR PRIOR TO THE CLOSING DATE
     WILL HAVE, THOROUGHLY INSPECTED AND EXAMINED THE PROPERTY TO THE EXTENT
     DEEMED NECESSARY BY BUYER IN ORDER TO ENABLE BUYER TO EVALUATE THE
     CONDITION OF THE PROPERTY AND ALL OTHER ASPECTS OF THE PROPERTY (INCLUDING,
     BUT NOT LIMITED TO, THE ENVIRONMENTAL CONDITION OF THE PROPERTY), AND BUYER
     ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER
     SET FORTH HEREIN AND AS OTHERWISE PROVIDED HEREIN, BUYER IS RELYING SOLELY
     UPON ITS OWN (OR ITS REPRESENTATIVES') INSPECTION, EXAMINATION AND
     EVALUATION OF THE PROPERTY. AS A MATERIAL PART OF THE CONSIDERATION FOR



     THIS CONTRACT, BUYER HEREBY AGREES TO ACCEPT THE PROPERTY ON THE CLOSING
     DATE IN ITS "AS IS, WHERE IS" CONDITION AND WITH ALL FAULTS, AND, EXCEPT
     FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH HEREIN AND AS
     OTHERWISE PROVIDED HEREIN, WITHOUT REPRESENTATIONS AND WARRANTIES OF ANY
     KIND, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW. WITHOUT LIMITING
     THE GENERALITY OF THE FOREGOING, IN CONNECTION WITH THE SALE OF THE
     PROPERTY TO BUYER, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER
     SET FORTH HEREIN AND AS OTHERWISE PROVIDED HEREIN, SELLER AND SELLER'S
     PARTNERS, OFFICERS, AGENTS, DIRECTORS, EMPLOYEES, ATTORNEYS, CONTRACTORS
     AND AFFILIATES ("SELLER'S RELATED PARTIES") HAVE MADE NO, AND SPECIFICALLY
     DISCLAIM, AND BUYER ACCEPTS THAT SELLER AND SELLER'S RELATED PARTIES HAVE
     DISCLAIMED, ANY AND ALL REPRESENTATIONS, GUARANTIES OR WARRANTIES, EXPRESS
     OR IMPLIED, OR ARISING BY OPERATION OF LAW, OF OR RELATING TO THE PROPERTY,
     INCLUDING, WITHOUT LIMITATION, OF OR RELATING TO (I) THE USE, INCOME
     POTENTIAL, EXPENSES, OPERATION, CHARACTERISTICS OR CONDITION OF THE
     PROPERTY OR ANY PORTION THEREOF, INCLUDING WITHOUT LIMITATION, WARRANTIES
     OF SUITABILITY, HABITABILITY, MERCHANTABILITY, DESIGN OR FITNESS FOR ANY
     SPECIFIC OR A PARTICULAR PURPOSE, OR GOOD AND WORKMANLIKE CONSTRUCTION,
     (II) THE NATURE, MANNER, CONSTRUCTION, CONDITION, STATE OF REPAIR OR LACK
     OF REPAIR OF ANY IMPROVEMENTS LOCATED ON THE PROPERTY, ON THE SURFACE OR
     SUBSURFACE THEREOF, WHETHER OR NOT OBVIOUS, VISIBLE OR APPARENT, (III) THE
     NATURE OR QUALITY OF CONSTRUCTION, STRUCTURAL DESIGN OR ENGINEERING OF THE
     PROPERTY, (IV) THE ENVIRONMENTAL CONDITION OF THE PROPERTY AND THE PRESENCE
     OR ABSENCE OF OR CONTAMINATION BY HAZARDOUS MATERIALS, OR THE COMPLIANCE OF
     THE PROPERTY WITH REGULATIONS OR LAWS PERTAINING TO HEALTH OR THE
     ENVIRONMENT, INCLUDING, WITHOUT LIMITATION, THE COMPREHENSIVE ENVIRONMENTAL
     RESPONSE, COMPENSATION AND LIABILITY ACT, THE CLEAR WATER ACT, THE CLEAN
     AIR ACT AND THE TEXAS HEALTH AND SAFETY CODE (THE "ENVIRONMENTAL LAWS"),
     AND (V) THE SOIL CONDITIONS, DRAINAGE, FLOODING CHARACTERISTICS, UTILITIES
     OR OTHER CONDITIONS EXISTING IN, ON OR UNDER THE PROPERTY. EXCEPT FOR THE
     REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH HEREIN AND AS OTHERWISE
     PROVIDED HEREIN, THE BUYER HEREBY EXPRESSLY ASSUMES ALL RISKS, LIABILITIES,
     CLAIMS, DAMAGES, AND COSTS (AND AGREES THAT SELLER SHALL NOT BE LIABLE FOR
     ANY SPECIAL, DIRECT, INDIRECT, CONSEQUENTIAL, OR OTHER DAMAGES) RESULTING
     OR ARISING FROM OR RELATED TO THE OWNERSHIP, USE, CONDITION, LOCATION,
     MAINTENANCE, REPAIR OR OPERATION OF THE PROPERTY. BUYER ACKNOWLEDGES THAT,
     EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH HEREIN
     AND AS OTHERWISE PROVIDED HEREIN, ANY CONDITION OF THE PROPERTY WHICH BUYER
     DISCOVERS OR DESIRES TO CORRECT OR IMPROVE PRIOR TO OR AFTER THE CLOSING
     DATE SHALL BE AT BUYER'S SOLE EXPENSE. BUYER EXPRESSLY WAIVES (TO THE
     EXTENT ALLOWED BY APPLICABLE LAW) ANY CLAIMS UNDER FEDERAL LAW, STATE OR
     OTHER LAW, INCLUDING ENVIRONMENTAL LAWS, THAT BUYER MIGHT OTHERWISE HAVE
     AGAINST SELLER RELATING TO THE USE, CHARACTERISTICS OR CONDITION OF THE
     PROPERTY, WHETHER SOUNDING IN TORT, CONTRACT, COMMON LAW OR PURSUANT TO
     STATUTE EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH
     HEREIN AND AS OTHERWISE PROVIDED HEREIN. ANY REPAIRS PAID FOR BY SELLER
     PURSUANT TO THIS CONTRACT, IF ANY, SHALL, EXCEPT FOR THE REPRESENTATIONS
     AND WARRANTIES OF SELLER SET FORTH HEREIN AND AS OTHERWISE PROVIDED HEREIN,
     BE DONE WITHOUT ANY WARRANTY OR REPRESENTATION BY SELLER, AND SELLER HEREBY
     EXPRESSLY DISCLAIMS ANY WARRANTY OR REPRESENTATION OF ANY KIND WHATSOEVER
     IN CONNECTION WITH SUCH REPAIRS. THE PROVISIONS OF THIS PARAGRAPH SHALL
     SURVIVE THE CLOSING. NOTWITHSTANDING THE FOREGOING OR ANYTHING TO THE
     CONTRARY, SELLER'S LIABILITY IS LIMITED AS PROVIDED IN SECTION 13.1 (P) OF
     THIS CONTRACT.


          (b) Subject to the express provisions of this Contract, Buyer or
     anyone claiming by, through or under Buyer, except for the representations
     and warranties of Seller set forth herein and except as otherwise provided
     herein, hereby fully waives and releases Seller, its affiliated companies,
     and their respective partners, employees, officers, directors,
     representatives, attorneys and agents ("Released Parties") from any and all
     claims, liabilities, damages, losses, penalties, fines, costs (including,
     without limitation, reasonable attorneys' and paralegals' fees, court costs
     and costs of experts), causes of action, and remedies arising from or
     related to any defects or other conditions affecting the Property. Buyer
     further acknowledges and agrees that this waiver and release shall be given
     full force and effect according to each of its expressed terms and
     provisions, including, but not limited to, those relating to unknown and
     suspected claims, damages and causes of action. This waiver and release of
     claims shall not apply to those representations and warranties of Seller
     set forth herein, but shall survive Closing and delivery of the Deed. Buyer
     shall execute a document at Closing reaffirming the representations,
     warranties and agreements set forth in this Section 13.2 and their survival
     as provided in this Section (the "Closing Certificate"). Notwithstanding
     the foregoing or anything to the contrary, Seller's liability is limited as
     provided in Section 13.1 (p) of this Contract.

          (c) BUYER COVENANTS AND AGREES NOT TO ASSERT A CLAIM AGAINST SELLER OR
     ANY OTHER SELLER RELATED PARTY CONTRARY TO THE TERMS HEREOF.

     13.3 Representations and Warranties of Buyer.

     In addition to other representations and warranties made herein, Buyer
represents, warrants, and covenants with Seller that:

     (a)  Buyer has the full right, power and authority to purchase the Property
          from Seller as provided in this Agreement to carry out Buyer's
          obligations hereunder. All requisite actions necessary to authorize
          Buyer to enter into this Agreement and perform its obligations
          hereunder have been taken. The joinder of no person or entity other
          than Buyer will be necessary to close this transaction.

     (b)  Buyer acknowledges and agrees that in the event that Seller furnishes
          Buyer with any environmental report in the possession of Seller
          pursuant to the terms and provisions of this Agreement, Buyer will not
          rely on such report in performing its due diligence and inspection of
          the Property. Further, in the event that such report is incorrect or
          incomplete in any respect, Buyer acknowledges and agrees that Seller
          shall have no responsibility or liability to Buyer by reason of such
          fact. Buyer shall promptly furnish to Seller any environmental report
          Buyer obtains with respect to the Property.

     (c)  All representations made in this Contract by Buyer shall survive the
          execution and delivery of this Contract and Closing. 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 one (1)
          year.

     14. Notices. All notices, demands and requests which may be given or which
are required to be given by either party to the other, and any exercise of a
right of termination provided by this Contract, shall be in writing and shall be
deemed effective only when: (i) personally delivered to the intended recipient;
(ii) two (2) days after being sent, by certified or registered mail, return
receipt requested, addressed to the intended recipient at the address specified
below; (iii) delivered in person to the address set forth below for the party to
whom the notice was given; (iv) deposited in to the custody of a nationally
recognized overnight delivery service such as Federal Express Corporation,
Emery, or Purolator, addressed to such party at the address specified below, as
evidenced by a deposit receipt issued by such company; or (v) telecopied to the
intended recipient at the telephone number specified below, as evidenced by a
confirmation from the sender's telecopy machine. For purposes of this Section,
the addresses of the parties for all notices are as follows (unless changed by
similar notice in writing given by the particular person whose address is to be
changed):



     If to Seller:        RPI INTERESTS II, LTD.
                          c/o Tommy J. Friedlander

     (If by mail):        P.O. Box 159
                          Bellaire, Texas 77402

     (If by delivery):    5333 Gulfton
                          Houston, Texas 77081
                          Telephone: (713) 662-7745
                          Facsimile: (713) 662-7769

     With a copy to
     Seller's Attorney:   Stephen L. Brochstein
                          DeLange, Hudspeth, McConnell & Tibbets
                          8 Greenway Plaza, Suite 1300
                          Houston, Texas 77046
                          Telephone: (713) 871-2000
                          Facsimile: (713) 871-2020
                          E-mail: sbrochstein@dhmtlaw.com

     If to Buyer:         COLE CAPITAL PARTNERS, L.L.C.
                          2555 East Camelback Road, Suite 400
                          Phoenix, Arizona 85016
                          Telephone: (602) 778-8700
                          Facsimile: (602) 778-8780

     With a copy to:      Bennett Wheeler Lytle & Cartwright, PLC
                          3838 North Central Avenue, Suite 1120
                          Phoenix, Arizona 85012
                          Telephone: (602) 445-3434
                          Facsimile: (602) 266-9119

          [E-MAIL ADDRESSES, AND TELEPHONE NUMBERS ARE PROVIDED FOR CONVENIENCE
          ONLY AND NOTICE SHALL NOT BE DEEMED TO HAVE BEEN GIVEN PURSUANT TO
          THIS CONTRACT BY E-MAIL OR TELEPHONE, BUT ONLY IN THE MANNER SET FORTH
          ABOVE.]

     15. Waiver of Claims

          (a) Buyer releases any and all rights or claims against the partners,
     agents, attorneys and representatives of Seller, other than its general
     partner, RPI INTERESTS GP, LLC, a Texas limited liability company, to the
     extent of its interest in Seller, and agrees to look solely to Seller, a
     Texas limited partnership and its general partner, RPI INTERESTS GP, LLC,
     to the extent of its interest in Seller as aforesaid, for all claims
     relating to or arising from this Contract or matters relating to or arising
     from the Property or any matters relating thereto, and covenants and agrees
     not to assert any such claim in contravention of this paragraph, whether
     against Seller's limited partners or their successors or assigns, or their
     respective agents, representatives, partners, owners or affiliates, or
     their successors or assigns, or otherwise.

          (b) Buyer acknowledges and agrees that Seller's attorneys, including
     STEPHEN L. BROCHSTEIN and the law firm with whom he is associated, do not
     represent Buyer and any communications with those attorneys are for
     purposes of negotiation only, and those attorneys shall not be deemed in
     any event to make any verbal representations, warranties or agreements on
     behalf of Seller, and Buyer agrees not to assert any such claim in
     contravention of this paragraph, whether against Seller's attorneys or
     otherwise.

          (c) In furtherance of the foregoing, Buyer absolutely agrees that it
     shall never contend or



     assert a claim that Seller or its partners or agents (or attorneys) have
     made any verbal agreements, representations or assurances. Any negotiations
     or verbal communications do not constitute binding agreements,
     representations or assurances. Seller would not enter into this Contract
     without these agreements or assurances on the part of Buyer who represents
     that: (i) it has knowledge and experience in financial and business matters
     that enable it to evaluate the merits and risks of the transaction that is
     the subject of this Contract; and (ii) Buyer is not in a significantly
     disparate bargaining position in relation to Seller.

          (d) The foregoing waivers and agreements are knowingly, intentionally,
     and voluntarily made by Buyer, and Buyer acknowledges that it has the right
     to be represented by independent legal counsel selected of its own free
     will in connection with the negotiations and execution of this Contract.

          (e) Seller releases any and all rights or claims against the partners,
     agents, attorneys and representatives of Buyer and agrees to look solely to
     Buyer for all claims relating to or arising from this Contract or matters
     relating to or arising from the Property or any matters relating thereto,
     and covenants and agrees not to assert any such claim in contravention of
     this paragraph, whether against Buyer's limited partners or their
     successors or assigns, or their respective agents, representatives,
     partners, owners or affiliates, or their successors or assigns, or
     otherwise.

          (f) Buyer acknowledges and agrees that Seller's attorneys, including
     Kevin T. Lytle, Esq., and the law firm with whom he is associated, do not
     represent Seller and any communications with those attorneys are for
     purposes of negotiation only, and those attorneys shall not be deemed in
     any event to make any verbal representations, warranties or agreements on
     behalf of Buyer, and Seller agrees not to assert any such claim in
     contravention of this paragraph, whether against Buyer's attorneys or
     otherwise.

          (g) In furtherance of the foregoing, Seller absolutely agrees that it
     shall never contend or assert a claim that Buyer or its partners or agents
     (or attorneys) have made any verbal agreements, representations or
     assurances. Any negotiations or verbal communications do not constitute
     binding agreements, representations or assurances. Buyer would not enter
     into this Contract without these agreements or assurances on the part of
     Seller who represents that: (i) it has knowledge and experience in
     financial and business matters that enable it to evaluate the merits and
     risks of the transaction that is the subject of this Contract; and (ii)
     Seller is not in a significantly disparate bargaining position in relation
     to Buyer.

          (h) The foregoing waivers and agreements are knowingly, intentionally,
     and voluntarily made by Seller, and Seller acknowledges that it has the
     right to be represented by independent legal counsel selected of its own
     free will in connection with the negotiations and execution of this
     Contract.

          (i) The provisions hereof shall survive Closing.

     16. Miscellaneous.

     16.1 Governing Law; Venue. This Contract shall be construed and interpreted
under and in accordance with the laws of the State of Texas. The parties
expressly waive trial by jury.

     16.2 Time. Time is of the essence of this Contract. Notwithstanding the
foregoing, if the last day of any time period stated herein shall fall on a
Saturday, Sunday or legal holiday, then the duration of such time period shall
be extended so that it shall end on the next succeeding day which is not a
Saturday, Sunday or legal holiday.

     16.3 Headings and Construction. The captions used in connection with the
paragraphs of this Contract are for convenience only and shall not be deemed to
construe or limit the meaning of the language contained in this Contract, or be
used as interpreting the meaning of the agreement. Words of any gender used in
this Contract shall be held and construed to include any other gender, and words
in the singular shall be held to include the plural and vice versa, unless the
context requires otherwise.

     16.4 Assignment and Binding Effect. Except as limited below, this Contract
shall be binding upon and inure to the benefit of Seller and Buyer, and their
respective heirs, personal representatives, successors and assigns.



Provided, however, that Buyer may assign all of Buyer's right, title and
interest in, to or under this Contract to, or designate as an assignee of Buyer,
only an Affiliate (as defined below) of Buyer, provided that no assignment shall
increase any of Seller's obligations or expenses hereunder. Buyer shall promptly
notify Seller and Title Company of any such assignment, and Buyer's assignee
shall thereafter assume all obligations and duties of Buyer hereunder; however
Buyer shall remain liable under this Contract and shall not be relieved of
Buyer's duties, obligations and liabilities hereunder. As used herein,
"Affiliate" means a United States legal entity owned or controlled by Buyer or
under common control with Buyer. "Control" (including with correlative meanings,
the term controlled) means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of the other
entity, whether through the ownership of voting securities, by contract or
otherwise. Except as expressly provided herein, nothing in this Contract is
intended to confer on any person, other than the parties hereto and their
respective heirs, personal representatives, successors and assigns, any rights
or remedies under or by reason of this Contract.

     16.5 Non-Merger. Any covenant or agreement herein which contemplates
performance after the time of Closing of this Contract shall not be deemed to be
merged into or waived by the instruments of Closing, but shall survive and be
binding upon the parties obligated thereby.

     16.6 Effective Date. The Effective Date of this Contract shall be December
27, 2005.

     16.7 Recording. Except as provided herein to the contrary, neither this
Contract nor any memorandum or other document, affidavit or other writing shall
be recorded.

     17. Exhibits. The following Exhibits are attached to and incorporated into
this Contract by reference:

     A:   Legal Description
     B:   Form of Special Warranty Deed
     C:   Form of Bill of Sale and Assignment of Leases
     D:   Form of Closing Certificate
     E:   Form of Tenant Notice
     F:   Seller's FIRPTA Certificate
     G:   SEC Filings Letter

     18. Offer. This Contract shall be null and void unless Buyer executes this
Contract and delivers the same to Seller for signature not later than Friday,
December 23, 2005 at 4:00 p.m. CST, and Seller executes counter-originals of the
Contract. In addition, Buyer must deliver the Earnest Money to the Title Company
within five (5) business day following the Effective Date of this Contract.
Buyer shall not begin its due diligence investigations at the Property until
Seller and Buyer have executed this Contract and delivered the same to the Title
Company, and Buyer has paid the Earnest Money pursuant to this Contract.

SELLER:                                 BUYER:

RPI INTERESTS II, LTD.                  COLE CAPITAL PARTNERS, L.L.C.


By: RPI Interests GP, LLC               By: /s/ John M. Pons
    Its General Partner                     ------------------------------------
                                        Name: John M. Pons
                                        Title: Senior Vice President
By: /s/ Tommy J. Friedlander, Manager
    ---------------------------------
    Tommy J. Friedlander, Manager



                                BROKER AGREEMENT

     Broker acknowledges and agrees that the parties have the right to modify or
amend the Contract of Sale (other than Section 11) without the consent or
joinder of Broker. Broker further agrees that Broker has no right or authority
to make any representation, warranty or agreement on behalf of Seller without
Seller's written authorization and agrees to comply with Section 13.2. Broker
agrees to use its diligent efforts to keep the terms of this transaction
confidential except to the extent such information is already public information
or is otherwise required to be disclosed by law.

                                        BROKER:

                                        BETZ COMMERCIAL BROKERAGE, INC.


                                        By: /s/ Larry Marks
                                            ------------------------------------
                                        Name: Larry Marks
                                        Title: SVP

                                        Address: 4900 Woodway, Suite 815
                                        Facsimile (713) 892-5300
                                        E-mail: LAMARKS@ATT.NET
                                        Date: 12/22/05



                          TITLE COMPANY ACKNOWLEDGMENT

     The Title Company hereby acknowledges receipt of a fully executed
counterpart of this Earnest Money Contract and receipt of the Earnest Money of
$500,000.00, referred to therein and agrees to accept, hold and disburse the
Earnest Money in accordance with the provisions of the Contract of Sale.

                                        LAWYERS TITLE INSURANCE CORPORATION:


                                        By: /s/ Allen S. Brown
                                            ------------------------------------
                                        Name: Allen S. Brown
                                        Title: Accounts Administrator

                                        Date: January 4, 2006



                          AMENDMENT TO CONTRACT OF SALE

     This Amendment to Contract of Sale (this "Amendment") is made and entered
into effective as of the 15th day of February, 2006, by and between RPI
INTERESTS II, LTD. ("Seller"), and COLE CAPITAL PARTNERS, LLC ("Buyer"), and
provides as follows:

                                   WITNESSETH:

     WHEREAS, Seller and Buyer entered into that certain Contract of Sale dated
as of December 27, 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. Buyer has approved all title matters pertaining to the Property pursuant
to Section 4 of the Purchase Agreement. Specifically, Buyer has approved the
marked Commitment from LandAmerica Commercial Services which is dated February
6, 2006 (Escrow Number 05-47524). It is noted, however, that a Memorandum of
Lease for Academy Corp. was inadvertently filed in Harris County, not Montgomery
County where the Property is located. Accordingly, the Title Company has ordered
a certified copy of that Memorandum of Lease now recorded at File No. T547594 of
the Real Property Records of Harris County, Texas and shall record the same in
Montgomery County, Texas and shall reference the Academy Lease (as described in
the Memorandum) and the Memorandum itself as a Schedule B exception in form
similar to Exceptions 10 m, n and o pertaining to other leases of part of the
Property.

     2. Buyer has also approved survey matters pertaining to the Property
pursuant to Section 4 of the Purchase Agreement. Specifically, Buyer has also
approved the revised Survey prepared by the Matthews Company dated January 18,
2006, and updated February 3, 2006 (Job No. 28630). Accordingly, Buyer approves
the "New Survey" as defined in Section 4.2 of the Purchase Agreement and
acknowledges and agrees that Buyer's objections (as defined in Section 4.3 of
the Purchase Agreement) have been satisfied.

     3. Article 5 of the Purchase Agreement gives Buyer right to terminate the
Agreement in the manner and within the time period set forth in Article 5.
Except as provided in and limited by Paragraph 4 of this Amendment, Buyer waives
all rights of termination pursuant to Article 5. Buyer further acknowledges
receipt of the Initial Seller Documentation as provided in Section 6 of the
Purchase Agreement and has approved same.

     4. Section 7.2 of the Purchase Agreement gives Buyer the right to terminate
the Purchase Agreement with respect to the SEC-S-X-3-14 Audit. Buyer
acknowledges that it has received from the Seller all SEC Filing Information (as
defined in Section 7.2), but Buyer has not conducted its audit (for reasons
unrelated to the Seller). Seller agrees that Buyer, Registered Company, Buyer's
auditors and Registered Company's auditors (collectively, the "Auditors") may
conduct its audit (pursuant to Section 7.2) and Buyer shall have the right to
terminate the Purchase Agreement pursuant to Section 7.2 if and only if (i)
Seller fails or refuses to cooperate with the auditors as required by Section
7.2, or (ii) Auditors discover that a material, adverse variance exists between
the SEC Filing Information and Seller's books and records examined and tested by
the Auditors in accordance with Section 7.2 and such material discrepancy is not
resolved by Seller to the reasonable satisfaction of such Auditors. Any right of
termination on the part of Buyer pursuant to Section 7.2 shall be deemed waived
if notice of termination is not given in writing to Seller (in the manner
required by the Agreement), pursuant to Section 7.2 of the Purchase Agreement,
as hereby amended, prior to 3pm MST on February 28, 2006. Buyer's sole remedy
under Section 7.2, as hereby amended shall be its timely election to terminate.
Seller will continue to cooperate with Buyer and the Auditors as reasonably
requested pursuant to Section 7.2. Buyer shall reimburse Seller for Seller's
reasonable costs associated with such audit.

     5. Section 8.1 is amended as follows:



     8.1 Closing Date. The Closing ("Closing") shall be held no later than 2
p.m. MST on or before March 2, 2006 or as Buyer and Seller may otherwise
mutually agree upon in writing (the "Scheduled Closing Date"). Neither Seller
nor Buyer need be physically present at the Closing and either or both may
handle the closing through the Title Company. The actual date of the Closing is
referred to as the "Closing Date". Seller may extend the Closing up to fifteen
(15) days as reasonably necessary in order to obtain Tenant estoppel letters and
SNDA's. Seller shall immediately forward those documents to the respective
Tenants.

     6. 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.

     7. 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.

                         [SIGNATURES ON FOLLOWING PAGE]

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date set forth above.

BUYER:                                  SELLER:

COLE CAPITAL PARTNERS, LLC, an          RPI INTERESTS II, LTD.,
Arizona limited liability company       a Texas limited partnership


By: /s/ John M. Pons                    By: RPI Interests GP, LLC
    ---------------------------------       Its General Partner
    John M. Pons
    Its Senior Vice President
                                        By: /s/ Tommy J. Friedlander
                                            ------------------------------------
                                            Tommy J. Friedlander
                                            Its Manager



                         ASSIGNMENT OF CONTRACT OF SALE

                     COLE CAPITAL PARTNERS, LLC, AS ASSIGNOR
                                       AND
                       COLE MT SPRING TX, LP, AS ASSIGNEE

     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, to and under that certain Contract of Sale (the "Purchase
Agreement") described herein, including, without limitation, Assignor's right,
title and interest in and to the Earnest Money, to Assignee and its successors
and assigns. The Purchase Agreement is described as follows:

                       
     DATE OF AGREEMENT:   December 27, 2005, as amended February 15, 2006

     ORIGINAL BUYER:      Cole Capital Partners, LLC

     ASSIGNED TO:         Cole MT Spring TX, LP

     PROPERTY ADDRESS:    25044 I-45 N., Spring, TX 77386



     Assignor acknowledges that it is not released from any obligations or
liabilities under said Purchase Agreement, with the exception of the obligation
to deliver the Earnest Money which has been delivered into escrow by Assignor.

     Assignee hereby agrees to assume and be responsible for all obligations and
liabilities under said Purchase Agreement, with the exception of the obligation
to deliver the Earnest Money which has been delivered into escrow by Assignor.
This Assignment shall be in full force and effect upon its full execution.

     Executed this 1st day of March, 2006.

ASSIGNOR:                               ASSIGNEE:

COLE CAPITAL PARTNERS, LLC,             COLE MT SPRING TX, LP,
an Arizona limited liability company    a Delaware limited partnership

                                        By: Cole GP CCPT II, LLC, a Delaware
By: /s/ John M. Pons                        Limited liability company, its
    ---------------------------------       General Partner
    John M. Pons
    Senior Vice President               By: Cole REIT Advisors II, LLC, a
                                            Delaware limited liability company,
                                            its Manager


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

EX-10.56

                                                                   Exhibit 10.56

                                                  MERS MIN: 8000101-0000002626-9

                                 PROMISSORY NOTE

$5,940,000.00                                                 New York, New York
                                                                   March 2, 2006

          FOR VALUE RECEIVED, COLE MT SPRING TX, LP, a Delaware limited
partnership, having its principal place of business at 2555 E. Camelback Road,
Ste. 400, Phoenix, Arizona 85016, a maker hereunder (referred to herein as
"BORROWER"), hereby unconditionally promises to pay to the order of BEAR STEARNS
COMMERCIAL MORTGAGE, INC., a New York corporation, as payee, having an address
at 383 Madison Avenue, New York, New York 10179 ("LENDER"), or at such other
place as the holder hereof may from time to time designate in writing, the
principal sum of FIVE MILLION NINE HUNDRED FORTY THOUSAND AND 00/100 DOLLARS
($5,940,000.00), in lawful money of the United States of America with interest
thereon to be computed from the date of this Note at the Interest Rate, and to
be paid in accordance with the terms of this Note and that certain Loan
Agreement, dated as of the date hereof, between Borrower and Lender (the "LOAN
AGREEMENT"). All capitalized terms not defined herein shall have the respective
meanings set forth in the Loan Agreement.

                                    ARTICLE 1

                                  PAYMENT TERMS

          Borrower agrees to pay the principal sum of this Note and interest on
the unpaid principal sum of this Note from time to time outstanding at the rates
and at the times specified in the Loan Agreement and the outstanding balance of
the principal sum of this Note and all accrued and unpaid interest thereon shall
be due and payable on the Maturity Date. This Note shall be the "Note" as
defined in the Loan Agreement.

                                    ARTICLE 2

                            DEFAULT AND ACCELERATION

          The Debt shall without notice become immediately due and payable at
the option of Lender if any payment required in this Note is not paid within
five (5) days of the date when due or if not paid on the Maturity Date or on the
happening of any other Event of Default.

                                    ARTICLE 3

                                 LOAN DOCUMENTS

          This Note is secured by the Mortgage and the other Loan Documents. All
of the terms, covenants and conditions contained in the Loan Agreement, the
Mortgage and the other Loan Documents are hereby made part of this Note to the
same extent and with the same force as if they were fully set forth herein. In
the event of a conflict or inconsistency between the terms of this Note and the
Loan Agreement, the terms and provisions of the Loan Agreement shall govern.

                                    ARTICLE 4

                                 SAVINGS CLAUSE

          Notwithstanding anything to the contrary contained in this Note or the
Mortgage, neither the Applicable Interest Rate nor the Default Rate shall at any
time exceed the Maximum Rate. The term "Maximum Rate," as used herein, shall
mean, on any day, the highest nonusurious rate of interest (if any) permitted by
applicable law on such day. For purposes of Chapter 303 of the Texas Finance
Code, as it may from time to time be amended, the Maximum Rate shall be the
"weekly ceiling" as defined in Section 303.002 of said Code and as computed in
accordance with Section 303.003 of said Code, from time to time in effect;
provided, however, that to the extent



permitted by applicable law, Lender reserves the right to change, from time to
time by further notice and disclosure to Borrower, the ceiling on which the
Maximum Rate is based under Chapter 303 of said Code; and, provided further,
that the "highest nonusurious rate of interest permitted by applicable law" for
purposes of this Note or the Mortgage shall not be limited to the applicable
rate ceiling under Chapter 303 of said Code if federal laws or other state laws
now or hereafter in effect and applicable to this Note or the Mortgage (and the
interest contracted for, charged and collected hereunder) shall permit a higher
rate of interest. In no event shall the Loan be considered a revolving credit
account as defined in Chapter 346 of the Texas Finance Code, as may be hereafter
amended or recodified.

     It is the intention of the parties hereto to comply with the usury laws of
the State of Texas and the United States of America. The parties hereto do not
intend to contract for, charge or receive any interest or other charge which is
usurious, and by execution of this Note or the Mortgage, Borrower agrees that
Lender has no such intent. This Note, the Mortgage, the other Loan Documents and
all other agreements between Borrower and Lender or any other holder hereof,
which are now existing or hereafter arising, whether written or oral, are hereby
expressly limited so that in no event whatsoever, whether by reason of
acceleration of maturity hereof, or otherwise, shall the amount paid, or agreed
to be paid, to Lender or any other holder hereof for the use, forbearance or
detention of the money to be due hereunder or otherwise, or for the payment or
performance of any covenant or obligation contained herein or in any other
document evidencing, securing or pertaining to the Debt, exceed the Maximum
Rate. If from any circumstance whatsoever fulfillment of any provisions hereof
or other document, at the time performance of such provisions shall be due,
shall involve transcending the valid limits prescribed by law, then ipso facto,
the obligation to be fulfilled shall be reduced to the Maximum Rate, and if from
any such circumstance Lender or any other holder shall ever receive as interest
or otherwise an amount which will exceed the Maximum Rate, such amount which
would be excessive interest shall be applied to the reduction of the principal
amount owing hereunder (without prepayment premium or penalty) or on account of
any other principal indebtedness of Borrower to the holder and not to the
payment of interest, or if such excessive interest exceeds the unpaid balance of
principal hereof and such other indebtedness, such excess shall be refunded to
Borrower. All sums paid and agreed to be paid to Lender or any other holder for
use, forbearance or detention of the indebtedness of Borrower shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the period until payment in full on the Note (or any renewals,
extensions and rearrangement thereof) so that the actual rate of interest on
account of the Debt is uniform throughout the term of this Note (and all
renewals, extensions and rearrangements hereof) and does not exceed the Maximum
Rate. The terms and provisions of this Article 4 shall control and supersede any
other provision of this Note or the other Loan Documents.

                                    ARTICLE 5

                                 NO ORAL CHANGE

          This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.

                                    ARTICLE 6

                                     WAIVERS

          Borrower and all others who may become liable for the payment of all
or any part of the Debt do hereby severally waive presentment and demand for
payment, notice of dishonor, notice of intention to accelerate, notice of
acceleration, protest and notice of protest and non-payment and all other
notices of any kind except with respect to matters for which any of the Loan
Documents specifically provides for the giving of notice by Lender to Borrower.
No release of any security for the Debt or extension of time for payment of this
Note or any installment hereof, and no alteration, amendment or waiver of any
provision of this Note, the Loan Agreement or the other Loan Documents made by
agreement between Lender or any other Person shall release, modify, amend,
waive, extend, change, discharge, terminate or affect the liability of Borrower,
and any other Person who may become liable for the payment of all or any part of
the Debt, under this Note, the Loan Agreement or the other Loan Documents. No
notice to or demand on Borrower shall be deemed to be a waiver of the obligation
of Borrower or of the right of



Lender to take further action without further notice or demand as provided for
in this Note, the Loan Agreement or the other Loan Documents. If Borrower is a
partnership, the agreements herein contained shall remain in force and
applicable, notwithstanding any changes in the individuals comprising the
partnership, and the term "Borrower," as used herein, shall include any
alternate or successor partnership, but any predecessor partnership and their
partners shall not thereby be released from any liability. If Borrower is a
limited liability company, the agreements herein contained shall remain in force
and applicable, notwithstanding any changes in the members comprising the
company, and the term "Borrower," as used herein, shall include any alternate or
successor company, but any predecessor company shall not thereby be released
from any liability. If Borrower is a corporation, the agreements contained
herein shall remain in full force and applicable notwithstanding any changes in
the shareholders comprising, or the officers and directors relating to, the
corporation, and the term "Borrower" as used herein, shall include any
alternative or successor corporation, but any predecessor corporation shall not
be relieved of liability hereunder. (Nothing in the foregoing sentence shall be
construed as a consent to, or a waiver of, any prohibition or restriction on
transfers of interests in such entity which may be set forth in the Loan
Agreement, the Mortgage or any other Loan Document.)

                                    ARTICLE 7

                                    TRANSFER

          Upon the transfer of this Note, Borrower hereby waiving notice of any
such transfer except as provided in the Loan Agreement, Lender may deliver all
the collateral mortgaged, granted, pledged or assigned pursuant to the Loan
Documents, or any part thereof, to the transferee who shall thereupon become
vested with all the rights herein or under applicable law given to Lender with
respect thereto, and Lender shall from that date forward forever be relieved and
fully discharged from any liability or responsibility in the matter; but Lender
shall retain all rights hereby given to it with respect to any liabilities and
the collateral not so transferred.

                                    ARTICLE 8

                                   EXCULPATION

          The provisions of Section 9.3 of the Loan Agreement are hereby
incorporated by reference into this Note to the same extent and with the same
force as if fully set forth herein.

                                    ARTICLE 9

                                  GOVERNING LAW

          THIS NOTE SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO
THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED AND SHALL IN ALL RESPECTS
BE GOVERNED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE IN
WHICH THE PROPERTY IS LOCATED AND APPLICABLE FEDERAL LAWS.

                                   ARTICLE 10

                                     NOTICES

          All notices or other written communications hereunder shall be
delivered in accordance with Section 10.6 of the Loan Agreement.

                         [NO FURTHER TEXT ON THIS PAGE]



          IN WITNESS WHEREOF, Borrower has duly executed this Note as of the day
and year first above written.

                          BORROWER:

                          COLE MT SPRING TX, LP, a Delaware limited partnership

                          By: Cole GP CCPT II, LLC, a Delaware limited liability
                              company, its General Partner

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


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



                                 ACKNOWLEDGMENT

STATE OF Arizona

COUNTY OF Maricopa

     This instrument was acknowledged before me on March 1, 2006, by John M.
Pons, Senior Vice President of Cole REIT Advisors II, LLC, a Delaware limited
liability company, the manager of Cole GP CCPT II, LLC, a Delaware limited
liability company, the general partner of Cole Mt Spring TX, LP, a Delaware
limited partnership, on behalf of said entities.


                                        /s/ Sadie Hansen
                                        ----------------------------------------
                                        Notary Public, State of Arizona

My Commission Expires:
2/26/09

EX-10.57

                                                                   Exhibit 10.57

================================================================================

                                 LOAN AGREEMENT

                            Dated as of March 2, 2006

                                     Between

                             COLE MT SPRING TX, LP,
                                   as Borrower

                                       and

                     BEAR STEARNS COMMERCIAL MORTGAGE, INC.,
                                    as Lender

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
I.    DEFINITIONS; PRINCIPLES OF CONSTRUCTION............................     1
   Section 1.1     Definitions...........................................     1
   Section 1.2     Principles of Construction............................    23
II.   GENERAL TERMS......................................................    23
   Section 2.1     Loan Commitment; Disbursement to Borrower.............    23
   Section 2.2     Interest Rate.........................................    23
   Section 2.3     Loan Payment..........................................    24
   Section 2.4     Prepayments...........................................    26
   Section 2.5     Defeasance............................................    27
   Section 2.6     Release of Property...................................    29
   Section 2.7     Cash Management.......................................    30
III.  CONDITIONS PRECEDENT...............................................    32
   Section 3.1     Conditions Precedent to Closing.......................    32
IV.   REPRESENTATIONS AND WARRANTIES.....................................    36
   Section 4.1     Borrower Representations..............................    36
   Section 4.2     Survival of Representations...........................    45
V.    BORROWER COVENANTS.................................................    46
   Section 5.1     Affirmative Covenants.................................    46
VI.   INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS................    61
   Section 6.1     Insurance.............................................    61
   Section 6.2     Casualty..............................................    65
   Section 6.3     Condemnation..........................................    65
   Section 6.4     Restoration...........................................    65
VII.  RESERVE FUNDS......................................................    69
   Section 7.1     Required Repairs......................................    69
   Section 7.2     Tax and Insurance Escrow Fund.........................    70
   Section 7.3     Replacements and Replacement Reserve..................    71
   Section 7.4     Rollover Reserve......................................    76
   Section 7.5     Reserve Funds, Generally..............................    76
VIII. DEFAULTS...........................................................    77
   Section 8.1     Event of Default......................................    77
   Section 8.2     Remedies..............................................    79
   Section 8.3     Remedies Cumulative; Waivers..........................    81
IX.   SPECIAL PROVISIONS.................................................    81
   Section 9.1     Securitization........................................    81
   Section 9.2     Securitization. ......................................    82
   Section 9.3     Exculpation...........................................    82
   Section 9.4     Matters Concerning Manager............................    84
   Section 9.5     Servicer..............................................    85
X.    MISCELLANEOUS......................................................    85
   Section 10.1    Survival..............................................    85
   Section 10.2    Lender's Discretion...................................    85
   Section 10.3    Governing Law.........................................    85
   Section 10.4    Modification, Waiver in Writing.......................    86
   Section 10.5    Delay Not a Waiver....................................    86
   Section 10.6    Notices...............................................    86
   Section 10.7    Trial by Jury.........................................    87
   Section 10.8    Headings..............................................    87
   Section 10.9    Severability..........................................    87
   Section 10.10   Schedules Incorporated................................    89
   Section 10.11   Offsets, Counterclaims and Defenses...................    89
   Section 10.12   No Joint Venture or Partnership; No Third Party
                      Beneficiaries......................................    90
   Section 10.13   Publicity.............................................    90
   Section 10.14   Waiver of Marshalling of Assets.......................    90




                                                                         
   Section 10.15   Waiver of Counterclaim................................    90
   Section 10.16   Conflict; Construction of Documents; Reliance.........    91
   Section 10.17   Brokers and Financial Advisors........................    91
   Section 10.18   Prior Agreements......................................    91
   Section 10.19   Joint and Several Liability...........................    91
   Section 10.20   Certain Additional Rights of Lender (VCOC)............    91





SCHEDULES
- ---------
Schedule I   -   Rent Roll
Schedule II  -   Required Repairs - Deadlines for Completion
Schedule III -   Organizational Chart of Borrower
Schedule IV  -   Tenant Direction Letter
Schedule V   -   Identified Affiliates


                                 LOAN AGREEMENT

     THIS LOAN AGREEMENT, dated as of March 2, 2006 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
"AGREEMENT"), between BEAR STEARNS COMMERCIAL MORTGAGE, INC., a New York
corporation, having an address at 383 Madison Avenue, New York, New York 10179
("LENDER") and COLE MT SPRING TX, LP, a Delaware limited partnership, having its
principal place of business at 2555 E. Camelback Road, Ste. 400, Phoenix,
Arizona 85016 and an organizational identification number of 4071262
("BORROWER").

                                   WITNESSETH:

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

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

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

     I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION

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

     "ACADEMY SPORTS" shall mean Academy Corp., a Texas corporation.

     "ACCRUED INTEREST" shall have the meaning set forth in Section 2.3.2
hereof.

     "ACTUAL KNOWLEDGE" shall mean, with respect to Borrower, the conscious
awareness of facts or other information by Borrower after inquiry reasonable for
an institutional owner of properties similar to the Property.

     "AFFILIATE" shall mean, as to any Person, any other Person that, directly
or indirectly, is in Control of, is Controlled by or is under common Control
with such Person.

     "AFFILIATED LOANS" shall mean a loan made by Lender to an Affiliate of
Borrower or Guarantor.

     "AFFILIATED MANAGER" shall mean any Manager that is an Affiliate of
Borrower or Guarantor.

     "AGENT" shall have the meaning set forth in Section 2.7.2 hereof.

     "AGREEMENT" shall mean this Loan Agreement, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

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

     "ANNUAL BUDGET" shall mean the operating budget, including all planned
Capital Expenditures, for the Property prepared by Borrower in accordance with
Section 5.1.11 hereof for the applicable Fiscal Year or other period.

     "ANTICIPATED REPAYMENT DATE" shall mean April 1, 2016.

     "APPLICABLE INTEREST RATE" shall mean (i) prior to the Anticipated
Repayment Date, the Initial Interest Rate and (ii) on and after the Anticipated
Repayment Date, the Revised Interest Rate.

     "APPROVED ANNUAL BUDGET" shall have the meaning set forth in Section 5.1.11
hereof.



     "ASSIGNMENT OF LEASES" shall mean that certain first priority Assignment of
Leases and Rents, dated as of the date hereof, from Borrower, as assignor, to
Mortgage Electronic Registration Systems, Inc., as nominee of Lender, as
assignee, assigning to Lender all of Borrower's interest in and to the Leases
and Rents of the Property as security for the Loan, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

     "AWARD" shall mean any compensation paid or payable to Borrower by any
Governmental Authority in connection with a Condemnation in respect of all or
any part of the Property.

     "BANKRUPTCY ACTION" shall mean with respect to any Person (a) such Person
filing a voluntary petition under the Bankruptcy Code or any other Federal or
state bankruptcy or insolvency law; (b) the filing of an involuntary petition
against such Person under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law, in which such Person colludes with, or otherwise
assists such Person, or cause to be solicited petitioning creditors for any
involuntary petition against such Person; (c) such Person filing an answer
consenting to or otherwise acquiescing in or joining in any involuntary petition
filed against it, by any other Person under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law; (d) such Person consenting to or
acquiescing in or joining in an application for the appointment of a custodian,
receiver, trustee, or examiner for such person or any portion of the Property;
(e) such Person making an assignment for the benefit of creditors, or admitting,
in writing or in any legal proceeding, its insolvency or inability to pay its
debts as they become due.

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

     "BASIC CARRYING COSTS" shall mean, the sum of the following costs
associated with the Property for the relevant Fiscal Year or payment period: (a)
Taxes, (b) Other Charges and (c) Insurance Premiums.

     "BORROWER" shall have the meaning set forth in the introductory paragraph
hereto, together with its successors and permitted assigns.

     "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or any
other day on which national banks in New York, New York, or the place of
business of any Servicer are not open for business.

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

     "CASH MANAGEMENT ACCOUNT" shall have the meaning set forth in Section 2.7.2
hereof.

     "CASH MANAGEMENT TERMINATION EVENT" shall mean (a) in the case of a Cash
Management Trigger pursuant to clause (ii) of the definition of such term, the
Debt Service Coverage Ratio shall be equal to or greater than 1.25 to l.0 for
two (2) complete, consecutive calendar quarters following the calendar quarter
in which the Cash Management Trigger occurred, provided, however, there shall be
no Cash Management Termination Event following a Cash Management Trigger caused
by clause (i) of the definition of such term, and there shall not be more than
two (2) Cash Management Termination Events during the term of the Loan.

     "CASH MANAGEMENT TRIGGER" shall mean (i) provided the Clearing Bank Option
has not been exercised and implemented, if the Loan has not been repaid on or
before the Payment Date that is three (3) calendar months prior to the
Anticipated Repayment Date, however, if the Clearing Bank Option has been
exercised and implemented, if the Loan has not been repaid on or before the
Payment Date that is one (1) calendar month prior to the Anticipated Repayment
Date, or (ii) Lender's determination that the Debt Service Coverage Ratio for
the preceding twelve (12) months annualized is less than or equal to 1.1 to 1.0.

     "CASUALTY" shall have the meaning set forth in Section 6.2 hereof.



     "CASUALTY CONSULTANT" shall have the meaning set forth in Section
6.4(b)(iii) hereof.

     "CASUALTY RETAINAGE" shall have the meaning set forth in Section 6.4(b)(iv)
hereof.

     "CLEARING ACCOUNT" shall have the meaning set forth in Section 2.7.1
hereof.

     "CLEARING BANK" shall have the meaning set forth in Section 2.7.1 hereof.

     "CLEARING BANK AGREEMENT" shall have the meaning set forth in Section 2.7.1
hereof.

     "CLEARING BANK OPTION" shall have the meaning set forth in Section 2.7.1
hereof.

     "CLOSING DATE" shall mean the date of the funding of the Loan.

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

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

     "CONDEMNATION PROCEEDS" shall have the meaning set forth in Section 6.4(b).

     "CONSENT REGARDING MANAGEMENT AGREEMENT" shall mean that certain Consent
and Agreement, dated as of the date hereof, among Lender, Borrower and Manager,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.

     "CONTROL" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management, policies or activities of a
Person, whether through ownership of voting securities, by contract or
otherwise. "CONTROLLED" and "CONTROLLING" shall have correlative meanings.

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

     "DEBT SERVICE" shall mean, with respect to any particular period of time,
scheduled principal and interest payments due under this Agreement and the Note.

     "DEBT SERVICE COVERAGE RATIO" shall mean a ratio for the applicable period
in which:

          (a) the numerator is the Net Operating Income (excluding interest on
credit accounts and using annualized operating expenses for any recurring
expenses not paid monthly (e.g., Taxes and Insurance Premiums)) for such period
as set forth in the statements required hereunder, without deduction for (i)
actual management fees incurred in connection with the operation of the
Property, or (ii) amounts paid to the Reserve Funds, less (A) management fees
equal to the greater of (1) assumed management fees of four percent (4.0%) of
Gross Income from Operations or (2) the actual management fees incurred, (B)
Replacement Reserve Fund contributions equal to $0.17 per square foot of gross
leasable area at the Property, and (C) Rollover Reserve Fund contributions equal
to $0.00 per square foot of gross leasable area at the Property; and

          (b) the denominator is the aggregate amount of principal and interest
due and payable on the Note for such period.



     "DEBT SERVICE COVERAGE RATIO DETERMINATION DATE" shall mean the date that
Lender determines the Debt Service Coverage Ratio in accordance with this
Agreement.

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

     "DEFAULT RATE" shall mean, with respect to the Loan, a rate per annum equal
to the lesser of (a) the maximum rate permitted by applicable law or (b) four
percent (4%) above the Applicable Interest Rate.

     "DEFEASANCE DATE" shall have the meaning set forth in Section 2.5.1(a)(i)
hereof.

     "DEFEASANCE DEPOSIT" shall mean an amount equal to the remaining principal
amount of the Note, the Defeasance Payment Amount, any costs and expenses
incurred or to be incurred in the purchase of U.S. Obligations necessary to meet
the Scheduled Defeasance Payments and any revenue, documentary stamp or
intangible taxes or any other tax or charge due in connection with the transfer
of the Note or otherwise required to accomplish the agreements of Sections 2.4
and 2.5 hereof (including, without limitation, any fees and expenses of
accountants, attorneys and the Rating Agencies incurred in connection
therewith).

     "DEFEASANCE EVENT" shall have the meaning set forth in Section 2.5.1(a)
hereof.

     "DEFEASANCE EXPIRATION DATE" shall mean the date that is two (2) years from
the "startup day" within the meaning of Section 860G(a)(9) of the Code for the
REMIC Trust.

     "DEFEASANCE PAYMENT AMOUNT" shall mean the amount (if any) which, when
added to the remaining principal amount of the Note, will be sufficient to
purchase U.S. Obligations providing the required Scheduled Defeasance Payments.

     "DISCLOSURE DOCUMENT" shall have the meaning set forth in Section 9.2
hereof.

     "ELIGIBLE ACCOUNT" shall mean a separate and identifiable account from all
other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the definition of Eligible Institution or (b)
a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. Section
9.10(b), having in either case a combined capital and surplus of at least Fifty
Million and 00/100 Dollars ($50,000,000.00) and subject to supervision or
examination by federal and state authority. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other instrument.

     "ELIGIBLE INSTITUTION" shall mean a depository institution or trust
company, the short term unsecured debt obligations or commercial paper of which
are rated at least "A-1+" by S&P, "P-1" by Moody's and "F-1+" by Fitch in the
case of accounts in which funds are held for thirty (30) days or less (or, in
the case of accounts in which funds are held for more than thirty (30) days, the
long-term unsecured debt obligations of which are rated at least "AA" by Fitch
and S&P and "Aa2" by Moody's).

     "EMBARGOED PERSON" shall have the meaning set forth in Section 5.1.23
hereof.

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

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

     "EVENT OF DEFAULT" shall have the meaning set forth in Section 8.1(a)
hereof.



     "EXCESS CASH FLOW" shall have the meaning set forth in Section 2.7.2(b)
hereof.

     "EXCHANGE ACT" shall have the meaning set forth in Section 9.2 hereof.

     "EXTRAORDINARY EXPENSE" shall have the meaning set forth in Section 5.1.11
hereof.

     "FISCAL YEAR" shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during each year of the term of the Loan.

     "FITCH" shall mean Fitch, Inc.

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

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

     "GROSS INCOME FROM OPERATIONS" shall mean, for any period, all income,
computed in accordance with the GAAP (or another basis of accounting acceptable
to Lender and consistently applied), derived from the ownership and operation of
the Property from whatever source during such period, including, but not limited
to, Rents from tenants in occupancy, open for business and paying full
contractual rent without right of offset or credit, utility charges,
escalations, forfeited security deposits, interest on credit accounts, service
fees or charges, license fees, parking fees, rent concessions or credits,
business interruption or other loss of income or rental insurance proceeds or
other required pass-throughs and interest on Reserve Accounts, if any, but
excluding Rents from month-to-month tenants or tenants that are included in any
Bankruptcy Action, sales, use and occupancy or other taxes on receipts required
to be accounted for by Borrower to any Governmental Authority, refunds and
uncollectible accounts, sales of furniture, fixtures and equipment, Insurance
Proceeds (other than business interruption or other loss of income or rental
insurance), Awards, unforfeited security deposits, utility and other similar
deposits and any disbursements to Borrower from the Reserve Funds, if any. Gross
income shall not be diminished as a result of the Mortgage or the creation of
any intervening estate or interest in the Property or any part thereof.

     "GUARANTOR" shall mean Cole Operating Partnership II, LP, a Delaware
limited partnership.

     "IDENTIFIED AFFILIATES" shall have the meaning set forth on Schedule V
hereof.

     "IMPROVEMENTS" shall have the meaning set forth in the granting clause of
the Mortgage.

     "INDEBTEDNESS" of a Person, at a particular date, means the sum (without
duplication) at such date of (a) all indebtedness or liability of such Person
(including, without limitation, amounts for borrowed money and indebtedness in
the form of mezzanine debt or preferred equity); (b) obligations evidenced by
bonds, debentures, notes, or other similar instruments; (c) obligations for the
deferred purchase price of property or services (including trade obligations);
(d) obligations under letters of credit; (e) obligations under acceptance
facilities; (f) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds, to invest in any Person
or entity, or otherwise to assure a creditor against loss; and (g) obligations
secured by any Liens, whether or not the obligations have been assumed (other
than the Permitted Encumbrances).

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

     "INITIAL INTEREST RATE" shall mean a rate of five and six hundred thirty
six thousandths percent (5.636%) per annum.



     "INSURANCE PREMIUMS" shall have the meaning set forth in Section 6.1(b)
hereof.

     "INSURANCE PROCEEDS" shall have the meaning set forth in Section 6.4(b)
hereof.

     "JACK-IN-THE-BOX" shall mean Jack In The Box Inc., a Delaware corporation.

     "LEASE" shall mean any lease, sublease or subsublease, letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in the
Property, and every modification, amendment or other agreement relating to such
lease, sublease, subsublease, or other agreement entered into in connection with
such lease, sublease, subsublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.

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

     "LENDER" shall have the meaning set forth in the introductory paragraph
hereto, together with its successors and assigns.

     "LICENSES" shall have the meaning set forth in Section 4.1.22 hereof.

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

     "LOAN" shall mean the loan made by Lender to Borrower pursuant to this
Agreement.

     "LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note, the
Mortgage, the Assignment of Leases, the Environmental Indemnity, the Consent
Regarding Management Agreement, the Indemnity, and all other documents executed
and/or delivered in connection with the Loan.

     "MANAGEMENT AGREEMENT" shall mean the management agreement entered into
among Manager, Cole Operating Partnership II, L.P., and Cole Credit Property
Trust II, Inc. pursuant to which Manager is to provide management and other
services with respect to the Property and certain other properties, or, if the
context requires, the Replacement Management Agreement.

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

     "MATERIAL ACTION" means, with respect to any Person, to file any insolvency
or reorganization case or proceeding, to institute proceedings to have such
Person be adjudicated bankrupt or insolvent, to institute proceedings under any
applicable insolvency law, to seek any relief under any law relating to relief
from debts or the protection of debtors, to consent to the filing or institution
of bankruptcy or insolvency proceedings against such Person, to file a petition
seeking, or consent to, reorganization or relief with respect to such Person
under any applicable federal or state law relating to bankruptcy or insolvency,
to seek or consent to the appointment of a



receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar
official of or for such Person or a substantial part of its property, to make
any assignment for the benefit of creditors of such Person, to admit in writing
such Person's inability to pay its debts generally as they become due, or to
take action in furtherance of any of the foregoing.

     "MATURITY DATE" shall mean April 1, 2036, or such other date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.

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

     "MONTHLY DEBT SERVICE PAYMENT AMOUNT" shall mean a payment of interest only
at the Initial Interest Rate for the calendar month preceding the related
Payment Date.

     "MOODY'S" shall mean Moody's Investors Service, Inc.

     "MORTGAGE" shall mean, that certain first priority Deed of Trust and
Security Agreement, dated the date hereof, executed and delivered by Borrower to
Mortgage Electronic Registration Systems, Inc., as nominee of Lender as security
for the Loan and encumbering the Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

     "NET CASH FLOW" shall mean, for any period, the amount obtained by
subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income from Operations for such period.

     "NET CASH FLOW SCHEDULE" shall have the meaning set forth in Section
5.1.11(b) hereof.

     "NET OPERATING INCOME" shall mean, for any period, the amount obtained by
subtracting Operating Expenses for such period from Gross Income from Operations
for such period.

     "NET PROCEEDS" shall have the meaning set forth in Section 6.4(b) hereof.

     "NET PROCEEDS DEFICIENCY" shall have the meaning set forth in Section
6.4(b)(vi) hereof.

     "NOTE" shall mean that certain Promissory Note, dated the date hereof, in
the principal amount of Five Million Nine Hundred Forty Thousand and 00/100
Dollars ($5,940,000.00), made by Borrower in favor of Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

     "OFFICER'S CERTIFICATE" shall mean a certificate delivered to Lender by
Borrower which is signed by an authorized officer of the general partner or
managing member of Borrower.

     "OPERATING EXPENSES" shall mean the total of all expenditures incurred by
or on behalf of Borrower, computed in accordance with the GAAP (or another basis
of accounting acceptable to Lender and consistently applied), of whatever kind
relating to the operation, maintenance and management of the Property that are
incurred on a regular monthly or other periodic basis, including without
limitation, utilities, ordinary repairs and maintenance, insurance, license
fees, property taxes and assessments, advertising expenses, management fees,
payroll and related taxes, computer processing charges, operational equipment or
other lease payments as approved by Lender, and other similar costs, but
excluding depreciation, Debt Service, Capital Expenditures (including any
reserves therefore maintained by Borrower but not required hereunder),
contributions to the Reserve Funds, tenant expenditures related to the operation
and maintenance of the Property to the extent such items are the responsibility
of tenant under its Lease.

     "O'REILLY AUTO PARTS" shall mean O'Reilly Automotive, Inc. (successor to
Hi-Lo Auto Supply, L.P.).



     "OTHER CHARGES" shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.

     "OTHER OBLIGATIONS" shall have the meaning as set forth in the Mortgage.

     "PAYMENT DATE" shall mean the first (1st) day of each calendar month during
the term of the Loan or, if such day is not a Business Day, the immediately
preceding Business Day.

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

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

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

          (ii) Federal Housing Administration debentures;

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

          (iv) federal funds, unsecured certificates of deposit, time deposits,
     bankers' acceptances and repurchase agreements with maturities of not more
     than 365 days of any bank, the short term obligations of which at all times
     are rated in the highest short term rating category by each Rating Agency
     (or, if not rated by all Rating Agencies, rated by at least one Rating
     Agency in the highest short term rating category and otherwise acceptable
     to each other Rating Agency, as confirmed in writing that such investment
     would not,



     in and of itself, result in a downgrade, qualification or withdrawal of the
     initial, or, if higher, then current ratings assigned to the Securities);
     provided, however, that the investments described in this clause must (A)
     have a predetermined fixed dollar of principal due at maturity that cannot
     vary or change, (B) if rated by S&P, must not have an "r" highlighter
     affixed to their rating, (C) if such investments have a variable rate of
     interest, such interest rate must be tied to a single interest rate index
     plus a fixed spread (if any) and must move proportionately with that index,
     and (D) such investments must not be subject to liquidation prior to their
     maturity;

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

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

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

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

          (ix) any other security, obligation or investment which has been
     approved as a Permitted Investment in writing by (a) Lender and (b) each
     Rating Agency, as evidenced by a written confirmation that the designation
     of such security, obligation or investment as a Permitted Investment will
     not, in and of



     itself, result in a downgrade, qualification or withdrawal of the initial,
     or, if higher, then current ratings assigned to the Securities by such
     Rating Agency;

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

     "PERMITTED RELEASE DATE" shall mean the date that is the fourth (4th)
anniversary of the first Payment Date.

     "PERMITTED TRANSFER" shall have the meaning set forth in Section 5.2.10(d)
hereof.

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

     "PERSONAL PROPERTY" shall have the meaning set forth in the granting clause
of the Mortgage.

     "PHYSICAL CONDITIONS REPORT" shall mean that certain Property Conditions
Report for Mortgage Financing Purposes dated January 24, 2006 from IVI Due
Diligence Services, Inc.

     "POLICIES" shall have the meaning specified in Section 6.1(b) hereof.

     "POLICY" shall have the meaning specified in Section 6.1(b) hereof.

     "PREPAYMENT RATE" shall mean the bond equivalent yield (in the secondary
market) on the United States Treasury Security that as of the Prepayment Rate
Determination Date has a remaining term to maturity closest to, but not
exceeding, the remaining term to the Anticipated Repayment Date as most recently
published in the "Treasury Bonds, Notes and Bills" section in The Wall Street
Journal as of such Prepayment Rate Determination Date. If more than one issue of
United States Treasury Securities has the remaining term to the Anticipated
Repayment Date, the "Prepayment Rate" shall be the yield on such United States
Treasury Security most recently issued as of the Prepayment Rate Determination
Date. The rate so published shall control absent manifest error. If the
publication of the Prepayment Rate in The Wall Street Journal is discontinued,
Lender shall determine the Prepayment Rate on the basis of "Statistical Release
H.15 (519), Selected Interest Rates," or any successor publication, published by
the Board of Governors of the Federal Reserve System, or on the basis of such
other publication or statistical guide as Lender may reasonably select.

     "PREPAYMENT RATE DETERMINATION DATE" shall mean the date which is five (5)
Business Days prior to the date that such prepayment shall be applied in
accordance with the terms and provisions of Section 2.4.1 hereof.

     "PROPERTY" shall mean the parcel of real property, the Improvements thereon
and all personal property owned by Borrower and encumbered by the Mortgage,
together with all rights pertaining to such property and Improvements, as more
particularly described in the granting clauses of the Mortgage and referred to
therein as the "Property".

     "PROVIDED INFORMATION" shall mean any and all financial and other
information provided at any time by, or on behalf of, Borrower, Guarantor and/or
Manager.

     "QUALIFIED MANAGER" shall mean either (a) Manager; (b) [reserved]; or (c)
in the reasonable judgment of Lender, a reputable and experienced management
organization (which may be an Affiliate of Borrower) possessing experience in
managing properties similar in size, scope, use and value as the Property,
provided, that Borrower shall have obtained prior written confirmation from the
applicable Rating Agencies that management of the Property by such Person will
not cause a downgrade, withdrawal or qualification of the then current ratings
of the Securities or any class thereof.



     "RATING AGENCIES" shall mean each of S&P, Moody's and Fitch, or any other
nationally recognized statistical rating agency which has been approved by
Lender.

     "RELATED ENTITIES" shall have the meaning set forth in Section 5.2.10(e)(v)
hereof.

     "RELATED PARTIES" shall have the meaning set forth in the definition of
Special Purpose Entity.

     "RELATED PARTY" shall have the meaning set forth in the definition of
Special Purpose Entity.

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

     "RENTS" shall mean, all rents (including percentage rents), rent
equivalents, moneys payable as damages or in lieu of rent or rent equivalents,
royalties (including, without limitation, all oil and gas or other mineral
royalties and bonuses), income, receivables, receipts, revenues, deposits
(including, without limitation, security, utility and other deposits), accounts,
cash, issues, profits, charges for services rendered, all other amounts payable
as rent under any Lease or other agreement relating to the Property, including,
without limitation, charges for electricity, oil, gas, water, steam, heat,
ventilation, air-conditioning and any other energy, telecommunication,
telephone, utility or similar items or time use charges, HVAC equipment charges,
sprinkler charges, escalation charges, license fees, maintenance fees, charges
for Taxes, Operating Expenses or other reimbursables payable to Borrower (or to
the Manager for the account of Borrower) under any Lease, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower or its agents or employees from any and all
sources arising from or attributable to the Property.

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

     "REPLACEMENT RESERVE ACCOUNT" shall have the meaning set forth in Section
7.3.1 hereof.

     "REPLACEMENT RESERVE FUND" shall have the meaning set forth in Section
7.3.1 hereof.

     "REPLACEMENT RESERVE MONTHLY DEPOSIT" shall have the meaning set forth in
Section 7.3.1 hereof.

     "REPLACEMENTS" shall have the meaning set forth in Section 7.3.1 hereof.

     "REQUIRED REPAIR ACCOUNT" shall have the meaning set forth in Section 7.1.1
hereof.

     "REQUIRED REPAIR FUND" shall have the meaning set forth in Section 7.1.1
hereof.

     "REQUIRED REPAIRS" shall have the meaning set forth in Section 7.1.1
hereof.

     "RESERVE FUNDS" shall mean, collectively, the Tax and Insurance Escrow
Fund, the Replacement Reserve Fund, the Required Repair Fund, the Rollover
Reserve Fund and any other escrow fund established by the Loan Documents.



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

     "RESTRICTED PARTY" shall mean collectively, Borrower, Guarantor, and any
direct members or general partners of Borrower or Guarantor.

     "REVISED INTEREST RATE" shall mean the greater of (i) the Initial Interest
Rate plus two percent (2%) per annum, and (ii) the then current Ten Year
Treasury Yield plus two percent (2%) per annum, provided, however, the Revised
Interest Rate shall not exceed the Initial Interest Rate plus five percent (5%)
per annum.

     "ROLLOVER RESERVE ACCOUNT" shall have the meaning set forth in Section
7.4.1 hereof.

     "ROLLOVER RESERVE FUND" shall have the meaning set forth in Section 7.4.1
hereof.

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

     "SALE OR PLEDGE" shall mean a voluntary or involuntary sale, conveyance,
assignment, transfer, encumbrance, pledge, grant of option or other transfer or
disposal of a legal or beneficial interest, whether direct or indirect.

     "SCHEDULED DEFEASANCE PAYMENTS" shall have the meaning set forth in Section
2.5.1(b) hereof.

     "SECURITIES" shall have the meaning set forth in Section 9.1 hereof.

     "SECURITIES ACT" shall have the meaning set forth in Section 9.2 hereof.

     "SECURITIZATION" shall have the meaning set forth in Section 9.1 hereof.

     "SECURITY AGREEMENT" shall have the meaning set forth in Section
2.5.1(a)(vi) hereof.

     "SERVICER" shall have the meaning set forth in Section 9.5 hereof.

     "SERVICING AGREEMENT" shall have the meaning set forth in Section 9.5
hereof.

     "SEVERED LOAN DOCUMENTS" shall have the meaning set forth in Section 8.2(c)
hereof.

     "SHERWIN WILLIAMS" shall mean The Sherwin-Williams Company, an Ohio
corporation.

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

          (i) is and shall be organized solely for the purpose of acquiring,
     developing, owning, holding, selling, leasing, transferring, exchanging,
     managing and operating the Property, entering into and performing its
     obligations under the Loan Documents with Lender, refinancing the Property
     in connection with a permitted repayment of the Loan, and transacting
     lawful business that is incident, necessary and appropriate to accomplish
     the foregoing;

          (ii) has not engaged and shall not engage in any business unrelated to
     the acquisition, development, ownership, management or operation of the
     Property;



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

          (iv) does not have, shall not have and at no time had any assets other
     than the Property and personal property necessary or incidental to its
     ownership and operation of the Property;

          (v) has not engaged in, sought, consented or permitted to and shall
     not engage in, seek, consent to or permit (A) any dissolution, winding up,
     liquidation, consolidation or merger, or (B) any sale or other transfer of
     all or substantially all of its assets or any sale of assets outside the
     ordinary course of its business, except as permitted by the Loan Documents;

          (vi) except as permitted under the Loan Documents, shall not cause,
     consent to or permit any amendment of its limited partnership agreement,
     articles of incorporation, articles of organization, certificate of
     formation, operating agreement or other formation document or
     organizational document (as applicable) with respect to the matters set
     forth in this definition without the consent of Lender;

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

          (viii) if such entity is a corporation, shall not cause or permit the
     board of directors of such entity to take any Material Action without the
     unanimous vote of one hundred percent (100%) of the members of its board of
     directors;

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

          (x) if such entity is a single-member limited liability company, (A)
     is and shall be a Delaware limited liability company, and (B) has and shall
     have either (1) a member which owns no economic interest in the company,
     has signed the company's limited liability company agreement and has no
     obligation to make capital contributions to the company, or (2) two natural
     persons or one entity that is not a member of the company, that has signed
     its limited liability company agreement and that, under the terms of such
     limited liability company agreement becomes a member of the company
     immediately prior to the withdrawal or dissolution of the last remaining
     member of the company;

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



          (xii) has at all times been and shall at all times remain solvent and
     has paid and shall pay its debts and liabilities (including, a
     fairly-allocated portion of any personnel and overhead expenses that it
     shares with any Affiliate) from its assets as the same shall become due,
     and has maintained and shall maintain adequate capital for the normal
     obligations reasonably foreseeable in a business of its size and character
     and in light of its contemplated business operations;

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

          (xiv) has maintained and shall maintain its bank accounts, books of
     account, books and records separate from those of any other Person and, to
     the extent that it is required to file tax returns under applicable law,
     has filed and shall file its own tax returns, except to the extent that it
     is required by law to file consolidated tax returns and, if it is a
     corporation, has not filed and shall not file a consolidated federal income
     tax return with any other corporation, except to the extent that it is
     required by law to file consolidated tax returns;

          (xv) has maintained and shall maintain its own records, books,
     resolutions and agreements;

          (xvi) has not commingled and shall not commingle its funds or assets
     with those of any other Person and has not participated and shall not
     participate in any cash management system with any other Person, other than
     as contemplated herein;

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

          (xviii) has conducted and shall conduct its business in its name or in
     a name franchised or licensed to it by an entity other than an Affiliate of
     itself or of Borrower, except for business conducted on behalf of itself by
     another Person under a business management services agreement that is on
     commercially-reasonable terms, so long as the manager, or equivalent
     thereof, under such business management services agreement holds itself out
     as an agent of Borrower;

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

          (xx) has paid and shall pay its own liabilities and expenses,
     including the salaries of its own employees, out of its own funds and
     assets, and has maintained and shall maintain a sufficient number of
     employees in light of its contemplated business operations;

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

          (xxii) has not incurred any Indebtedness other than (i) acquisition
     financing with respect to the Property; construction financing with respect
     to the Improvements and certain off-site improvements required by municipal
     and other authorities as conditions to the construction of the
     Improvements; and first mortgage financings secured by the Property; and
     Indebtedness pursuant to letters of credit, guaranties, interest rate
     protection agreements and other similar instruments executed and delivered
     in connection with such financings, (ii) unsecured trade payables and
     operational debt not evidenced by a note, (iii) Indebtedness incurred in
     the financing of equipment and other personal property used on the
     Property, and



     (iv) unsecured loans from Affiliates used to acquire the Property, which
     loans shall be repaid in full on or before the date hereof;

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

          (xxiv) has not assumed, guaranteed or become obligated and shall not
     assume or guarantee or become obligated for the debts of any other Person,
     has not held out and shall not hold out its credit as being available to
     satisfy the obligations of any other Person or has not pledged and shall
     not pledge its assets for the benefit of any other Person, in each case
     except as permitted pursuant to this Agreement;

          (xxv) has not acquired and shall not acquire obligations or securities
     of its partners, members or shareholders or any other owner or Affiliate;

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

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

          (xxviii) has not pledged and shall not pledge its assets to or for the
     benefit of any other Person other than with respect to loans secured by the
     Property and no such pledge remains outstanding except to Lender to secure
     the Loan;

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

          (xxx) has maintained and shall maintain its assets in such a manner
     that it shall not be costly or difficult to segregate, ascertain or
     identify its individual assets from those of any other Person;

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

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

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

          (xxxiv) has not had and shall not have any obligation to, and has not
     indemnified and shall not indemnify its partners, officers, directors or
     members, as the case may be, in each case unless such an



     obligation or indemnification is fully subordinated to the Debt and shall
     not constitute a claim against it in the event that its cash flow is
     insufficient to pay the Debt;

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

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

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

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

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

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

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

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

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

          (xliv) has no material contingent or actual obligations not related to
     the Property.

     "SPECS LIQUOR" shall mean C.B. Jackson Co. d/b/a Specs Liquor.

     "STATE" shall mean, the State or Commonwealth in which the Property or any
part thereof is located.

     "SUCCESSOR BORROWER" shall have the meaning set forth in Section 2.5.3
hereof.

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

     "TAX AND INSURANCE ESCROW FUND" shall have the meaning set forth in Section
7.2 hereof.

     "TAXES" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against the Property or part thereof.

     "TEN YEAR TREASURY YIELD" shall mean the yield, calculated by linear
interpolation (rounded to three decimal places), of the yields of United States
Treasury Constant Maturities with the terms (one longer and one shorter) most
nearly approximating those of U.S. Obligations having maturities as close as
possible to April 1, 2026, as determined by Lender on the basis of Federal
Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S.
Governmental Security/Treasury Constant Maturities, or other recognized source
of financial market information selected by the Lender on the last Business Day
of the week immediately prior to the Anticipated Repayment Date.



     "TENANT DIRECTION LETTER" shall mean a letter in the form of Schedule IV
attached hereto from Borrower to the tenant under each Lease with respect to the
Property (whether such Lease is presently effective or executed after the
Closing Date) directing such tenant to send directly to the Cash Management
Account all payments of Rent payable to Borrower under such Lease.

     "THRESHOLD AMOUNT" shall have the meaning set forth in Section 5.1.21
hereof.

     "TITLE INSURANCE POLICY" shall mean, an ALTA mortgagee title insurance
policy in the form acceptable to Lender (or, if the Property is in a State which
does not permit the issuance of such ALTA policy, such form as shall be
permitted in such State and acceptable to Lender) issued with respect to the
Property and insuring the lien of the Mortgage.

     "TRANSFER" shall have the meaning set forth in Section 5.2.10(b) hereof.

     "TRANSFEREE" shall have the meaning set forth in Section 5.2.10(e)(iii)
hereof.

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

     "UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code
as in effect in the State in which the Property is located.

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

     "YIELD MAINTENANCE DEFAULT PREMIUM" shall mean an amount equal to the
greater of (a) two percent (2%) of the outstanding principal balance of the Loan
to be prepaid or satisfied and (b) the Defeasance Payment Amount that would be
required if a Defeasance Event were to occur at such time (whether or not then
permitted) in an amount equal to the outstanding principal amount of the Loan to
be prepaid or satisfied.

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

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

     II. GENERAL TERMS

     SECTION 2.1 LOAN COMMITMENT; DISBURSEMENT TO BORROWER.



          2.1.1 AGREEMENT TO LEND AND BORROW. Subject to and upon the terms and
conditions set forth herein, Lender hereby agrees to make and Borrower hereby
agrees to accept the Loan on the Closing Date.

          2.1.2 SINGLE DISBURSEMENT TO BORROWER. Borrower may request and
receive only one (1) borrowing hereunder in respect of the Loan and any amount
borrowed and repaid hereunder in respect of the Loan may not be reborrowed.

          2.1.3 THE NOTE, MORTGAGE AND LOAN DOCUMENTS. The Loan shall be
evidenced by the Note and secured by the Mortgage, the Assignment of Leases and
the other Loan Documents.

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

     SECTION 2.2 INTEREST RATE.

          2.2.1 INTEREST RATE. Interest on the outstanding principal balance of
the Loan shall accrue from (and including) the Closing Date to but excluding the
Anticipated Repayment Date at the Initial Interest Rate. Interest on the
outstanding principal balance of the Loan shall accrue from and including the
Anticipated Repayment Date to but excluding the Maturity Date at the Revised
Interest Rate.

          2.2.2 INTEREST CALCULATION. Interest on the outstanding principal
balance of the Loan shall be calculated by multiplying (a) the actual number of
days elapsed in the period for which the calculation is being made by (b) a
daily rate based on a three hundred sixty (360) day year by (c) the outstanding
principal balance.

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

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

     SECTION 2.3 LOAN PAYMENT.

          2.3.1 MONTHLY DEBT SERVICE PAYMENTS PRIOR TO THE ANTICIPATED REPAYMENT
DATE. (a) Borrower shall pay to Lender on the Closing Date, an amount equal to
interest only on the outstanding principal balance of the Loan from the Closing
Date up to and including March 31, 2006, and (b) on each Payment Date thereafter
up to and including the Anticipated Repayment Date, Borrower shall make a
payment to Lender of



interest only in an amount equal to the Monthly Debt Service Payment Amount,
which shall be applied to interest on the outstanding principal amount of the
Loan for the prior calendar month at the Initial Interest Rate.

          2.3.2 PAYMENTS AFTER ANTICIPATED REPAYMENT DATE. From and after the
Anticipated Repayment Date, interest shall accrue on the unpaid principal
balance from time to time at the Revised Interest Rate. On each Payment Date
occurring after the Anticipated Repayment Date Borrower shall (a) make a payment
to Lender of interest only calculated at the Initial Interest Rate, such payment
to be applied to interest in an amount equal to interest that would have accrued
on the outstanding principal balance of the Loan (without adjustment for Accrued
Interest) at the Initial Interest Rate, and (b) pay to Lender the other amounts
required to be paid in accordance with the terms hereof. Interest accrued at the
Revised Interest Rate and not paid pursuant to the preceding sentence shall be
added to the outstanding principal balance on the first day following such
Payment Date and shall earn interest at the Revised Interest Rate to the extent
permitted by law (such accrued interest referred to as, "Accrued Interest").

          2.3.3 PAYMENTS GENERALLY. The first (1st) interest accrual period
hereunder shall commence on and include the Closing Date and shall end on and
include March 31, 2006. Each interest accrual period thereafter shall commence
on the first (1st) day of each calendar month during the term of this Agreement
and shall end on and include the final calendar date of such calendar month. For
purposes of making payments hereunder, but not for purposes of calculating
interest accrual periods, if the day on which such payment is due is not a
Business Day, then amounts due on such date shall be due on the immediately
preceding Business Day and with respect to payments of principal due on the
Maturity Date, interest shall be payable at the Applicable Interest Rate or the
Default Rate, as the case may be, through and including the day immediately
preceding such Maturity Date. All amounts due under this Agreement and the other
Loan Documents shall be payable without setoff, counterclaim, defense or any
other deduction whatsoever.

          2.3.4 PAYMENT ON MATURITY DATE. Borrower shall pay to Lender on the
Maturity Date the outstanding principal balance of the Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Note, the
Mortgage and the other Loan Documents.

          2.3.5 LATE PAYMENT CHARGE. If any principal, interest or any other
sums due under the Loan Documents (including the amounts due on the Maturity
Date) are not paid by Borrower on or prior to the date on which it is due,
Borrower shall pay to Lender upon demand an amount equal to the lesser of five
percent (5%) of such unpaid sum or the Maximum Legal Rate in order to defray the
expense incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment. Any
such amount shall be secured by the Mortgage and the other Loan Documents to the
extent permitted by applicable law.

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

     SECTION 2.4 PREPAYMENTS.

          2.4.1 VOLUNTARY PREPAYMENTS. Except as otherwise provided in this
Section 2.4, Borrower shall not have the right to prepay the Loan in whole or in
part prior to the Anticipated Repayment Date. On the Payment Date three (3)
months prior to the Anticipated Repayment Date, or on any Payment Date
thereafter, Borrower may, at its option and upon thirty (30) days prior written
notice to Lender, prepay the Debt in whole or in part without payment of the
Yield Maintenance Premium or any other prepayment premium or penalty, provided,
however, if for any reason Borrower prepays the Loan on a date other than a
Payment Date, Borrower shall pay Lender, in addition to the Debt, all interest
which would have accrued on the amount of the Loan through and including the
Payment Date next occurring following the date of such prepayment.



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

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

          2.4.4 PREPAYMENT PRIOR TO DEFEASANCE EXPIRATION DATE. If the Permitted
Release Date has occurred but the Defeasance Expiration Date has not occurred,
the Debt may be prepaid in whole (but not in part) prior to the date permitted
under Section 2.4.1 hereof upon not less than thirty (30) days prior written
notice to Lender specifying the Payment Date on which prepayment is to be made
(a "Prepayment Date") provided no Event of Default exists and upon payment of an
amount equal to the Yield Maintenance Premium. Lender shall notify Borrower of
the amount and the basis of determination of the required prepayment
consideration. If any notice of prepayment is given, the Debt shall be due and
payable on the Prepayment Date. Lender shall not be obligated to accept any
prepayment of the Debt unless it is accompanied by the prepayment consideration
due in connection therewith. If for any reason Borrower prepays the Loan on a
date other than a Payment Date, Borrower shall pay Lender, in addition to the
Debt, all interest which would have accrued on the amount of the Loan through
and including the Payment Date next occurring following the date of such
prepayment.

     SECTION 2.5 DEFEASANCE.

          2.5.1 VOLUNTARY DEFEASANCE. (a) Provided no Event of Default shall
then exist, Borrower shall have the right at any time after the Defeasance
Expiration Date and prior to the date voluntarily prepayments are permitted
under Section 2.4.1 hereof to voluntarily defease all, but not part, of the Loan
by and upon satisfaction of the following conditions (such event being a
"DEFEASANCE EVENT"):

          (i) Borrower shall provide not less than thirty (30) days prior
     written notice to Lender specifying the Payment Date (the "DEFEASANCE
     DATE") on which the Defeasance Event is to occur;

          (ii) Borrower shall pay to Lender all accrued and unpaid interest on
     the principal balance of the Loan to and including the Defeasance Date. If
     for any reason the Defeasance Date is not a Payment Date, the Borrower
     shall also pay interest that would have accrued on the Note through and
     including the Payment Date immediately preceding the next Payment Date,
     provided, however, if the Defeasance Deposit shall include short-term
     interest computed from the date of such prepayment through to the next
     succeeding Payment Date, Borrower shall not be required to pay such short
     term interest pursuant to this sentence;

          (iii) Borrower shall pay to Lender all other sums, not including
     scheduled interest or principal payments, then due under the Note, this
     Agreement, the Mortgage and the other Loan Documents;

          (iv) Borrower shall pay to Lender the required Defeasance Deposit for
     the Defeasance Event;

          (v) Intentionally omitted;


          (vi) Borrower shall execute and deliver a pledge and security
     agreement, in form and substance that would be reasonably satisfactory to a
     prudent lender creating a first priority lien on the Defeasance Deposit and
     the U.S. Obligations purchased with the Defeasance Deposit in accordance
     with the provisions of this Section 2.5 (the "Security Agreement");

          (vii) Borrower shall deliver an opinion of counsel for Borrower that
     is standard in commercial lending transactions and subject only to
     customary qualifications, assumptions and exceptions opining, among other
     things, that Borrower has legally and validly transferred and assigned the
     U.S. Obligations and all obligations, rights and duties under and to the
     Note to the Successor Borrower, that Lender has a perfected first priority
     security interest in the Defeasance Deposit and the U.S. Obligations
     delivered by Borrower and that any REMIC Trust formed pursuant to a
     Securitization will not fail to maintain its status as a "real estate
     mortgage investment conduit" within the meaning of Section 860D of the Code
     as a result of such Defeasance Event;

          (viii) Borrower shall deliver confirmation in writing from each of the
     applicable Rating Agencies to the effect that such release will not result
     in a downgrade, withdrawal or qualification of the respective ratings in
     effect immediately prior to such Defeasance Event for the Securities issued
     in connection with the Securitization which are then outstanding. If
     required by the applicable Rating Agencies, Borrower shall also deliver or
     cause to be delivered an Additional Insolvency Opinion with respect to the
     Successor Borrower in form and substance satisfactory to Lender and the
     applicable Rating Agencies;

          (ix) Borrower shall deliver an Officer's Certificate certifying that
     the requirements set forth in this Section 2.5.1(a) have been satisfied;

          (x) Borrower shall deliver a certificate of Borrower's independent
     certified public accountant certifying that the U.S. Obligations purchased
     with the Defeasance Deposit will generate monthly amounts equal to or
     greater than the Scheduled Defeasance Payments;

          (xi) Borrower shall deliver such other certificates, documents or
     instruments as Lender may reasonably request; and

          (xii) Borrower shall pay all reasonable costs and expenses of Lender
     incurred in connection with the Defeasance Event, including (A) any
     reasonable costs and expenses associated with a release of the Lien of the
     Mortgage as provided in Section 2.6 hereof, (B) reasonable attorneys' fees
     and expenses incurred in connection with the Defeasance Event, (C) the
     reasonable costs and expenses of the Rating Agencies, (D) any revenue,
     documentary stamp or intangible taxes or any other tax or charge due in
     connection with the transfer of the Note, or otherwise required to
     accomplish the defeasance and (E) the reasonable costs and expenses of
     Servicer and any trustee, including reasonable attorneys' fees.

          (b) In connection with the Defeasance Event, Borrower shall use the
Defeasance Deposit to purchase U.S. Obligations which provide payments on or
prior to, but as close as possible to, all successive scheduled Payment Dates
after the Defeasance Date upon which interest and principal payments are
required under this Agreement and the Note, and in amounts equal to the
scheduled payments due on such dates under this Agreement and the Note
(including, without limitation, scheduled payments of principal, interest,
servicing fees (if any), and any other amounts due under the Loan Documents on
such Payment Dates) and assuming the Note is prepaid in full on the Anticipated
Repayment Date (the "Scheduled Defeasance Payments"). Borrower, pursuant to the
Security Agreement or other appropriate document, shall authorize and direct
that the payments received from the U.S. Obligations may be made directly to
Lender (or its designee) and applied to satisfy the Debt Service obligations of
Borrower under this Agreement and the Note. Any portion of the Defeasance
Deposit in excess of the amount necessary to purchase the U.S. Obligations
required by this Section 2.5 and satisfy Borrower's other obligations under this
Section 2.5 and Section 2.6 shall be remitted to Borrower.

          2.5.2 COLLATERAL. Each of the U.S. Obligations that are part of the
defeasance collateral shall be duly endorsed by the holder thereof as directed
by Lender or accompanied by a written instrument of transfer in



form and substance that would be satisfactory to a prudent lender (including,
without limitation, such instruments as may be required by the depository
institution holding such securities or by 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 collateral a first priority security interest therein in favor of
Lender in conformity with all applicable state and federal laws governing the
granting of such security interests.

          2.5.3 SUCCESSOR BORROWER. In connection with any Defeasance Event,
Borrower may at its option, or if so required by the applicable Rating Agencies
shall, establish or designate a successor entity (the "Successor Borrower")
acceptable to Lender, which shall be a Special Purpose Entity and Borrower shall
transfer and assign all obligations, rights and duties under and to the Note,
together with the pledged U.S. Obligations to such Successor Borrower. Such
Successor Borrower shall assume the obligations under the Note and the Security
Agreement and Borrower shall be relieved of its obligations under such
documents. Borrower shall pay One Thousand and 00/100 Dollars ($1,000) to any
such Successor Borrower as consideration for assuming the obligations under the
Note and the Security Agreement. Notwithstanding anything in this Agreement to
the contrary, no other assumption fee shall be payable upon a transfer of the
Note in accordance with this Section 2.5.3, but Borrower shall pay all
reasonable costs and expenses incurred by Lender, including Lender's reasonable
attorneys' fees and expenses and any reasonable fees and expenses of any Rating
Agencies, incurred in connection therewith.

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

          2.6.1 RELEASE OF PROPERTY.

          (a) If Borrower has elected to defease the entire Loan and the
requirements of Section 2.5 and this Section 2.6 have been satisfied, all of the
Property shall be released from the Lien of the Mortgage and the U.S.
Obligations, pledged pursuant to the Security Agreement, shall be the sole
source of collateral securing the Note.

          (b) In connection with a defeasance of the Loan, Borrower shall submit
to Lender, not less than thirty (30) days prior to the Defeasance Date, a
release of Lien (and related Loan Documents) for the Property for execution by
Lender. Such release shall be in a form appropriate in the jurisdiction in which
the Property is located and that would be satisfactory to a prudent lender and
contains standard provisions, if any, protecting the rights of the releasing
lender. In addition, Borrower shall provide all other documentation Lender
reasonably requires to be delivered by Borrower in connection with such release,
together with an Officer's Certificate certifying that such documentation (i) is
in compliance with all Legal Requirements, and (ii) will effect such releases in
accordance with the terms of this Agreement.

          2.6.2 RELEASE ON PAYMENT IN FULL. Lender shall, upon the written
request and at the expense of Borrower, upon payment in full of all principal
and interest due on the Loan and all other amounts due and payable under the
Loan Documents in accordance with the terms and provisions of the Note and this
Agreement, release the Lien of the Mortgage on the Property.

     SECTION 2.7 CASH MANAGEMENT.

          2.7.1 CLEARING BANK OPTION. Borrower shall have the option, to be
exercised and implemented not less than six months prior to the Anticipated
Repayment Date (the "CLEARING BANK OPTION"), to establish an account (the
"CLEARING ACCOUNT") at a bank acceptable to Lender in its reasonable discretion
(the "CLEARING BANK") to which each tenant at the Property shall be instructed
to deliver all Rents due under their respective Leases. Lender, Borrower and
Clearing Bank shall execute an agreement in form and substance acceptable to
Lender in its reasonable discretion (the "CLEARING BANK AGREEMENT") whereby
Clearing Bank agrees, among other things, that upon its receipt from Lender of a
notice that a Cash Management Trigger has occurred, all funds on deposit in the
Clearing Account shall be swept on a daily basis to the Cash Management Account.



Borrower shall be responsible for all fees, including fees charged by Clearing
Bank, in connection with the Clearing Account.

          2.7.2 CASH MANAGEMENT ACCOUNT.

          (a) In connection with the Closing, Borrower shall execute and deliver
to Lender a Tenant Direction Letter for each of the tenants at the Property,
which Tenant Direction Letter instructs each such tenant to deposit Rent and
other receivables related to the Property directly into an account (the "CASH
MANAGEMENT ACCOUNT") to be owned and controlled by Lender or Servicer (on behalf
of Lender) (the "AGENT"). Lender shall have a first priority security interest
in the Cash Management Account and all deposits at any time contained therein
and the proceeds thereof and will take all actions necessary to maintain in
favor of Lender a perfected first priority security interest in the Cash
Management Account, including, without limitation, executing and filing UCC-1
Financing Statements and continuations thereof. Such Cash Management Account
shall bear interest for the benefit of Borrower, and shall, at Lender's option,
be an Eligible Account. Borrower covenants and agrees to execute and deliver to
Lender a Tenant Direction Letter for each new tenant at the Property within
thirty (30) days after the execution of each new Lease for premises at the
Property. Lender will hold all Tenant Direction Letters in escrow; provided,
however, upon the occurrence of a Cash Management Trigger, unless the Clearing
Bank Option shall have been exercised and implemented, Lender shall have the
right to deliver a Tenant Direction Letter to each tenant at the Property.
Borrower constitutes and appoints Lender its true and lawful attorney in fact
with full power of substitution for purposes of executing the Tenant Direction
Letters should Borrower fail to do so within five (5) Business Days after
Lender's request. Such power of attorney shall be deemed to be a power coupled
with an interest and cannot be revoked.

          (b) Borrower shall be responsible for all fees, including fees charged
by Agent, in connection with the Cash Management Account.

          (c) Following a Cash Management Trigger, and provided no Event of
Default shall then exist, on each Payment Date (or, if such Payment Date is not
a Business Day, on the immediately preceding Business Day) all funds on deposit
in the Cash Management Account shall be applied by Lender to the payment of the
following items in the order indicated:

          (i) First, payments to the Tax and Insurance Escrow Fund in accordance
     with the terms and conditions of Section 7.2 hereof;

          (ii) Second, payment of the Monthly Debt Service Payment Amount,
     applied to the payment of interest computed at the Initial Interest Rate;

          (iii) Third, required payments to the Replacement Reserve Fund and the
     Rollover Reserve Fund in accordance with the terms and conditions hereof;

          (iv) Fourth, payment to the Lender of any other amounts then due and
     payable under the Loan Documents (other than Accrued Interest);

          (v) Fifth, on or after the Anticipated Repayment Date, payments for
     monthly Operating Expenses incurred in accordance with the related Approved
     Annual Budget pursuant to a written request for payment submitted by
     Borrower to Lender specifying the individual Operating Expenses in a form
     acceptable to Lender;

          (vi) Sixth, on or after the Anticipated Repayment Date, payments for
     Extraordinary Expenses approved by Lender, if any, pursuant to a written
     request for payment submitted by Borrower to Lender specifying the
     individual Extraordinary Expenses in a form acceptable to Lender;

          (vii) Seventh, on or after the Anticipated Repayment Date, payments to
     Lender in reduction of the outstanding principal balance of the Loan;



          (viii) Eighth, on or after the Anticipated Repayment Date, payments to
     Lender for Accrued Interest; and

          (ix) Lastly, payment of any excess amounts, if any, ("EXCESS CASH
     FLOW") to Borrower.

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

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

          (f) Notwithstanding anything herein to the contrary, upon a Cash
Management Termination Event, Lender promptly shall send revised Tenant
Direction Letters to each tenant directing such tenants to remit all rent due to
Borrower, and all funds remaining in the Cash Management Account shall be
returned to Borrower.

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

     III. CONDITIONS PRECEDENT

     SECTION 3.1 CONDITIONS PRECEDENT TO CLOSING. The obligation of Lender to
make the Loan hereunder is subject to the fulfillment by Borrower or waiver by
Lender of the following conditions precedent no later than the Closing Date:

          3.1.1 REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH CONDITIONS. The
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date with the same effect as if made on and as of such date,
and no Default or Event of Default shall have occurred and be continuing; and
Borrower shall be in compliance in all material respects with all terms and
conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed.

          3.1.2 LOAN AGREEMENT AND NOTE. Lender shall have received a copy of
this Agreement and the Note, in each case, duly executed and delivered on behalf
of Borrower.

          3.1.3 DELIVERY OF LOAN DOCUMENTS; TITLE INSURANCE; REPORTS; LEASES .

          (a) MORTGAGE, ASSIGNMENT OF LEASES. Lender shall have received from
Borrower fully executed and acknowledged counterparts of the Mortgage and the
Assignment of Leases and evidence that counterparts of the Mortgage and
Assignment of Leases have been delivered to the title company for recording, in
the reasonable judgment of Lender, so as to effectively create upon such
recording valid and enforceable Liens upon the Property, of the requisite
priority, in favor of Lender (or such other trustee as may be required or
desired under local law), subject only to the Permitted Encumbrances and such
other Liens as are permitted pursuant to the Loan Documents. Lender shall have
also received from Borrower fully executed counterparts of the other Loan
Documents.

          (b) TITLE INSURANCE. Lender shall have received the Title Insurance
Policy issued by a title company acceptable to Lender and dated as of the
Closing Date, with, to the extent reasonably required by Lender,



reinsurance and direct access agreements acceptable to Lender. Such Title
Insurance Policy shall (i) provide coverage in amounts satisfactory to Lender,
(ii) insure Lender that the Mortgage creates a valid lien on the Property of the
requisite priority, free and clear of all exceptions from coverage other than
Permitted Encumbrances and standard exceptions and exclusions from coverage (as
modified by the terms of any endorsements), (iii) contain such endorsements and
affirmative coverages as Lender may reasonably request, and (iv) name Lender as
the insured. The Title Insurance Policy shall be assignable. Lender also shall
have received evidence that all premiums in respect of such Title Insurance
Policy have been paid.

          (c) SURVEY. Lender shall have received a current survey for the
Property, certified to the title company and Lender and their successors and
assigns, in form and content satisfactory to Lender and prepared by a
professional and properly licensed land surveyor satisfactory to Lender in
accordance with the Accuracy Standards for ALTA/ACSM Land Title Surveys as
adopted by American Land Title Association, American Congress on Surveying &
Mapping and National Society of Professional Surveyors in 2005. The survey shall
reflect the same legal description contained in the Title Insurance Policy
referred to in clause (b) above and shall include, among other things, a metes
and bounds description of the real property comprising part of the Property
reasonably satisfactory to Lender. The surveyor's seal shall be affixed to the
survey and the surveyor shall provide a certification for the survey in form and
substance acceptable to Lender.

          (d) INSURANCE. Lender shall have received valid certificates of
insurance for the policies of insurance required hereunder, satisfactory to
Lender in its sole discretion, and evidence of the payment of all premiums
payable for the existing policy period.

          (e) ENVIRONMENTAL REPORTS. Lender shall have received a Phase I
environmental report (and, if recommended by the Phase I environmental report, a
Phase II environmental report) in respect of the Property, in each case
satisfactory in form and substance to Lender.

          (f) ZONING. Lender shall have received, at Lender's option, (i)
letters or other evidence with respect to the Property from the appropriate
municipal authorities (or other Persons) concerning applicable zoning and
building laws, and (ii) either (A) an ALTA 3.1 zoning endorsement for the
applicable Title Insurance Policy or (B) a zoning opinion letter, in each case
in substance reasonably satisfactory to Lender.

          (g) ENCUMBRANCES. Borrower shall have taken or caused to be taken such
actions in such a manner so that Lender has a valid and perfected first priority
Lien as of the Closing Date with respect to the Mortgage, subject only to
applicable Permitted Encumbrances and such other Liens as are permitted pursuant
to the Loan Documents, and Lender shall have received satisfactory evidence
thereof.

          3.1.4 RELATED DOCUMENTS. Each additional document not specifically
referenced herein, but relating to the transactions contemplated herein, shall
be in form and substance reasonably satisfactory to Lender, and shall have been
duly authorized, executed and delivered by all parties thereto and Lender shall
have received and approved copies thereof.

          3.1.5 DELIVERY OF ORGANIZATIONAL DOCUMENTS. On or before the Closing
Date, Borrower shall deliver or cause to be delivered to Lender copies certified
by Borrower of all organizational documentation related to Borrower and/or the
formation, structure, existence, good standing and/or qualification to do
business, as Lender may request in its sole discretion, including, without
limitation, amendments (as requested by Lender), good standing certificates,
qualifications to do business in the appropriate jurisdictions, resolutions
authorizing the entering into of the Loan and incumbency certificates as may be
requested by Lender.

          3.1.6 OPINIONS OF BORROWER'S COUNSEL. Lender shall have received
opinions from Borrower's counsel with respect to due execution, authority,
enforceability of the Loan Documents and such other matters as Lender may
require, all such opinions in form, scope and substance satisfactory to Lender
and Lender's counsel in their reasonable discretion.

          3.1.7 BUDGETS. Borrower shall have delivered, and Lender shall have
approved, the Annual Budget for the current Fiscal Year.



          3.1.8 BASIC CARRYING COSTS. Borrower shall have paid or cause to be
paid all Basic Carrying Costs relating to the Property which are in arrears,
including without limitation, (a) accrued but unpaid Insurance Premiums due
pursuant to the Policies, (b) currently due Taxes (including any in arrears)
relating to the Property, and (c) currently due Other Charges relating to the
Property, which amounts shall be funded with proceeds of the Loan.

          3.1.9 COMPLETION OF PROCEEDINGS. All organizational and other
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all documents
incidental thereto shall be satisfactory in form and substance to Lender, and
Lender shall have received all such counterpart originals or certified copies of
such documents as Lender may reasonably request.

          3.1.10 PAYMENTS. All payments, deposits or escrows required to be made
or established by Borrower under this Agreement, the Note and the other Loan
Documents on or before the Closing Date shall have been paid or will be paid out
of the proceeds of the Loan.

          3.1.11 TENANT ESTOPPELS. Lender shall have received an executed tenant
estoppel letter, which shall be in form and substance satisfactory to Lender,
from (a) each tenant identified by Lender as an "anchor tenant" of the Property,
(b) each tenant leasing an entire building at the Property, (c) each tenant
paying base rent in an amount equal to or exceeding five percent (5%) of the
Gross Income from Operations from the Property occupied by such tenant and (d)
disregarding the area leased by those described in clauses (a), (b) and (c),
lessees of not less than seventy-five percent (75%) of the remaining gross
leasable area of the Property.

          3.1.12 TRANSACTION COSTS. Borrower shall have paid or reimbursed
Lender for all title insurance premiums, recording and filing fees, costs of
environmental reports, Physical Conditions Report, appraisals and other reports,
the reasonable fees and costs of Lender's counsel and all other reasonable third
party out-of-pocket expenses incurred in connection with the origination and
closing of the Loan.

          3.1.13 MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in the financial condition or business condition of Borrower,
Guarantor or the Property since the date of the most recent financial statements
delivered to Lender. The income and expenses of the Property, the occupancy
thereof, and all other features of the transaction shall be as represented to
Lender without material adverse change. Neither Borrower nor Guarantor shall be
the subject of any bankruptcy, reorganization, or insolvency proceeding.

          3.1.14 LEASES AND RENT ROLL. Lender shall have received copies of all
tenant leases, which tenant leases shall be certified by Borrower as being true,
correct and complete and certified copies of all ground leases affecting the
Property, if any. Lender shall have received a current certified rent roll of
the Property, reasonably satisfactory in form and substance to Lender.

          3.1.15 SUBORDINATION, NONDISTURBANCE AND ATTORNMENT. Lender shall have
received appropriate instruments acceptable to Lender in its reasonable
discretion subordinating all of the Leases designated by Lender to the Mortgage.
Lender shall have received an agreement to attorn to Lender satisfactory to
Lender from any tenant under a Lease that does not provide for such attornment
by its terms. Lender shall agree in any such agreement to provide the applicable
tenant non-disturbance protection provided the applicable Lease is not in
default beyond applicable notice and grace periods.

          3.1.16 TAX LOT. Lender shall have received evidence that the Property
constitutes one (1) or more separate tax lots, which evidence shall be
reasonably satisfactory in form and substance to Lender.

          3.1.17 PHYSICAL CONDITIONS REPORT. Lender shall have received a
Physical Conditions Report with respect to the Property, which report shall be
issued by an engineer selected by Lender and shall be reasonably satisfactory in
form and substance to Lender.

          3.1.18 MANAGEMENT AGREEMENT. Lender shall have received a copy of the
Management Agreement with respect to the Property which shall be satisfactory in
form and substance to Lender.



          3.1.19 APPRAISAL. Lender shall have received an appraisal of the
Property, from an appraiser selected by Lender, which appraisal shall be
satisfactory in form and substance to Lender.

          3.1.20 FINANCIAL STATEMENTS. To the extent available to Borrower,
Lender shall have received a balance sheet with respect to the Property for the
two (2) most recent Fiscal Years and statements of income and statements of cash
flows with respect to the Property for the three (3) most recent Fiscal Years,
each in form and substance satisfactory to Lender.

          3.1.21 FURTHER DOCUMENTS. Lender or its counsel shall have received
such other documents and further approvals, opinions, documents and information
as Lender or its counsel may have reasonably requested including the Loan
Documents in form and substance satisfactory to Lender and its counsel.

     IV. REPRESENTATIONS AND WARRANTIES

     SECTION 4.1 BORROWER REPRESENTATIONS. Borrower represents and warrants as
of the date hereof and as of the Closing Date that:

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

          4.1.2 PROCEEDINGS. Borrower has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents. This Agreement and such other Loan Documents have been
duly executed and delivered by or on behalf of Borrower and constitute legal,
valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, subject only to applicable bankruptcy,
insolvency and similar laws affecting rights of creditors generally, and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).

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

          4.1.4 LITIGATION. There are no actions, suits or proceedings at law or
in equity by or before any Governmental Authority or other agency now pending or
threatened against or affecting Borrower, Guarantor or, to Borrower's actual
knowledge, the Property, which actions, suits or proceedings, if determined
against Borrower, Guarantor or the Property, might materially adversely affect
the condition (financial or otherwise) or business of Borrower, Guarantor or the
condition or ownership of the Property.

          4.1.5 AGREEMENTS. Borrower is not a party to any agreement or
instrument or subject to any restriction which might materially and adversely
affect Borrower or the Property, or Borrower's business, properties



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

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

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

          4.1.8 FULL AND ACCURATE DISCLOSURE. No statement of fact made by
Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading. There
is no material fact presently known to Borrower which has not been disclosed to
Lender which adversely affects, nor as far as Borrower can foresee, might
adversely affect, the Property or the business, operations or condition
(financial or otherwise) of Borrower.

          4.1.9 NO PLAN ASSETS. Borrower does not sponsor, is not obligated to
contribute to, and is not itself an "employee benefit plan," as defined in
Section 3(3) of ERISA, subject to Title I of ERISA or Section 4975 of the Code,
and none of the assets of Borrower constitutes or will constitute "plan assets"
of one or more such plans



within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) Borrower is
not a "governmental plan" within the meaning of Section 3(32) of ERISA and (b)
transactions by or with Borrower are not subject to any state or other statute,
regulation or other restriction regulating investments of, or fiduciary
obligations with respect to, governmental plans within the meaning of Section
3(32) of ERISA which is similar to the provisions of Section 406 of ERISA or
Section 4975 of the Code and which prohibit or otherwise restrict the
transactions contemplated by this Agreement, including but not limited to the
exercise by Lender of any of its rights under the Loan Documents.

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

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

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

          4.1.13 FEDERAL RESERVE REGULATIONS. No part of the proceeds of the
Loan will be used for the purpose of purchasing or acquiring any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.

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

          4.1.15 NOT A FOREIGN PERSON. Borrower is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.

          4.1.16 SEPARATE LOTS. To Borrower's actual knowledge, the Property is
comprised of one (1) or more parcels which constitute a separate tax lot or lots
and does not constitute a portion of any other tax lot not a part of the
Property.



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

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

          4.1.19 NO PRIOR ASSIGNMENT. There are no prior assignments as security
of the landlord's interest in the Leases or any portion of the Rents due and
payable or to become due and payable which are presently outstanding.

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

          4.1.21 USE OF PROPERTY. The Property is used exclusively for retail
purposes and other appurtenant and related uses.

          4.1.22 CERTIFICATE OF OCCUPANCY; LICENSES. All certifications,
permits, licenses and approvals, including without limitation, certificates of
completion and occupancy permits required for the legal use, occupancy and
operation of the Property as a retail center (collectively, the "Licenses"),
have been obtained and are in full force and effect. Borrower shall keep and
maintain (or cause to be kept and maintained) all Licenses necessary for the
operation of the Property as a retail center. The use being made of the Property
is in conformity with the certificate of occupancy issued for the Property.

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

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

          4.1.25 BOUNDARIES. To Borrower's actual knowledge and except as set
forth on the Survey, all of the improvements which were included in determining
the appraised value of the Property lie wholly within the boundaries and
building restriction lines of the Property, and no improvements on adjoining
properties encroach upon the Property, and no easements or other encumbrances
upon the Property encroach upon any of the



Improvements, so as to affect the value or marketability of the Property except
those which are insured against by the Title Insurance Policy.

          4.1.26 LEASES. The Property is not subject to any leases other than
the Leases described in the rent roll attached hereto as Schedule I and made a
part hereof. Borrower is the owner and lessor of landlord's interest in the
Leases. No Person has any possessory interest in the Property or right to occupy
the same except under and pursuant to the provisions of the Leases. The current
Leases are in full force and effect and, to Borrower's actual knowledge and
except as may be disclosed in any tenant estoppel certificates delivered to
Lender, there are no material defaults thereunder by either party and there are
no conditions that, with the passage of time or the giving of notice, or both,
would constitute material defaults thereunder. No Rent (including security
deposits) has been paid more than one (1) month in advance of its due date. To
Borrower's actual knowledge and except as may be disclosed in any tenant
estoppel certificates delivered to Lender, all work to be performed by Borrower
under each Lease has been performed as required and has been accepted by the
applicable tenant, and any payments, free rent, partial rent, rebate of rent or
other payments, credits, allowances or abatements required to be given by
Borrower to any tenant has already been received by such tenant. There has been
no prior sale, transfer or assignment (other than to Borrower), hypothecation or
pledge of any Lease or of the Rents received therein (other than sales,
transfers, assignments, hypothecations or pledges which may have been made by
the tenants under the Leases). To Borrower's actual knowledge and except as
indicated on Schedule I, no tenant listed on Schedule I has assigned its Lease
or sublet all or any portion of the premises demised thereby, no such tenant
holds its leased premises under assignment or sublease, nor does anyone except
such tenant and its employees occupy such leased premises. No tenant under any
Lease has a right or option pursuant to such Lease or otherwise to purchase all
or any part of the leased premises or the building of which the leased premises
are a part, other than rights of first refusal or rights of first offer
described in any Leases delivered to Lender prior to the date hereof. No tenant
under any Lease has any right or option for additional space in the
Improvements. To Borrower's actual knowledge and except as disclosed in any
environmental reports delivered to Lender in connection with the Loan, no
hazardous wastes or toxic substances, as defined by applicable federal, state or
local statutes, rules and regulations, have been disposed, stored or treated by
any tenant under any Lease on or about the leased premises nor does Borrower
have any actual knowledge of any tenant's intention to use its leased premises
for any activity which, directly or indirectly, involves the use, generation,
treatment, storage, disposal or transportation of any petroleum product or any
toxic or hazardous chemical, material, substance or waste, other than substances
of kinds and in amounts ordinarily and customarily used or stored for the
purposes of cleaning or other maintenance or operations and otherwise in
compliance with applicable environmental laws.

          4.1.27 SURVEY. To Borrower's actual knowledge, the Survey does not
fail to reflect any material matter affecting the Property or the title thereto.

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

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

          4.1.30 SPECIAL PURPOSE ENTITY/SEPARATENESS.



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

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

          (c) Intentionally omitted.

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

          4.1.32 ILLEGAL ACTIVITY. No portion of the Property has been or will
be purchased by Borrower with proceeds of any illegal activity.

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

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

          4.1.35 EMBARGOED PERSON. As of the Closing Date, to Borrower's
knowledge, (a) none of the funds or other assets of Borrower constitute property
of, or are beneficially owned, directly or indirectly, by any Embargoed Person;
(b) no Embargoed Person has any interest of any nature whatsoever in Borrower
with the result that the investment in Borrower (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law; and (c)
none of the funds of Borrower have been derived from any unlawful activity with
the result that the investment in Borrower (whether directly or indirectly), is
prohibited by law or the Loan is in violation of law, provided, however, with
respect to direct or indirect interests in Cole Credit Property Trust, Inc. or
Cole Credit Property Trust II, Inc., Lender acknowledges that Borrower has
relied exclusively on its U.S. broker-dealer network to implement the normal and
customary investor screening practices mandated by applicable law and NASD
regulations in making the foregoing representation.

          4.1.36 PRINCIPAL PLACE OF BUSINESS; STATE OF ORGANIZATION. Borrower's
principal place of business as of the date hereof is the address set forth in
the introductory paragraph of this Agreement. The Borrower is organized under
the laws of the State of Delaware.

          4.1.37 LOAN TO VALUE. Based on the appraisal delivered pursuant to
Section 3.1.19, the maximum principal amount of the Loan does not exceed 60% of
the fair market value of the Property.

          4.1.38 CASH MANAGEMENT ACCOUNT. Borrower hereby represents and
warrants to Lender that:



          (a) Upon the establishment of the Cash Management Account, this
Agreement, together with the other Loan Documents, will create a valid and
continuing security interest (as defined in the Uniform Commercial Code of the
state in which such account is located) in the Cash Management Account in favor
of Lender, which security interest is prior to all other Liens, other than
Permitted Encumbrances, and is enforceable as such against creditors of and
purchasers from Borrower;

          (b) Upon its establishment, the Cash Management Account will
constitute a "deposit account" and/or "securities account" within the meaning of
the Uniform Commercial Code of the state in which such account is located); and

          (c) Upon its establishment, the Cash Management Account will not be in
the name of any Person other than Borrower, as pledgor, or Lender, as pledgee.
Borrower has not consented to Agent complying with instructions with respect to
the Cash Management Account from any Person other than Lender.

     SECTION 4.2 SURVIVAL OF REPRESENTATIONS. Borrower agrees that all of the
representations and warranties of Borrower set forth in Section 4.1 hereof and
elsewhere in this Agreement and in the other Loan Documents shall survive for so
long as any amount remains owing to Lender under this Agreement or any of the
other Loan Documents by Borrower. All representations, warranties, covenants and
agreements made in this Agreement or in the other Loan Documents by Borrower
shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf.

     V. BORROWER COVENANTS

     SECTION 5.1 AFFIRMATIVE COVENANTS. From the date hereof and until payment
and performance in full of all obligations of Borrower under the Loan Documents
or the earlier release of the Lien of the Mortgage encumbering the Property (and
all related obligations) in accordance with the terms of this Agreement and the
other Loan Documents, Borrower hereby covenants and agrees with Lender that:

          5.1.1 EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower shall do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its existence, rights, licenses, permits and franchises and
comply with all Legal Requirements applicable to it and the Property. There
shall never be committed by Borrower, and Borrower shall never permit any other
Person in occupancy of or involved with the operation or use of the Property to
commit any act or omission affording the federal government or any state or
local government the right of forfeiture against the Property or any part
thereof or any monies paid in performance of Borrower's obligations under any of
the Loan Documents. Borrower hereby covenants and agrees not to commit, permit
or suffer to exist any act or omission affording such right of forfeiture.
Borrower shall at all times maintain, preserve and protect all franchises and
trade names and preserve all the remainder of its property used or useful in the
conduct of its business and shall keep the Property in good working order and
repair, and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and improvements thereto,
all as more fully provided in the Mortgage. Borrower shall cause the Property to
be insured at all times by financially sound and reputable insurers, to such
extent and against such risks, and cause to be maintained liability and such
other insurance, as is more fully provided in this Agreement. After prior
written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding promptly initiated and conducted in good faith and
with due diligence, the validity of any Legal Requirement, the applicability of
any Legal Requirement to Borrower or the Property or any alleged violation of
any Legal Requirement, provided that (i) no Event of Default has occurred and
remains uncured; (ii) Borrower is permitted to do so under the provisions of any
mortgage or deed of trust superior in lien to the Mortgage; (iii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any instrument to which Borrower is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable statutes, laws and ordinances; (iv) neither the
Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, cancelled or lost; (v) Borrower shall promptly upon
final determination thereof comply with any such Legal Requirement determined to
be valid or applicable or cure any violation of any Legal Requirement; (vi) such
proceeding shall suspend the enforcement of the contested Legal Requirement
against Borrower or the Property; and (vii) Borrower shall furnish such security
as may be required in the proceeding, or as may be requested by Lender, to
insure compliance with such Legal Requirement, together with all interest and
penalties payable in connection



therewith. Lender may apply any such security, as necessary to cause compliance
with such Legal Requirement at any time when, in the reasonable judgment of
Lender, the validity, applicability or violation of such Legal Requirement is
finally established or the Property (or any part thereof or interest therein)
shall be in danger of being sold, forfeited, terminated, cancelled or lost.

          5.1.2 TAXES AND OTHER CHARGES. Borrower shall pay or cause to be paid
all Taxes and Other Charges now or hereafter levied or assessed or imposed
against the Property or any part thereof as the same become due and payable;
provided, however, Borrower's obligation to directly pay (or cause to be paid)
Taxes shall be suspended for so long as Borrower complies with the terms and
provisions of Section 7.2 hereof. Borrower will deliver to Lender receipts for
payment or other evidence satisfactory to Lender that the Taxes and Other
Charges have been so paid or are not then delinquent no later than ten (10) days
prior to the date on which the Taxes and/or Other Charges would otherwise be
delinquent if not paid, provided, however, if the tenant under a Lease pays such
Taxes or Other Charges directly to the applicable authority and Borrower timely
requests and diligently pursues evidence of payment, and further provided that
no enforcement action has been commenced by the applicable authority resulting
from such tenant's failure to pay Taxes or Other Charges, Borrower shall have an
additional thirty (30) day period to provide such evidence to Lender. Borrower
shall not suffer and shall promptly cause to be paid and discharged any Lien or
charge whatsoever which may be or become a Lien or charge against the Property
(other than Permitted Encumbrances), and shall promptly pay for or cause to be
paid all utility services provided to the Property. After prior written notice
to Lender, Borrower, at its own expense, may contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any
Taxes or Other Charges, provided that (i) no Event of Default has occurred and
remains uncured; (ii) Borrower is permitted to do so under the provisions of any
mortgage or deed of trust superior in lien to the Mortgage; (iii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable statutes, laws and ordinances; (iv) neither the
Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, cancelled or lost; (v) Borrower shall promptly upon
final determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (vi) such proceeding shall suspend the collection of such
contested Taxes or Other Charges from the Property; and (vii) Borrower shall
furnish such security as may be required in the proceeding, or as may be
requested by Lender, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon. Lender may pay over any such
cash deposit or part thereof held by Lender to the claimant entitled thereto at
any time when, in the judgment of Lender, the entitlement of such claimant is
established or the Property (or part thereof or interest therein) shall be in
danger of being sold, forfeited, terminated, cancelled or lost or there shall be
any danger of the Lien of the Mortgage being primed by any related Lien (other
than Permitted Encumbrances).

     Notwithstanding the foregoing provisions of this Section 5.1.2, to the
extent the Leases with Academy Sports, O'Reilly Auto Parts, Specs Liquor,
Sherwin Williams and Jack-in-the-Box remain in effect and each such tenant
remains liable for the obligations under its respective Lease, the right to
contest the validity, applicability or amount of any asserted tax or assessment
shall be governed by such Leases.

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

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

          5.1.5 NOTICE OF DEFAULT. Borrower shall promptly advise Lender of any
material adverse change in Borrower's condition, financial or otherwise, or of
the occurrence of any Event of Default of which Borrower has actual knowledge.

          5.1.6 COOPERATE IN LEGAL PROCEEDINGS. Borrower shall cooperate fully
with Lender with respect to any proceedings before any court, board or other
Governmental Authority which may in any way affect



the rights of Lender hereunder or any rights obtained by Lender under any of the
other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings.

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

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

          5.1.9 FURTHER ASSURANCES. Borrower shall, at Borrower's sole cost and
expense:

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

          (b) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require; and

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

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

          5.1.11 FINANCIAL REPORTING. Borrower shall keep accurate books and
records of account of the Property and its own financial affairs sufficient to
permit the preparation of financial statements therefrom on the income tax basis
of accounting. Lender and its duly authorized representatives shall have the
right to examine, copy and audit Borrower's records and books of account at all
reasonable times. So long as this Agreement continues in



effect, Borrower shall provide to Lender, in addition to any other financial
statements required hereunder or under any of the other Loan Documents, the
following financial statements and information, all of which must be certified
to Lender as being true and correct by Borrower or the person or entity to which
they pertain, as applicable, and be prepared in accordance with the income tax
basis of accounting and be in form and substance reasonably acceptable to
Lender:

     (a) copies of any tax returns filed by Borrower, within thirty (30) days
after the date of filing;

     (b) [reserved]; and

     (c) quarterly operating statements for the Property, within forty-five (45)
days after the end of each March, June, September and December commencing with
March, 2006;

     (d) annual balance sheets for the Property and annual financial statements
for Borrower, each principal or general partner in Borrower, and each Guarantor,
within ninety (90) days after the end of each calendar year; and

     (e) such other information with respect to the Property, Borrower, the
principals or general partners in Borrower, and each Guarantor, which may be
reasonably requested from time to time by Lender, within a reasonable time after
the applicable request.

If any of the aforementioned materials are not furnished to Lender within the
applicable time periods or Lender is dissatisfied with the contents of any of
the foregoing and has notified Borrower of its dissatisfaction, in addition to
any other rights and remedies of Lender contained herein, (i) Borrower shall pay
to Lender upon demand, at Lender's option and in its sole discretion, an amount
equal to $1,000 for each of the aforementioned materials that is not delivered
in accordance with the income tax basis of accounting, provided Lender has given
Borrower at least 30 days prior written notice of such failure, and (ii) Lender
shall have the right, but not the obligation, to obtain the same by means of an
audit by an independent certified public accountant selected by Lender, in which
event Borrower agrees to pay, or to reimburse Lender for, any reasonable expense
of such audit and further agrees to provide all reasonably necessary information
to said accountant and to otherwise cooperate in the making of such audit.

Within sixty (60) days after the occurrence of a Cash Management Trigger, and
not later than sixty (60) days prior to the commencement of each Fiscal Year
thereafter until a Cash Management Termination Event shall have occurred,
Borrower shall submit to Lender an Annual Budget in form reasonably satisfactory
to Lender. The Annual Budget shall be subject to Lender's written approval (each
such approved Annual Budget, an "Approved Annual Budget"). In the event that
Lender objects to a proposed Annual Budget submitted by Borrower, Lender shall
advise Borrower of such objections within fifteen (15) days after receipt
thereof (and deliver to Borrower a reasonably detailed description of such
objections) and Borrower shall promptly revise such Annual Budget and resubmit
the same to Lender. Lender shall advise Borrower of any objections to such
revised Annual Budget within ten (10) days after receipt thereof (and deliver to
Borrower a reasonably detailed description of such objections) and Borrower
shall promptly revise the same in accordance with the process described in this
subsection until Lender approves the Annual Budget. Until such time that Lender
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 Taxes, Insurance Premiums and Other Charges. In the
event that, Borrower must incur an extraordinary operating expense or capital
expense not set forth in the Approved Annual Budget (each an "Extraordinary
Expense"), then Borrower shall promptly deliver to Lender a reasonably detailed
explanation of such proposed Extraordinary Expense for Lender's approval.

          5.1.12 BUSINESS AND OPERATIONS. Borrower will continue to engage in
the businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, management and operation of the
Property. Borrower will qualify to do business and will remain in good standing
under the laws of the jurisdiction of its formation as and to the extent the
same are required for the ownership, maintenance, management and operation of
the Property. Borrower shall at all times during the term of the Loan, continue
to own all of Equipment, Fixtures and Personal Property which are necessary to
operate the Property in the manner required



hereunder and in the manner in which it is currently operated, other than
Equipment, Fixtures and Personal Property owned by the tenants under the Leases.

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

          5.1.14 COSTS OF ENFORCEMENT. In the event (a) that the Mortgage
encumbering the Property is foreclosed in whole or in part or that the Mortgage
is put into the hands of an attorney for collection, suit, action or
foreclosure, (b) of the foreclosure of any mortgage encumbering the Property
prior to or subsequent to the Mortgage in which proceeding Lender is made a
party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Borrower or Guarantor or an assignment by Borrower or
Guarantor for the benefit of its creditors, Borrower, its successors or assigns,
shall be chargeable with and agrees to pay all costs of collection and defense,
including reasonable attorneys' fees and costs, incurred by Lender or Borrower
in connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, together with all required service or use
taxes.

          5.1.15 ESTOPPEL STATEMENT.

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

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

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

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

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

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



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

          5.1.20 LEASING MATTERS. Any Leases with respect to the Property
written after the date hereof, for more than 5,000 square feet shall be approved
by Lender, which approval shall not be unreasonably withheld, conditioned or
delayed. Upon request, Borrower shall furnish Lender with executed copies of all
Leases. All renewals of Leases and all proposed Leases shall provide for rental
rates comparable to existing local market rates. All proposed Leases shall be on
commercially reasonable terms and shall not contain any terms which would
materially affect Lender's rights under the Loan Documents. All Leases executed
after the date hereof shall provide that they are subordinate to the Mortgage
and that the lessee agrees to attorn to Lender or any purchaser at a sale by
foreclosure or power of sale. Borrower (i) shall observe and perform the
obligations imposed upon the lessor under the Leases in a commercially
reasonable manner; (ii) shall enforce and may amend or terminate the terms,
covenants and conditions contained in the Leases upon the part of the lessee
thereunder to be observed or performed in a commercially reasonable manner and
in a manner not to impair the value of the Property involved except that no
termination by Borrower or acceptance of surrender by a tenant of any Leases
shall be permitted unless by reason of a tenant default and then only in a
commercially reasonable manner to preserve and protect the Property; provided,
however, that no such termination or surrender of any Lease covering more than
5,000 square feet will be permitted without the written consent of Lender; (iii)
shall not collect any of the rents more than one (1) month in advance (other
than security deposits); (iv) shall not execute any other assignment of lessor's
interest in the Leases or the Rents (except as contemplated by the Loan
Documents); (v) shall not alter, modify or change the terms of the Leases in a
manner inconsistent with the provisions of the Loan Documents; and (vi) shall
execute and deliver at the request of Lender all such further assurances,
confirmations and assignments in connection with the Leases as Lender shall from
time to time reasonably require. Notwithstanding anything to the contrary
contained herein, Borrower shall not enter into a lease of all or substantially
all of the Property without Lender's prior written consent. Borrower shall
provide Lender, at least ten (10) Business Days prior notice for the approval or
rejection of any proposed Lease demising over 5,000 square feet (each a
"Material Lease"). Each such request shall include the notation "IMMEDIATE
RESPONSE REQUIRED" prominently displayed in bold, all caps and fourteen (14)
point or larger font at the top of the first page of the Material Lease approval
request and the envelope containing such request. In the event that Lender fails
to respond within such time period, Borrower shall submit a second approval
request to which Lender shall respond within five (5) Business Days. If Lender
fails to respond to such second notice within such period, such failure shall be
deemed to be the consent and approval of the Material Lease by Lender if (I)
Borrower has delivered to Lender all required documents and information
necessary to adequately and completely evaluate the Material Lease, (II)
Borrower has resubmitted the Material Lease with the notation "IMMEDIATE
RESPONSE REQUIRED, FAILURE TO RESPOND TO THIS LEASE APPROVAL REQUEST WITHIN FIVE
(5) BUSINESS DAYS FROM RECEIPT SHALL BE DEEMED TO BE LENDER'S APPROVAL OF THE
LEASE" prominently displayed in bold, all caps and fourteen (14) point or larger
font at the top of the first page of the Material Lease approval request and the
envelope containing such request, and (III) the proposed tenant (or its parent
if such parent guarantees the tenant's obligations under such proposed Lease)
shall have a credit rating issued by Standard and Poor's of BB or better (or an
equivalent rating issued by another nationally recognized rating agency
reasonably acceptable to Lender).

          5.1.21 ALTERATIONS. Borrower shall obtain Lender's prior written
consent to any alterations to any Improvements, which consent shall not be
unreasonably withheld or delayed except with respect to alterations that may
have a material adverse effect on Borrower's financial condition, the value of
the Property or the Net Operating Income. Notwithstanding the foregoing,
Lender's consent shall not be required in connection with (a) tenant improvement
work performed pursuant to the terms of any Lease executed on or before the date
hereof, (b) tenant improvement work performed pursuant to the terms of any Lease
executed after the date hereof, provided that such Lease shall satisfy the
requirements of Section 5.1.20, or (c) alterations performed in connection with
the Restoration of the Property after the occurrence of a Casualty or
Condemnation in accordance with the terms and provisions of this Agreement, and
in the case of clause (c), provided such alterations will not have a material
adverse effect on Borrower's financial condition, the value of the Property or
the Net Operating Income. If the total unpaid amounts due and payable with
respect to alterations to the Improvements at the Property (other than such
amounts to be paid or reimbursed by tenants under the Leases) shall at any time
exceed One Hundred Thousand and 00/100 Dollars ($100,000.00) (the "Threshold
Amount"), Borrower shall promptly deliver to Lender as security for the payment
of such amounts and as additional security for Borrower's obligations under the
Loan Documents any of



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

          5.1.22 OPERATION OF PROPERTY.

          (a) Borrower shall cause the Property to be operated, in all material
respects, in accordance with the Leases and Management Agreement (or Replacement
Management Agreement) as applicable. In the event that the Management Agreement
expires or the Property is removed from the application of the Management
Agreement (without limiting any obligation of Borrower to obtain Lender's
consent to any removal of the Property from the application of the Management
Agreement or modification of the Management Agreement as it relates to the
Property if required in accordance with the terms and provisions of this
Agreement), Borrower shall promptly enter into a Replacement Management
Agreement with Manager or another Qualified Manager, as applicable.

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

          5.1.23 EMBARGOED PERSON. Borrower has performed and shall perform
reasonable due diligence to insure that at all times throughout the term of the
Loan, including after giving effect to any Transfers permitted pursuant to the
Loan Documents, (a) none of the funds or other assets of Borrower and Guarantor
constitute property of, or are beneficially owned, directly or indirectly, by
any person, entity or government subject to trade restrictions under U.S. law,
including, but not limited to, The USA PATRIOT Act (including the anti-terrorism
provisions thereof), the International Emergency Economic Powers Act, 50 U.S.C.
Sections 1701, et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et
seq., and any Executive Orders or regulations promulgated thereunder including
those related to Specially Designated Nationals and Specially Designated Global
Terrorists, with the result that the investment in Borrower or Guarantor, as
applicable (whether directly or indirectly), is prohibited by law or the Loan
made by the Lender is in violation of law ("Embargoed Person"); (b) no Embargoed
Person has any interest of any nature whatsoever in Borrower or Guarantor, as
applicable, with the result that the investment in Borrower or Guarantor, as
applicable (whether directly or indirectly), is prohibited by law or the Loan is
in violation of law; and (c) none of the funds of Borrower or Guarantor, as
applicable, have been derived from, or are the proceeds of, any unlawful
activity, including money laundering, terrorism or terrorism activities, with
the result that the investment in Borrower or Guarantor, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of
law, or may cause the Property to be subject to forfeiture or seizure.
Notwithstanding the foregoing, with respect to the direct and indirect interests
in Cole Credit Property Trust, Inc. or Cole Credit Property Trust II, Inc.,
Borrower shall be permitted to rely exclusively on the implementation by its
U.S. broker-dealer network of the normal and customary investor screening
practices mandated by applicable law and NASD regulations in satisfaction of the
foregoing covenant.


     SECTION 5.2 NEGATIVE COVENANTS. From the date hereof until payment and
performance in full of all obligations of Borrower under the Loan Documents or
the earlier release of the Lien of the Mortgage encumbering the Property (and
all related obligations) in accordance with the terms of this Agreement and the
other Loan Documents, Borrower covenants and agrees with Lender that it will not
do, directly or indirectly, any of the following:

          5.2.1 OPERATION OF PROPERTY.

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

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

          5.2.2 LIENS. Borrower shall not create, incur, assume or suffer to
exist any Lien on any portion of the Property or permit any such action to be
taken, except:

          (a) Permitted Encumbrances;

          (b) Liens created by or permitted pursuant to the Loan Documents; and

          (c) Liens for Taxes or Other Charges not yet due.

          5.2.3 DISSOLUTION. Borrower shall not, without obtaining the prior
written consent of Lender or Lender's designee (a) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity,
(b) engage in any business activity not related to the ownership and operation
of the Property, (c) transfer, lease or sell, in one transaction or any
combination of transactions, the assets or all or substantially all of the
properties or assets of Borrower except to the extent permitted by the Loan
Documents, or (d) modify, amend, waive or terminate its organizational documents
(other than to evidence transfers permitted under this Agreement) or its
qualification and good standing in any jurisdiction.

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

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

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



          5.2.7 INTENTIONALLY OMITTED.

          5.2.8 INTENTIONALLY OMITTED.

          5.2.9 ERISA.

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

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

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

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

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

          5.2.10 TRANSFERS.

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

          (b) Without the prior written consent of Lender, and except to the
extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall
not permit any Restricted Party do any of the following (collectively, a
"Transfer"): (i) sell, convey, mortgage, grant, bargain, encumber, pledge,
assign, grant options with respect to, or otherwise transfer or dispose of
(directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) the Property or
any part thereof or any legal or beneficial interest therein or (ii) permit a
Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant
to Leases of space in the Improvements to tenants in accordance with the
provisions of Section 5.1.20 and (B) Permitted Transfers.

          (c) A Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower's right, title and interest
in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation
or trust, the sale, conveyance, transfer, disposition, alienation, hypothecation
or encumbering of more than 10% of the issued and outstanding capital stock of
such Restricted Party (or the issuance of new shares of capital stock in such
Restricted Party so that immediately after such issuance (in one or a series of
transactions) the total capital stock then issued and outstanding is more than
110% of the total immediately prior to such issuance); (iv) if a Restricted
Party is a limited or general



partnership or joint venture, a change in the ownership interests in any general
partner or any joint venturer, either voluntarily, involuntarily or otherwise,
or the sale, conveyance, transfer, disposition, alienation, hypothecation or
encumbering of all or any portion of the interest of any such general partner or
joint venturer (whether in the form of a beneficial, membership or partnership
interest or in the form of a power of direction, control or management, or
otherwise); or (v) if a Restricted Party is a limited liability company, a
change in the ownership interests in any managing member, either voluntarily,
involuntarily or otherwise, or the sale, conveyance, transfer, disposition,
alienation, hypothecation or encumbering of all or any portion of the interest
of any such managing member (whether in the form of a beneficial, membership or
partnership interest or in the form of a power of direction, control or
management, or otherwise).

          (d) Notwithstanding the foregoing, however, (i) limited partnership
interests in any Restricted Party shall be freely transferable without the
consent of Lender, (ii) any involuntary transfer caused by the death of any
Restricted Party or any general partner, shareholder, joint venturer, manager,
member or beneficial owner of a trust shall not be an Event of Default so long
as Borrower is reconstituted, if required, following such death and so long as
those persons responsible for the management of the Property and Borrower remain
unchanged as a result of such death or any replacement management is approved by
Lender, (iii) gifts for estate planning purposes of any individual's interests
in any Restricted Party to the spouse or any lineal descendant of such
individual, or to a trust for the benefit of any one or more of such individual,
spouse or lineal descendant, shall not be an Event of Default so long as
Borrower is reconstituted, if required, following such gift and so long as those
persons responsible for the management of the Property and Borrower remain
unchanged following such gift or any replacement management is approved by
Lender, and (iv) membership interests in any Restricted Party and interests in
any member of any Restricted Party (collectively, "Permitted Transfers") may be
transferred to any Affiliate of a Restricted Party without the consent of
Lender, provided that, at all times, Christopher H. Cole or Cole Credit Property
Trust II, Inc. must continue to Control Borrower and Guarantor.

          (e) Notwithstanding the foregoing provisions of this Section, at any
time other than the period commencing ninety (90) days prior to a Securitization
and ending thirty (30) days after such Securitization, Lender shall not withhold
its consent to a Transfer of the Property provided that Lender receives not less
than sixty (60) days prior written notice of such Transfer and no Event of
Default has occurred and is continuing, and further provided that the following
additional requirements are satisfied:

          (i) Borrower shall pay Lender an administrative fee of not more than
     $5,000 and an assumption fee equal to one-half-of-one percent (0.5%) of the
     outstanding principal balance of the Loan at the time of such transfer,
     provided, however, that (A) no administrative or assumption fee shall be
     payable in connection with a Transfer by the initial Borrower to an
     Identified Affiliate, and (B) an administrative fee of not more than
     $5,000, and no assumption fee, shall be payable in connection with a
     Transfer by an Identified Affiliate to another Identified Affiliate;

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

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

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

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



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

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

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

          (ix) Transferee and Transferee's Principals must be able to satisfy
     all the representations and covenants set forth in Sections 4.1.30 and
     5.2.9 of this Agreement, no Event of Default shall otherwise occur as a
     result of such Transfer, and Transferee and Transferee's Principals shall
     deliver (A) all organizational documentation reasonably requested by
     Lender, which shall be reasonably satisfactory to Lender and (B) all
     certificates, agreements and covenants reasonably required by Lender,
     provided that such certificates, agreements and covenants shall not
     materially increase the obligations of Borrower under the Loan Documents or
     materially decrease the rights of Borrower under the Loan Documents;

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

          (xi) Intentionally omitted;

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

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

          (xiv) The Property shall be managed by a Qualified Manager pursuant to
     a Replacement Management Agreement.

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

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

     VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS

     SECTION 6.1 INSURANCE.



          (a) From the date hereof until payment and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the
Lien of the Mortgage encumbering the Property (and all related obligations) in
accordance with the terms of this Agreement and the other Loan Documents,
Borrower shall obtain and maintain, or cause to be maintained, insurance for
Borrower and the Property providing at least the following coverages:

          (i) comprehensive all risk insurance ("Special Form") including, but
     not limited to, loss caused by any type of windstorm or hail on the
     Improvements and the Personal Property, (A) in an amount equal to one
     hundred percent (100%) of the "Full Replacement Cost," which for purposes
     of this Agreement shall mean actual replacement value (exclusive of costs
     of excavations, foundations, underground utilities and footings) with a
     waiver of depreciation, but the amount shall in no event be less than the
     outstanding principal balance of the Loan; (B) containing an agreed amount
     endorsement with respect to the Improvements and Personal Property waiving
     all co-insurance provisions or to be written on a no co-insurance form; (C)
     providing for no deductible in excess of Ten Thousand and 00/100 Dollars
     ($10,000.00) for all such insurance coverage excluding windstorm and
     earthquake and (D) if any of the Improvements or the use of the Property
     shall at any time constitute legal non-conforming structures or uses,
     coverage for loss due to operation of law in an amount equal to the full
     Replacement Cost, coverage for demolition costs and coverage for increased
     costs of construction. In addition, Borrower shall obtain: (x) if any
     portion of the Improvements is currently or at any time in the future
     located in a federally designated "special flood hazard area", flood hazard
     insurance in an amount equal to the lesser of (1) the outstanding principal
     balance of the Note or (2) the maximum amount of such insurance available
     under the National Flood Insurance Act of 1968, the Flood Disaster
     Protection Act of 1973 or the National Flood Insurance Reform Act of 1994,
     as each may be amended or such greater amount as Lender shall reasonably
     require and (y) earthquake insurance in amounts and in form and substance
     reasonably satisfactory to Lender in the event the Property is located in
     an area with a high degree of seismic activity;

          (ii) business income insurance (A) with loss payable to Lender; (B)
     covering all risks required to be covered by the insurance provided for in
     subsection (i) above; (C) in an amount equal to one hundred percent (100%)
     of the projected gross revenues from the operation of the Property (as
     reduced to reflect expenses not incurred during a period of Restoration)
     for a period of at least twelve (12) months after the date of the Casualty;
     and (D) containing an extended period of indemnity endorsement which
     provides that after the physical loss to the Improvements and Personal
     Property has been repaired, the continued loss of income will be insured
     until such income either returns to the same level it was at prior to the
     loss, or the expiration of six (6) months from the date that the Property
     is repaired or replaced and operations are resumed, whichever first occurs,
     and notwithstanding that the policy may expire prior to the end of such
     period. The amount of such business income insurance shall be determined
     prior to the date hereof and at least once each year thereafter based on
     Borrower's reasonable estimate of the gross revenues from the Property for
     the succeeding twelve (12) month period. Notwithstanding the provisions of
     Section 2.7.1 hereof, all proceeds payable to Lender pursuant to this
     subsection shall be held by Lender and shall be applied to the obligations
     secured by the Loan Documents from time to time due and payable hereunder
     and under the Note; provided, however, that nothing herein contained shall
     be deemed to relieve Borrower of its obligations to pay the obligations
     secured by the Loan Documents on the respective dates of payment provided
     for in this Agreement and the other Loan Documents except to the extent
     such amounts are actually paid out of the proceeds of such business income
     insurance;

          (iii) at all times during which structural construction, repairs or
     alterations are being made with respect to the Improvements, and only if
     the Property coverage form does not otherwise apply, (A) owner's contingent
     or protective liability insurance, otherwise known as Owner Contractor's
     Protective Liability, covering claims not covered by or under the terms or
     provisions of the below mentioned commercial general liability insurance
     policy and (B) the insurance provided for in subsection (i) above written
     in a so-called builder's risk completed value form (1) on a non-reporting
     basis, (2) against all risks insured against pursuant to subsection (i)
     above, (3) including permission to occupy the Property and (4) with an
     agreed amount endorsement waiving co-insurance provisions;



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

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

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

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

          (viii) umbrella and excess liability insurance in an amount not less
     than Three Million and 00/100 Dollars ($3,000,000.00) per occurrence on
     terms consistent with the commercial general liability insurance policy
     required under subsection (v) above, including, but not limited to,
     supplemental coverage for employer liability and automobile liability,
     which umbrella liability coverage shall apply in excess of the automobile
     liability coverage in clause (vi) above;

          (ix) If the policy or policies of insurance covering the risks
     required to be covered under Section 6.1(a) do not provide coverage for
     acts of terrorism, Borrower shall make commercially reasonable efforts to
     obtain and maintain a separate policy providing such coverages in the event
     of any act of terrorism, provided such coverage is available for properties
     similar to the Property and located in or around the region in which the
     Property is located; and

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

          (b) All insurance provided for in Section 6.1(a) hereof, shall be
obtained under valid and enforceable policies (collectively, the "Policies" or
in the singular, the "Policy"), and shall be subject to the approval of Lender
as to insurance companies, amounts, deductibles, loss payees and insureds. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State and having a claims paying
ability rating of "A-" or better (and the equivalent thereof) by at least two
(2) of the Rating Agencies rating the Securities (one (1) of which shall be S&P
if they are rating the Securities and one (1) of which will be Moody's if they
are rating the Securities), or if only one (1) Rating Agency is rating the
Securities, then only by such Rating Agency. The Policies described in Section
6.1 hereof (other than those strictly limited to liability protection) shall
designate Lender as loss payee. Not less than ten (10) days prior to the
expiration dates of the Policies theretofore furnished to Lender, certificates
of insurance evidencing the Policies accompanied by evidence satisfactory to
Lender of payment of the premiums due thereunder (the "Insurance Premiums"),
shall be delivered by Borrower to Lender.

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



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

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

          (i) no act or negligence of Borrower, or anyone acting for Borrower,
     or of any tenant or other occupant, or failure to comply with the
     provisions of any Policy, which might otherwise result in a forfeiture of
     the insurance or any part thereof, shall in any way affect the validity or
     enforceability of the insurance insofar as Lender is concerned;

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

          (iii) the issuers thereof shall give written notice to Lender if the
     Policy has not been renewed thirty (30) days prior to its expiration; and

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

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

          (g) To the extent that any portion of the Improvements consisting of
an entire building separate in all respects from any other building comprising
part of the Improvements is occupied by a single tenant, and such tenant
provides insurance satisfying the requirements hereof with respect to such
Improvements (including, without limitation, naming Lender as an additional
insured or loss payee, as applicable), such insurance shall satisfy Borrower's
obligations hereunder. In addition, provided no default shall exist under such
tenant's Lease, and further provided that such tenant (or the corporate
guarantor of such tenant's Lease) shall maintain a credit rating issued by
Standard and Poor's of BB or better (or an equivalent rating issued by another
nationally recognized rating agency reasonably acceptable to Lender), such
tenant shall be permitted to self-insure in accordance with its Lease with
respect to the coverage required hereunder, and such self-insurance shall be
deemed to satisfy the requirements hereof. Lender acknowledges that the
insurance in place as of the date hereof, as evidenced by the certificates of
insurance provided by Borrower and each tenant in connection with the closing of
the Loan, shall be deemed to satisfy the foregoing requirements as in effect on
the date hereof.

     SECTION 6.2 CASUALTY. If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty (a "Casualty"), Borrower shall give
prompt notice of such damage to Lender and shall promptly commence and
diligently prosecute the completion of the Restoration of the Property pursuant
to Section 6.4 hereof as nearly as possible to the condition the Property was in
immediately prior to such Casualty, with such alterations as may be reasonably
approved by Lender and otherwise in accordance with Section 6.4 hereof. Borrower
shall pay (or cause to be paid) all costs of such Restoration whether or not
such costs are covered by insurance. Lender may, but shall not be obligated to
make proof of loss if not made promptly by Borrower. In addition, Lender may
participate in any settlement discussions with any insurance companies (and
shall approve the final settlement, which approval shall not be unreasonably
withheld or delayed) with respect to any Casualty in which the Net Proceeds or
the costs of completing the Restoration are equal to or greater than One Hundred
Thousand and 00/100



Dollars ($100,000.00) and Borrower shall deliver to Lender all instruments
required by Lender to permit such participation.

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

     SECTION 6.4 RESTORATION. The following provisions shall apply in connection
with the Restoration of the Property:

          (a) If the Net Proceeds shall be less than One Hundred Thousand and
00/100 Dollars ($100,000.00) and the costs of completing the Restoration shall
be less than One Hundred Thousand and 00/100 Dollars ($100,000.00), the Net
Proceeds will be disbursed by Lender to Borrower upon receipt, provided that all
of the conditions set forth in Section 6.4(b)(i) hereof are met and Borrower
delivers to Lender a written undertaking to expeditiously commence and to
satisfactorily complete with due diligence the Restoration in accordance with
the terms of this Agreement.

          (b) If the Net Proceeds are equal to or greater than One Hundred
Thousand and 00/100 Dollars ($100,000.00) or the costs of completing the
Restoration are equal to or greater than One Hundred Thousand and 00/100 Dollars
($100,000.00) Lender shall make the Net Proceeds available for the Restoration
in accordance with the provisions of this Section 6.4. The term "Net Proceeds"
for purposes of this Section 6.4 shall mean: (i) the net amount of all insurance
proceeds received by Lender pursuant to Section 6.1 (a)(i), (iv), (ix) and (x)
as a result of such damage or destruction, after deduction of its reasonable
costs and expenses (including, but not limited to, reasonable counsel fees), if
any, in collecting same ("Insurance Proceeds"), or (ii) the net amount of the
Award, after deduction of its reasonable costs and expenses (including, but not
limited to, reasonable counsel fees), if any, in collecting same ("Condemnation
Proceeds"), whichever the case may be.

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

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

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

               (C) Intentionally omitted;



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

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

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

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

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

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

               (J) the Debt Service Coverage Ratio for the Property, after
     giving effect to the Restoration, shall be equal to or greater than 1.38 to
     1.0;

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

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

          (ii) The Net Proceeds shall be held by Lender in an interest-bearing
     account and, until disbursed in accordance with the provisions of this
     Section 6.4(b), shall constitute additional security for the Debt and Other
     Obligations under the Loan Documents. The Net Proceeds shall be disbursed
     by Lender to, or as directed by, Borrower from time to time during the
     course of the Restoration, upon receipt of evidence satisfactory to Lender
     that (A) all materials installed and work and labor performed (except to
     the extent that they are to be paid for out of the requested disbursement)
     in connection with the Restoration have been paid for in full, and (B)
     there exist no notices of pendency, stop orders, mechanic's or
     materialman's liens or notices of intention to file same, or any other
     liens or encumbrances of any nature whatsoever on the Property which have
     not either been fully bonded to the satisfaction of Lender or discharged of
     record or in the alternative fully insured to the satisfaction of Lender by
     the title company issuing the Title Insurance Policy.

          (iii) All plans and specifications required in connection with the
     Restoration shall be subject to prior review and acceptance in all respects
     by Lender and by an independent consulting engineer selected by Lender (the
     "Casualty Consultant"), such acceptance not to be unreasonably withheld,
     conditioned or delayed. Lender shall have the use of the plans and
     specifications and all permits, licenses



     and approvals required or obtained in connection with the Restoration. The
     identity of the contractors, subcontractors and materialmen engaged in the
     Restoration, as well as the contracts under which they have been engaged,
     shall be subject to prior review and acceptance by Lender and the Casualty
     Consultant, such acceptance not to be unreasonably withheld, conditioned or
     delayed. All reasonable costs and expenses incurred by Lender in connection
     with making the Net Proceeds available for the Restoration including,
     without limitation, reasonable counsel fees and disbursements and the
     Casualty Consultant's reasonable fees, shall be paid by Borrower.

          (iv) In no event shall Lender be obligated to make disbursements of
     the Net Proceeds in excess of an amount equal to the costs actually
     incurred from time to time for work in place as part of the Restoration, as
     certified by the Casualty Consultant, minus the Casualty Retainage. The
     term "Casualty Retainage" shall  mean an amount equal to ten percent (10%)
     of the costs actually incurred for work in place as part of the
     Restoration, as certified by the Casualty Consultant, until the Restoration
     has been completed. The Casualty Retainage shall in no event, and
     notwithstanding anything to the contrary set forth above in this Section
     6.4(b), be less than the amount actually held back by Borrower from
     contractors, subcontractors and materialmen engaged in the Restoration. The
     Casualty Retainage shall not be released until the Casualty Consultant
     certifies to Lender that the Restoration has been completed in accordance
     with the provisions of this Section 6.4(b) and that all approvals necessary
     for the re-occupancy and use of the Property have been obtained from all
     appropriate governmental and quasi-governmental authorities, and Lender
     receives evidence satisfactory to Lender that the costs of the Restoration
     have been paid in full or will be paid in full out of the Casualty
     Retainage; provided, however, that Lender will release the portion of the
     Casualty Retainage being held with respect to any contractor, subcontractor
     or materialman engaged in the Restoration as of the date upon which the
     Casualty Consultant certifies to Lender that the contractor, subcontractor
     or materialman has satisfactorily completed all work and has supplied all
     materials in accordance with the provisions of the contractor's,
     subcontractor's or materialman's contract, the contractor, subcontractor or
     materialman delivers the lien waivers and evidence of payment in full of
     all sums due to the contractor, subcontractor or materialman as may be
     reasonably requested by Lender or by the title company issuing the Title
     Insurance Policy, and Lender receives an endorsement to the Title Insurance
     Policy insuring the continued priority of the lien of the Mortgage and
     evidence of payment of any premium payable for such endorsement. If
     required by Lender, the release of any such portion of the Casualty
     Retainage shall be approved by the surety company, if any, which has issued
     a payment or performance bond with respect to the contractor, subcontractor
     or materialman.

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

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

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



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

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

          (e) Notwithstanding the foregoing provisions of this Section 6.4, to
the extent the Lease with Academy Sports remains in effect and Academy Sports
remains liable for the obligations under its Lease, the disposition of any
Casualty insurance proceeds and any Award shall be governed by such Lease.

     VII. RESERVE FUNDS

     SECTION 7.1 REQUIRED REPAIRS.

          7.1.1 DEPOSITS. Borrower shall perform or cause to be performed the
repairs at the Property, as more particularly set forth on Schedule II hereto
(such repairs hereinafter referred to as "Required Repairs"). Borrower shall
complete the Required Repairs on or before the required deadline for each repair
as set forth on Schedule II. It shall be an Event of Default under this
Agreement if Borrower does not complete the Required Repairs at the Property by
the required deadline for each repair as set forth on Schedule II, provided,
that if such repair cannot reasonably be completed by the required deadline for
such repair and Borrower has commenced such repair before the required deadline
and thereafter diligently and expeditiously proceeds to complete the same, the
required deadline shall be extended for such time as is reasonably necessary for
Borrower to complete such repair in the exercise of due diligence. Upon the
occurrence of such an Event of Default, Lender, at its option, may withdraw all
Required Repair Funds from the Required Repair Account and Lender may apply such
funds either to completion of the Required Repairs at the Property or toward
payment of the Debt in such order, proportion and priority as Lender may
determine in its sole discretion. Lender's right to withdraw and apply Required
Repair Funds shall be in addition to all other rights and remedies provided to
Lender under this Agreement and the other Loan Documents. On the Closing Date,
Borrower shall deposit with Lender the amount for the Property set forth on such
Schedule II hereto to perform the Required Repairs for the Property. Amounts so
deposited with Lender shall be held by Lender in accordance with Section 7.5
hereof. Amounts so deposited shall hereinafter be referred to as Borrower's
"Required Repair Fund" and the account in which such amounts are held shall
hereinafter be referred to as Borrower's "Required Repair Account".

          7.1.2 RELEASE OF REQUIRED REPAIR FUNDS. Lender shall disburse to
Borrower the Required Repair Funds from the Required Repair Account from time to
time upon satisfaction by Borrower of each of the following conditions: (a)
Borrower shall submit a written request for payment to Lender at least fifteen
(15) days prior to the date on which Borrower requests such payment be made and
specifies the Required Repairs to be paid, (b) on the date such payment is to be
made, no Event of Default shall exist and remain uncured, (c) Lender shall have
received an Officers' Certificate (i) stating that all Required Repairs to be
funded by the requested disbursement have been completed in good and workmanlike
manner and in accordance with all applicable federal, state and local laws,
rules and regulations, such certificate to be accompanied by a copy of any
license, permit or other approval by any Governmental Authority required to
commence and/or complete the Required Repairs, (ii) identifying each Person that
supplied materials or labor in connection with the Required Repairs to be funded
by the requested disbursement, and (iii) stating that each such Person has been
paid in full or will be paid in full upon such disbursement, such Officers'
Certificate to be accompanied by lien waivers or other evidence of payment
satisfactory to Lender, (d) at Lender's option, a title search for the Property
indicating that the Property is free from all liens, claims and other
encumbrances other than Permitted Encumbrances and those previously approved by
Lender, and (e) Lender shall have received such other evidence as Lender shall
reasonably request that the Required Repairs to be funded by the requested
disbursement have been completed and are paid for or will be paid upon such



disbursement to Borrower. Lender shall not be required to make disbursements
from the Required Repair Account with respect to the Property unless such
requested disbursement is in an amount greater than Twenty-five Thousand and
00/100 Dollars ($25,000.00) (or a lesser amount if the total amount in the
Required Repair Account is less than Twenty-five Thousand and 00/100 Dollars
($25,000.00), in which case only one disbursement of the amount remaining in the
account shall be made) and such disbursement shall be made only upon
satisfaction of each condition contained in this Section 7.1.2.

     SECTION 7.2 TAX AND INSURANCE ESCROW FUND. Borrower shall pay to Lender on
each Payment Date (a) one-twelfth (1/12) of the Taxes and Other Charges that
Lender estimates will be payable during the next ensuing twelve (12) months in
order to accumulate with Lender sufficient funds to pay all such Taxes and Other
Charges at least thirty (30) days prior to their respective due dates, and (b)
one-twelfth (1/12) of the Insurance Premiums that Lender estimates will be
payable for the renewal of the coverage afforded by the Policies upon the
expiration thereof in order to accumulate with Lender sufficient funds to pay
all such Insurance Premiums at least thirty (30) days prior to the expiration of
the Policies (said amounts in (a) and (b) above hereinafter called the "Tax and
Insurance Escrow Fund"). The Tax and Insurance Escrow Fund and the Monthly Debt
Service Payment Amount, shall be added together and shall be paid as an
aggregate sum by Borrower to Lender. Lender will apply the Tax and Insurance
Escrow Fund to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to Sections 5.1.2 and 6.1 hereof and under the Mortgage. In
making any payment relating to the Tax and Insurance Escrow Fund, Lender may do
so according to any bill, statement or estimate procured from the appropriate
public office (with respect to Taxes) or insurer or agent (with respect to
Insurance Premiums), without inquiry into the accuracy of such bill, statement
or estimate or into the validity of any tax, assessment, sale, forfeiture, tax
lien or title or claim thereof. If the amount of the Tax and Insurance Escrow
Fund shall exceed the amounts due for Taxes, Other Charges and Insurance
Premiums pursuant to Sections 5.1.2 and 6.1 hereof, Lender shall, in its sole
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Tax and Insurance Escrow Fund. Any amount remaining
in the Tax and Insurance Escrow Fund after the Debt has been paid in full shall
be returned to Borrower. If at any time Lender reasonably determines that the
Tax and Insurance Escrow Fund is not or will not be sufficient to pay Taxes,
Other Charges and Insurance Premiums by the dates set forth in (a) and (b)
above, Lender shall notify Borrower of such determination and Borrower shall
increase its monthly payments to Lender by the amount that Lender estimates is
sufficient to make up the deficiency at least thirty (30) days prior to the due
date of the Taxes and Other Charges and/or thirty (30) days prior to expiration
of the Policies, as the case may be.

     Notwithstanding the foregoing, provided no Event of Default shall exist, in
the event that Borrower provides (1) evidence satisfactory to Lender that the
Property is insured in accordance with Section 6.1 of this Agreement, and (2)
evidence satisfactory to Lender that the Taxes and Other Charges for the
Property have been paid in accordance with the requirements set forth in this
Agreement, Lender waives the requirement set forth herein for Borrower to make
deposits into the Tax and Insurance Escrow Fund for the payment of Insurance
Premiums and for payment of Taxes and Other Charges, provided, however, Lender
expressly reserves the right to require Borrower to make deposits to the Tax and
Insurance Escrow Fund for the payment of Insurance Premiums and/or for payment
of Taxes and Other Charges if an Event of Default shall exist, or Borrower fails
to provide to Lender evidence that the Property is insured in accordance with
Section 6.1 of this Agreement or that Taxes and Other Charges have been paid in
accordance with the requirements of this Agreement, in either case, within ten
(10) days of Lender's request.

     SECTION 7.3 REPLACEMENTS AND REPLACEMENT RESERVE.

          7.3.1 REPLACEMENT RESERVE FUND. Borrower shall pay to Lender on each
Payment Date one-twelfth (1/12) of an annualized amount equal to $0.17 per gross
leaseable square foot at the Property (the "Replacement Reserve Monthly
Deposit") reasonably estimated by Lender in its sole discretion to be due for
replacements and repairs required to be made to the Property during the calendar
year (collectively, the "Replacements"). Amounts so deposited shall hereinafter
be referred to as Borrower's "Replacement Reserve Fund" and the account in which
such amounts are held shall hereinafter be referred to as Borrower's
"Replacement Reserve Account". Lender may reassess its estimate of the amount
necessary for the Replacement Reserve Fund from time to time, and may increase
the monthly amounts required to be deposited into the Replacement Reserve Fund
upon thirty (30) days notice to Borrower if Lender determines in its reasonable
discretion that an increase is



necessary to maintain the proper maintenance and operation of the Property.
Notwithstanding the foregoing, provided no Event of Default shall exist, in the
event that Lender determines, in its reasonable discretion, that the Property is
being maintained at a standard required under any applicable Lease and
consistent with similar properties owned by other national retail property
owners operating in the market in which the Property is located, Lender waives
the requirement set forth herein for Borrower to make the Replacement Reserve
Monthly Deposit, provided, however, Lender expressly reserves the right to
require Borrower to make the Replacement Reserve Monthly Deposit if an Event of
Default shall exist, or Lender determines that the Property is not being so
maintained.

          7.3.2 DISBURSEMENTS FROM REPLACEMENT RESERVE ACCOUNT.

          (a) Lender shall make disbursements from the Replacement Reserve
Account to pay Borrower only for the costs of the Replacements. Lender shall not
be obligated to make disbursements from the Replacement Reserve Account to
reimburse Borrower for the costs of routine maintenance to the Property,
replacements of inventory or for costs which are to be reimbursed from the
Required Repair Fund or Rollover Reserve Fund.

          (b) Lender shall, upon written request from Borrower and satisfaction
of the requirements set forth in this Section 7.3.2, disburse to Borrower
amounts from the Replacement Reserve Account necessary to pay for the actual
approved costs of Replacements or to reimburse Borrower therefor, upon
completion of such Replacements (or, upon partial completion in the case of
Replacements made pursuant to Section 7.3.2(e) hereof) as determined by Lender.
In no event shall Lender be obligated to disburse funds from the Replacement
Reserve Account if a Default or Event of Default exists.

          (c) Each request for disbursement from the Replacement Reserve Account
shall be in a form specified or approved by Lender and shall specify (i) the
specific Replacements for which the disbursement is requested, (ii) the quantity
and price of each item purchased, if the Replacement includes the purchase or
replacement of specific items, (iii) the price of all materials (grouped by type
or category) used in any Replacement other than the purchase or replacement of
specific items, and (iv) the cost of all contracted labor or other services
applicable to each Replacement for which such request for disbursement is made.
With each request Borrower shall certify that all Replacements have been made in
accordance with all applicable Legal Requirements of any Governmental Authority
having jurisdiction over the Property. Each request for disbursement shall
include copies of invoices for all items or materials purchased and all
contracted labor or services provided and, unless Lender has agreed to issue
joint checks as described below in connection with a particular Replacement,
each request shall include evidence satisfactory to Lender of payment of all
such amounts. Except as provided in Section 7.3.2(e) hereof, each request for
disbursement from the Replacement Reserve Account shall be made only after
completion of the Replacement for which disbursement is requested. Borrower
shall provide Lender evidence of completion of the subject Replacement
satisfactory to Lender in its reasonable judgment.

          (d) Borrower shall pay all invoices in connection with the
Replacements with respect to which a disbursement is requested prior to
submitting such request for disbursement from the Replacement Reserve Account
or, at the request of Borrower, Lender will issue joint checks, payable to
Borrower and the contractor, supplier, materialman, mechanic, subcontractor or
other party to whom payment is due in connection with a Replacement. In the case
of payments made by joint check, Lender may require a waiver of lien from each
Person receiving payment prior to Lender's disbursement from the Replacement
Reserve Account. In addition, as a condition to any disbursement, Lender may
require Borrower to obtain lien waivers from each contractor, supplier,
materialman, mechanic or subcontractor who receives payment in an amount equal
to or greater than Twenty-five Thousand and 00/100 Dollars ($25,000.00) for
completion of its work or delivery of its materials. Any lien waiver delivered
hereunder shall conform to the requirements of applicable law and shall cover
all work performed and materials supplied (including equipment and fixtures) for
the Property by that contractor, supplier, subcontractor, mechanic or
materialman through the date covered by the current reimbursement request (or,
in the event that payment to such contractor, supplier, subcontractor, mechanic
or materialmen is to be made by a joint check, the release of lien shall be
effective through the date covered by the previous release of funds request).


          (e) If (i) the cost of a Replacement exceeds Twenty-five Thousand and
00/100 Dollars ($25,000.00), (ii) the contractor performing such Replacement
requires periodic payments pursuant to terms of a written contract, and (iii)
Lender has approved in writing in advance such periodic payments (such approval
not to be unreasonably, withheld, delayed or conditioned), a request for
reimbursement from the Replacement Reserve Account may be made after completion
of a portion of the work under such contract, provided (A) such contract
requires payment upon completion of such portion of the work, (B) the materials
for which the request is made are on site at the Property and are properly
secured or have been installed in the Property, (C) all other conditions in this
Agreement for disbursement have been satisfied, (D) funds remaining in the
Replacement Reserve Account are, in Lender's judgment, sufficient to complete
such Replacement and other Replacements when required, and (E) if required by
Lender, each contractor or subcontractor receiving payments under such contract
shall provide a waiver of lien with respect to amounts which have been paid to
that contractor or subcontractor.

          (f) Borrower shall not make a request for disbursement from the
Replacement Reserve Account more frequently than once in any calendar month and
(except in connection with the final disbursement) the total cost of all
Replacements in any request shall not be less than Twenty-five Thousand and
00/100 Dollars ($25,000.00).

          7.3.3 PERFORMANCE OF REPLACEMENTS.

          (a) Borrower shall make or cause to be made Replacements when required
in order to keep the Property in condition and repair consistent with other
first class retail centers in the same market segment in the metropolitan area
in which the Property is located, and to keep the Property or any portion
thereof from deteriorating in any material respect. Borrower shall complete or
cause to be completed all Replacements in a good and workmanlike manner as soon
as practicable following the commencement of making each such Replacement.

          (b) Lender reserves the right, at its option, to approve all contracts
or work orders with materialmen, mechanics, suppliers, subcontractors,
contractors or other parties providing labor or materials in connection with the
Replacements, such approval not to be unreasonably, withheld, delayed or
conditioned. Upon Lender's request, Borrower shall assign any contract or
subcontract to Lender.

          (c) In the event Lender determines in its reasonable discretion that
any Replacement is not being performed in a workmanlike or timely manner or that
any Replacement has not been completed in a workmanlike or timely manner, Lender
shall have the option, upon prior notice to Borrower, to withhold disbursement
for such unsatisfactory Replacement and to proceed under existing contracts or
to contract with third parties to complete such Replacement and to apply the
Replacement Reserve Fund toward the labor and materials necessary to complete
such Replacement.

          (d) In order to facilitate Lender's completion or making of such
Replacements pursuant to Section 7.3.3(c) above, Borrower grants Lender the
right to enter onto the Property and perform any and all work and labor
necessary to complete or make such Replacements and/or employ watchmen to
protect the Property from damage. All sums so expended by Lender, to the extent
not from the Replacement Reserve Fund, shall be deemed to have been advanced
under the Loan to Borrower and secured by the Mortgage. For this purpose
Borrower constitutes and appoints Lender its true and lawful attorney-in-fact
with full power of substitution to complete or undertake such Replacements in
the name of Borrower. Such power of attorney shall be deemed to be a power
coupled with an interest and cannot be revoked. Borrower empowers said
attorney-in-fact as follows: (i) to use any funds in the Replacement Reserve
Account for the purpose of making or completing such Replacements; (ii) to make
such additions, changes and corrections to such Replacements as shall be
necessary or desirable to complete such Replacements; (iii) to employ such
contractors, subcontractors, agents, architects and inspectors as shall be
required for such purposes; (iv) to pay, settle or compromise all existing bills
and claims which are or may become Liens against the Property, or as may be
necessary or desirable for the completion of such Replacements, or for clearance
of title; (v) to execute all applications and certificates in the name of
Borrower which may be required by any of the contract documents; (vi) to
prosecute and defend all actions or proceedings in connection with the Property
or the rehabilitation and repair of the Property; and (vii) to do any and every
act which Borrower might do in its own behalf to fulfill the terms of this
Section 7.3.



          (e) Nothing in this Section 7.3.3 shall: (i) make Lender responsible
for making or completing any Replacements; (ii) require Lender to expend funds
in addition to the Replacement Reserve Fund to make or complete any Replacement;
(iii) obligate Lender to proceed with any Replacements; or (iv) obligate Lender
to demand from Borrower additional sums to make or complete any Replacement.

          (f) Borrower shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect, or
inspector) or third parties making Replacements pursuant to this Section 7.3.3
to enter onto the Property during normal business hours (subject to the rights
of tenants under their Leases) to inspect the progress of any Replacements and
all materials being used in connection therewith, to examine all plans and shop
drawings relating to such Replacements which are or may be kept at the Property,
and to complete any Replacements made pursuant to this Section 7.3.3 if Borrower
shall fail to do so. Borrower shall cause all contractors and subcontractors to
cooperate with Lender or Lender's representatives or such other persons
described above in connection with inspections described in this Section
7.3.3(f) or the completion of Replacements pursuant to this Section 7.3.3.

          (g) Lender may require an inspection of the Property at Borrower's
expense prior to making a monthly disbursement from the Replacement Reserve
Account in order to verify completion of the Replacements for which
reimbursement is sought. Lender may require that such inspection be conducted by
an appropriate independent qualified professional selected by Lender and/or may
require a copy of a certificate of completion by an independent qualified
professional acceptable to Lender prior to the disbursement of any amounts from
the Replacement Reserve Account. Borrower shall pay the reasonable expense of
the inspection as required hereunder, whether such inspection is conducted by
Lender or by an independent qualified professional.

          (h) The Replacements and all materials, equipment, fixtures, or any
other item comprising a part of any Replacement shall be constructed, installed
or completed, as applicable, free and clear of all mechanic's, materialmen's or
other liens (except for those Liens which constitute Permitted Encumbrances or
which otherwise have been approved in writing by Lender).

          (i) Before each disbursement from the Replacement Reserve Account,
Lender may require Borrower to provide Lender with a search of title to the
Property effective to the date of the disbursement, which search shows that no
mechanic's or materialmen's liens or other liens of any nature have been placed
against the Property since the date of recordation of the related Mortgage and
that title to the Property is free and clear of all Liens (other than the lien
of the related Mortgage, Permitted Encumbrances and any other Liens previously
approved in writing by Lender, if any).

          (j) All Replacements shall comply with all applicable Legal
Requirements of all Governmental Authorities having jurisdiction over the
Property and applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental regulations, and
requirements of insurance underwriters.

          (k) In addition to any insurance required under the Loan Documents,
Borrower shall provide or cause to be provided workmen's compensation insurance,
builder's risk, and public liability insurance and other insurance to the extent
required under applicable law in connection with a particular Replacement. All
such policies shall be in form and amount reasonably satisfactory to Lender. All
such policies which can be endorsed with standard mortgagee clauses making loss
payable to Lender or its assigns shall be so endorsed. Certified copies of such
policies shall be delivered to Lender.

          7.3.4 FAILURE TO MAKE REPLACEMENTS.

          (a) It shall be an Event of Default under this Agreement if Borrower
fails to comply with any provision of this Section 7.3 and such failure is not
cured within thirty (30) days after notice from Lender. Upon the occurrence and
during the continuance of such an Event of Default, Lender may use the
Replacement Reserve Fund (or any portion thereof) for any purpose, including but
not limited to completion of the Replacements as provided in Section 7.3.3, or
for any other repair or replacement to the Property or toward payment of the
Debt in such order, proportion and priority as Lender may determine in its sole
discretion. Lender's right to withdraw and apply the



Replacement Reserve Fund shall be in addition to all other rights and remedies
provided to Lender under this Agreement and the other Loan Documents.

          (b) Nothing in this Agreement shall obligate Lender to apply all or
any portion of the Replacement Reserve Fund on account of an Event of Default to
payment of the Debt or in any specific order or priority.

          7.3.5 BALANCE IN THE REPLACEMENT RESERVE ACCOUNT. The insufficiency of
any balance in the Replacement Reserve Account shall not relieve Borrower from
its obligation to fulfill all preservation and maintenance covenants in the Loan
Documents.

     SECTION 7.4 ROLLOVER RESERVE.

          7.4.1 DEPOSITS TO ROLLOVER RESERVE FUND. On the Closing Date, Borrower
shall deposit with Lender the sum of $108,000.00, which sum shall be held by
Lender for tenant improvement and leasing commission obligations incurred
following the date hereof. The amount so deposited shall hereinafter be referred
to as the "Rollover Reserve Fund" and the account to which such amount is held
shall hereinafter be referred to as the "Rollover Reserve Account".

          7.4.2 WITHDRAWAL OF ROLLOVER RESERVE FUNDS. Lender shall make
disbursements from the Rollover Escrow Fund for tenant improvement and leasing
commission obligations incurred by Borrower. All such expenses shall be approved
by Lender in its sole discretion. Lender shall make disbursements as requested
by Borrower on a monthly basis in increments of no less than $5,000.00 upon
delivery by Borrower of Lender's standard form of draw request accompanied by
copies of paid invoices for the amounts requested and, if required by Lender,
lien waivers and releases from all parties furnishing materials and/or services
in connection with the requested payment. Lender may require an inspection of
the Property at Borrower's expense prior to making a monthly disbursement in
order to verify completion of improvements for which reimbursement is sought.
All earnings or interest on the Rollover Escrow Fund shall be and become part of
such Rollover Escrow Fund and shall be disbursed as provided in this Section
7.4.

     SECTION 7.5 RESERVE FUNDS, GENERALLY. Borrower grants to Lender a
first-priority perfected security interest in each of the Reserve Funds and any
and all monies now or hereafter deposited in each Reserve Fund as additional
security for payment of the Debt. Until expended or applied in accordance
herewith, the Reserve Funds shall constitute additional security for the Debt.
Upon the occurrence and during the continuance of an Event of Default, Lender
may, in addition to any and all other rights and remedies available to Lender,
apply any sums then present in any or all of the Reserve Funds to the payment of
the Debt in any order in its sole discretion. The Reserve Funds shall not
constitute trust funds and may be commingled with other monies held by Lender.
The Reserve Funds shall be held in an Eligible Account in Permitted Investments
in accordance with the terms and provisions hereof. All interest on a Reserve
Fund shall not be added to or become a part thereof and shall be the sole
property of and shall be paid to Lender. Borrower shall be responsible for
payment of any federal, state or local income or other tax applicable to the
interest earned on the Reserve Funds that is credited or paid to Borrower, if
any. Borrower shall not, without obtaining the prior written consent of Lender,
further pledge, assign or grant any security interest in any Reserve Fund or the
monies deposited therein or permit any lien or encumbrance to attach thereto, or
any levy to be made thereon, or any UCC-1 Financing Statements, except those
naming Lender as the secured party, to be filed with respect thereto. Lender
shall not be liable for any loss sustained on the investment of any funds
constituting the Reserve Funds. Borrower shall indemnify Lender and hold Lender
harmless from and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations and costs and expenses (including
litigation costs and reasonable attorneys fees and expenses) arising from or in
any way connected with the Reserve Funds or the performance of the obligations
for which the Reserve Funds were established, unless arising from the gross
negligence, willful misconduct or bad faith of Lender. Borrower shall assign to
Lender all rights and claims Borrower may have against all persons or entities
supplying labor, materials or other services which are to be paid from or
secured by the Reserve Funds; provided, however, that Lender may not pursue any
such right or claim unless an Event of Default has occurred and remains uncured.

     VIII. DEFAULTS



     SECTION 8.1 EVENT OF DEFAULT.

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

          (i) if any payment of the Monthly Debt Service Payment Amount or any
     other payment required hereunder or under the other Loan Documents is not
     paid within five (5) days of the applicable due date, or the payment of all
     sums due hereunder and under the other Loan Documents on the Maturity Date
     is not paid when due;

          (ii) if any of the Taxes or Other Charges are not paid prior to the
     date when the same become delinquent, except to the extent that there are
     sufficient funds in the Tax and Insurance Escrow Fund to pay such Taxes or
     Other Charges and Lender fails to or refuses to release the same from the
     Tax and Insurance Escrow Fund;

          (iii) if the Policies are not kept in full force and effect, or if
     certified copies of the Policies are not delivered to Lender within fifteen
     (15) days after request;

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

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

          (vi) if Borrower, Guarantor or any other guarantor under any guaranty
     issued in connection with the Loan shall make an assignment for the benefit
     of creditors;

          (vii) if a receiver, liquidator or trustee shall be appointed for
     Borrower, Guarantor or any other guarantor under any guarantee issued in
     connection with the Loan or if Borrower, Guarantor or such other guarantor
     shall be adjudicated a bankrupt or insolvent, or if any petition for
     bankruptcy, reorganization or arrangement pursuant to federal bankruptcy
     law, or any similar federal or state law, shall be filed by or against,
     consented to, or acquiesced in by, Borrower, Guarantor or such other
     guarantor, or if any proceeding for the dissolution or liquidation of
     Borrower, Guarantor or such other guarantor shall be instituted; provided,
     however, if such appointment, adjudication, petition or proceeding was
     involuntary and not consented to by Borrower, Guarantor or such other
     guarantor, upon the same not being discharged, stayed or dismissed within
     one hundred eighty (180) days;

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

          (ix) if Borrower breaches any covenant contained in Section 4.1.30
     hereof;

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

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



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

          (xiii) if Borrower shall continue to be in default under any of the
     other terms, covenants or conditions of this Agreement not specified in
     subsections (i) to (xii) above, for ten (10) days after notice to Borrower
     from Lender, in the case of any Default which can be cured by the payment
     of a sum of money, or for thirty (30) days after notice from Lender in the
     case of any other Default; provided, however, that if such non-monetary
     Default is susceptible of cure but cannot reasonably be cured within such
     thirty (30) day period and provided further that Borrower shall have
     commenced to cure such Default within such thirty (30) day period and
     thereafter diligently and expeditiously proceeds to cure the same, such
     thirty (30) day period shall be extended for such time as is reasonably
     necessary for Borrower in the exercise of due diligence to cure such
     Default, such additional period not to exceed one hundred eighty (180)
     days; or

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

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

     SECTION 8.2 REMEDIES.

          (a) Upon the occurrence and during the continuance of an Event of
Default, subject to Section 9.3, all or any one or more of the rights, powers,
privileges and other remedies available to Lender against Borrower under this
Agreement or any of the other Loan Documents executed and delivered by, or
applicable to, Borrower or at law or in equity may be exercised by Lender at any
time and from time to time, whether or not all or any of the Debt shall be
declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to all or any part of the
Property. Subject to Section 9.3, any such actions taken by Lender shall be
cumulative and concurrent and may be pursued independently, singularly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, Borrower agrees
that if an Event of Default is continuing and to the fullest extent permitted by
law (i) Lender is not subject to any "one action" or "election of remedies" law
or rule, and (ii) all liens and other rights, remedies or privileges provided to
Lender shall remain in full force and effect until Lender has exhausted all of
its



remedies against the Property and the Mortgage has been foreclosed, sold and/or
otherwise realized upon in satisfaction of the Debt or the Debt has been paid in
full.

          (b) With respect to Borrower and the Property, nothing contained
herein or in any other Loan Document shall be construed as requiring Lender to
resort to the Property for the satisfaction of any of the Debt in any preference
or priority, and Lender may seek satisfaction out of the Property, or any part
thereof, in its absolute discretion in respect of the Debt. In addition, to the
fullest extent permitted by law, Lender shall have the right from time to time
to partially foreclose the Mortgage in any manner and for any amounts secured by
the Mortgage then due and payable as determined by Lender in its sole discretion
including, without limitation, the following circumstances: (i) in the event
Borrower defaults beyond any applicable grace period in the payment of one or
more scheduled payments of principal and interest, Lender may foreclose the
Mortgage to recover such delinquent payments or (ii) in the event Lender elects
to accelerate less than the entire outstanding principal balance of the Loan,
Lender may foreclose the Mortgage to recover so much of the principal balance of
the Loan as Lender may accelerate and such other sums secured by the Mortgage as
Lender may elect. Notwithstanding one or more partial foreclosures, the Property
shall remain subject to the Mortgage to secure payment of sums secured by the
Mortgage and not previously recovered, to the fullest extent permitted by law.

          (c) Lender shall have the right from time to time to sever the Note
and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the "Severed Loan Documents") in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender and provided that such severance
agreement and other documents incorporate the provisions of Section 9.3.
Borrower hereby absolutely and irrevocably appoints Lender as its true and
lawful attorney, coupled with an interest, in its name and stead to make and
execute all documents necessary or desirable to effect the aforesaid severance,
Borrower ratifying all that its said attorney shall do by virtue thereof;
provided, however, Lender shall not make or execute any such documents under
such power until ten (10) days after notice has been given to Borrower by Lender
of Lender's intent to exercise its rights under such power. Borrower shall be
obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents and
the Severed Loan Documents shall not contain any representations, warranties or
covenants not contained in the Loan Documents and any such representations and
warranties contained in the Severed Loan Documents will be given by Borrower
only as of the Closing Date.

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

     IX. SPECIAL PROVISIONS

     SECTION 9.1 SECURITIZATION.

          9.1.1 SALE OF NOTES AND SECURITIZATION. Borrower acknowledges and
agrees that Lender may sell all or any portion of the Loan and the Loan
Documents, or issue one or more participations therein, or consummate one or
more private or public securitizations of rated single- or multi-class
securities (the "Securities") secured by or evidencing ownership interests in
all or any portion of the Loan and the Loan Documents or a pool of assets that
include the Loan and the Loan Documents (such sales, participations and/or
securitizations, collectively, a "Securitization"). At the request of Lender,
and to the extent not already required to be provided by or on behalf



of Borrower under this Agreement, Borrower shall use reasonable efforts to
provide information not in the possession of Lender or which may be reasonably
required by Lender or take other actions reasonably required by Lender, in each
case in order to satisfy the market standards to which Lender customarily
adheres or which may be reasonably required by prospective investors and/or the
Rating Agencies in connection with any such Securitization including, without
limitation, to:

          (a) provide additional and/or updated Provided Information;

          (b) assist in preparing descriptive materials for presentations to any
or all of Lender's prospective investors or the Rating Agencies;

          (c) if required by any prospective investor and/or any Rating Agency,
use commercially reasonable efforts to deliver such additional tenant estoppel
letters, subordination agreements or other agreements from parties to agreements
that affect the Property, which estoppel letters, subordination agreements or
other agreements shall be reasonably satisfactory to Lender, prospective
investors and/or the Rating Agencies;

          (d) execute such certifications and/or amendments to the Loan
Documents as may be requested by Lender, prospective investors and/or the Rating
Agencies to effect the Securitization, provided that Borrower shall not be
required to modify or amend any Loan Document if such modification or amendment
would (i) initially change the weighted average interest rate on the Loan, the
stated maturity or the amortization of principal set forth herein or in the
Note, (ii) modify or amend any other material economic term of the Loan, or
(iii) materially increase the obligations, or decrease the rights, of Borrower
under the Loan Documents;

          (e) if requested by Lender, review any information regarding the
Property, Borrower, Guarantor, Manager and the Loan which is contained in a
preliminary or final private placement memorandum, prospectus, prospectus
supplement (including any amendment or supplement to either thereof), or other
disclosure document to be used by Lender or any affiliate thereof; and

          (f) supply to Lender such documentation, financial statements and
reports regarding the Property, Borrower, Guarantor, Manager and the Loan in
form and substance required in order to comply with any applicable securities
laws.

          9.1.2 SECURITIZATION COSTS. All reasonable third party costs and
expenses incurred by Borrower in connection with Borrower's complying with
requests made under this Section 9.1 shall be paid by Borrower, provided,
however, such costs and expenses shall not exceed $2,500.

     SECTION 9.2 SECURITIZATION. Borrower understands that certain of the
Provided Information may be included in disclosure documents in connection with
the Securitization, including, without limitation, a prospectus, prospectus
supplement or private placement memorandum (each, a "Disclosure Document") and
may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower will cooperate with the
holder of the Note in updating the Disclosure Document by providing all current
information necessary to keep the Disclosure Document accurate and complete in
all material respects.

     SECTION 9.3 EXCULPATION. Notwithstanding anything to the contrary contained
in this Agreement, the Note, the Mortgage or the other Loan Documents but
subject to the qualifications below, Lender shall not enforce the liability and
obligation of Borrower to perform and observe the obligations contained in the
Note, this Agreement, the Mortgage or the other Loan Documents by any action or
proceeding wherein a money judgment shall be sought against Borrower, except
that Lender may bring a foreclosure action, an action for specific performance
or any other appropriate action or proceeding to enable Lender to enforce and
realize upon its interest under the Note, this Agreement, the Mortgage and the
other Loan Documents, or in the Property, the Rents, or any other collateral
given to Lender pursuant to the Loan Documents; provided, however, that, except
as specifically



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

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

          (ii) the willful misconduct of Borrower;

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

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

          (v) the misapplication or conversion by Borrower of (A) any Insurance
     Proceeds paid by reason of any loss, damage or destruction to the Property,
     which are not applied by Borrower in accordance with this Agreement, (B)
     any Awards received in connection with a Condemnation of all or a portion
     of the Property, which are not applied by Borrower in accordance with this
     Agreement, (C) any Rents following an Event of Default, (D) any Rents paid
     more than one month in advance, or (E) any amounts paid to Borrower by
     tenants of the Property specifically for Taxes and Other Charges, which are
     not applied by Borrower to pay such Taxes and Other Charges or in
     accordance with this Agreement;

          (vi) failure to pay charges incurred by Borrower or any Affiliate of
     Borrower for labor or materials that can create Liens on any portion of the
     Property, subject to any right to contest such charges pursuant to the
     terms of this Agreement; and

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

     Notwithstanding anything to the contrary in this Agreement, the Note or any
of the Loan Documents, (A) Lender shall not be deemed to have waived any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Debt secured by the Mortgage or to require that all collateral shall continue to
secure all of the Debt owing to Lender in accordance with the Loan Documents,
and (B) the Debt shall be fully recourse to Borrower (i) in the event of: (a)
Borrower filing a voluntary petition under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law; (b) the filing by any Person of
an involuntary petition against Borrower under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law, in which Borrower colludes with,
or otherwise assists such Person, or



solicits or causes to be solicited petitioning creditors for any involuntary
petition against Borrower from any Person; (c) Borrower filing an answer
consenting to or otherwise acquiescing in or joining in any involuntary petition
filed against it, by any other Person under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law; (d) Borrower consenting to or
acquiescing in or joining in an application for the appointment of a custodian,
receiver, trustee, or examiner for Borrower or any portion of the Property
(other than a receiver requested by Lender in connection with enforcement of its
rights under the Loan Documents); (e) Borrower making an assignment for the
benefit of creditors, or admitting, in writing or in any legal proceeding, its
insolvency or inability to pay its debts as they become due; (ii) if the first
full monthly payment of interest on the Note is not paid within five (5) days of
notice that such payment is late (provided, however, that such grace period
relates only to the recourse trigger described in this paragraph); (iii) if
Borrower fails to permit on-site inspections of the Property subject to the
rights of tenants and any applicable cure period set forth in the Loan
Documents, fails to provide financial information as required under the Loan
Documents subject to any applicable cure period (except for financial
information required to be delivered by a tenant pursuant to the applicable
Lease that has not been delivered to Borrower, provided Borrower has requested
such financial information from such tenant), or fails to maintain its status as
a Single Purpose Entity; (iv) if Borrower fails to obtain Lender's prior written
consent to any Indebtedness incurred by Borrower and not otherwise permitted by
this Agreement or the Mortgage or voluntary Lien encumbering the Property
created by Borrower and not otherwise permitted by this Agreement or the
Mortgage; or (v) if Borrower fails to obtain Lender's prior written consent to
any Transfer as required by this Agreement or the Mortgage.

     SECTION 9.4 MATTERS CONCERNING MANAGER. If (a) the Debt has been
accelerated pursuant to Section 8.1(b) hereof, (b) Manager shall become bankrupt
or insolvent or (c) a default occurs under the Management Agreement which is not
cured within any applicable notice or grace period, Borrower shall, at the
request of Lender, remove the Property from the application of the Management
Agreement if permitted to do so by the terms of the Management Agreement and the
Consent Regarding Management Agreement, and replace the Manager of the Property
with a Qualified Manager pursuant to a Replacement Management Agreement, it
being understood and agreed that the management fee for such Qualified Manager
shall not exceed then prevailing market rates.

     SECTION 9.5 SERVICER. At the option of Lender, the Loan may be serviced by
a servicer/trustee (any such servicer/trustee, together with its agents,
nominees or designees, are collectively referred to as "Servicer") selected by
Lender and Lender may delegate all or any portion of its responsibilities under
this Agreement and the other Loan Documents to Servicer pursuant to a servicing
agreement (the "Servicing Agreement") between Lender and Servicer. Borrower
shall not be responsible for payment of any set-up fees or any other initial
costs relating to or arising under the Servicing Agreement or the monthly
servicing fee due to Servicer under the Servicing Agreement.

     X. MISCELLANEOUS

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

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

     SECTION 10.3 GOVERNING LAW.



THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED AND SHALL IN ALL RESPECTS BE
GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE IN WHICH THE PROPERTY IS LOCATED AND APPLICABLE FEDERAL LAWS.

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

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

     SECTION 10.6 NOTICES. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, and by telecopier (with
answer back acknowledged), addressed as follows (or at such other address and
Person as shall be designated from time to time by any party hereto, as the case
may be, in a written notice to the other parties hereto in the manner provided
for in this Section):

          If to Lender:     Bear Stearns Commercial Mortgage, Inc.
                            383 Madison Avenue
                            New York, New York 10179
                            Attention:  J. Christopher Hoeffel
                            Facsimile No.: (212) 272-7047

          with a copy to:   Katten Muchin Rosenman LLP
                            401 South Tryon Street, Ste. 2600
                            Charlotte, North Carolina 28202
                            Attention:  Daniel S. Huffenus, Esq.
                            Facsimile No.: (704) 344-3056

          If to Borrower:   COLE MT SPRING TX, LP
                            2555 East Camelback Road, Ste. 400
                            Phoenix, Arizona 85016
                            Attention: General Counsel
                            Facsimile No.: (602) 778-8780

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



     SECTION 10.7 TRIAL BY JURY. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH
IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.

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

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

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

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

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

          10.9.4 EXPENSES; INDEMNITY.

          (a) Borrower covenants and agrees to pay or, if Borrower fails to pay,
to reimburse, Lender upon receipt of written notice from Lender for all
reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by Lender in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement and the other Loan
Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower
(including without limitation any opinions reasonably requested by Lender as to
any legal matters arising under this Agreement or the other Loan Documents with
respect to the Property); (ii) Borrower's ongoing performance of and compliance
with Borrower's



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

          (b) Borrower shall indemnify, defend and hold harmless Lender from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), that may be imposed on, incurred
by, or asserted against Lender in any manner relating to or arising out of (i)
any material breach by Borrower of its obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the "Indemnified Liabilities"); provided, however, that Borrower
shall not have any obligation to Lender hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or
willful misconduct of Lender. To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Lender.

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

     SECTION 10.10 SCHEDULES INCORPORATED. The Schedules annexed hereto are
hereby incorporated herein as a part of this Agreement with the same effect as
if set forth in the body hereof.

     SECTION 10.11 OFFSETS, COUNTERCLAIMS AND DEFENSES. Any assignee of Lender's
interest in and to this Agreement, the Note and the other Loan Documents shall
take the same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower may otherwise have against any
assignor of such documents, and no such unrelated counterclaim or defense shall
be interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon such documents and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by Borrower.

     SECTION 10.12 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES.



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

          (b) This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole
discretion, Lender deems it advisable or desirable to do so.

     SECTION 10.13 PUBLICITY All news releases, publicity or advertising by
Borrower or its Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the Loan
Documents, to Lender, or any of their Affiliates shall be subject to the prior
written approval of Lender.

     SECTION 10.14 WAIVER OF MARSHALLING OF ASSETS. To the fullest extent
permitted by law, Borrower, for itself and its successors and assigns, waives
all rights to a marshalling of the assets of Borrower, Borrower's partners and
others with interests in Borrower, and of the Property, and agrees not to assert
any right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of estates
of decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Lender under the Loan Documents to a sale of the Property for the
collection of the Debt without any prior or different resort for collection or
of the right of Lender to the payment of the Debt out of the net proceeds of the
Property in preference to every other claimant whatsoever.

     SECTION 10.15 WAIVER OF COUNTERCLAIM. Borrower hereby waives the right to
assert a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or its agents.

     SECTION 10.16 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE. In the event
of any conflict between the provisions of this Agreement and any of the other
Loan Documents, the provisions of this Agreement shall control. The parties
hereto acknowledge that they were represented by competent counsel in connection
with the negotiation, drafting and execution of the Loan Documents and that such
Loan Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue
of the ownership by it or any parent, subsidiary or Affiliate of Lender of any
equity interest any of them may acquire in Borrower, and Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Lender's exercise of any such rights or
remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.

     SECTION 10.17 BROKERS AND FINANCIAL ADVISORS. Each party hereby represents
to the other that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Each party hereby agrees to
indemnify, defend and hold the other harmless from and against any and all
claims, liabilities, costs and expenses of any kind (including reasonable
attorneys' fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of such party in connection with the
transactions contemplated herein. The provisions of this Section 10.17 shall
survive the expiration and termination of this Agreement and the payment of the
Debt.



     SECTION 10.18 PRIOR AGREEMENTS. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, are superseded by the terms of
this Agreement and the other Loan Documents.

     SECTION 10.19 JOINT AND SEVERAL LIABILITY. If Borrower consists of more
than one (1) Person the obligations and liabilities of each Person shall be
joint and several.

     SECTION 10.20 CERTAIN ADDITIONAL RIGHTS OF LENDER (VCOC). Notwithstanding
anything to the contrary contained in this Agreement, Lender shall have:

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

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

          (c) the right, in accordance with the terms of this Agreement to
receive the financial statements required to be delivered under Section 5.1.11
hereof; and

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

The rights described above in this Section 10.20 may be exercised by any entity
which owns and controls, directly or indirectly, substantially all of the
interests in Lender.

                         [NO FURTHER TEXT ON THIS PAGE]



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

                                        BORROWER:

                                        COLE MT SPRING TX, LP,
                                        a Delaware limited partnership

                                        By: Cole GP CCPT II, LLC, a Delaware
                                            limited liability company,
                                            its General Partner

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


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


                                        LENDER:

                                        BEAR STEARNS COMMERCIAL MORTGAGE, INC.,
                                        a New York corporation


                                        By: /s/ Michael A. Forastiere
                                            ------------------------------------
                                            Michael A. Forastiere
                                            Managing Director


                                   Schedule V

                              Identified Affiliates

Each of the following entities shall be deemed to be an "Identified Affiliate"
for purposes hereof:

Series A, LLC, an Arizona limited liability company;
Series B, LLC, an Arizona limited liability company;
Series C, LLC, an Arizona limited liability company;
Series D, LLC, an Arizona limited liability company;
Cole Operating Partnership I, LP, a Delaware limited partnership; and
Any entity wholly-owned by one or more of the foregoing


                                  Schedule V-1

EX-10.58

                                                                   EXHIBIT 10.58
                               PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                                     Between

                              SCIOTO TRAIL COMPANY

                                    as Seller

                                       and

                               COLE TAKEDOWN, LLC

                                    as Buyer

                                November 28, 2005



                   PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

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

PARTIES:  This Purchase Agreement and Escrow Instructions is between SCIOTO
          TRAIL COMPANY, as "Seller", and COLE TAKEDOWN, LLC, as "Buyer".

      WHEREAS, as of the Effective Date, Seller is the fee title owner of that
certain improved property located at 2812 Scioto Trail, Portsmouth, 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 10,125 square feet (the "Building") which
Building is leased to Revco Discount Drug Centers, Inc. ("Tenant") in accordance
with a written lease (the "Lease"). The lessee's obligations under the Lease are
guaranteed (the "Guaranty") by CVS Corporation. 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 the Guaranty and all rents issued and profits due or to become
due after the COE (as hereafter defined) 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 (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 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.

      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 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 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) all of Seller's interest in the Lease and the Guaranty and
the security deposit, if any, now or hereafter due under the Lease; 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 (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 and
Guaranty which are to be transferred by that certain assignment and assumption
of lease and guaranty, 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 limited 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 NINETY-ONE THOUSAND and NO/100 DOLLARS
($2,191,000.00) (the "Purchase Price"), payable as follows:

            (a) Fifty Thousand and no/100 Dollars ($50,000.00) earnest money
(the "Earnest Money Deposit") to be deposited in escrow with Fidelity National
Title Insurance Company, 40 North Central Avenue, Suite 2850, Phoenix, Arizona
85004, Attention: Ms. Mary L. Garcia ("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) Two Million One Hundred Forty-One Thousand and no/100 Dollars
($2,141,000.00) 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 to Buyer after Escrow Agent has
provided Seller with ten (10) days notice of its intent to pay the Earnest Money
Deposit 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. One-half of the cost of the Owner's Policy shall be paid by
Seller, one-half of the cost of the Owner's Policy shall be paid by Buyer, and
any additional costs for an extended coverage policy shall be paid by Buyer. In
addition to the Report, Escrow Agent shall simultaneously deliver to Buyer and
Seller 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 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 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 the later of 5:00 p.m.
MST on (i) the thirtieth (30th) day after the Opening of Escrow, (ii) that day
which is thirty (30) days from Buyer's receipt of all deliveries of Seller's
Diligence Materials (as hereinafter defined), or (iii) that day which is ten
(10) days from Buyer's receipt of the Survey (as hereinafter defined) (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").

            (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 time or times 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 Diligence. Buyer's indemnity and hold harmless obligation shall survive
cancellation of this Agreement or COE.

            (c) Cancellation. Unless Buyer 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 deemed canceled and the Earnest Money Deposit plus
interest shall be returned immediately to Buyer (subject to Section 5 (a)) 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. 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, repair,
zoning (including any zoning verification letters), platting, engineering, soil
tests, water tests, environmental tests, construction (including the Certificate
of Occupancy for the Property), master planning, architectural drawings and like
matters regarding the Property (collectively, "Seller's Diligence Materials"),
all at no cost to Buyer. The foregoing deliveries shall include, but not be
limited to, copies of all: (i) books of account and records for the Property for
the last twenty-four (24) months (including year-end Tenant CAM expense
reconciliations); (ii) the Lease and a copy of the leasehold title insurance
policy delivered to Tenant; (iii) a detailed listing of all capital expenditures
on the Property for the last thirty-six (36) months; (iv) the maintenance
history of the Property for the last twenty-four (24) months; (v) current
maintenance, management, and listing contracts for the Property including any
amendments thereto; (vi) all claims or suits by Tenant or third parties
involving the Property or the Lease or any Contracts (whether or not covered by
insurance); (vii) a list of all claims or suits by or against Seller regarding
the Property for the last thirty-six (36) months; (viii) any appraisals of the
Property; (ix) the site plan with respect to the Property; and (x) any other
documents or other information in the possession 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
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 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.

      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.

      12. CONDITIONS PRECEDENT.

            (a) Seller's Conditions Precedent. In addition to all other
conditions precedent set forth in this Agreement, Seller's obligation to perform
under this Agreement and to close escrow are expressly subject to the total
payoff of the outstanding indebtedness owed by Seller to Midland Loan Services,
as a servicer, being in an amount equal to or less than $1,600,000, including a
prepayment premium equal to or less than $420,000.

            (b) 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:

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



                  (ii) 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;

                  (iii) 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;

                  (iv) the deposit by Seller with Buyer not later than five (5)
business days prior to COE of (y) an 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 (z) 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;

                  (v) 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;

                  (vi) 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;

                  (vii) the delivery by Seller to Buyer of a copy of the
Certificate of Occupancy for the Improvements;

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

                  (ix) delivery of the SEC Filing Information (as hereinafter
defined) and the SEC Filings Letter (as hereinafter defined) by Seller to Buyer
not less than five (5) days prior to COE; and

                  (x) 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 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.

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

            (a) there are no unrecorded leases (other than the 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;

            (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 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) 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 actual knowledge, no default 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, when due, in full by Seller;

            (m) 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 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) Except as set forth in this paragraph 13 (o), 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;

            (p) Except as set forth in this paragraph 13 (p), to Seller's actual
knowledge, there is not now, nor has there ever been, on or in the Property
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 Hazardous Materials released on the Property prior to
COE and continuing in existence on the Property at COE);

            (q) to Seller's actual knowledge there are no proceedings pending
for the increase of the assessed valuation of the Real Property;

            (r) 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;

            (s) 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

            (t) all representations made in this Agreement by Seller shall
survive the execution and delivery of this Agreement for one (1) year after the
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 for
one (1) year after the 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, 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. 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.

      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 any 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:

            (a) the Parties warrant to one another that they have not dealt with
any finder, broker or realtor in connection with this Agreement; and



            (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, 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.

      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 fifteen (15) 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 Thousand and no/100 Dollars ($100,000.00) 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. Notwithstanding the foregoing,
in no event shall COE occur on or before January 2, 2006.

      Not later than one (1) business day prior to COE, Buyer and Seller shall
submit a Closing Statement to Escrow Agent signed by both Buyer and Seller which
sets forth all funds received or to be received by Escrow Agent and instructions
to the Escrow Agent regarding how and to what entity the disbursement of funds
is to be made by the Escrow Agent at the COE ("Closing Statement").

      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.

      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, 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:                        Scioto Trail Company
                                     711 Second Street
                                     Portsmouth, OH 45662
                                     Attn: Jeffrey P. Albrecht
                                     Tel.: (740) 354-7711
                                     Fax:  (740) 353-1539

with copies to:                      Dinsmore & Shohl LLP
                                     Attn:  Mark C. Bissinger
                                     1900 Chemed Center
                                     255 East Fifth Street
                                     Cincinnati, OH  45202
                                     Tel.: (513) 977-8118
                                     Fax:  (513) 977-8141

if to Buyer:                         Cole Takedown, 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:                  Fidelity National Title Insurance Company
                                     40 North Central Avenue, Suite 2850
                                     Phoenix, AZ 85004
                                     Attn: Ms. Mary L. Garcia
                                     Tel.: (602) 343-7571
                                     Fax:  (602) 343-7564

            (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. Buyer shall pay
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. Real estate taxes shall not be prorated since the real
estate taxes are reimbursed by Tenant pursuant to the Lease. 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 23(a), Seller and Buyer shall each bear their own costs
in regard to this Agreement. Escrow Agent shall disburse the funds strictly in
accordance with the Closing Statement.

            (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. SELLER OR BUYER EXCHANGE. Should either Buyer or Seller choose to
exchange for other property of like kind, each agrees to cooperate in this
exchange under IRS Section 1031. This contemplated exchange shall not impose
upon either Party any additional liability or financial obligation, and each
agrees to hold the other harmless from any liability that might arise from such
exchange. This Agreement is not subject to or contingent upon either parties
ability to acquire a suitable exchange property or effectuate an exchange. In
the event any exchange contemplated by either party should fail to occur, for
whatever reason, the sale of the Property shall nonetheless be consummated as
provided herein.

      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 Ohio. 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
Southern District of Ohio and in the Common Pleas Court of Sciota County, 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 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. 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 company that
is subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended ("Registered Company"), promoted by the Buyer or to an affiliate of a
Registered Company (a "Registered Company Affiliate"). In the event Buyer's
assignee under this Agreement is a Registered Company or a Registered Company
Affiliate, the Registered Company will be required to make certain filings with
the U.S. Securities and Exchange Commission required under SEC Rule 3-14 of
Regulation S-X (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 and the Registered Company with financial information regarding
the Property for the Audited Year requested by Buyer, the Registered Company,
and/or Buyer's or the Registered Company'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 ("SEC Filing Information"). Seller shall deliver the SEC Filing
Information requested by Buyer, the Registered Company



and/or Buyer's or the Registered Company's auditors prior to the expiration of
the Study Period, and Seller agrees to cooperate with Buyer, the Registered
Company and Buyer's or the Registered Company's auditors regarding any inquiries
by Buyer, the Registered Company and Buyer's or the Registered Company'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 or the Registered Company's auditors ("SEC Filings Letter"). A sample
SEC Filings Letter is attached to the Purchase Agreement as Exhibit G; however,
Buyer's and/or the Registered Company'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 37 shall survive the COE for a period of one (1)
year.

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

SELLER:                               SCIOTO TRAIL COMPANY, an Ohio corporation

                                      By:    /s/ Jeff Albrecht
                                             -----------------------------------
                                      Name:  Jeff Albrecht
                                      Its:   President

BUYER:                                COLE TAKEDOWN, LLC, an Arizona corporation

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

ESCROW AGENT:                         FIDELITY NATIONAL TITLE INSURANCE COMPANY

                                      By:    /s/ M. Burton
                                             -----------------------------------
                                      Name:  M. Burton
                                      Its:   Asst. Commercial Escrow Officer



                            ESCROW AGENT'S ACCEPTANCE

      The foregoing fully executed Agreement together with the Earnest Money
Deposit is accepted by the undersigned this 5 day of December, 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.

                                      FIDELITY NATIONAL TITLE INSURANCE COMPANY

                                      By     /s/ M. Burton
                                             -----------------------------------
                                      Name   M. Burton
                                      Its    Asst. Commercial Escrow Officer



                         AMENDMENT TO PURCHASE AGREEMENT

      This Amendment to Purchase Agreement (this "Amendment") is made and
entered into effective as of the 19th day of January, 2006, by and between
SCIOTO TRAIL COMPANY, an Ohio corporation ("Seller") and COLE TAKEDOWN, LLC, a
Delaware limited liability company ("Buyer") and provides as follows:

                                   WITNESSETH:

      WHEREAS, Seller and Buyer entered into that certain Purchase Agreement and
Escrow Instructions dated as of November 28, 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 amended by deleting the current
provision in its entirety and substituting the following in lieu thereof:

            PURCHASE PRICE. The price to be paid by Buyer to Seller for the
            Property is TWO MILLION ONE HUNDRED SIXTY-SIX THOUSAND and NO/100
            DOLLARS ($2,166,000.00) (the "Purchase Price"), payable as follows:

                  (a) Fifty Thousand and no/100 Dollars ($50,000.00) earnest
            money (the "Earnest Money Deposit") to be deposited in escrow with
            Fidelity National Title Insurance Company, 40 North Central Avenue,
            Suite 2850, Phoenix, Arizona 85004, Attention: Ms. Mary L. Garcia
            ("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) Two Million One Hundred Sixteen Thousand and no/100
            Dollars ($2,116,000.00) 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. 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.

      3. 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:

COLE TAKEDOWN, LLC, an Arizona         SCIOTO TRAIL COMPANY, an Ohio corporation
corporation

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



                        ASSIGNMENT OF PURCHASE AGREEMENT
                             AND ESCROW INSTRUCTIONS

                      Cole Acquisitions I, LLC, as Assignor
                                       and
                    Cole CV Scioto Trail OH, LLC, as Assignee

      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, to and under that certain Purchase Agreement and Escrow
Instructions (the "Purchase Agreement") described herein, including, without
limitation, Assignor's right, title and interest in and to the Earnest Money
Deposit, to Assignee and its successors and assigns. The Purchase Agreement is
described as follows:

DATE OF AGREEMENT:           November 28, 2005

ORIGINAL BUYER:              Cole Acquisitions I, LLC (f/k/a Cole Takedown, LLC)

ASSIGNED TO:                 Cole CV Scioto Trail OH, LLC

PROPERTY ADDRESS:            2812 Scioto Trail, Portsmouth, OH 45662

      Assignor acknowledges that it is not released from any obligations or
liabilities under said Purchase Agreement, with the exception of the obligation
to deliver the Earnest Money Deposit which has been delivered into escrow by
Assignor.

      Assignee hereby agrees to assume and be responsible for all obligations
and liabilities under said Purchase Agreement, with the exception of the
obligation to deliver the Earnest Money Deposit which has been delivered into
escrow by Assignor. This Assignment shall be in full force and effect upon its
full execution.

      Executed this 6th day of March, 2006.

ASSIGNOR:                              ASSIGNEE:

COLE ACQUISITIONS I, LLC,              COLE CV SCIOTO TRAIL OH, LLC,
a Delaware 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                           By: /s/ John M. Pons
                                               ------------------------
    Authorized Officer                         John M. Pons

                                           Its:     Senior Vice President

EX-10.59

                                                                   EXHIBIT 10.59

                                                                    CVS - Scioto
                                                             Loan No. 50-2854583

                                 PROMISSORY NOTE

$1,753,000.00                                                      March 8, 2006

      FOR VALUE RECEIVED, the undersigned, COLE CV SCIOTO TRAIL OH, 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 ONE MILLION SEVEN HUNDRED FIFTY-THREE THOUSAND AND NO/100
DOLLARS ($1,753,000.00), 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 March 11, 2031.

            (d) "Fixed Rate Tranche A" shall mean One Million Four Hundred
Twenty-Four Thousand and No/100 Dollars ($1,424,000.00) 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 Three Hundred Twenty-Nine
Thousand and No/100 Dollars ($329,000.00) 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 sixty-nine one-hundredths percent
(6.69%) 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 March 11, 2011.

            (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 March 11, 2011.

            (o) "Optional Prepayment Determination Date" shall mean January 11,
2011.

            (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 Scioto
County, Ohio.

      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 June 8, 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 sixty-seven one-hundredths percent (5.67%) (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 April 11, 2006 (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; and

                        (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.

                        (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 CV SCIOTO TRAIL OH, 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                                $  1,424,000.00

Note Rate % (Per Annum)                                            5.670%

Original Amortization Term (Months)                                  999

Monthly Payment Amount (Excluding IO Period)             $      6,728.40

Note Date                                                       3/8/2006

First Pay Date                                                 4/11/2006

Original Loan Term (Months)                                           60

Scheduled Maturity Date                                        3/11/2011

Interest Accrual Basis During Amortization Periods            ACTUAL/360

Interest Only (IO) Periods (Months)                                   60

Interest Accrual Basis During IO Period                       ACTUAL/360



COLE CVS SCIOTO TRAIL PORTSMOUTH OH                                    502854583



                                                INTEREST     PRINCIPAL
                     ACCRUAL                  COMPONENT OF  COMPONENT OF   ENDING UNPAID
  PAY                DAYS IN     SCHEDULED     SCHEDULED     SCHEDULED       PRINCIPAL
PERIOD   PAY DATE    PERIOD       PAYMENT       PAYMENT       PAYMENT         BALANCE
- ------  ----------   -------   -------------  ------------  -------------  -------------
                                                         
 0      3/11/2006       3      $        0.00  $     672.84  $        0.00  $1,424,000.00
 1      4/11/2006      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
 2      5/11/2006      30      $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
 3      6/11/2006      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
 4      7/11/2006      30      $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
 5      8/11/2006      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
 6      9/11/2006      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
 7      10/11/2006     30      $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
 8      11/11/2006     31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
 9      12/11/2006     30      $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
10      1/11/2007      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
11      2/11/2007      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
12      3/11/2007      28      $    6,279.84  $   6,279.84  $        0.00  $1,424,000.00
13      4/11/2007      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
14      5/11/2007      30      $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
15      6/11/2007      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
16      7/11/2007      30      $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
17      8/11/2007      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
18      9/11/2007      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
19      10/11/2007     30      $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
20      11/11/2007     31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
21      12/11/2007     30      $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
22      1/11/2008      31      $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00




                                                         
23      2/11/2008         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
24      3/11/2008         29   $    6,504.12  $   6,504.12  $        0.00  $1,424,000.00
25      4/11/2008         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
26      5/11/2008         30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
27      6/11/2008         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
28      7/11/2008         30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
29      8/11/2008         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
30      9/11/2008         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
31      10/11/2008        30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
32      11/11/2008        31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
33      12/11/2008        30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
34      1/11/2009         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
35      2/11/2009         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
36      3/11/2009         28   $    6,279.84  $   6,279.84  $        0.00  $1,424,000.00
37      4/11/2009         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
38      5/11/2009         30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
39      6/11/2009         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
40      7/11/2009         30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
41      8/11/2009         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
42      9/11/2009         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
43      10/11/2009        30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
44      11/11/2009        31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
45      12/11/2009        30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
46      1/11/2010         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
47      2/11/2010         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
48      3/11/2010         28   $    6,279.84  $   6,279.84  $        0.00  $1,424,000.00
49      4/11/2010         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
50      5/11/2010         30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
51      6/11/2010         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
52      7/11/2010         30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
53      8/11/2010         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
54      9/11/2010         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
55      10/11/2010        30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
56      11/11/2010        31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
57      12/11/2010        30   $    6,728.40  $   6,728.40  $        0.00  $1,424,000.00
58      1/11/2011         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
59      2/11/2011         31   $    6,952.68  $   6,952.68  $        0.00  $1,424,000.00
60      3/11/2011         28   $1,430,279.84  $   6,279.84  $1,424,000.00  $        0.00

60                     1,826   $1,833,535.28  $ 409,535.28  $1,424,000.00





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

                                  [VOID 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-14.1

                                                                    EXHIBIT 14.1

                       COLE CREDIT PROPERTY TRUST II, INC.

                                CODE OF BUSINESS

                               CONDUCT AND ETHICS

                               Adopted May 4, 2005




                       COLE CREDIT PROPERTY TRUST II, INC.
                       CODE OF BUSINESS CONDUCT AND ETHICS

                                TABLE OF CONTENTS



                                                                           Page
                                                                           ----
                                                                        
COLE CREDIT PROPERTY TRUST II, INC. CODE OF BUSINESS CONDUCT AND ETHICS...    1

CHAPTER 1 INTRODUCTION....................................................    1
  A. GENERAL..............................................................    1
  B. INTENT AND PURPOSE...................................................    1
  C. APPLICABILITY AND ACCOUNTABILITY....................................     1
  D. RELATIONSHIP TO OTHER COMPANY POLICIES AND PROCEDURES................    1
  E. COMPLIANCE AND SANCTIONS.............................................    2

CHAPTER 2  BUSINESS CONFLICTS POLICY......................................    2
  A. GIFTS AND ENTERTAINMENT..............................................    2
  B. RELATIONSHIPS WITH COMPANY VENDORS AND SUPPLIERS.....................    2
  C. PERSONAL USE OF COMPANY PROPERTY, RESOURCES, FACILITIES, ASSETS AND
     INNOVATIONS..........................................................    3
  D. CONFIDENTIAL INFORMATION, DATA AND DOCUMENTS.........................    5

CHAPTER 3 COMPLIANCE WITH LAWS, RULES AND REGULATIONS.....................    5
  A. LAWS, RULES AND REGULATIONS..........................................    5
  B. POLITICAL CONTRIBUTIONS AND OTHER POLITICAL ACTIVITIES...............    6
  C. GOVERNMENT INVESTIGATIONS............................................    6
  D. IMPROPER INFLUENCE ON CONDUCT OF AUDITS..............................    7

CHAPTER 4 ADMINISTRATIVE PROVISIONS AND ENFORCEMENT.......................    7
  A. RESOURCES............................................................    7
  B. BUSINESS CONDUCT POLICY REVIEW COMMITTEE.............................    7
  C. "WHISTLEBLOWER" REPORTING AND AUDITING...............................    7
  D. REPORTING PROCEDURES.................................................    8
  E. NON-RETALIATION POLICY...............................................    8
  F. ENFORCEMENT..........................................................    8
  G. PERIODIC COMPLIANCE QUESTIONNAIRE....................................    8
  H. IMPLEMENTATION.......................................................    8
  I. CHANGES AND AMENDMENTS...............................................    8



                       COLE CREDIT PROPERTY TRUST II, INC.
                       CODE OF BUSINESS CONDUCT AND ETHICS
                               Adopted May 4, 2005

                                    CHAPTER 1
                                  INTRODUCTION

A.    GENERAL

      It is the policy of Cole Credit Property Trust II, Inc. (the "Company") to
conduct business with the highest degree of ethics and integrity and in
accordance with the letter and spirit of all applicable laws, rules and
regulations. To further this objective, the Company has issued this Code of
Business Conduct and Ethics (the "Code"). The Code describes ethical and legal
principles that must guide all of us in our work. To be useful, this Code must
be accessible, understandable and reviewed frequently. Employees are expected to
become familiar with and strictly adhere to all aspects of the Code. Every
employee should feel free to discuss questions about this Code with his or her
immediate supervisor, or submit inquiries to the Business Conduct Policy Review
Committee referenced in Chapter 4, Part B.

B.    INTENT AND PURPOSE

      Each employee can contribute significantly to establishing the Company's
reputation as an ethical and law-abiding organization by understanding and
complying with this Code.

      The Company recognizes that corporate excellence must rest upon a sound
foundation of business ethics. Strict compliance with the letter and spirit of
this Code is vital to assuring the Company's continued competitiveness and
success in the marketplace. Ethical business conduct is a prerequisite to the
Company's goals of growth, outstanding operational performance, investor
satisfaction and employee satisfaction.

C.    APPLICABILITY AND ACCOUNTABILITY

      This Code applies to the Company and any other company later established
that is controlled by or affiliated with the Company. All employees are
accountable for their individual compliance, and managers and supervisors also
are accountable for compliance by their subordinates. This Code also is
applicable to the Company's officers and directors and the employees of Cole
REIT Advisors II, LLC, a Delaware limited liability company ("Cole Advisors
II"), and the words "employee" and "employees" herein shall be deemed to include
them.

D.    RELATIONSHIP TO OTHER COMPANY POLICIES AND PROCEDURES

      This Code is complementary of, and supplemental to, other policies and
procedures of the Company and Cole Advisors II. Such other important policies
include, but are not limited to, employment practices such as equal opportunity,
workplace harassment and substance abuse. Note also that certain businesses may
be subject to regulatory and policy limitations more restrictive than the Code.
In such cases those regulations and policies shall govern over the Code. All
employees are expected to read and become familiar with the details of those
policies and procedures that relate to their area of work or direct employer.
Any employee who needs further information or clarification should consult the
Company's policies and procedures referenced in Chapter 4, Part A "Resources."
In the event an employee believes a conflict exists between this Code and any
other Company policy, the employee's immediate supervisor should be consulted
and, if an interpretation is required, the matter may be referred to the
Business Conduct Policy Review Committee, referenced in Chapter 4, Part B, for
clarification.

      This Code may be posted on the Company's website (www.colecapital.com)
where it will be available to the financial community and general public, the
Company's stockholders, employees and their families and other interested
persons. Waivers of the Code for officers and directors may be granted only by
the Company's Board of Directors or any committee designated by the Board of
Directors and must be promptly disclosed to the Company's stockholders. Any
material waivers or amendments of the Code will also be posted on the Company's
website and/or disclosed pursuant to Item 5.05 of Form 8-K.



E.    COMPLIANCE AND SANCTIONS

      All employees must strictly adhere to this Code and, where applicable,
their families shall also adhere to the Code. Compliance will be subject to
audit. Managerial, supervisory and other selected employees periodically will be
surveyed in respect of compliance as described in Chapter 4, Part G. Violations
of the Code will subject employees to discipline, up to and including
termination.

                                    CHAPTER 2
                            BUSINESS CONFLICTS POLICY

A.    GIFTS AND ENTERTAINMENT

Policy

      It is Company policy that employees ordinarily may not accept or offer any
business gift of substantial value. Such gifts generally are inappropriate and
may improperly influence the normal business relationship between the Company
and its suppliers, investors or competitors. Gifts with a value over $2,500 will
be considered to be substantial. If an employee is offered or proposes to offer
any gift with a value over $2,500 (or cumulative gifts from or to any single
source valued at over $2,500 per calendar year), the employee's immediate
supervisor must be notified and the gift may not be accepted or given unless
specifically approved in writing by the supervisor (or in the case of the Chief
Executive Officer, such person must provide notice to the Chairperson of the
Audit Committee).

      It is also Company policy that employees ordinarily may not accept or
offer business entertainment of substantial value that is not consistent with
applicable business practices for the applicable business on the premise that it
might improperly influence the normal business relationship between the Company
and its suppliers, investors or competitors. Generally entertainment with a
value over $2,500 per person (or cumulative entertainment received from or given
to any single source valued at over $2,500 per person per calendar year) will be
considered substantial. If an employee proposes to offer any such substantial
entertainment to a third party, the employee must obtain the advance written
approval of his or her immediate supervisor. It is recognized that there may be
particular circumstances where it would be appropriate for an employee to accept
an invitation involving substantial business entertainment. However, substantial
entertainment offered to an employee only may be accepted following written
approval by the employee's immediate supervisor (or in the case of the Chief
Executive Officer, such person must provide notice to the Chairperson of the
Audit Committee).

Discussion

      The exchange of gifts or social amenities, including sporting events,
outings, hunting or fishing trips and other entertainment between suppliers,
investors and competitors is acceptable when reasonably based on a clear
business purpose and within the bounds of good taste. No such activities should
be of a type which could embarrass or harm the reputation of the Company.
Adherence to the foregoing policies and procedures is intended to avoid abuses
while providing a degree of flexibility in respect of substantial gifts and
entertainment.

      Please note that payments of money, gifts, services, entertainment or
anything of value may not be offered or made available in any amount, directly
or indirectly, to any government official or employee.

B.    RELATIONSHIPS WITH COMPANY VENDORS AND SUPPLIERS

Policy

      Company policy is to conduct all purchasing in accordance with (i) U.S.
laws, (ii) Company procurement policies and (iii) Company principles of business
ethics. It is also Company policy that employees shall endeavor to deal fairly
with the Company's vendors, suppliers, competitors, and employees while
zealously seeking the best arrangements available for the Company but should not
take unfair advantage of any of the above through



manipulation, concealment, abuse of privileged information, misrepresentation of
material facts, or any other unfair-dealing practice.

Discussion

      The Company purchases equipment, materials, products and services solely
on the basis of their value and merit. Employees who make purchasing and
contracting decisions for the Company have a responsibility for independence and
objectivity of judgment that must not be compromised, nor appear to be
compromised. During the supplier or vendor selection process, Company employees
are accountable to seek the most technically efficient and cost-effective
products and services and to evaluate them, using consistent and unbiased
standards. The Company may from time to time develop systematic processes for
placing orders for goods and services and authorizing contracts, which shall be
utilized for all purchasing activity. Employees should not take unfair advantage
of any of the above through manipulation, concealment, abuse of privileged
information, misrepresentation of material facts, or any other unfair-dealing
practice.

C.    PERSONAL USE OF COMPANY PROPERTY, RESOURCES, FACILITIES, ASSETS AND
      INNOVATIONS

Policy

      It is the policy of the Company that all employees (i) are prohibited from
using Company property, resources or facilities for personal gain, (ii) may only
use Company property, resources or facilities for limited personal purposes
within prescribed guidelines and (iii) may not take advantage of inventions or
ideas that are discovered by virtue of their employment.

Discussion

      Company resources are provided for Company business use. This Code
provides guidance on the proper use of Company resources and addresses such
issues as use of Company office equipment or other facilities for non-Company
purposes.

      The continued success of the Company requires the commitment of all
employees to the proper allocation and use of Company resources. Such resources,
including Company physical property, information and intellectual property, are
provided for Company business use. Nonetheless, limited personal use of Company
resources by employees may occur without adversely affecting the Company's
interests. This Code authorizes such use, states requirements and directs
Company managers and supervisors to use their discretion in making responsible
decisions concerning the appropriate use of the resources they manage.

      This Code is not intended to cover every situation that could arise
involving the use of Company resources. Interpretation of the requirements of
the Code and questions concerning situations not covered herein should be
discussed with and determined by the employee's immediate supervisor. In this
regard, employees should seek additional guidance concerning proper use of
Company resources from their immediate supervisor, who will refer the matter to
the Business Conduct Policy Review Committee referenced in Chapter 4, Part B, if
specific guidance is desired.

      Employees are expected to use good judgment in the use of Company
resources and are accountable for using such resources to perform Company
business. Personal use of Company resources must not be conducted on a regular
basis or result in significant added costs, disruption of business processes or
any other disadvantage to the Company. Managers and supervisors are accountable
for the resources assigned to their respective organizations and are empowered
to resolve issues concerning their proper use.

      It is the intent of the Company to provide the communication systems
necessary for the conduct of its business. Employees are expected to adhere to
proper use of all communication systems, including but not limited to the
telephone, electronic mail (e-mail), facsimile, Internet, corporate intranet,
voice mail, computers and computer



terminals and related networks, modems and systems software ("IT Systems").
Employees are permitted use of Company property and must comply with Company
policies and procedures regarding its use.

      The communication systems are owned and operated by the Company and are to
be used for the business of the Company. Employees should have no expectation of
privacy of any correspondence, messages or information in the IT Systems. All
messages sent and received, including personal messages, and all data and
information stored on the Company's IT Systems are Company property regardless
of the content.

      The Company's IT Systems are to be used by employees only for the purpose
of conducting Company business. Employees may, however, use the Company's IT
Systems for the following incidental personal uses so long as such use does not
interfere with the employee's duties, is not done for pecuniary gain, does not
conflict with the Company's business, and does not violate any Company policy:

      -     to send and receive necessary and occasional personal
            communications;

      -     to prepare and store incidental personal data (such as personal
            calendars, personal address lists, and similar incidental personal
            data) in a reasonable manner;

      -     to use the telephone system for brief and necessary personal calls;
            and

      -     to access the Internet for brief personal searches and inquiries
            during meal times or other breaks, or outside of work hours,
            provided that employees adhere to all other usage policies.

      The Company assumes no liability for loss, damage, destruction,
alteration, disclosure, or misuse of any personal data or communications
transmitted over or stored on the Company's IT Systems. The Company accepts no
responsibility or liability for the loss or non-delivery of any personal
electronic mail or voicemail communications or any personal data stored on any
Company property. The Company strongly discourages employees from storing any
personal data on any of the Company's IT Systems.

      The Company reserves the right to access and disclose all such messages
sent by its employees for any purpose. All such messages, regardless of content
or the intent of the sender, are a form of corporate correspondence, and are
subject to the same internal and external regulation, security and scrutiny as
any other corporate correspondence. E-mail communications must be written
following customary business communications practices as is used in Company
correspondence. E-mail communications are official internal Company
communications, which may be subject to summons in legal proceedings.
Work-related messages should be directed to the affected employee(s) rather than
sending a global message to all employees.

      The Company's communication systems shall not be used as a forum to
promote religious, political or other personal causes, or any illegal activity.
Offensive or improper messages or opinions, transmission of sexually explicit
images, messages, cartoons, or other such items, or messages that may be
construed as harassment or disparagement of others based on race, national
origin, sex, sexual orientation, age, disability, or religion are also
prohibited on the Company's communication systems.

      Employees shall not attempt to gain access to another employee's personal
communications system and messages. The Company, however, reserves the right to
access and/or disclose an employee's messages at any time, without notice to the
employee.

      Ideas and innovations developed or discovered by virtue of employment by
the Company are Company, not individual, assets. All inventions, discoveries or
ideas relating to Company business, services or products which employees may
make, develop or have during or by virtue of their employment by the Company,
must be promptly and fully disclosed by them to the Company and shall be the
Company's exclusive property. At the Company's request, employees shall sign all
documents necessary or helpful to transfer patent rights or copyrights to the
Company with respect to any such inventions, discoveries or ideas.



D.    CONFIDENTIAL INFORMATION, DATA AND DOCUMENTS

Policy

      Employees may not provide any confidential information, data or documents
belonging to the Company or its customers, suppliers, tenants, investors or
other business relations to any third party without the express written consent
of the employee's immediate supervisor. This includes, but is not limited to,
any confidential Company documents relating to investors, customers, suppliers,
tenants, assets or finances of the Company or any internal plans, employment
arrangements (including the employee's own employment arrangements) or other
internal arrangements.

Discussion

      In performing their work, employees may access confidential information,
data and documents and become aware of information about the Company, its
investors, customers, suppliers, tenants or potential tenants and other business
relations that are not generally known to the public. This includes bids,
quotations, technologies, concepts, business strategies and plans, financial
data, employment arrangements and other confidential sensitive information. It
is the duty of every employee not to use or disclose this information improperly
or in a way that could be detrimental to the interests of the Company or its
suppliers, investors or tenants.

      Confidential information, data and documents should be protected by all
Company employees and not disclosed to outsiders without specific written
authorization from the employees' immediate supervisor. Since inadvertent or
improper disclosure could be harmful to the Company, employees should take every
practicable step to preserve the confidentiality of the Company's confidential
information, data and documentation. For example, employees should not discuss
material information in elevators, hallways, restaurants, airplanes, taxicabs or
any place where they can be overheard, read confidential documents in public
places or discard them where they can be retrieved by others, leave confidential
documents in unattended conference rooms or leave confidential documents behind
when the meeting or conference is over.

                                    CHAPTER 3
                   COMPLIANCE WITH LAWS, RULES AND REGULATIONS

A.    LAWS, RULES AND REGULATIONS

Policy

      The Company conducts its business in strict compliance with all applicable
laws, rules and regulations, including but not limited to antitrust laws,
insider trading laws and laws and regulations relating to recordkeeping and
internal controls. The Company promotes full, fair, accurate, timely and
understandable disclosure in reports and documents that the Company files with,
or submits to, the Securities and Exchange Commission and in other public
communications made by the Company. All employees and directors involved in the
Company's disclosure process, including the senior financial officers, are
responsible for acting in furtherance of this policy. In particular, these
individuals are required to maintain familiarity with the disclosure
requirements applicable to the Company and are prohibited from knowingly
misrepresenting, omitting or causing others to misrepresent or omit, material
facts about the Company to others, whether within or outside of the Company,
including the Company's independent auditors. In addition, any employee or
director who has a supervisory role in the Company's disclosure process has an
obligation to discharge his or her responsibilities diligently. Company policy
also prohibits employees having any discussion, communication, agreement or
understanding with any competitor concerning bidding rates, pricing policy,
terms or conditions of contracts, territorial markets, labor and other costs or
the like. Any understanding or agreement with another person to refrain from
doing business with an investor or supplier or otherwise engage in market
collusion is against Company policy.



B.    POLITICAL CONTRIBUTIONS AND OTHER POLITICAL ACTIVITIES

Policy

      It is against Company policy, and may also be illegal, for any employee
to:

      -     use any Company funds, property or facilities, or normal working
            time of any of the Company's employees, for any political activity;
            or

      -     include, directly or indirectly, any political contribution that the
            employee may desire to make on the employee's expense account or
            otherwise cause the Company to reimburse the employee or bear the
            cost for that expense.

      However, when permitted by law and authorized by the Chief Executive
Officer, the Company may express its views through designated spokespersons on
specific issues that are important to the Company's business and may make
contributions to, or otherwise support, candidates to elective office.

Discussion

      The Company encourages all of its employees to vote and become active in
civic affairs and the political process. Employees must recognize, however, that
their involvement and participation must be on an individual basis, on their own
time and at their own expense. Federal laws restrict any corporate contributions
to candidates for federal elections, and there are similar laws in many states.
Examples of prohibited conduct include using Company secretarial time to send
invitations for political fundraising events, using the Company telephone or
email systems to make politically motivated solicitations, allowing any
candidate to use any Company facilities, such as meeting rooms, for political
purposes, or to loan any Company property to anyone for use in connection with a
political campaign.

      The political process has become highly regulated, and any employee who
has any question about what is or is not proper should consult with the
Company's Chief Financial Officer before agreeing to do anything that could be
construed as involving the Company in any political activity at the federal,
state, or local levels.

C.    GOVERNMENT INVESTIGATIONS

Policy

      It is Company policy to cooperate fully with governmental authorities in
the proper performance of their functions, consistent with the safeguards that
the law has established for the benefit of persons under investigation.

Discussion

      In the event an employee is approached at home or at work in the United
States by any government regulatory or law enforcement officials investigating
the Company, its operations or business practices, the employee can insist that
any interview take place at his or her office or other location away from home.

      In the event of a government investigation, the Company's Chief Financial
Officer should be advised of the contacts immediately and, if possible, prior to
supplying any information to the authorities. When notifying the Chief Financial
Officer, please try to report the name(s) of the officials and their government
agency, along with the information they are requesting and, if disclosed, the
nature of the investigation.

      It is extremely important that, in all instances, employees be truthful
and accurate in all statements and information given to regulatory and law
enforcement officials. For the avoidance of doubt, employees should never
destroy or alter documents in connection with a pending or contemplated
investigation, lie or make misleading statements or attempt to cause any other
Company employee to do the same. Company policy and the law protect employees
from retaliatory action for good faith activities in assisting investigations by
government authorities.



D.    IMPROPER INFLUENCE ON CONDUCT OF AUDITS

Policy

      None of the Company's officers or directors, or any other person acting
under the direction thereof, may take any action to fraudulently influence,
coerce, manipulate, or mislead any independent public or certified accountant
engaged in the performance of an audit of the Company's financial statements for
the purpose of rendering such financial statements materially misleading.

                                    CHAPTER 4
                    ADMINISTRATIVE PROVISIONS AND ENFORCEMENT

A.    RESOURCES

      Questions relating to this Code and other Company policies and procedures
should be submitted to the employee's immediate supervisor. Questions or reports
relative to this Code also may be submitted, on a confidential basis if desired,
to the Business Conduct Policy Review Committee. For additional information, see
Part B below.

      It must be emphasized that, if any employee has a question as to whether a
particular action being considered might be inconsistent with this Code or be
improper for any other reason, the employee should raise that question with his
or her immediate supervisor and obtain clarification before taking any action.

B.    BUSINESS CONDUCT POLICY REVIEW COMMITTEE

      The Company has established a Business Conduct Policy Review Committee to
review any questions relating to this Code and any situations that may involve a
violation. The Business Conduct Policy Review Committee is comprised of the
Company's Chief Financial Officer and other senior executives as are appointed
from time to time by the Chief Executive Officer and Chief Financial Officer.
The initial Chairperson of the Business Conduct Policy Review Committee is the
Company's Chief Financial Officer. The Chief Executive Officer may from time to
time appoint successors as the Chairperson of this Committee. The Committee has
been established as a resource for employees, and employees are encouraged to
submit questions that may arise from time to time to the Business Conduct Policy
Review Committee. The Committee will confidentially process all questions,
statements and information it may receive relating to suspected violations,
except under circumstances where enforcement action is required.

C.    "WHISTLEBLOWER" REPORTING AND AUDITING

      All employees should be alert and sensitive to situations that could
result in actions by themselves, other employees or third parties that might
violate the standards of conduct set forth in this Code or applicable U.S. laws.
Any employee who knows or believes that another employee or agent of the Company
has engaged or is contemplating or engaging in improper conduct contrary to
Company policy or in any illegal activity is encouraged to report such
information.

      Generally, such matters should be raised first with an employee's
immediate supervisor. This may provide valuable insights or perspectives and
encourage resolution of problems within the appropriate work unit. However, an
employee who would not be comfortable raising a matter with his or her immediate
supervisor, or who does not believe the supervisor will deal with the matter
properly, should raise the matter with the appropriate department head or the
Business Conduct Policy Review Committee.

      The Company's employees have been accorded a means of contacting the
Business Conduct Policy Review Committee for any purpose, including reporting
suspected violations of this Code of Business Conduct Policy or any other
Company policy. An employee may report such matters by submitting such report by
mail addressed to the Chief Financial Officer. All such written communications
should be clearly marked on the envelope "Confidential to the Chief Financial
Officer" and will be submitted to the Business Conduct Policy Review Committee.



      Additionally, employees or non-employees may report any concerns regarding
questionable accounting, auditing or other matters of business on a confidential
basis directly to the Chairperson of the Audit Committee, who is an independent
non-employee director. Such reports may be submitted by mail addressed as
follows: Chairperson of the Audit Committee, Cole Credit Property Trust II,
Inc., 2555 Camelback Road, Suite 400, Phoenix, Arizona 85016.

      All communications pursuant to this paragraph shall be confidentially
processed except under circumstances where enforcement action is required.
Employees may freely report such information, in name or anonymously as they
deem appropriate.

D.    REPORTING PROCEDURES

      Employees should follow the reporting procedures established by this Code
and should refrain from reporting such activities outside of such procedures.
Employees must keep in mind the serious nature of any accusation of violation of
this Code and/or law and any such report must be made in good faith and believed
to be true. An employee who is incorrectly or falsely accused of violation of
this Code or of law may suffer significant personal damage for which the
reporting party and the Company may become liable.

E.    NON-RETALIATION POLICY

      Company policy prohibits any form of retaliation for good faith reporting
of suspected violations of this Code or any other Company policy. The Company
will take appropriate disciplinary action against any employee who directly or
indirectly retaliates against an employee who reports a suspected violation of
Company policy. Although an employee will not be subject to any disciplinary or
retaliatory action for filing a good faith report of a suspected or potential
violation of this Code, the filing of a known false or malicious report will not
be tolerated. Anyone participating in the filing of such a report will be
subject to appropriate disciplinary action.

F.    ENFORCEMENT

      Compliance with the provisions and requirements of this Code periodically
will be evaluated and monitored by the Business Conduct Policy Review Committee.
The principles set forth in this Code will be enforced at all levels, fairly and
without prejudice. Employees who violate this Code will be subject to
disciplinary action, ranging from a reprimand to dismissal and possible civil
action or criminal prosecution.

G.    PERIODIC COMPLIANCE QUESTIONNAIRE

      The Company periodically will circulate a Compliance Questionnaire to
selected employees, including but not limited to officers, managers, supervisors
and those with purchasing authority. Completion of the Questionnaire will be
required in order to monitor compliance with various provisions of this Code.
Responses to the Questionnaire will be maintained on a confidential basis by the
Business Conduct Policy Review Committee except under circumstances where
enforcement action is required. The Compliance Questionnaire is an important
means of monitoring compliance with this Code, and employees are expected to
carefully review the Questionnaire and respond in a timely manner.

H.    IMPLEMENTATION

      This Code is being distributed to all employees and is effective
immediately. This Code does not alter any existing legal rights and obligations
of the Company or Cole Advisors II and is not a guarantee of future employment.

I.    CHANGES AND AMENDMENTS

      The Company reserves the right to change or amend any provisions of this
Code as it may deem appropriate from time to time. All employees will be
notified in writing by the Company whenever changes or amendments are
implemented, and the revised Code will be posted on the Company's website.

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 annual report on Form 10-K 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 the
          registrant's board of directors (or persons performing the equivalent
          functions):

          a)    all significant deficiencies and material weaknesses in the
                design or operation of internal control over financial reporting
                which are reasonably likely to adversely affect the registrant's
                ability to record, process, summarize and report financial
                information; and

          b)    any fraud, whether or not material, that involves management or
                other employees who have a significant role in the registrant's
                internal control over financial reporting.

                                              /s/ Christopher H. Cole
                                          -------------------------------------
                                                  Christopher H. Cole
                                          Chief Executive Officer and President

Date: March 23, 2006

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 annual report on Form 10-K of Cole Credit
           Property Trust II, Inc.;

      2.   Bzased 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 the registrant's board of directors (or persons
           performing the equivalent functions):

           a)    all significant deficiencies and material weaknesses in the
                 design or operation of internal control over financial
                 reporting which are reasonably likely to adversely affect the
                 registrant's ability to record, process, summarize and report
                 financial information; and

           b)    any fraud, whether or not material, that involves management or
                 other employees who have a significant role in the registrant's
                 internal control over financial reporting.

                                                    /s/ Blair D. Koblenz
                                                -----------------------------
                                                      Blair D. Koblenz
                                                Executive Vice President and
                                                   Chief Financial Officer

Date: March 23, 2006

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 Annual Report on Form 10-K of the Company for
      the period ended December 31, 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: March 23, 2006

      The foregoing certification is being furnished with the Company's 10-K for
the period ended December 31, 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.